EXHIBIT 10.1
U.S. $750,000,000
CREDIT AGREEMENT
Dated as of June 25, 2003
among
THE GAP, INC.
as Borrower,
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
as Subsidiary Borrowers,
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
as LC Subsidiaries,
THE BANKS AND FINANCIAL INSTITUTIONS NAMED HEREIN,
as Lenders,
THE BANKS NAMED HEREIN
as Issuing Banks,
CITIGROUP GLOBAL MARKETS INC.,
and
BANC OF AMERICA SECURITIES LLC,
as Joint Book Managers,
BANC OF AMERICA SECURITIES LLC,
HSBC BANK USA
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Co-Syndication Agents,
CITIGROUP GLOBAL MARKETS INC.,
BANC OF AMERICA SECURITIES LLC
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Arrangers,
and
CITICORP USA, INC.,
as Agent
for the Issuing Banks and the Lenders from time to time party hereto
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms............................................................ 1
SECTION 1.02 Computation of Time Periods......................................................22
SECTION 1.03 Accounting Terms.................................................................22
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Advances.....................................................................22
SECTION 2.02 Making the Advances..............................................................23
SECTION 2.03 Fees.............................................................................26
SECTION 2.04 Reduction and Increase of the Commitments; Reduction and Increase of the
Swing Line Commitment; Additional Issuing Banks..................................26
SECTION 2.05 Repayment of Advances............................................................30
SECTION 2.06 Interest on Advances.............................................................30
SECTION 2.07 Additional Interest on Eurodollar Rate Advances..................................31
SECTION 2.08 Interest Rate Determination......................................................31
SECTION 2.09 Voluntary Conversion of Advances.................................................32
SECTION 2.10 Prepayments of Advances..........................................................32
SECTION 2.11 Increased Costs..................................................................33
SECTION 2.12 Illegality.......................................................................34
SECTION 2.13 Borrower Guaranty................................................................35
SECTION 2.14 Subsidiary Borrowers.............................................................40
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN
SECTION 3.01 Letters of Credit................................................................40
i
SECTION 3.02 Limitation on the Issuance of Letters of Credit Denominated in Alternative
Currencies.......................................................................41
SECTION 3.03 Issuing the Letters of Credit....................................................41
SECTION 3.04 Reimbursement Obligations........................................................41
SECTION 3.05 Participations Purchased by the Lenders..........................................42
SECTION 3.06 Letter of Credit Fees............................................................43
SECTION 3.07 Indemnification; Nature of the Issuing Banks' Duties.............................44
SECTION 3.08 Increased Costs..................................................................45
SECTION 3.09 Uniform Customs and Practice.....................................................46
SECTION 3.10 Reductions and Increases in Issuing Commitment...................................46
SECTION 3.11 Existing Letters of Credit.......................................................46
SECTION 3.12 Currency Provisions..............................................................47
SECTION 3.13 Borrower Guaranty................................................................48
SECTION 3.14 Dollar Payment Obligation........................................................51
SECTION 3.15 Applications; Survival of Provisions; Cash Collateral............................51
SECTION 3.16 LC Subsidiaries..................................................................51
ARTICLE IV
PAYMENTS, TAXES, EXTENSIONS, ETC.
SECTION 4.01 Payments and Computations/Borrowings.............................................52
SECTION 4.02 Taxes/Borrowings.................................................................53
SECTION 4.03 Sharing of Payments, Etc./Borrowings.............................................56
SECTION 4.04 Evidence of Debt/Borrowings......................................................57
SECTION 4.05 Payments and Computations/Letters of Credit......................................57
SECTION 4.06 Taxes/Letters of Credit..........................................................59
SECTION 4.07 Sharing of Payments, Etc./Letters of Credit......................................62
ii
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01 Conditions Precedent to Effectiveness of this Agreement..........................62
SECTION 5.02 Conditions Precedent to Each Advance/Issuance....................................64
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties of the Borrower...................................65
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01 Affirmative Covenants............................................................68
SECTION 7.02 Negative Covenants...............................................................73
SECTION 7.03 Financial Covenants..............................................................80
SECTION 7.04 Reporting Requirements...........................................................81
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default................................................................83
ARTICLE IX
THE AGENT
SECTION 9.01 Authorization and Action.........................................................86
SECTION 9.02 Agent's Reliance, Etc............................................................87
SECTION 9.03 CUSA, Citibank and Affiliates....................................................87
SECTION 9.04 Lender Credit Decision...........................................................88
SECTION 9.05 Indemnification..................................................................88
SECTION 9.06 Successor Agent..................................................................89
SECTION 9.07 Co-Syndication Agents, Joint Book Managers and Joint Lead Arrangers..............89
SECTION 9.08 Release of Collateral............................................................90
SECTION 9.09 Release of Guarantor/Domestic Subsidiary.........................................90
iii
SECTION 9.10 Actions in Respect of Intercreditor Agreement....................................90
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendments, Etc.................................................................90
SECTION 10.02 Notices, Etc....................................................................91
SECTION 10.03 No Waiver; Remedies.............................................................92
SECTION 10.04 Costs and Expenses..............................................................92
SECTION 10.05 Right of Set-off................................................................93
SECTION 10.06 Binding Effect..................................................................94
SECTION 10.07 Assignments and Participations..................................................94
SECTION 10.08 Severability of Provisions......................................................97
SECTION 10.09 Independence of Provisions......................................................97
SECTION 10.10 Confidentiality.................................................................97
SECTION 10.11 Headings........................................................................98
SECTION 10.12 Entire Agreement................................................................98
SECTION 10.13 Execution in Counterparts.......................................................98
SECTION 10.14 Consent to Jurisdiction.........................................................98
SECTION 10.15 GOVERNING LAW...................................................................99
SECTION 10.16 WAIVER OF JURY TRIAL............................................................99
iv
SCHEDULES AND EXHIBITS
SCHEDULES
Schedule I-A - Commitment Amounts
Schedule I-B - List of Applicable Lending Offices
Schedule II - Existing Liens
Schedule III - Change of Control
Schedule IV - Outstanding Balance of Existing Letters of Credit
Schedule V - LC Subsidiaries
Schedule VI - Subsidiary Borrowers
Schedule VII - Permitted Investments
Schedule VIII - Plans
Schedule IX - Special Purpose Subsidiaries
Schedule X - ERISA Matters
Schedule XI - Subsidiaries of the Borrower
Schedule XII - Environmental Matters
Schedule XIII - Existing Debt
Schedule XIV - Excluded Subsidiaries
Schedule XV - Hedge Subsidiaries
EXHIBITS
Exhibit A - Notice of Borrowing
Exhibit B - Form of Promissory Note
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Subsidiary Guaranty
Exhibit E - Form of Security Agreement
Exhibit F-1 - Form of Opinion of Counsel to the Loan Parties
Exhibit F-2 - Form of UCC Opinion of Special New York Counsel to the
Loan Parties
Exhibit F-3 - Form of Corporate Opinion of Special New York Counsel to
the Loan Parties
Exhibit G - Form of Opinion of Special New York Counsel to the Agent
Exhibit H - Form of Assumption Agreement
Exhibit I - Form of Compliance Certificate
CREDIT AGREEMENT, dated as of June 24, 2003 (this "Agreement"),
among The Gap, Inc., a Delaware corporation (the "Borrower"), the LC
Subsidiaries (as hereinafter defined), the Subsidiary Borrowers (as hereinafter
defined), the banks and financial institutions (the "Lenders") listed on the
signature pages hereof, the Issuing Banks (as hereinafter defined), Citigroup
Global Markets Inc. ("CGMI") and Banc of America Securities LLC ("BAS") as joint
book managers (the "Joint Book Managers"), BAS, HSBC Bank USA ("HSBC") and ▇.▇.
▇▇▇▇▇▇ Securities Inc. ("▇▇ ▇▇▇▇▇▇") as co-syndication agents (the
"Co-Syndication Agents"), CGMI, BAS and ▇▇ ▇▇▇▇▇▇ as joint lead arrangers (the
"Joint Lead Arrangers"), and Citicorp USA, Inc. ("CUSA"), as agent (the "Agent")
for the Lenders and the Issuing Banks hereunder.
PRELIMINARY STATEMENTS:
(1) The Borrower, certain of its subsidiaries, certain banks
and financial institutions, and the Agent entered into a Credit
Agreement dated as of March 7, 2002 (the "Existing Credit Agreement").
(2) The Borrower, the LC Subsidiaries, the Subsidiary
Borrowers, the Lenders, the Issuing Banks, the Joint Book Managers, the
Co-Syndication Agents, the Joint Lead Arrangers and the Agent desire to
enter into this Agreement to replace in part the Existing Credit
Agreement and provide other financing facilities to the Borrower, the LC
Subsidiaries and the Subsidiary Borrowers as set forth below.
NOW THEREFORE, the Borrower, the LC Subsidiaries, the Subsidiary
Borrowers, the Lenders, the Issuing Banks, the Joint Book Managers, the
Co-Syndication Agents, the Joint Lead Arrangers and the Agent 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):
"Advance" means an advance by Lender to the Borrower as part of
a Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of Advance; and means a Swing
Line Advance by a Swing Line Lender to a Subsidiary Borrower as the
context may require.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by, or is under common
control with, such Person.
"Alternative Currency" means any lawful currency other than
Dollars which is freely transferable and convertible into Dollars and
which an Issuing Bank or Swing Line Lender can obtain in the ordinary
course of its business.
"Applicable Facility Fee" means, as of any date a percentage per
annum determined by reference to the applicable Performance Level in
effect on such date as set forth below:
PERFORMANCE
LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
-------------------------------------------------------------------------------------------------
Applicable Facility
Fee .175% .300% .500% .500% .750% .750%
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate
Advance, and such Lender's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Applicable Letter of Credit Fee" means as of any date, a
percentage per annum determined by reference to the applicable
Performance Level in effect on such date as set forth below:
PERFORMANCE
LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
-------------------------------------------------------------------------------------------------
Applicable Letter of .5625% .6875% .8750% 1.125% 1.500% 1.750%
Credit Fee
"Applicable Margin" means as of any date, a percentage per annum
determined by reference to the applicable Performance Level in effect on
such date as set forth below:
PERFORMANCE
LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
-------------------------------------------------------------------------------------------------
Base Rate Applicable .000% .250% .500% 1.00% 2.00% 2.50%
Margin
Eurodollar Rate .700% .825% 1.00% 1.50% 2.00% 2.50%
Applicable Margin
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent (if such acceptance is required by this Agreement), in
substantially the form of Exhibit C hereto.
"Assuming Lender" means an Eligible Assignee acceptable to the
Agent and each Issuing Bank and not previously a Lender that becomes a
Lender hereunder pursuant to Section 2.04(c) hereof and which has a
Commitment of not less than $25,000,000.
"Assumption Agreement" means an agreement, substantially in the
form of Exhibit H hereto, by which an Eligible Assignee agrees to become
a Lender hereunder pursuant to Section 2.04(c) hereof, agreeing to be
bound by all obligations of a Lender hereunder.
2
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as Citibank's
base rate;
(b) 1/2% per annum above 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
being determined weekly on each Monday (or, if any such date is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by the Agent 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 Agent from
three New York certificate of deposit dealers of recognized
standing selected by the Agent, in either case adjusted to the
nearest 1/4 of one percent or, if there is no nearest 1/4 of one
percent, to the next higher 1/4 of one percent; and
(c) 1/2% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance which bears interest as
provided in Section 2.06(a) hereof.
"Borrowing" means a borrowing, consisting of simultaneous
Advances of the same Type made by each of the Lenders pursuant to
Section 2.01(a) hereof.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or San Francisco,
California and a day on which wire transfers may be effectuated among
member banks of the Federal Reserve System through use of the fedwire
funds transfer system and (i) if the applicable Business Day relates to
any Eurodollar Rate Advances, a day on which dealings are carried on in
the London interbank market and (ii) if the applicable Business Day
relates to any Swing Line Advance or Letter of Credit denominated in an
Alternative Currency, a day on which commercial banks are open for
business in the country of issue of such Alternative Currency and on
which dealings in such Alternative Currency are carried on by such
commercial banks in such country of issue (if such Alternative Currency
is other than the Euro) or if such Alternative Currency is the Euro, a
day on which the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) System is in operation.
"Capital Assets" means, with respect to any Person, all
equipment, fixed assets and real property or improvements of such
Person, or replacements or substitutions therefor or additions thereto,
that, in accordance with generally accepted accounting principles, have
been or should be reflected as additions to property, plant or equipment
on the balance sheet of such Person.
3
"Capital Expenditures" means, with respect to any Person for any
period, all expenditures made directly or indirectly by such Person
during such period for Capital Assets (whether paid in cash or other
consideration or accrued as a liability and including, without
limitation, all expenditures for maintenance and repairs which are
required, in accordance with generally accepted accounting principles,
to be capitalized on the books of such Person). For purposes of this
definition, the purchase price of equipment or other fixed assets that
are purchased simultaneously with the trade-in of existing assets or
with insurance proceeds shall be included in Capital Expenditures only
to the extent of the gross amount by which such purchase price exceeds
the credit granted by the seller of such assets for the assets being
traded in at such time or the amount of such insurance proceeds, as the
case may be.
"Capital Lease" of any Person means any lease of any property
(whether real, personal or mixed) by such Person as lessee, which lease
should, in accordance with generally accepted accounting principles, be
required to be accounted for as a capital lease on the balance sheet of
such Person.
"Capital Lease Obligations" means the obligations of any Person
to pay rent or other amounts under a Capital Lease, the amount of which
is required to be capitalized on the balance sheet of such Person in
accordance with generally accepted accounting principles.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.), and any regulations promulgated thereunder.
"Change of Control" means the occurrence, after the date of this
Agreement, of (i) any Person or two or more Persons acting in concert
acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended), directly or indirectly, of securities of the Borrower
(or other securities convertible into such securities) representing 50%
or more of the combined voting power of all securities of the Borrower
entitled to vote in the election of directors; or (ii) 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 24-month period
were directors of the Borrower ceasing for any reason to constitute a
majority of the Board of Directors of the Borrower unless the Persons
replacing such individuals were nominated by the Board of Directors of
the Borrower; or (iii) any Person or two or more Persons acting in
concert acquiring by contract or otherwise, or entering into a contract
or arrangement which upon consummation will result in its or their
acquisition of, control over securities of the Borrower (or other
securities convertible into such securities) representing 50% or more of
the combined voting power of all securities of the Borrower entitled to
vote in the election of directors; provided, that, the Person or group
of Persons referred to in clauses (i) and (iii) of this definition of
Change of Control shall not include any Person listed on Schedule III
hereto or any group of Persons in which one or more of the Persons
listed on Schedule III are members.
4
"Citibank" means Citibank, N.A..
"Collateral" means all of the "Collateral" referred to in the
Collateral Documents and all of the other property and assets that are
or are intended under the terms of the Collateral Documents to be
subject to Liens in favor of the Collateral Agent for the benefit of the
Lender Parties.
"Collateral Agent" has the meaning specified therefor in the
Security Agreement.
"Collateral Documents" means, collectively, the Security
Agreement (as amended, and any supplements thereto), collateral
assignments, security agreements, pledge agreements or other similar
agreements delivered to the Agent and the Lender Parties pursuant to
Section 5.01 or Section 7.01 hereof, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in
favor of the Collateral Agent for the benefit of the Lender Parties.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on Schedule I-A hereto under the caption
"Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, the amount set forth for such Lender with respect
thereto in the Register maintained by the Agent pursuant to Section
10.07 hereof, in each case as such amount may be reduced or increased
pursuant to Section 2.04 hereof.
"Commitment Percentage" means, with respect to each Lender, the
percentage which the then existing Commitment of such Lender is of the
Commitments of all Lenders; provided, however, that with respect to
Letters of Credit which expire after the Termination Date has occurred,
the Commitment Percentage of each Lender shall be the percentage which
Lender's Commitment immediately prior to the Termination Date is of the
Commitment of all Lenders immediately prior to the Termination Date.
"Confidential Information" means certain non-public,
confidential or proprietary information and material disclosed, from
time to time, either orally, in writing, electronically or in some other
form by the Borrower in connection with the Loan Documents. Confidential
Information shall include, but not be limited to non-public,
confidential or proprietary information, trade secrets, know-how,
inventions, techniques, processes, algorithms, software programs,
documentation, screens, icons, schematics, software programs, source
documents and other MIS related information; contracts, customer lists,
financial information, financial forecasts, sales and marketing plans
and information and business plans, products and product designs;
textile projections and results; ideas, designs and artwork for all
types of marketing, advertising, public relations and commerce
(including ideas, designs and artwork related to the World Wide Web and
any Web Site of the Borrower or any Subsidiary); textile designs;
advertising, strategies, plans and results; sourcing information; vendor
lists, potential product labeling and marking ideas; all materials
including, without limitation, documents, drawings, samples, sketches,
designs, and any other information concerning, color palette and color
standards furnished to a Recipient by the Borrower or any Subsidiary;
customer base(s); and other non-public information relating to the
Borrower's or any Subsidiary's business.
5
"Consolidated" and any derivative thereof each means, with
reference to the accounts or financial reports of any Person, the
consolidated accounts or financial reports of such Person and each
Subsidiary of such Person determined in accordance with generally
accepted accounting principles, including principles of consolidation,
consistent with those applied in the preparation of the Consolidated
financial statements of the Borrower referred to in Section 6.01(e)
hereof.
"Constitutive Documents" means, with respect to any Person, the
certificate of incorporation or registration (including, if applicable,
certificate of change of name), articles of incorporation or
association, memorandum of association, charter, bylaws, certificate of
limited partnership, partnership agreement, trust agreement, joint
venture agreement, certificate of formation, articles of organization,
limited liability company operating or members agreement, joint venture
agreement or one or more similar agreements, instruments or documents
constituting the organization or formation of such Person.
"Convert," "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of another Type
pursuant to Section 2.08 or 2.09 hereof.
"Debt" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred
purchase price (excluding any deferred purchase price that constitutes
an account payable incurred in the ordinary course of business) of
property or services, (ii) all obligations of such Person in connection
with any agreement to purchase, redeem, exchange, convert or otherwise
acquire for value any capital stock of such Person or to purchase,
redeem or acquire for value any warrants, rights or options to acquire
such capital stock, now or hereafter outstanding, (iii) all obligations
of such Person evidenced by bonds, notes, debentures, convertible
debentures or other similar instruments, (iv) all indebtedness created
or arising under any conditional sale or other title retention agreement
(other than under any such agreement which constitutes or creates an
account payable incurred in the ordinary course of business) 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, acceleration, or termination are limited to repossession or
sale of such property), (v) all Capital Lease Obligations, (vi)
obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness
or obligations of others of the kinds referred to in clauses (i) through
(v) above, (vii) all Debt referred to in clause (i), (ii), (iii), (iv),
(v), or (vi) 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, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Debt and (viii) all mandatorily redeemable
preferred stock of such Person, valued at the applicable redemption
price, plus accrued and unpaid dividends payable in respect of such
redeemable preferred stock.
6
"Default" means an event which would constitute an Event of
Default but for the requirement that notice be given or time elapse, or
both.
"Dollars," "dollars" and the sign "$" each means lawful money of
the United States.
"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-B hereto or in the Assignment and
Acceptance pursuant to which it became Lender, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Agent.
"Domestic Subsidiary" means, at any time, any of the direct or
indirect Subsidiaries of the Borrower that is incorporated or organized
under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, for any period, Net Income plus, to the extent
deducted in determining such Net Income, the sum of (a) Interest
Expense, (b) income tax expense, (c) depreciation expense and (d)
amortization expense, all determined on a Consolidated basis for the
Borrower and its Subsidiaries in accordance with generally accepted
accounting principles.
"Effective Date" has the meaning specified in Section 5.01
hereof.
"Eligible Assignee" means (i) a commercial bank organized under
the laws of the United States, or any State thereof, and having a
combined capital and surplus of at least $100,000,000; (ii) a commercial
bank organized under the laws of any other country which is a member of
the OECD, or a political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000; provided, that,
such bank is acting through a branch or agency located in the United
States; (iii) a Person that is primarily engaged in the business of
commercial banking and that is (a) a Subsidiary of a Lender, (b) a
Subsidiary of a Person of which a Lender is a Subsidiary, or (c) a
Person of which a Lender is a Subsidiary; (iv) any Lender or Affiliate
of a Lender; (v) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act of 1933, as amended)
which extends credit or buys loans as one of its businesses, including
but not limited to, insurance companies, mutual funds and lease
financing companies; and (vi) any other Person acceptable to the Issuing
Banks and the Agent and, provided no Event of Default is continuing, the
Borrower. No Loan Party or any Affiliate thereof shall be an Eligible
Assignee.
"Environmental Action" means any outstanding action, suit,
demand, demand letter, claim, notice of noncompliance or violation,
notice of liability or potential liability, investigation, proceeding,
consent order or consent agreement, abatement order or other order or
directive (conditional or otherwise) relating in any way to any
Environmental Law, any Environmental Permit or any Hazardous Substances
or arising from alleged injury or threat to health, safety, natural
resources or the environment, including, without limitation, (a) by any
Governmental Authority for enforcement, cleanup, removal,
7
response, remedial or other actions or damages and (b) by any applicable
Governmental Authority or any other third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any Requirement of Law relating to (a)
the generation, use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Substances, (b) pollution or
the protection of the environment, health, safety or natural resources
or (c) occupational safety and health, industrial hygiene, land use or
the protection of human, plant or animal health or welfare, including,
without limitation, CERCLA, in each case as amended from time to time,
and including the regulations promulgated and the rulings issued from
time to time thereunder.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"Equity Interests" means, with respect to any Person, all of the
shares of capital stock of (or other ownership or profit interests in)
such Person, all of the warrants, options or other rights for the
purchase or other acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of
the securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and all of the
other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is a member of a controlled group of which the
Borrower or any Subsidiary of the Borrower is a member or which is under
common control with the Borrower or any Subsidiary of the Borrower
within the meaning of Section 414 of the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Event" means a reportable event with respect to a Plan
within the meaning of Section 4043 of ERISA.
"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-B hereto or in the Assignment and
Acceptance pursuant to which it became Lender (or, if
8
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 Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to (i) the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) at which deposits in
U.S. dollars appear on page 3750 (or any successor page thereto) of the
Dow ▇▇▇▇▇ Telerate Screen two Business Days before the first day of such
Interest Period and for a term comparable to such Interest Period, or
(ii) if such rate does not so appear on the Dow ▇▇▇▇▇ Telerate Screen on
any date of determination, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) at which deposits in U.S. dollars
appear on the Reuters Screen LIBO Page two Business Days before the
first day of such Interest Period and for a term comparable to such
Interest Period, provided, however, that if the Reuters Screen LIBO Page
is being used to determine the Eurodollar Rate at any date of
determination and more than one rate is specified thereon as the London
interbank offered rate for deposits in U.S. dollars, the applicable rate
shall be the average of all such rates (rounded upward, if necessary, to
the nearest whole multiple of 1/16 of 1% per annum), or (iii) if such
rate does not so appear on either the Dow ▇▇▇▇▇ Telerate Screen or
Reuters Screen LIBO Page on any date of determination, then, the average
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum)
of the rates per annum at which deposits in 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 comprising part of such Borrowing and for a period equal to such
Interest Period. In such circumstances, the Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance comprising part of the
same Borrowing shall be determined by the Agent on the basis of the
applicable rates given to and received by the Agent from the Reference
Banks two Business Days prior to the first day of such Interest Period,
subject, however, to the provisions of Section 2.08 hereof.
"Eurodollar Rate Advance" means an Advance which bears interest
as provided in Section 2.06(b) hereof.
"Eurodollar Rate Reserve Percentage" of any Lender for any
Interest Period for any Eurodollar Rate Advance means the reserve
percentage applicable during such Interest Period (or if more than one
such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) 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,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 8.01
hereof.
9
"Excluded Subsidiaries" means (a) Foreign Subsidiaries, (b)
those Subsidiaries whose assets have a book value of less than $500,000,
are dormant (as provided under any applicable law), or which are in the
process of being liquidated as of the Effective Date, (c) Special
Purpose Subsidiaries, (d) Subsidiaries of Foreign Subsidiaries and (e)
Banana Republic (East) LP and Gap (Texas) LP, each a California Limited
partnership, and in each case so long as any partnership interests
therein is owned by a Special Purpose Subsidiary. Excluded Subsidiaries
referred to in clause (b) as of the Effective Date are listed in
Schedule XIV hereto.
"Existing Credit Agreement" has the meaning specified in
Preliminary Statement (1).
"Existing Letter of Credit" has the meaning specified in Section
3.11 hereof.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period 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 which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Quarter" means any quarter in any Fiscal Year, the
duration of such quarter being defined in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the Borrower's financial statements referred to in
Section 6.01(e) hereof.
"Fiscal Year" means a fiscal year of the Borrower and its
Subsidiaries.
"Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the amount equal to the sum of (i) Consolidated EBITDA and (ii)
Lease Expense in each case for the Borrower and its Subsidiaries for
such period, to (b) the sum of (i) Consolidated Interest Expense and
(ii) Lease Expense, in each case for the Borrower and its Subsidiaries
for such period.
"Foreign Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Borrower that is not a Domestic Subsidiary.
"Funded Debt" means, as of any date of determination, all
indebtedness (including Capital Lease Obligations but excluding all
accounts payable incurred in the ordinary course of business) of the
Borrower and its Subsidiaries on a Consolidated basis that would (or
would be required to) appear as liabilities for long-term Debt,
short-term Debt, current maturities of Debt, and other similar
interest-bearing obligations on a Consolidated balance sheet of the
Borrower and its Subsidiaries in accordance with generally accepted
accounting principles.
10
"Governmental Authority" means any nation or government, any
state, province, city, municipal entity or other political subdivision
thereof, and any governmental, executive, legislative, judicial,
administrative or regulatory agency, department, authority,
instrumentality, commission, board or similar body, whether ▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, local or foreign.
"Governmental Authorization" means any authorization, approval,
consent, franchise, license, covenant, order, ruling, permit,
certification, exemption, notice, declaration or similar right,
undertaking or other action of, to or by, or any filing, qualification
or registration with, any Governmental Authority.
"Guarantee Supplement" has the meaning specified in the
Subsidiary Guaranty.
"Guaranteed Obligations" has the meaning specified in the
Subsidiary Guaranty.
"Guarantor" means each Domestic Subsidiary of the Borrower party
to the Subsidiary Guarantee or, as the case may be, a Guarantee
Supplement.
"Hazardous Substance" means (i) any hazardous substance or toxic
substance as such terms are presently defined or used in Section 101(14)
of CERCLA (42 U.S.C. Section 9601(14)), in 33 U.S.C. Section 1251 et.
seq. (Clean Water Act), or 15 U.S.C. Section 2601 et. seq. (Toxic
Substances Control Act) and (ii) as of any date of determination, any
additional substances or materials which are hereafter incorporated in
or added to the definition of "hazardous substance" or "toxic substance"
for purposes of CERCLA or any other applicable law.
"Hedge Agreements" means (a) any and all interest rate swaps,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity
or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swaps, cross-currency rate swaps, currency options, spot
contracts or any other similar transactions or any combination of any of
the foregoing (including any options to enter into any of the
foregoing), whether or not any such transaction is governed by or
subject to any master agreement, and (b) any and all transactions of any
kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by
the International Swaps and Derivatives Association, Inc., the
International Foreign Exchange Master Agreement, or any other master
agreement, including any such obligations or liabilities under any such
agreement.
"Hedge Agreements Exposure" means, with respect to all Hedge
Agreements of the Hedge Banks, the amount, if any, by which the sum of
the (a) product of 5% of the notional amount of foreign exchange Hedge
Agreements with a tenor of 6 months or less; (b) the product of 15% of
the notional amount of all foreign exchange Hedge Agreements with a
tenor of more than 6 months but less than or equal to 18 months; (c) the
product of 20% of the notional amount of both all foreign exchange Hedge
Agreements with a tenor
11
of more than 18 months but less than or equal to 24 months and all
foreign exchange Hedge Agreements for transactions denominated in
currencies other than U.S. Dollars, Canadian Dollars, EURO, British
Pounds Sterling, Japanese Yen, Hong Kong Dollars or Singapore Dollars
(and any other currencies as determined by the Agent in consultation
with the Borrower); (d) the product of 12% of the notional amount of all
interest rate Hedge Agreements with a tenor of 5 years or less; and (e)
the product of 15% of the notional amount of all interest rate Hedge
Agreements with a tenor of more than 5 years but less than or equal to
10 years, in each case existing as of the Effective Date or permitted
under Section 7.02(h) hereof, exceeds $250,000,000.
"Hedge Bank" means any Lender or an Affiliate of a Lender, in
its capacity as a party to a Hedge Agreement.
"Hedge Subsidiary" means, as of the Effective Date, the
Subsidiaries of the Borrower listed on Schedule XVI hereto and, after
the Effective Date, any other Subsidiary of the Borrower that may from
time to time enter into a Hedge Agreement with a Hedge Bank.
"Information Memorandum" means the information memorandum dated
May 28, 2003 prepared in connection with this Agreement.
"Intercreditor Agreement" means an Intercreditor and Collateral
Agency Agreement dated as of the date hereof duly executed by the Agent
on behalf of the Lender Parties, the Collateral Agent, as defined
therein, and any Lender who is as of such date or thereafter a party to
a Hedge Agreement.
"Interest Expense" of any Person for any period means the
aggregate amount of interest or fees paid, accrued or scheduled to be
paid or accrued in respect of any Debt (including the interest portion
of rentals under Capital Leases) and all but the principal component of
payments in respect of conditional sales, equipment trust or other title
retention agreements paid, accrued or scheduled to be paid or accrued by
such Person during such period, net of interest income, determined in
accordance with generally accepted accounting principles.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date
of such Type of Advance or the date of the Conversion of any Advance
into such Type of an 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 1, 2, 3, 6 or, if
acceptable to the Lenders, 9 or 12 months in the case of a Eurodollar
Rate Advance, in each case as the Borrower may, upon notice received by
the Agent not later than 12:00 noon (New York City time) on the third
Business Day prior to the first day of such Interest Period, select;
provided, however, that:
12
(i) the Borrower may not select any Interest Period
which ends after the Termination Date;
(ii) Interest Periods commencing on the same date for
Advances comprising part of the same 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, in the case of any
Interest Period for a Eurodollar Rate Advance, 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) the Borrower may request in a Notice of
Borrowing an Interest Period of 9 or 12 months for a Eurodollar
Rate Advance and the Interest Period for such Eurodollar Rate
Advance shall be 9 or 12 months, if, and only if, the Agent
determines a Eurodollar Rate for the tenor of such Interest
Period and the Lenders do not notify the Agent pursuant to
Section 2.08(b) hereof that the Eurodollar Rate for such
Interest Period will not adequately reflect the cost to the
Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period; if both of
the preceding conditions are not satisfied with respect to such
requested 9 or 12 month Interest Period, the duration of the
requested Interest Period shall be the alternative specified in
the Notice of Borrowing, or, if no alternative Interest Period
is selected, 6 months.
"Investment" has the meaning specified therefor in Section
7.02(d)(ii) hereof.
"Issue" means, with respect to any Letter of Credit, either to
issue, or to extend the expiry of, or to renew, or to increase the
amount of, such Letter of Credit, and the term "Issued" or "Issuance"
shall have corresponding meanings.
"Issuing Bank" means Citibank, HSBC or Bank of America, N.A., or
any other Lender which agrees to become, and is designated as an Issuing
Bank under Section 2.04(d) hereof or any Affiliate thereof as agreed to
from time to time by the Borrower and such Issuing Bank, that may from
time to time Issue Letters of Credit for the account of the Borrower or
for the account of any LC Subsidiary.
"Issuing Commitment" means, as to any Issuing Bank, the amount
set forth opposite such Issuing Bank's name on Schedule I-A hereto under
the caption Issuing Commitment, as such amount may be reduced or
increased pursuant to Section 2.04 or 3.10 hereof.
"LC Facility" means each three year letter of credit facility
agreement entered into or to be entered into on or about the date of
this Agreement between the Borrower, certain of its Subsidiaries and,
respectively, Bank of America, N.A., Citibank and HSBC, and the letter
of credit agreement proposed to be entered into by the Borrower, certain
of its Subsidiaries and JPMorgan Chase Bank subsequent to the date of
this Agreement, as
13
any such agreement may be replaced, amended, supplemented or otherwise
modified from time to time.
"LC Subsidiary" means, as of the date hereof, the Subsidiaries
of the Borrower listed on Schedule V hereto and, after the date hereof,
any other Subsidiary of the Borrower that may from time to time become a
party hereto (with respect to Letters of Credit only) and in connection
therewith such other Subsidiary shall execute such documents as are
reasonably requested by the Agent to evidence its agreement to be bound
hereunder as an LC Subsidiary, and for whose account an Issuing Bank may
from time to time Issue Letters of Credit.
"Lease Expense" means, with respect to any Person, for any
period for such Person and its subsidiaries on a Consolidated basis,
lease and rental expense accrued during such period under all leases and
rental agreements, other than Capital Leases and leases of personal
property, determined in conformity with generally accepted accounting
principles.
"Lender Party" means any Lender and any Issuing Bank.
"Lenders" means the Lenders listed on the signature pages hereof
as Lenders and as Swing Line Lenders, as the context may require, and
each Eligible Assignee that shall become a party hereto pursuant to
Section 10.07 hereof.
"Letter of Credit" means either a Trade Letter of Credit or a
Standby Letter of Credit which in either case is in form satisfactory to
the respective Issuing Bank, which is at any time Issued by such Issuing
Bank pursuant to Article III, in each case as amended, supplemented or
otherwise modified from time to time.
"Letter of Credit Liability" means, as of any date of
determination, all then existing liabilities of the Borrower and the LC
Subsidiaries to the Issuing Banks in respect of the Letters of Credit
Issued for the Borrower's account and for the account of the LC
Subsidiaries, whether such liability is contingent or fixed, and shall,
in each case, consist of the sum of (i) the aggregate maximum amount
(the determination of such maximum amount to assume compliance with all
conditions for drawing) then available to be drawn under such Letters of
Credit (including, without limitation, amounts available under such
Letters of Credit for which a draft has been presented but not yet
honored) and (ii) the aggregate amount which has then been paid by, and
not been reimbursed to, the Issuing Banks under such Letters of Credit.
For the purposes of determining the Letter of Credit Liability, the face
amount of Letters of Credit outstanding in an Alternative Currency shall
be expressed as the equivalent of such Alternative Currency in Dollars.
"Leverage Ratio" means, as of any date of determination, the
ratio of (a) the amount equal to the sum of (i) Consolidated Funded Debt
and (ii) an amount equal to eight times Lease Expense for the most
recently completed four consecutive Fiscal Quarters ending on or prior
to such date, to (b) the sum of (i) Consolidated EBITDA for the most
recently completed four consecutive Fiscal Quarters ending on or prior
to such
14
date and (ii) Lease Expense for the most recently completed four
consecutive Fiscal Quarters ending on or prior to such date, in each
case for the Borrower and its Subsidiaries as of such date.
"Lien" means any assignment, chattel mortgage, pledge or other
security interest or any mortgage, deed of trust or other lien, or other
charge or encumbrance, upon property or rights (including after-acquired
property or rights), or any preferential arrangement with respect to
property or rights (including after-acquired property or rights) which
has the practical effect of constituting a security interest or lien.
"Loan Documents" means, collectively, this Agreement, any note
delivered pursuant to Section 2.02(a) hereof, the Subsidiary Guaranty,
the Collateral Documents, each application or agreement and other
documents delivered in connection with Letters of Credit pursuant to
Section 3.03 hereof, in each case as amended, supplemented or otherwise
modified hereafter from time to time in accordance with the terms
thereof and Section 8.01 hereof.
"Loan Parties" means, collectively, the Borrower and each of the
Subsidiaries of the Borrower party to any Loan Document.
"Majority Lenders" means the Lenders having at least 51% of the
aggregate "Credit Exposure." For the purposes hereof, "Credit Exposure"
of any Lender shall mean, at any date of determination, the maximum
dollar amount that such Lender could be then required by the terms
hereof (assuming all conditions to Borrowings and Issuances were
satisfied) to expend to (i) purchase participations in Letters of Credit
pursuant to Section 3.05 hereof (including any amounts so expended and
not reimbursed at the date of determination) and (ii) fund Advances
(including any amounts so expended to fund Advances outstanding on the
date of determination).
"Margin Stock" has the meaning assigned to such term in
Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries, taken as a whole;
provided, that a downgrade of the Borrower's public debt ratings or a
Negative Pronouncement shall not by itself be deemed to be a material
adverse change; provided, further, the occurrence or subsistence of any
such material adverse change which has been disclosed (a) by the
Borrower in any filing made with the Securities and Exchange Commission
prior to the date of this Agreement, (b) by the Borrower in a public
announcement prior to the date of this Agreement, or (c) in the
Information Memorandum prior to the date of this of this Agreement,
shall not constitute a Material Adverse Change.
"Material Adverse Effect" means a material adverse effect on the
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
15
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate 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.
"Negative Pronouncement" means a public announcement by either
S&P or Moody's in respect to a possible downgrade of, or negative
outlook with respect to, the public debt rating of the Borrower.
"Net Income" of any Person means, for any period, net income
before (i) extraordinary items, (ii) the results of discontinued
operations and (iii) the effect of any cumulative change in accounting
principles, determined in accordance with generally accepted accounting
principles.
"Notice of Borrowing" has the meaning specified in Section
2.02(a) hereof.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 8.01(e) hereof.
Without limiting the generality of the foregoing, the Obligations of the
Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, commissions, charges, expenses, fees, attorneys'
fees and disbursements, indemnity payments and other amounts payable by
any Loan Party under any Loan Document and (b) the obligation of any
Loan Party to reimburse any amount in respect of any of the foregoing
items that any Lender Party, in its sole discretion, may elect to pay or
advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Operating Indebtedness" means Debt to any Operating Lender
arising under (i) any purchasing card program established to enable
headquarters and field staff of the Borrower or any of its Subsidiaries
to purchase goods and supplies from vendors and (ii) any travel and
entertainment card program established to enable headquarters and field
staff of the Borrower or any of its Subsidiaries to make payments for
expenses incurred related to travel and entertainment, provided, that
the aggregate amount of such Debt shall not exceed $10,000,000 at any
time outstanding.
"Operating Indebtedness Agreement" means the agreement which
governs the terms of the Operating Indebtedness between an Operating
Lender and the Borrower or its respective Subsidiary.
"Operating Lender" means a Lender or an Affiliate thereof which
has extended Operating Indebtedness to the Borrower or one of its
Subsidiaries pursuant to an Operating Indebtedness Agreement and which
has become party to the Intercreditor Agreement in that capacity.
16
"Other Taxes" has the meaning specified in Section 4.02(b)
hereof.
"Payment Office" means the office of the respective Issuing Bank
as shall be from time to time selected by such Issuing Bank and notified
by such Issuing Bank to the Borrower, the LC Subsidiaries, and the
Lenders.
"Performance Level" means Performance Level I, Performance Level
II, Performance Level III, Performance Level IV, Performance Level V, or
Performance Level VI, as identified by reference to the Public Debt
Rating and Leverage Ratio in effect on such date as set forth below:
PERFORMANCE LEVEL PUBLIC DEBT RATING
----------------------- ------------------------------------------------------
Level I Long-Term Senior Unsecured Debt of the Borrower Rated
at least BBB by S&P or Baa2 by Moody's or the Leverage
Ratio is less than or equal to 3.00:1.00
Level II Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level I but at least BBB- by S&P or Baa3 by
Moody's or the Leverage Ratio is less than or equal to
3.25:1.00
Level III Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level II but at least BB+ by S&P or Ba1 by
Moody's or the Leverage Ratio is less than or equal to
3.50:1.00
Level IV Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level III but at least BB by S&P or Ba2 by
Moody's or the Leverage Ratio is less than or equal to
3.75:1.00
Level V Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level IV but at least BB- by S&P or Ba3 by
Moody's or the Leverage Ratio is less than or equal to
4.00:1.00
Level VI Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level V or the Leverage Ratio is greater
than 4.00:1.00
For purposes of this definition, the Performance Level shall be determined by
the applicable public debt rating or Leverage Ratio as follows: (a) the public
debt ratings above shall be determined as follows: (i) the public debt ratings
shall be determined by the then-current rating announced by either S&P or
Moody's, as the case may be, for any class of non-credit-enhanced long-term
senior unsecured debt issued by the Borrower, (ii) if only one of S&P and
Moody's
17
shall have in effect a public debt rating, the Performance Level shall be
determined by reference to the available rating; (iii) if neither S&P nor
Moody's shall have in effect a public debt rating, the applicable Performance
Level will be Performance Level VI; (iv) if the ratings on the Borrower's
long-term senior unsecured debt established by S&P and Moody's shall fall within
different levels, the public debt rating will be determined by the higher of the
two ratings, provided, that, in the event that the lower of such ratings is more
than one level below the higher of such ratings, the public debt rating will be
determined based upon the level that is one level above the lower of such
ratings; (v) if any rating established by S&P or Moody's shall be changed, such
change shall be effective as of the date on which such change is first announced
publicly by the rating agency making such change; and (vi) if S&P or Moody's
shall change the basis on which ratings are established, each reference to the
public debt rating announced by S&P or Moody's, as the case may be, shall refer
to the then equivalent rating by S&P or Moody's, as the case may be; (b) the
Leverage Ratio shall be determined on the basis of the most recent certificate
of the Borrower with respect to the financial statements to be delivered
pursuant to, as applicable, Section 7.04(i) or (iii) hereof for the most
recently ended Fiscal Quarter and any change in the Leverage Ratio shall be
effective one Business Day after the date on which the Agent receives such
certificate; provided, that until the Borrower has delivered to the Agent such
certificate pursuant to Section 7.04(i) hereof in respect of the second Fiscal
Quarter of 2003, the Leverage Ratio shall be deemed to be at Level IV; provided,
further, that for so long as the Borrower has not delivered such certificate
when due pursuant to Section 7.04(i) or (iii) hereof, as the case may be, the
Leverage Ratio shall be deemed to be at Level VI until the respective
certificate is delivered to the Agent; and (c) the Performance Level shall be
determined in accordance with the Borrower's respective public debt rating and
Leverage Ratio, provided, that, if the Borrower's public debt rating and the
Leverage Ratio shall fall within different levels, the Performance Level will be
determined by the higher of the public debt rating and the Leverage Ratio,
provided, further, that, in the event that the lower of the Borrower's public
debt rating and the Leverage Ratio is more than one level below the higher of
the Borrower's public debt rating and the Leverage Ratio, the Performance Level
shall be determined based upon the level that is one level above the lower of
the Borrower's public debt rating and the Leverage Ratio.
"Permitted Lien" means:
(i) Liens for taxes, assessments or governmental charges or
levies to the extent not past due or to the extent contested, in good
faith, by appropriate proceedings and for which adequate reserves have
been established;
(ii) Liens imposed by law, such as materialman's, mechanic's,
carrier's, worker's, landlord's and repairman's Liens and other similar
Liens arising in the ordinary course of business which relate to
obligations which are not overdue for a period of more than 30 days or
which are being contested in good faith, by appropriate proceedings and
for which reserves required by generally accepted accounting principles
have been established;
(iii) pledges or deposits in the ordinary course of business
to secure obligations under worker's compensation or unemployment laws
or similar legislation or to secure the performance of leases or
contracts (including insurance contracts issued by insurance
18
companies which are Subsidiaries of the Borrower) entered into in the
ordinary course of business or of public or statutory obligations, bids,
or appeal bonds;
(iv) zoning restrictions, easements, licenses, landlord's
Liens or restrictions on the use of property which do not materially
impair the use of such property in the operation of the business of the
Borrower or any of its Subsidiaries;
(v) Liens upon assets subject to a Capital Lease and
securing payment of the obligations arising under such Capital Lease;
(vi) Liens of the Borrower and its Subsidiaries not described
in the foregoing clauses (i) through (v) existing on the Effective Date
and listed on Schedule II hereto and any extensions, renewals or
replacements of such Liens for the same or lesser amount, provided,
that, no such extension, renewal or replacement shall extend to or cover
any property not theretofore subject to the Lien being extended, renewed
or replaced;
(vii) judgment Liens in respect of judgments that do not
constitute an Event of Default under Section 8.01(f) hereof; and
(viii) Liens arising out of or pursuant to this Agreement or
any Collateral Document.
"Person" means an individual, partnership, limited liability
company, corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained by the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate for its employees and subject to Title
IV of ERISA.
"RCRA" means the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. Section 6901 et seq.), and any regulations
promulgated thereunder.
"Recipient" has the meaning specified in Section 10.10 hereof.
"Reference Banks" means Citibank, JPMorgan Chase Bank, HSBC and
Bank of America, N.A.
"Responsible Officer" means, with respect to any certificate,
report or notice to be delivered or given hereunder, unless the context
otherwise requires, the president, chief executive officer, chief
financial officer or treasurer of the Borrower or other executive
officer of the Borrower who in the normal performance of his or her
operational duties would have knowledge of the subject matter relating
to such certificate, report or notice.
"Register" has the meaning specified in Section 10.07(c) hereof.
"Requirements of Law" means, with respect to any Person, all
laws, constitutions, statutes, treaties, ordinances, rules and
regulations, all orders, writs, decrees, injunctions,
19
judgments, determinations and awards of an arbitrator, a court or any
other Governmental Authority, and all Governmental Authorizations,
binding upon or applicable to such Person or to any of its properties,
assets or businesses.
"Retail Assets" means property (tangible and intangible) that is
used, sold or consumed in a Retail Business.
"Retail Business" means, with respect to any Person, that such
Person is engaged in the business of manufacturing, producing,
supplying, distributing or selling apparel, home furnishings,
accessories, specialty foods and related products or goods.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Secured Obligations" has the meaning specified in Section 2 of
the Security Agreement.
"Secured Parties" means, collectively, the Agent, the Lender
Parties, and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms of the
Collateral Documents.
"Securities Act" means the Securities Act of 1933, as amended,
and the regulations promulgated and the rulings issued thereunder.
"Security Agreement" has the meaning specified in Section
5.01(b) hereof.
"Solvent" and "Solvency" mean, with respect to any Person on any
date of determination, that on such date (a) the fair value of the
property and assets of such Person is greater than the total amount of
liabilities (including, without limitation, contingent liabilities), of
such Person, (b) the present fair salable value of the property and
assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such
Person is not engaged in business or in a transaction, and is not about
to engage in business or in a transaction, for which such Person's
property and assets would constitute an unreasonably small capital. The
amount of contingent liabilities of any such Person at any time shall be
computed as the amount that, in the light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Special Purpose Subsidiary" means a Domestic Subsidiary of the
Borrower that holds certain trademarks and service marks and
Subsidiaries thereof. Special Purpose Subsidiaries as of the Effective
Date are listed on Schedule IX hereto.
"Standby Letter of Credit" means a letter of credit or other
credit support instrument issued for the benefit of a Person party to a
contractual arrangement with the
20
Borrower or any of its Subsidiaries as credit support for the
obligations of the Borrower or such Subsidiary thereunder.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, trust or other Person of which more than 50% of the
outstanding capital stock (or similar property right in the case of
partnerships and trusts and other Persons) having ordinary voting power
to elect a majority of the board of directors of such corporation (or
similar governing body or Person with respect to partnerships and trusts
and other Persons) (irrespective of whether or not 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) is at the time
directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person.
"Subsidiary Borrower" means, as of the date hereof, the
Subsidiaries of the Borrower listed on Schedule VI and, after the date
hereof, any other Subsidiary of the Borrower that may from time to time
become a party hereto (with respect to Swing Line Advances only) and in
connection therewith such other Subsidiary shall execute such documents
as are reasonably requested by the Agent to evidence its agreement to be
bound hereunder as a Subsidiary Borrower, and to whom the Swing Line
Lenders may from time to time make Swing Line Advances.
"Subsidiary Guaranty" has the meaning specified in Section
5.01(b) hereof.
"Subsidiary Swing Line Obligations" has the meaning specified in
Section 2.13(b) hereof.
"Subsidiary LC Obligations" has the meaning specified in Section
3.13(b) hereof.
"Swing Line Advance" means an advance made by a Swing Line
Lender pursuant to Section 2.01(b) hereof.
"Swing Line Lender" means each Lender designated as such on the
signature pages hereto and each other Lender which agrees from time to
time to act as a Swing Line Lender.
"Swing Line Commitment" means $3,000,000 on the Effective Date,
as such amount may be increased or reduced from time to time pursuant to
Section 2.04(b) hereof, provided, that the Swing Line Commitment may not
be more than $75,000,000 (or its equivalent in the respective
Alternative Currencies).
"Taxes" has the meaning specified in Section 4.02(a) hereof.
"Termination Date" means June 24, 2006, or the earlier date of
termination in whole of the Commitments pursuant to Section 2.04(a) or
8.01 hereof.
"Total Assets" of any Person means all property, whether real,
personal, tangible, intangible or otherwise, which, in accordance with
generally accepted accounting
21
principles, should be included in determining total assets as shown on
the assets portion of a balance sheet of such Person.
"Trade Letter of Credit" means a direct-pay trade or documentary
letter of credit issued for the benefit of a vendor in connection with
the purchase of goods by the Borrower or any of its Subsidiaries in the
ordinary course of business.
"Type" refers to the distinction among Advances bearing interest
at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"UCP" has the meaning specified in Section 3.09 hereof.
"Withdrawal Liability" has the meaning specified 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 means "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 6.01(e) hereof.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Advances. (a) Each Lender severally agrees, on
the terms and conditions hereinafter set forth, to make Advances to the Borrower
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Commitment, provided, that, the Lenders shall not be
obligated to, and shall not, make any Advances as part of a Borrowing if after
giving effect to such Borrowing, the sum of the then outstanding aggregate
amount of all Borrowings, the aggregate Swing Line Commitment then in effect
(computed without giving regard to usage), the then outstanding Hedge Agreements
Exposure and the then outstanding aggregate amount of all Letter of Credit
Liability shall exceed the aggregate amount of the Commitments in effect from
time to time. Each Borrowing shall be in an aggregate amount not less than (A)
$10,000,000, in the case of a Borrowing consisting of Eurodollar Rate Advances
and (B) $1,000,000, in the case of a Borrowing consisting of Base Rate Advances,
or, in each case, in integral multiples of $1,000,000 in excess thereof and
shall consist of 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 from time to time borrow, prepay pursuant
to Section 2.10 hereof and reborrow under this Section 2.01.
(b) The Swing Line Advances. A Subsidiary Borrower may
request the respective Swing Line Lender to make, and such Swing Line
Lender shall on the terms and conditions hereinafter set forth, make
Swing Line Advances in Dollars or the
22
respective Alternative Currency to such Subsidiary Borrower from time to
time on any Business Day during the period from the Effective Date until
the Termination Date in an amount, when combined with all Swing Line
Advances of all Swing Line Lenders, not to exceed the lesser of (i) the
Swing Line Commitment then in effect and (ii) such Swing Line Lender's
Commitment. Each Swing Line Advance shall be in an amount of $100,000
(or its equivalent in the respective Alternative Currency) or an
integral multiple thereof and shall bear interest at a rate to be agreed
on by the respective Subsidiary Borrower and the respective Swing Line
Lender. Within the limits of the first sentence of this Section 2.01(b),
the respective Subsidiary Borrower may borrow under this Section
2.01(b), repay pursuant to Section 2.05(b) hereof, prepay pursuant to
Section 2.10(b) hereof and reborrow under this Section 2.01(b).
SECTION 2.02 Making the Advances. (a) Each Borrowing shall be
made on notice given not later than (i) 12:00 noon (New York City time) on the
third Business Day prior to the date of the proposed Borrowing, if such proposed
Borrowing consists of Eurodollar Rate Advances and (ii) 10:00 A.M. (New York
City time) on the day of such proposed Borrowing, if such proposed Borrowing
consists of Base Rate Advances, by the Borrower to the Agent, which shall give
to each Lender prompt notice thereof by telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telecopier or telephone (and if
by telephone, confirmed immediately in writing), in substantially the form of
Exhibit A hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing and (iv) in the case of a Borrowing comprised of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Lender shall,
before 2:00 p.m. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 10.02 hereof, in same day funds, such Lender's
ratable portion of such Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article V, the Agent
will make such funds available to the Borrower at the Agent's aforesaid address.
(b) (i) Each Swing Line Advance shall be made on such
notice and on such terms (subject to the provisions of Section 2.05(b)
hereof) as are agreed to from time to time between the respective
Subsidiary Borrower and the respective Swing Line Lender. Upon
fulfillment of the applicable conditions set forth in Article V, the
respective Swing Line Lender will make such funds available to the
respective Subsidiary Borrower. No later than 30 days after the end of
each calendar quarter, each Swing Line Lender shall deliver to the Agent
a report as to the outstanding amount of Swing Line Advances by such
Swing Line Lender as of the end of such quarter and the identity of the
respective Subsidiary Borrower. In addition, each Swing Line Lender will
provide such information as to the Swing Line Advances made by such
Swing Line Lender as is requested by the Agent from time to time.
(ii) Upon demand by the respective Swing Line Lender,
with a copy of such demand to the Agent (which shall give prompt
notice thereof to each Lender), each Lender shall purchase from
such Swing Line Lender, and such Swing Line Lender shall sell
and assign to each such Lender, such Lender's ratable share (as
determined by reference to such Lender's Commitment Percentage)
of any outstanding Swing Line Advance by such Swing Line Lender
23
as of the date of such demand, by making available to the
respective Swing Line Lender, an amount equal to such ratable
share. If such Swing Line Advance is denominated in an
Alternative Currency, the payment to be made by the Lenders
pursuant to the preceding sentence shall be Converted into
Dollars by the Swing Line Lender at a rate determined by such
Swing Line Lender as provided in Section 3.12(a) hereof. Each
Lender hereby agrees to purchase its ratable share of an
outstanding Swing Line Advance on (A) the Business Day on which
demand therefor is made by the respective Swing Line Lender so
long as notice of such demand is given not later than one
Business Day prior to such Business Day or (B) the first
Business Day next succeeding such demand if notice of such
demand is given after such time. The respective Subsidiary
Borrower, hereby agrees to each such sale and assignment. Upon
any such assignment by the respective Swing Line Lender to any
Lender of a portion of a Swing Line Advance, the respective
Swing Line Lender represents and warrants to such Lender that
such Swing Line Lender is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation
or warranty and assumes no responsibility with respect to such
Swing Line Advance, the Loan Documents or any Loan Party. If and
to the extent that any Lender shall not have so made its ratable
share of any applicable Swing Line Advance available to the
respective Swing Line Lender in accordance with the foregoing
provisions of this Section 2.02(b)(ii), such Lender hereby
agrees to pay to the respective Swing Line Lender forthwith on
demand the amount of its ratable share, together with interest
thereon, for each day from the date of demand by such Swing Line
Lender therefor until the date such amount is paid to such Swing
Line Lender, at the Federal Funds Rate. If such Lender shall pay
to such Swing Line Lender the amount of its ratable share on any
Business Day, such amount so paid in respect of principal shall
constitute a Swing Line Advance made by such Lender on such
Business Day for all purposes of this Agreement, and the
outstanding principal amount of the Swing Line Advance made by
the respective Swing Line Lender shall be reduced by such amount
on such Business Day.
(iii) The obligation of each Lender to purchase its
ratable share of each outstanding Swing Line Advance upon demand
by the respective Swing Line Lender therefor pursuant to clause
(ii) of this Section 2.02(b) shall be absolute, unconditional
and irrevocable, and shall be made strictly in accordance with
the terms of clause (ii) of this Section 2.02(b) under all
circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any
Loan Document or any other agreement or instrument relating
thereto;
(B) the existence of any claim, set-off, defense or
other right that such Lender may have at any time against the
respective Swing Line Lender, the respective Subsidiary Borrower
or any other Person, whether in connection with the transactions
contemplated by the Loan Documents or any unrelated transaction;
24
(C) the occurrence and continuance of any Default or
Event of Default;
(D) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(E) the failure of the respective Subsidiary
Borrower to comply with the applicable conditions set forth in
Article V.
(c) Anything in subsection (a) above to the contrary
notwithstanding, the Borrower may not select Eurodollar Rate Advances
for any Borrowing if the aggregate amount of such Borrowing is less than
$1,000,000 multiplied by the number of Lenders.
(d) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower or the respective Subsidiary Borrower, as the
case may be. In the case of any Borrowing which the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing
the applicable conditions set forth in Article V, including, without
limitation, 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 Advance, as a result of such failure, is not made on such date.
(e) Unless the Agent shall have received notice from a
Lender (i) in the case of any Borrowing consisting of (A) Eurodollar
Rate Advances or (B) Base Rate Advances for which the Notice of
Borrowing is given other than on the date thereof, prior to the date of
such Borrowing or (ii) in the case of any Borrowing consisting of Base
Rate Advances for which the Notice of Borrowing is given on the date
thereof, prior to the time at which such Lender is required to fund such
Borrowing, which notice shall in either case state that such Lender will
not make available to the Agent such Lender's ratable portion of such
Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon
such assumption, make available to the Borrower or the respective
Subsidiary Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and the Borrower or the respective
Subsidiary Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Borrower or
the respective Subsidiary Borrower until the date such amount is repaid
to the Agent at (x) in the case of the Borrower or the respective
Subsidiary Borrower, the interest rate applicable at the time to
Advances comprising such Borrowing and (y) in the case of such Lender,
the Federal Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this
Agreement.
25
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, 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 the
date of any Borrowing.
(g) The Borrower shall, if requested by any Lender, execute
and deliver a promissory note, in substantially the form of Exhibit B
hereto, payable to the order of such Lender in an original principal
amount equal to such Lender's Commitment, duly executed by the Borrower.
SECTION 2.03 Fees. (a) Facility Fee. The Borrower agrees to pay
to the Agent for the account of each Lender a facility fee, from the date hereof
in the case of each initial Lender and from the effective date specified in the
Assumption Agreement or in the Assignment and Acceptance, respectively, pursuant
to which it became Lender in the case of each other Lender until the Termination
Date at a rate per annum equal to the Applicable Facility Fee in effect from
time to time, (i) on the amount of such Lender's Commitment (computed without
giving effect to any usage of the Commitment of such Lender), payable quarterly
in arrears on the last day of each January, April, July and October and on the
Termination Date; and (ii) on the aggregate amount of Letter of Credit Liability
under all Letters of Credit that are outstanding beyond the Termination Date
(regardless of the actual or deemed usage thereof) payable in arrears on the
last day of each January, April, July and October after the Termination Date and
on the first day after the Termination Date on which no Letters of Credit are
outstanding.
(b) Utilization Fee. The Borrower agrees to pay to the Agent
for the account of each Lender a utilization fee, accruing, during all
periods from and after the date hereof when the aggregate amount of
outstanding Advances (including any outstanding Swing Line Advances)
exceeds 25% of the aggregate Commitments (without regard to any usage
thereof), at the rate of 0.25% per annum on the aggregate amount of
Advances (including any Swing Line Advances) by such Lender outstanding
from time to time during such periods, payable quarterly in arrears on
the last day of each January, April, July and October and on the
Termination Date.
(c) Other Fees. The Borrower hereby agrees to pay the fees
and charges referred to in that certain letter agreement, dated as of
the date hereof, among the Borrower, the Issuing Banks and the Agent.
SECTION 2.04 Reduction and Increase of the Commitments;
Reduction and Increase of the Swing Line Commitment; Additional Issuing Banks.
(a) The Borrower shall have the right, upon at least three Business Days' notice
to the Agent, to irrevocably terminate in whole or reduce ratably in part the
unused portions of the respective Commitments of the Lenders, provided, that,
after giving effect to such reduction, the Commitments are not less than the sum
of the aggregate amount of all Letter of Credit Liability, the aggregate Swing
Line Commitment then in effect (computed without giving regard to usage), and
the then outstanding amount of all Borrowings; provided, further, that, each
partial reduction shall be in the aggregate amount of $25,000,000 or an integral
multiple of $1,000,000 in excess thereof.
26
(b) Not more frequently than four times in any calendar year
starting on the Effective Date, the Borrower shall have the right, upon
at least three Business Days' notice to the Agent and the Swing Line
Lenders to reduce in whole or in part the unused portion of the Swing
Line Commitment or increase the amount of the Swing Line Commitment;
provided, that, after giving effect to any such reduction, the Swing
Line Commitment is not less than the outstanding amount of all Swing
Line Advances; provided, further, that, each partial reduction or
increase shall be in the amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof (or, in each case, the equivalent amount in
the respective Alternative Currency), provided, further, that, the Swing
Line Commitment, after giving effect to any increase thereof proposed
herein, shall not exceed $75,000,000 and, together with the then
outstanding aggregate amount of all Borrowings, the then outstanding
Hedge Agreements Exposure and the then outstanding aggregate amount of
all Letter of Credit Liability, shall not exceed the aggregate amount of
the Commitments in effect from time to time and at the time of any
proposed increase in the Swing Line Commitment and after giving effect
thereto, no event has occurred and is continuing which constitutes an
Event of Default or Default and, provided, further, that, the Agent
shall record any such increase or decrease in the Swing Line Commitment
in the Register.
(c) Not more frequently than twice in any calendar year, the
Borrower shall have the right prior to the Termination Date to (i)
increase the amount of the Commitments of one or more Lenders (subject
to the consent of such Lenders in their sole and absolute discretion),
(ii) add one or more Assuming Lenders as Lenders (subject to the consent
of the Agent and the Issuing Banks in their sole and absolute
discretion) and (iii) increase the Issuing Commitment of an Issuing Bank
(subject to the consent of such Issuing Bank in its sole and absolute
discretion) (each such increase under clause (i), (ii) or (iii) being a
"Commitment Increase"), on and subject to the following terms:
(i) The aggregate amount of the increase in the
Commitments shall not exceed $100,000,000 after the date hereof;
(ii) The amount of each Commitment Increase by any
Lender or any Assuming Lender shall be in a minimum amount of
$25,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(iii) No proposed Commitment Increase shall occur
unless each of the following requirements in respect thereof
shall have been satisfied:
(A) The Agent shall have received from the Borrower
an irrevocable written notice (a "Commitment Increase Notice"),
dated not earlier than 60 days before the proposed Commitment
Increase Effective Date (as defined below) therefor and not
later than 30 days (or such shorter period agreed to by the
Agent) before such proposed Commitment Increase Effective Date,
that (1) specifies (w) (if applicable) the proposed Issuing
Commitment increase of each Issuing Bank and/or of the Lenders
which are to become Issuing Banks and the amount of each Issuing
Bank's Issuing Commitment after giving effect thereto, (x) the
aggregate amount of the proposed Commitment Increase, (y) the
Lenders whose
27
Commitments are to be increased by the proposed Commitment
Increase and/or the Assuming Lenders which are to become Lenders
and the amount by which each such Lender's Commitment is to be
so increased and/or the amount of each such Assuming Lender's
Commitment and (z) the date (the "Commitment Increase Effective
Date") on which the proposed Commitment Increase shall become
effective, and (2) has been signed by each Lender whose
Commitment is to be increased, evidencing the consent of such
Lender to the proposed Commitment Increase and each Issuing Bank
whose Issuing Commitment is to be increased evidencing the
consent of such Issuing Bank thereto and/or by each such
Assuming Lender; and
(B) On and as of the Commitment Increase Effective
Date of the proposed Commitment Increase (1) the following
statements shall be true (and the giving of the applicable
Commitment Increase Notice shall constitute a representation and
warranty by the Borrower that on such Commitment Increase
Effective Date such statements are true):
(x) The representations and warranties
contained in Section 6.01 hereof are correct on and as
of such Commitment Increase Effective Date before and
after giving effect to the proposed Commitment Increase,
as though made on and as of such date; and
(y) No event has occurred and is continuing,
or would result from such Commitment Increase, which
constitutes an Event of Default or Default; and
(z) the Agent shall have received such other
approvals, opinions or documents as the Agent may
reasonably request.
(iv) Promptly following its receipt of a Commitment
Increase Notice in proper form, the Agent shall deliver copies
thereof to each Lender and Issuing Bank. If, and only if, all of
the terms, conditions and requirements specified in paragraphs
(i) through (iv) are satisfied in respect of any proposed
Commitment Increase on and as of the proposed Commitment
Increase Effective Date thereof and in the case of each such
Assuming Lender, an Assumption Agreement, duly executed by such
Assuming Lender, the Agent and the Borrower, has been received
by the Agent, then, as of such Commitment Increase Effective
Date and from and after such date, (1) the Commitments of the
Lenders consenting to such Commitment Increase shall be
increased by the respective amounts specified in the Commitment
Increase Notice pertaining thereto, (2) references herein to the
amounts of the Lenders' respective Commitments shall refer to
respective amounts giving effect to such Commitment Increase,
and (3) each such Assuming Lender shall be a Lender and Issuing
Bank, if applicable, for all purposes hereof, and the Agent
shall record all relevant information with respect to such
Assuming Lender and its Commitment and, if applicable, with
respect to any increased Issuing Commitment of an Issuing Bank
in the Register;
28
(v) It is understood that no Lender or Issuing Bank
shall have any obligation whatsoever to agree to any request
made by the Borrower for a Commitment Increase;
(vi) As part of such Commitment Increase, such Lender
or Assuming Lender shall purchase assignments in the Advances
and Commitments of the other Lenders so that after giving effect
thereto, the percentage held by each Lender of the aggregate
Commitments is the same as prior to such Commitment Increase and
such Lender or Assuming Lender shall have acquired a ratable
participation in all Swing Line Advances as contemplated by
Section 2.02(b) hereof. In connection therewith, on each
Commitment Increase Effective Date, (A) each Lender whose
Commitment has been increased (each such Lender being an
"Increasing Lender") shall, before 2:00 p.m. (New York City
time) on such Commitment Increase Effective Date, make available
for the account of its Applicable Lending Office to the Agent at
the address specified in Section 10.02 hereof, in same day
funds, an amount equal to the excess of (1) such Increasing
Lender's ratable portion of the Advances then outstanding
(calculated based on its Commitment as a percentage of the
aggregate Commitments of the Lenders (including each such
Assuming Lender) outstanding after giving effect to the relevant
Commitment Increase) over (2) the aggregate principal amount of
then outstanding Advances made by such Increasing Lender and (B)
each such Assuming Lender shall before 2:00 p.m. (New York City
time) on such Commitment Increase Effective Date, make available
for the account of its Applicable Lending Office to the Agent at
the address specified in Section 10.02 hereof in same day funds,
an amount equal to such Assuming Lender's ratable portion of the
Advances then outstanding (calculated based on its Commitment as
a percentage of the aggregate Commitments of the Lenders
(including each such Assuming Lender) outstanding after giving
effect to the relevant Commitment Increase); and
(vii) After the Agent's receipt of such funds from
each such Increasing Lender and such Assuming Lender, the Agent
will promptly thereafter cause to be distributed like funds to
the other Lenders for the account of their respective Applicable
Lending Offices in an amount to each other Lender such that the
aggregate amount of the outstanding Advances owing to each
Lender (including each such Assuming Lender) after giving effect
to such distribution equals such Lender's ratable portion of the
Advances then outstanding (calculated based on its Commitment as
a percentage of the aggregate Commitments of the Lenders
outstanding after giving effect to the relevant Commitment
Increase).
(d) The Borrower may at any time, upon at least five
Business Days' prior written notice to the Agent and the Lenders or as
part of a proposed Commitment Increase pursuant to this Section 2.04,
designate (i) as an Issuing Bank any Lender that has agreed in writing
to act as an Issuing Bank and (ii) the Issuing Commitment of such
Lender. Thereupon, any Lender so designated as an Issuing Bank shall
thenceforth issue Letters of Credit on the terms and subject to the
conditions herein, and the Agent shall
29
record all relevant information with respect to such Lender as such
Issuing Bank in the Register.
SECTION 2.05 Repayment of Advances. (a) The Borrower shall repay
in full the principal amount of each Advance made pursuant to Section 2.01(a)
hereof owing to each Lender, together with accrued interest and fees thereon, on
the Termination Date.
(b) Swing Line Advances. The respective Subsidiary Borrower
shall repay the respective Swing Line Lender and each Lender that has
made a Swing Line Advance on the earlier of (i) the maturity date for
each Swing Line Advance (which maturity shall be no later than 30 days
after the date of such Advance) and (ii) the Termination Date, the
principal amount of each such Swing Line Advance made by the Swing Line
Lender and each such Lender and outstanding on such date.
SECTION 2.06 Interest on Advances. The Borrower or the
respective Subsidiary Borrower, as the case may be, shall pay interest on the
unpaid principal amount of each Advance made by each Lender from the date of
such Advance until such principal amount shall be paid in full, at the following
rates per annum:
(a) Base Rate Advances. If such 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 respective Applicable
Margin in effect from time to time, payable quarterly on the last day of
each April, July, October, and January and on the date such Base Rate
Advance shall be Converted or paid in full; provided, that, any amount
of principal which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which
such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance immediately prior to the
date on which such principal amount become due.
(b) Eurodollar Rate Advances. If such 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 respective Applicable Margin in
effect from time to time, payable on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day which occurs during such Interest Period every three
months from the first day of such Interest Period; provided, that, any
amount of principal which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance (as
if such Advance were a Base Rate Advance) immediately prior to the date
on which such principal amount became due.
(c) Swing Line Advances. If such Advance is a Swing Line
Advance, a rate per annum as agreed upon by the respective Swing Line
Lender and respective Subsidiary Borrower.
30
SECTION 2.07 Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Lender, from the date of such
Advance until such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. Such
additional interest shall be determined by such Lender and notified to the
Borrower through the Agent.
SECTION 2.08 Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Agent timely information for the purpose of
determining the Eurodollar Rate. If any one or more of the Reference Banks shall
not furnish such timely information to the Agent for the purpose of determining
such interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks. The Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Agent for purposes of Section 2.06(a) or (b) hereof, and
the applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section 2.06(b) hereof.
(b) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost
to such Majority Lenders of making, funding or maintaining their
respective Eurodollar Rate Advances for such Interest Period, the Agent
shall forthwith so notify the Borrower and the Lenders, whereupon:
(i) each outstanding 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 Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist.
(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 hereof, the 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.
(d) On the date on which the aggregate unpaid principal
amount of Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $1,000,000 multiplied by the
number of Lenders, such Advances shall, if they are Advances of a Type
other than Base Rate Advances, automatically Convert on the
31
last day of the Interest Period with respect to such Advance into Base
Rate Advances, and on and after such date the right of the Borrower to
Convert such Advances into Advances of a Type other than Base Rate
Advances shall terminate; provided, however, that if and so long as each
such Advance shall be of the same Type and have the same Interest Period
as Advances comprising another Borrowing or other Borrowings, and the
aggregate unpaid principal amount of all such Advances shall equal or
exceed $1,000,000 multiplied by the number of Lenders, the Borrower
shall have the right to continue all such Advances as, or to Convert all
such Advances into, Advances of such Type having such Interest Period.
(e) Upon the occurrence and during the continuance of any
Event of Default, (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 obligations of the Lenders to
make, or to convert Advances into, Eurodollar Rate Advances will be
suspended.
(f) If fewer than two Reference Banks furnish timely
information to the Agent for determining the Eurodollar Rate for any
Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower
and the Lenders that the interest rate cannot be determined for
such Eurodollar Rate Advances,
(ii) 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
(iii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist.
SECTION 2.09 Voluntary Conversion of Advances. The Borrower may
on any Business Day, upon notice given to the Agent not later than 12:00 noon
(New York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.08 and 2.12 hereof,
Convert all Advances of one Type comprising the same Borrowing into Advances of
another Type; provided, however, that any Conversion of any Eurodollar Rate
Advances into Advances of another Type shall be made on, and only on, the last
day of an Interest Period for such Eurodollar Rate Advances. Each such notice of
a Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the Interest Period
for each such Advance.
SECTION 2.10 Prepayments of Advances.
(a) The Borrower may (i) upon at least two Business Days',
in the case of Eurodollar Rate Advances and (ii) on the same Business
Day, in the case of Base Rate Advances, notice to the Agent (to be
received by the Agent prior to 12:00 noon (New
32
York City time)) stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amounts of the Advances
comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
principal amount prepaid (provided that any prepayment in connection
with the termination and refinancing of this Agreement may be
conditioned on the closing of such refinancing); provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount
not less than $10,000,000 if made with respect to Eurodollar Rate
Advances, or $1,000,000, if made with respect to Base Rate Advances, and
in each case in $1,000,000 integral multiples in excess thereof and (y)
in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof
pursuant to Section 10.04(b) hereof.
(b) The right of any Subsidiary Borrower to prepay any Swing
Line Advance shall be as set forth in an agreement between the
respective Swing Line Lender and the respective Subsidiary Borrower.
SECTION 2.11 Increased Costs. (a) If, due to either (i) the
introduction of or any change at any time after the date of this Agreement
(other than any change by way of imposition or increase of reserve requirements
in the case of Eurodollar Rate Advances, included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance after the date of this Agreement 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 (other than an increase
in taxes, which increase is dealt with exclusively in Article IV) 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 Agent), pay to the Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost; provided, that, the Borrower shall have no obligation to
reimburse any Lender for increased costs incurred more than 60 days prior to the
date of such demand. A certificate as to the amount of such increased cost
setting forth the basis for the calculation of such increased costs, submitted
to the Borrower and the Agent by such Lender, shall be conclusive and binding
for all purposes, absent manifest error.
(b) If, at any time after the date of this Agreement, any
Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender and that the
amount of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other commitments of this
type, then, upon demand by such Lender (with a copy of such demand to
the Agent), the Borrower shall immediately pay to the Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such
corporation 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; provided,
that, the Borrower shall have no obligation to pay such compensatory
amounts
33
that relate to an actual increase in the capital of such Lender
undertaken by such Lender more than 60 days prior to the date of such
demand. A certificate as to such amounts submitted to the Borrower and
the Agent by such Lender and setting forth the basis for the calculation
of such amount shall be conclusive and binding for all purposes, absent
manifest error.
(c) Without affecting its rights under Sections 2.11(a) or
2.11(b) hereof or any other provision of this Agreement, each Lender
agrees that if there is any increase in any cost to or reduction in any
amount receivable by such Lender with respect to which the Borrower
would be obligated to compensate such Lender pursuant to Sections
2.11(a) or 2.11(b) hereof, such Lender shall use reasonable efforts to
select an alternative Applicable Lending Office which would not result
in any such increase in any cost to or reduction in any amount
receivable by such Lender; provided, however, that no Lender shall be
obligated to select an alternative Applicable Lending Office if such
Lender determines that (i) as a result of such selection such Lender
would be in violation of any applicable law, regulation, treaty, or
guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or inconsistent
with the interests of such Lender.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.11 shall survive the payment in
full (after the Termination Date) of all Obligations.
SECTION 2.12 Illegality. (a) Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Agent that the introduction of
or any change in or in the interpretation of any law or regulation makes it
unlawful or impossible, or any central bank or other governmental authority
asserts that it is unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate Advances or to fund or
maintain Eurodollar Rate Advances hereunder, (i) the obligation of the Lenders
to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of notice from the Agent, Converts all Eurodollar Rate
Advances of all Lenders then outstanding into Advances of another Type in
accordance with Section 2.09 hereof.
(b) Without affecting its rights under Section 2.12(a)
hereof or under any other provision of this Agreement, each Lender
agrees that if it becomes unlawful or impossible for such Lender to
make, maintain or fund its Eurodollar Rate Advances as contemplated by
this Agreement, such Lender shall use reasonable efforts to select an
alternative Applicable Lending Office from which such Lender may
maintain and give effect to its obligations under this Agreement with
respect to making, funding and maintaining such Eurodollar Rate
Advances; provided, however, that no Lender shall be obligated to select
an alternative Applicable Lending Office if such Lender determines that
(i) as a result of such selection such Lender would be in violation of
any applicable law, regulation, or treaty, or would incur additional
costs or expenses or (ii) such
34
selection would be inadvisable for regulatory reasons or inconsistent
with the interests of such Lender.
SECTION 2.13 Borrower Guaranty.
(a) Generally. The Swing Line Lenders may, from time to
time, make Swing Line Advances for the account of each Subsidiary
Borrower as provided herein, the Hedge Banks may, from time to time,
enter into Hedge Agreements with one or more Hedge Subsidiaries and the
Operating Lenders now have and hereafter may, from time to time, extend
Operating Indebtedness to one or more Subsidiaries of the Borrower,
provided, that, the repayment and other obligations of each such
Subsidiary Borrower in respect of such Swing Line Advances and each
Hedge Subsidiary in respect of such Hedge Agreements and of each such
Subsidiary in respect of Operating Indebtedness are and remain
unconditionally guaranteed by the Borrower pursuant to this Section
2.13.
(b) Guaranty.
(i) The Borrower hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at
stated maturity, by acceleration or otherwise, of all
obligations of the Subsidiary Borrowers now or hereafter
existing under this Agreement with respect to the Swing Line
Advances issued for the account of any of the Subsidiary
Borrowers, including any extensions, modifications,
substitutions, amendments and renewals thereof, whether for
repayment obligations, interest, fees, expenses or otherwise
(such obligations being the "Subsidiary Swing Line
Obligations"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses in accordance with Section
10.04 hereof) incurred by the Swing Line Lenders or the Lenders
in enforcing any rights hereunder with respect to the Subsidiary
Swing Line Obligations. Without limiting the generality of the
foregoing, the Borrower's liability shall extend to all amounts
which constitute part of the Subsidiary Swing Line Obligations
and would be owed by any Subsidiary Borrower to the Swing Line
Lenders or the Lenders hereunder, or under the Swing Line
Advances issued for the account of a Subsidiary Borrower, but
for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar
proceeding involving such Subsidiary Borrower.
(ii) The Borrower hereby unconditionally and
irrevocably guarantees the punctual payment when due of all
obligations of the Hedge Subsidiaries now or hereafter existing
under any Hedge Agreements entered into by a Hedge Subsidiary
with a Hedge Bank, including any extensions, modifications,
substitutions, amendments and renewals thereof (such obligations
being the "Hedge Subsidiary Obligations"), and agrees to pay any
and all expenses (including reasonable counsel fees and expenses
in accordance with Section 10.04 hereof) incurred by the Hedge
Banks in enforcing any rights thereunder with respect to the
Hedge Subsidiary Obligations. Without limiting the generality of
the foregoing, the Borrower's liability shall extend to all
amounts which constitute part of the Hedge Subsidiary
Obligations and would be owed by any
35
Hedge Subsidiary to the respective Hedge Bank thereunder, but
for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar
proceeding involving such Hedge Subsidiary.
(iii) The Borrower hereby unconditionally and
irrevocably guarantees the punctual payment when due of all
obligations of Subsidiaries of the Borrower now or hereafter
existing under any Operating Indebtedness Agreement entered into
by such Subsidiary with an Operating Lender, including any
extensions, modifications, substitutions, amendments and
renewals thereof such obligations being the "Subsidiary
Operating Indebtedness Obligations", and agrees to pay any and
all expenses (including reasonable counsel fees and expenses in
accordance with Section 10.04 hereof) incurred by the Operating
Lender in enforcing any rights thereunder with respect to the
Subsidiary Operating Indebtedness Obligations. Without limiting
the generality of the foregoing, the Borrower's liability shall
extend to all amounts which constitute part of the Subsidiary
Operating Indebtedness Obligations and would be owed by any such
Subsidiary to the respective Operating Lender thereunder, but
for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar
proceeding involving such Subsidiary.
(c) Guaranty Absolute. The Borrower guarantees that the
Subsidiary Swing Line Obligations, Hedge Subsidiary Obligations and
Subsidiary Operating Indebtedness Obligations will be paid strictly in
accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Swing Line Lenders, the
Lenders, the Hedge Banks or the Operating Lenders, respectively, with
respect thereto. The obligations of the Borrower hereunder are
independent of the Subsidiary Swing Line Obligations, Hedge Subsidiary
Obligations and Subsidiary Operating Indebtedness Obligations and a
separate action or actions may be brought and prosecuted against the
Borrower to enforce the guaranty contained in this Section 2.13,
irrespective of whether any action is brought against any Subsidiary
Borrower or Hedge Subsidiary or Subsidiary of the Borrower party to an
Operating Indebtedness Agreement or whether any Subsidiary Borrower or
Hedge Subsidiary or such Subsidiary is joined in any such action or
actions. The liability of the Borrower under the guaranty contained in
this Section 2.13 shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any of
the Subsidiary Swing Line Obligations, Hedge Subsidiary
Obligations, Subsidiary Operating Indebtedness Obligations or
any agreement or instrument relating thereto against any Swing
Line Borrower, Hedge Subsidiary, such Subsidiary of the Borrower
or any other Person;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Subsidiary Swing Line Obligations or of the Hedge Subsidiary
Obligations or of the Subsidiary Operating Indebtedness
Obligations or any other amendment or waiver of or any consent
to departure with respect to Swing Line Advances issued for the
account of a Subsidiary Borrower or with
36
respect to Hedge Agreements entered into by any Hedge Subsidiary
or with respect to Operating Indebtedness Agreements entered
into by any such Subsidiary of the Borrower including, without
limitation, any increase in the Subsidiary Swing Line
Obligations resulting from the Issuance of Swing Line Advances
beyond the aggregate limitation specified in Section 2.01 hereof
to any and all Subsidiary Borrowers or otherwise;
(iii) any taking, exchange, release or non-perfection
of any collateral, or any taking, release or amendment or waiver
of or consent to departure from any other guaranty, for all or
any of the Subsidiary Swing Line Obligations or of the Hedge
Subsidiary Obligations or of the Subsidiary Operating
Indebtedness Obligations;
(iv) any manner of application of collateral, or
proceeds thereof, to all or any of the Subsidiary Swing Line
Obligations or of the Hedge Subsidiary Obligations or of the
Subsidiary Operating Indebtedness Obligations, or any manner of
sale or other disposition of any collateral for all or any of
the Subsidiary Swing Line Obligations or of the Hedge Subsidiary
Obligations or of the Subsidiary Operating Indebtedness
Obligations or any other assets of a Subsidiary Borrower or a
Hedge Subsidiary or such Subsidiary of the Borrower;
(v) any change, restructuring or termination of the
corporate structure or existence of a Subsidiary Borrower or a
Hedge Subsidiary or such Subsidiary of the Borrower or any
Subsidiary Borrower's or any Hedge Subsidiary's or any such
Subsidiary's lack of corporate power or authority; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, a third
party guarantor.
The guaranty provided in this Section 2.13 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Subsidiary Swing Line Obligations or the Hedge Subsidiary Obligations or the
Subsidiary Operating Indebtedness Obligations is rescinded or must otherwise be
returned by any Swing Line Lender, any Lender, any Hedge Bank or any Operating
Lender, respectively, upon the insolvency, bankruptcy or reorganization of a
Subsidiary Borrower, a Hedge Subsidiary or any such Subsidiary of the Borrower,
as the case may be, or otherwise, all as though such payment had not been made.
(d) Waivers. The Borrower hereby waives, to the extent
permitted by applicable law:
(i) any requirement that any Swing Line Lender or
any Hedge Bank or any Operating Lender secure or insure any
security interest or lien or any property subject thereto or
exhaust any right or take any action against any Subsidiary
Borrower or any Hedge Subsidiary, any such Subsidiary of the
Borrower or any other Person or any collateral;
(ii) any defense arising by reason of any claim or
defense based upon an election of remedies by any Swing Line
Lender, any Hedge Bank or any
37
Operating Lender (including, without limitation, an election to
nonjudicially foreclose on any real or personal property
collateral) which in any manner impairs, reduces, releases or
otherwise adversely affects its subrogation, reimbursement or
contribution rights or other rights to proceed against any
Subsidiary Borrower, Hedge Subsidiary, any such Subsidiary of
the Borrower or any other Person or any collateral;
(iii) any defense arising by reason of the failure of
any Subsidiary Borrower, any Hedge Subsidiary or any such
Subsidiary of the Borrower to properly execute any letter of
credit application and agreement or otherwise comply with
applicable legal formalities;
(iv) any defense or benefits that may be derived from
California Civil Code Sections 2808, 2809, 2810, 2819, 2845 or
2850, or California Code of Civil Procedure Sections 580a, 580d
or 726, or comparable provisions of the laws of any other
jurisdiction and all other suretyship defenses it would
otherwise have under the laws of California or any other
jurisdiction;
(v) any duty on the part of any Swing Line Lender,
any Hedge Bank or any Operating Lender to disclose to the
Borrower any matter, fact or thing relating to the business,
operation or condition of any Subsidiary Borrower, any Hedge
Subsidiary, any such Subsidiary of the Borrower, or its
respective assets now known or hereafter known by any Swing Line
Lender, any Hedge Bank or any Operating Lender;
(vi) all benefits of any statute of limitations
affecting the Borrower's liability under or the enforcement of
the guaranty provided in this Section 2.13 or any of the
Subsidiary Swing Line Obligations, Hedge Subsidiary Obligations,
or the Subsidiary Operating Indebtedness Obligations or any
collateral;
(vii) all setoffs and counterclaims;
(viii) promptness, diligence, presentment, demand for
performance and protest;
(ix) notice of nonperformance, default, acceleration,
protest or dishonor;
(x) except for any notice otherwise required by
applicable laws that may not be effectively waived by the
Borrower, notice of sale or other disposition of any collateral;
and
(xi) notice of acceptance of the guaranty provided in
this Section 2.13 and of the existence, creation or incurring of
new or additional Subsidiary Swing Line Obligations, Hedge
Subsidiary Obligations or Subsidiary Operating Indebtedness
Obligations.
38
(e) Notwithstanding any other provision of this Agreement to
the contrary, it is understood and agreed by the parties hereto and by
any Hedge Bank seeking to enforce the guaranty under this Section 2.13
or to otherwise obtain any benefit under this Section 2.13, that:
(A) to the extent that the Borrower is required to
make any payment with respect to the obligations of a Hedge
Subsidiary pursuant to the guaranty contained in this Section
2.13, such payment shall be governed by the provisions of
Section 4.02 hereof by treating the recipient of such payment as
a Lender Party that first became a party to this Agreement
immediately prior to the receipt of such payment; and
(B) (i) any such Hedge Bank shall be bound by all
the provisions of this Section 2.13, (ii) the Obligations under
this Agreement in favor of the Lender Parties with respect to
the Credit Agreement and the Obligations guaranteed under this
Section 2.13 in favor of the Hedge Banks with respect to the
Hedge Agreements entered into by the Hedge Subsidiaries are
separate, (iii) no Lender Party shall have any claim hereunder
or under any other Loan Document solely as a result of a claim
by any Hedge Bank under this Section 2.13 or the Subsidiary
Guaranty, and no Hedge Bank shall have any claim under this
Section 2.13 solely as a result of a claim by any Lender Party
hereunder or under any other Loan Document or by any other Hedge
Bank under this Section 2.13 or the Subsidiary Guaranty, and
(iv) with respect to the Obligations under the Hedge Agreements
entered into by the Hedge Subsidiaries, the guaranty under this
Section 2.13 shall operate in favor of only those Lenders or
Affiliates of a Lender which are Hedge Banks Lenders prior to
the termination of this Agreement, and then only with respect to
the Obligations incurred under Hedge Agreements with Hedge
Subsidiaries in effect prior to such termination.
(f) Notwithstanding any other provision of this Agreement to
the contrary, it is understood and agreed by the parties hereto and by
any Operating Lender seeking to enforce the guaranty under this Section
2.13 or to otherwise obtain any benefit under this Section 2.13, that:
(A) to the extent that the Borrower is required to
make any payment with respect to the obligations of any of its
Subsidiaries pursuant to the guaranty contained in this Section
2.13, such payment shall be governed by the provisions of
Section 4.02 hereof by treating the recipient of such payment as
a Lender Party that first became a party to this Agreement
immediately prior to the receipt of such payment; and
(B) (i) any such Operating Lender shall be bound by
all the provisions of this Section 2.13, (ii) the Obligations
under this Agreement in favor of the Lender Parties with respect
to the Credit Agreement and the Obligations guaranteed under
this Section 2.13 in favor of the Operating Lenders with respect
to the Operating Indebtedness Agreements entered into by the
Subsidiaries of the Borrower are separate, (iii) no Lender Party
shall have any claim hereunder or
39
under any other Loan Document solely as a result of a claim by
any Operating Lender under this Section 2.13 or the Subsidiary
Guaranty, and no Operating Lender shall have any claim under
this Section 2.13 solely as a result of a claim by any Lender
Party hereunder or under any other Loan Document or by any other
Operating Lender under this Section 2.13 or the Subsidiary
Guaranty, and (iv) with respect to the Obligations under the
Operating Indebtedness Agreements entered into by the
Subsidiaries of the Borrower, the guaranty under this Section
2.13 shall operate in favor of only those Lenders or Affiliates
of a Lender which are Operating Lenders prior to the termination
of this Agreement, and then only with respect to the Obligations
incurred under Operating Indebtedness Agreements with such
Subsidiaries in effect prior to such termination.
SECTION 2.14 Subsidiary Borrowers. Any Subsidiary of the
Borrower not a Subsidiary Borrower on the date hereof may become a "Subsidiary
Borrower" hereunder by delivering to the Agent appropriate authorizations in
respect of it entering into this Agreement, an agreement, in form and substance
satisfactory to the Agent, wherein such Subsidiary agrees to be bound by all
terms and provisions of this Agreement relating to Swing Line Advances to be
made to such Subsidiary Borrower and delivers a written consent of the Borrower
assenting to the inclusion of such Subsidiary as a "Subsidiary Borrower"
hereunder. Unless objected to by the Majority Lenders within the 10 day period
referred to below, such Subsidiary shall become a "Subsidiary Borrower"
hereunder 10 days after the Agent notifies the Borrower that such agreement and
consent are in form and substance satisfactory to it.
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN
SECTION 3.01 Letters of Credit. (a) Each Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to Issue for the account of the
Borrower or any LC Subsidiary, one or more Letters of Credit (in an aggregate
amount not in excess of the Issuing Commitment of such Issuing Bank) from time
to time during the period from the date of this Agreement until the Termination
Date in an aggregate undrawn amount not to exceed at any time the Commitments of
the Lenders in effect at such time (inclusive of the Dollar equivalent of
Letters of Credit Issued in an Alternative Currency), each such Letter of Credit
(except Standby Letter of Credit) upon its Issuance to expire on or before the
date which occurs one year from the date of its Issuance but in any event prior
to the Termination Date; provided, however, that an Issuing Bank shall not be
obligated to, and shall not, Issue any Letter of Credit if:
(i) after giving effect to the Issuance of such
Letter of Credit, the sum of the then outstanding aggregate
amount of all Letter of Credit Liability, the then outstanding
principal amount of all Borrowings, the then outstanding Hedge
Agreements Exposure and the aggregate Swing Line Commitment then
in effect (computed without giving regard to usage) shall exceed
the aggregate amount of the Commitments in effect from time to
time;
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(ii) after giving effect to the Issuance of such
Letter of Credit, the then outstanding aggregate amount of all
Letter of Credit Liability in respect of Letters of Credit
Issued by such Issuing Bank shall exceed the Issuing Commitment
of such Issuing Bank; or
(iii) the Agent or the Majority Lenders shall have
notified the Issuing Banks and the Borrower that no further
Letters of Credit are to be Issued by the Issuing Banks due to
failure to meet any of the applicable conditions set forth in
Article V, and such notice has not been withdrawn.
(b) Each Issuing Bank shall provide to the Agent in writing,
no later than 5 days after the end of each month, a report with respect
to the outstanding Letters of Credit issued by such Issuing Bank, which
report shall set forth the undrawn amount and drawn but unreimbursed
amount as of the end of each day during that month of all such Letters
of Credit. Promptly after receiving all of such reports, the Agent shall
forward copies thereof to each Lender.
Within the limits of the obligations of the Issuing Banks set forth above and in
Section 3.02 hereof, the Borrower and each LC Subsidiary may request the Issuing
Banks to Issue one or more Letters of Credit, reimburse the Issuing Banks for
payments made thereunder pursuant to Section 3.04(a) hereof and request the
Issuing Banks to Issue one or more additional Letters of Credit under this
Section 3.01.
SECTION 3.02 Limitation on the Issuance of Letters of Credit
Denominated in Alternative Currencies. The Issuing Banks shall not be obligated
to, and shall not, Issue any Letter of Credit denominated in an Alternative
Currency if, after giving effect to the Issuance of any Letter of Credit
denominated in an Alternative Currency, the then outstanding aggregate amount of
all Letter of Credit Liability with respect to all Letters of Credit denominated
in an Alternative Currency equals or exceeds (on a Dollar equivalent basis)
$75,000,000.
SECTION 3.03 Issuing the Letters of Credit. Each Letter of
Credit shall be Issued on notice from the Borrower or any LC Subsidiary, as the
case may be, to the respective Issuing Bank as provided in the application and
agreement governing such Letter of Credit specifying the date, amount, currency,
expiry and beneficiary thereof and whether such Letter of Credit is a Trade
Letter of Credit or Standby Letter of Credit and, if it is a Standby Letter of
Credit, the amount of all Standby Letters of Credit then outstanding,
accompanied by such documents as such Issuing Bank may specify to the Borrower
or LC Subsidiary, as the case may be, in form and substance satisfactory to such
Issuing Bank. On the date specified by the Borrower or LC Subsidiary, as the
case may be, in such notice and upon fulfillment of the applicable conditions
set forth in Section 3.01 hereof, such Issuing Bank will Issue such Letter of
Credit and shall promptly notify the Agent thereof.
SECTION 3.04 Reimbursement Obligations. (a) The Borrower or the
appropriate LC Subsidiary, as the case may be, shall:
(i) pay to the respective Issuing Bank an amount
equal to, and in reimbursement for, each amount which such
Issuing Bank pays under any Letter
41
of Credit not later than the date which occurs one Business Day
after notice from the Issuing Bank to the Borrower or the
appropriate LC Subsidiary of payment of such amount by such
Issuing Bank under such Letter of Credit; and
(ii) pay to such Issuing Bank interest on any amount
paid by such Issuing Bank under any Letter of Credit from the
date on which such Issuing Bank pays such amount under any
Letter of Credit until such amount is reimbursed in full to such
Issuing Bank pursuant to clause (i) above, payable on demand, at
a fluctuating rate per annum equal to 2% per annum above the
rate per annum required to be paid on Base Rate Advances
immediately prior to the date on which such Issuing Bank makes
such payment under such Letter of Credit.
(b) All amounts to be reimbursed to an Issuing Bank in
accordance with subsection (a) above may, subject to the limitations set
forth in Section 2.01 hereof (inclusive of the minimum borrowing
limitations), be paid from the proceeds of Advances.
SECTION 3.05 Participations Purchased by the Lenders. (a) On the
date of Issuance of each Letter of Credit the respective Issuing Bank shall be
deemed irrevocably and unconditionally to have sold and transferred to each
Lender without recourse or warranty, and each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from such Issuing Bank,
an undivided interest and participation, to the extent of such Lender's
Commitment Percentage in effect from time to time, in such Letter of Credit and
all Letter of Credit Liability relating to such Letter of Credit and all
documents securing, guaranteeing, supporting, or otherwise benefiting the
payment of such Letter of Credit Liability. The Agent or such Issuing Bank will
notify each Lender promptly after the close of each calendar month of all
Letters of Credit then outstanding and of their respective dates of Issue,
outstanding amounts (on a Dollar equivalent basis) as at the end of such month,
currency, expiry dates and reference numbers.
(b) In the event that any reimbursement obligation under
Section 3.04(a) hereof is not paid when due to the respective Issuing
Bank with respect to any Letter of Credit, such Issuing Bank shall
promptly notify the Agent who shall promptly notify the Lenders of the
amount of such reimbursement obligation (on a Dollar equivalent basis in
the case of Letters of Credit denominated in an Alternative Currency)
and each Lender shall pay to such Issuing Bank, in lawful money of the
United States and in same day funds, an amount equal to such Lender's
Commitment Percentage then in effect of the amount of such unpaid
reimbursement obligation with such payment to be made on the date of
notification to such Lender, if such notification is made prior to 12:00
noon (New York City time) on a Business Day and if such notification is
made after 12:00 noon (New York City time) on a Business Day, such
payment to be made on the immediately succeeding Business Day, and in
each case with interest at the Federal Funds Rate for each day after
such payment is due until such amount is paid to such Issuing Bank.
(c) Promptly after the respective Issuing Bank receives a
payment (including interest payments) on account of a reimbursement
obligation with respect to any Letter of Credit, such Issuing Bank shall
promptly pay to each Lender which funded its
42
participation therein, in lawful money of the United States, the Dollar
equivalent of funds so received, in an amount equal to such Lender's
Commitment Percentage thereof.
(d) Upon the request of any Lender, the Agent shall furnish,
or cause the respective Issuing Bank to furnish, to such Lender copies
of any outstanding Letter of Credit and any application and agreement
for letter of credit as may be reasonably requested by such Lender.
(e) The obligation of each Lender to make payments under
subsection (b) above shall be unconditional and irrevocable and shall
remain in effect after the occurrence of the Termination Date with
respect to any Letter of Credit that was Issued by the respective
Issuing Bank on behalf of the Borrower or any LC Subsidiary on or before
the Termination Date and such payments shall be made under all
circumstances, including, without limitation, any of the circumstances
referred to in Section 3.07(b) hereof other than in connection with
circumstances involving any willful misconduct or gross negligence of
such Issuing Bank in Issuing a Letter of Credit or in determining
whether documents presented under a Letter of Credit comply with the
terms thereof.
(f) If any payment received on account of any reimbursement
obligation with respect to a Letter of Credit and distributed to a
Lender as a participant under Section 3.05(c) hereof is thereafter
recovered from the respective Issuing Bank in connection with any
bankruptcy or insolvency proceeding relating to the Borrower or an LC
Subsidiary, each Lender which received such distribution shall, upon
demand by such Issuing Bank, repay to such Issuing Bank such Lender's
ratable share of the amount so recovered together with an amount equal
to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so
recovered) of any interest or other amount paid or payable by such
Issuing Bank in respect of the total amount so recovered.
SECTION 3.06 Letter of Credit Fees.
(a) Letter of Credit Fee. The Borrower hereby agrees to pay
to the Agent for the account of each Lender (in accordance with its
Commitment Percentage), a letter of credit fee at a rate per annum equal
in the case of Trade Letters of Credit to the Applicable Letter of
Credit Fee in effect from time to time, and in the case of Standby
Letters of Credit, to the Applicable Margin applicable to Eurodollar
Rate Advances in effect from time to time, on the maximum amount
available to be drawn under each such Letter of Credit from time to time
(the determination of such maximum amount to assume compliance with all
conditions for drawing) from the date of Issuance of each such Letter of
Credit until the expiry date of each such Letter of Credit, payable in
arrears on the last day of each January, April, July and October prior
to the expiry date of each such Letter of Credit and on the expiry date
of each such Letter of Credit.
(b) Issuing Bank Fees. The Borrower hereby agrees to pay to
each Issuing Bank the fees and charges as agreed to from time to time by
such Issuing Bank and the Borrower.
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SECTION 3.07 Indemnification; Nature of the Issuing Banks'
Duties. (a) The Borrower agrees to indemnify and save harmless the Agent, the
Issuing Banks and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which the Agent, the respective Issuing Bank or such Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the Issuance
of any Letter of Credit or (ii) any action or proceeding relating to a court
order, injunction, or other process or decree restraining or seeking to restrain
an Issuing Bank from paying any amount under any Letter of Credit; provided,
that, an Issuing Bank shall not be indemnified for any of the foregoing caused
by its gross negligence or willful misconduct.
(b) The obligations of the Borrower and each LC Subsidiary
hereunder with respect to Letters of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms
hereof under all circumstances, including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or any agreement or
instrument relating thereto;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower or any LC Subsidiary may have at
any time against the beneficiary, or any transferee, of any
Letter of Credit, or the Issuing Banks, any Lender, or any other
Person;
(iii) any draft, certificate, or other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) any lack of validity, effectiveness, or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or
in part;
(v) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof;
(vi) any exchange, release or non-perfection of any
collateral, or any release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the obligations of the
Borrower or an LC Subsidiary in respect of the Letters of
Credit;
(vii) any change in the time, manner or place of
payment of, or in any other terms of, all or any of the
obligations of the Borrower or any LC Subsidiary in respect of
the Letters of Credit or any other amendment or waiver of or any
consent to departure from all or any of this Agreement;
(viii) any failure of the beneficiary of a Letter of
Credit to strictly comply with the conditions required in order
to draw upon any Letter of Credit;
44
(ix) any misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; or
(x) any other circumstance or happening whatsoever,
whether or not similar to the foregoing;
provided, that, notwithstanding the foregoing, an Issuing Bank shall not be
relieved of any liability it may otherwise have as a result of its gross
negligence or willful misconduct.
SECTION 3.08 Increased Costs. (a) Change in Law. If, at any time
after the date of this Agreement, any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit or guarantees issued by, or assets held by or deposits in or for the
account of, the Issuing Banks or any Lender or (ii) impose on the Issuing Banks
or any Lender any other condition regarding this Agreement or the Letters of
Credit or any collateral thereon, and the result of any event referred to in
clause (i) or (ii) above shall be to increase the cost (other than an increase
in taxes, which increase is dealt with exclusively in Article IV) to such
Issuing Bank or such Lender of issuing or maintaining, funding or purchasing
participations in the Letters of Credit, then, upon demand by such Issuing Bank
or such Lender (with a copy of such demand to the Agent), the Borrower shall pay
to the Agent for the account of such Issuing Bank or such Lender, from time to
time as specified by such Issuing Bank or such Lender, additional amounts
sufficient to compensate such Issuing Bank or such Lender for such increased
cost; provided, that, the Borrower shall have no obligation to reimburse an
Issuing Bank or any Lender for increased costs incurred more than 60 days prior
to the date of such demand. A certificate as to the amount of such increased
cost setting forth the basis for the calculation of such increased costs,
submitted by an Issuing Bank or a Lender to the Borrower, shall be conclusive
and binding for all purposes, absent manifest error.
(b) Capital. If, at any time after the date of this
Agreement, an Issuing Bank or 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 Issuing Bank or such Lender or any corporation
controlling such Issuing Bank or such Lender and that the amount of such
capital is increased by or based upon the existence of such Issuing
Bank's or Lender's commitment hereunder and other commitments of this
type or the issuance of (or commitment to purchase of participations in)
the Letters of Credit (or similar contingent obligations), then, upon
written demand by such Issuing Bank or such Lender (with a copy of such
demand to the Agent), the Borrower shall pay to the Agent for the
account of such Issuing Bank or such Lender, from time to time as
specified by such Issuing Bank or such Lender, additional amounts
sufficient to compensate such Issuing Bank or such Lender or such
corporation in the light of such circumstances, to the extent that such
Issuing Bank or such Lender reasonably determines such increase in
capital to be allocable to the existence of such Issuing Bank's or such
Lender's commitment hereunder; provided, that, the Borrower shall have
no obligation to pay such compensatory amounts that relate to an actual
increase in the capital of such Issuing Bank or such Lender undertaken
by such Issuing
45
Bank or such Lender more than 60 days prior to the date of such demand.
A certificate as to such amounts setting forth the basis for the
calculation of such amount submitted to the Borrower and the Agent by an
Issuing Bank or a Lender shall be conclusive and binding for all
purposes, absent manifest error.
(c) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.08 shall survive the payment in
full (after the Termination Date) of all Obligations.
(d) Without affecting its rights under Sections 3.08(a) or
3.08(b) or any other provision of this Agreement, the Issuing Banks and
each Lender agree that if there is any increase in any cost to or
reduction in any amount receivable by the respective Issuing Bank or
Lender with respect to which the Borrower would be obligated to
compensate such Lender pursuant to Sections 3.08(a) or 3.08(b) hereof,
the respective Issuing Bank or Lender shall use reasonable efforts to
select an alternative issuing office or Applicable Lending Office, as
the case may be, which would not result in any such increase in any cost
to or reduction in any amount receivable by such Issuing Bank or such
Lender; provided, however, that the Issuing Banks and each Lender shall
not be obligated to select an alternative issuing office or Applicable
Lending Office if the respective Issuing Bank or such Lender determines
that (i) as a result of such selection such Issuing Bank or such Lender
would be in violation of any applicable law, regulation, treaty, or
guideline, or would incur additional costs or expenses or (ii) such
selection would be inadvisable for regulatory reasons or inconsistent
with the interests of such Issuing Bank or such Lender.
SECTION 3.09 Uniform Customs and Practice. The Uniform Customs
and Practice for Documentary Credits as most recently published by the
International Chamber of Commerce ("UCP") shall in all respects be deemed a part
of this Article III as if incorporated herein and shall apply to the Letters of
Credit.
SECTION 3.10 Reductions and Increases in Issuing Commitment. (a)
The Borrower shall have the right, upon at least three Business Days' notice to
the Issuing Banks and the Agent, to irrevocably reduce in whole or in part an
Issuing Bank's Issuing Commitment, provided, that, each partial reduction shall
be in the aggregate amount of $25,000,000 or an integral multiple of $1,000,000
in excess thereof and no such reduction shall reduce such Issuing Bank's Issuing
Commitment below the then outstanding aggregate amount of all Letter of Credit
Liability in respect of Letters of Credit Issued by such Issuing Bank.
(b) The Borrower may at any time, upon at least five
Business Days' prior written notice to the respective Issuing Bank and
the Agent, increase the Issuing Commitment of an Issuing Bank and at the
same time reduce by an equivalent amount the Issuing Commitment of one
or more of the other Issuing Banks; provided, that such notice is
consented to by each Issuing Bank affected by such increase and decrease
and provided, further, that the Agent shall record each such increase
and decrease of the Issuing Commitment of the respective Issuing Bank in
the Register.
SECTION 3.11 Existing Letters of Credit. There currently are
outstanding certain Standby Letters of Credit issued pursuant to the Existing
Credit Agreement (collectively,
46
the "Existing Letters of Credit"), the outstanding balance of each of which is
set forth on Schedule IV hereto (as such Schedule may be modified between the
date hereof and the fifth Business Day after the Effective Date). From and after
the date hereof and upon fulfillment of the conditions to initial Issuance
specified in Section 5.01 hereof, each such Existing Letter of Credit shall be
deemed and treated for all purposes hereof (including, without limitation, the
calculation of fees payable under Section 3.06 hereof, and calculating the usage
of the respective Issuing Bank's commitment under Section 3.01 hereof) as a
"Letter of Credit" hereunder, any participation interest existing prior to the
date hereof of any Lender in such Existing Letters of Credit shall, without
further action on its part, be deemed extinguished in full and each Lender,
without further act on its part, shall be deemed to have purchased a
participation in each such Existing Letter of Credit as provided in Section 3.05
hereof in accordance with its Commitment Percentage.
SECTION 3.12 Currency Provisions.
(a) Equivalents. For purposes of the provisions of Article
II and III, (i) the equivalent in Dollars of any Alternative Currency
shall be determined by using the mean of the bid and offer quoted spot
rates at which the respective Issuing Bank's or Swing Line Lender's
principal office in New York, New York offers to exchange Dollars for
such Alternative Currency in New York, New York at 11:00 A.M. (New York
City time) on the Business Day on which such equivalent is to be
determined and (ii) the equivalent in any Alternative Currency of
Dollars shall be determined by using the mean of the bid and offer
quoted spot rates at which such Issuing Bank's or Swing Line Lender's
principal office in New York, New York offers to exchange such
Alternative Currency for Dollars in New York, New York at 11:00 A.M.
(New York City time) on the Business Day on which such equivalent is to
be determined.
(b) Issuing Banks' Commitment/Lenders' Commitments. For
purposes of determining the unused portion of an Issuing Bank's Issuing
Commitment specified in Section 3.01 and of each Lender's Commitment,
the equivalent in Dollars of each Letter of Credit issued by an Issuing
Bank in an Alternative Currency as determined on the date of the
Issuance of such Letter of Credit shall be the amount of such Issuing
Bank's Issuing Commitment used in connection with the Issuance of such
Letter of Credit and the resulting proportionate amount of each Lender's
Commitment used, such reduction to be calculated in accordance with its
Commitment Percentage. Further adjustments shall be made with respect to
the unused portion of an Issuing Bank's Issuing Commitment to Issue
Letters of Credit and each such Lender's Commitment based upon
fluctuations thereafter in the value of the Alternative Currency of such
Letter of Credit as provided in subsection (c) below.
(c) ▇▇▇▇ to Market. If, on any day, the equivalent in
Dollars of the aggregate face amount of all Letters of Credit then
outstanding (less the aggregate amount of cash collateral held by all
the Issuing Banks with respect to outstanding Letters of Credit) exceeds
the total of (x) the Commitments then in effect minus (y) the sum of the
then outstanding aggregate amount of all Borrowings and the aggregate
Swing Line Commitment then in effect (computed without giving regard to
usage), the Borrower shall, upon demand by the Agent, immediately
deposit into the L/C Collateral Account
47
(as defined in the Security Agreement) held by the Collateral Agent, in
Dollars, (i) the Dollar amount of such excess plus (ii) a Dollar amount
equal to the lesser of (A) $1,000,000 and (B) 10% of the Dollar
equivalent of all then existing Letter of Credit Liability relating to
Letters of Credit denominated in Alternative Currencies, which amount
shall be held by the Collateral Agent in accordance with the terms of
the Security Agreement as cash collateral for the Borrowers' and LC
Subsidiaries' obligations with respect to outstanding Letters of Credit.
Amounts on deposit with the Collateral Agent as cash collateral in the
L/C Collateral Account shall be invested as provided in the Security
Agreement and shall (so long as no Default has occurred and is
continuing) be released to the Borrower (1) if the Termination Date has
not occurred, on the date on which the aggregate of all Letter of Credit
Liability does not exceed 99% of the aggregate amount of the Commitments
then in effect (without regard to any usage thereof) minus the sum of
the then outstanding aggregate amount of all Borrowings and the
aggregate Swing Line Commitment then in effect (computed without giving
regard to usage), or (2) if the Termination Date has occurred, in
accordance with Section 3.15 hereof.
(d) Monthly Report. Each Issuing Bank, on the last Business
Day of each month until the Termination Date, shall calculate the Letter
of Credit Liability on such date (converting any amounts of the Letter
of Credit Liability which are denominated in an Alternative Currency to
Dollars for purposes of such calculation) and shall promptly send notice
of such Letter of Credit Liability to the Agent, the Borrower and each
Lender, and the Agent shall then determine the excess amount, if any,
referred to in the first sentence of Section 3.12(c) above and shall
promptly inform the Borrower of such amount and the Borrower shall
promptly upon receipt thereof make the payments provided for in Section
3.12(c) above if applicable.
SECTION 3.13 Borrower Guaranty.
(a) Generally. The Issuing Banks may, from time to time,
Issue Letters of Credit for the account of each LC Subsidiary provided,
that, the reimbursement and other obligations of each such LC Subsidiary
are and remain unconditionally guaranteed by the Borrower pursuant to
this Section 3.13.
(b) Guaranty. The Borrower hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the LC
Subsidiaries now or hereafter existing under this Agreement with respect
to Letters of Credit issued for the account of any of the LC
Subsidiaries, including any extensions, modifications, substitutions,
amendments and renewals thereof, whether for reimbursement obligations,
interest, fees, expenses or otherwise (such obligations being the
"Subsidiary LC Obligations"), and agrees to pay any and all expenses
(including reasonable counsel fees and expenses in accordance with
Section 10.04 hereof) incurred by the Issuing Banks or the Lenders in
enforcing any rights hereunder with respect to the Subsidiary
Obligations. Without limiting the generality of the foregoing, the
Borrower's liability shall extend to all amounts which constitute part
of the Subsidiary LC Obligations and would be owed by any LC Subsidiary
to the Issuing Banks or the Lenders hereunder, or under the Letters of
Credit issued for the account of an LC Subsidiary, but for the fact that
they are unenforceable or
48
not allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving such LC Subsidiary.
(c) Guaranty Absolute. The Borrower guarantees that the
Subsidiary LC Obligations will be paid strictly in accordance with the
terms hereof regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights
of the Issuing Banks or the Lenders with respect thereto. The
obligations of the Borrower hereunder are independent of the Subsidiary
LC Obligations and a separate action or actions may be brought and
prosecuted against the Borrower to enforce the guaranty contained in
this Section 3.13, irrespective of whether any action is brought against
any LC Subsidiary or whether any LC Subsidiary is joined in any such
action or actions. The liability of the Borrower under the guaranty
contained in this Section 3.13 shall be absolute and unconditional
irrespective of:
(i) any lack of validity or enforceability of any of
the Subsidiary LC Obligations or any agreement or instrument
relating thereto against any LC Subsidiary or any other Person;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Subsidiary Obligations, or any other amendment or waiver of or
any consent to departure herefrom with respect to Letters of
Credit issued for the account of an LC Subsidiary including,
without limitation, any increase in the Subsidiary LC
Obligations resulting from the Issuance of Letters of Credit
beyond the aggregate limitation specified in Section 3.01 hereof
to any and all LC Subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection
of any collateral, or any taking, release or amendment or waiver
of or consent to departure from any other guaranty, for all or
any of the Subsidiary Obligations;
(iv) any manner of application of collateral, or
proceeds thereof, to all or any of the Subsidiary Obligations,
or any manner of sale or other disposition of any collateral for
all or any of the Subsidiary LC Obligations or any other assets
of an LC Subsidiary;
(v) any change, restructuring or termination of the
corporate structure or existence of an LC Subsidiary or any LC
Subsidiary's lack of corporate power or authority; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, a third
party guarantor.
The guaranty provided in this Section 3.13 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Subsidiary LC Obligations is rescinded or must otherwise be returned by the
Issuing Banks or any Lender upon the insolvency, bankruptcy or reorganization of
an LC Subsidiary or otherwise, all as though such payment had not been made.
49
(d) Waivers. The Borrower hereby waives, to the extent
permitted by applicable law:
(i) any requirement that the Issuing Banks or any
Lender secure or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action
against any LC Subsidiary or any other Person or any collateral;
(ii) any defense arising by reason of any claim or
defense based upon an election of remedies by the Issuing Banks
or any Lender (including, without limitation, an election to
nonjudicially foreclose on any real or personal property
collateral) which in any manner impairs, reduces, releases or
otherwise adversely affects its subrogation, reimbursement or
contribution rights or other rights to proceed against any LC
Subsidiary or any other Person or any collateral;
(iii) any defense arising by reason of the failure of
any LC Subsidiary to properly execute any letter of credit
application and agreement or otherwise comply with applicable
legal formalities;
(iv) any defense or benefits that may be derived from
California Civil Code Sections 2808, 2809, 2810, 2819, 2845 or
2850, or California Code of Civil Procedure Sections 580a, 580d
or 726, or comparable provisions of the laws of any other
jurisdiction and all other suretyship defenses it would
otherwise have under the laws of California or any other
jurisdiction;
(v) any duty on the part of the Issuing Banks or any
Lender to disclose to the Borrower any matter, fact or thing
relating to the business, operation or condition of any LC
Subsidiary and its respective assets now known or hereafter
known by the Issuing Banks or any Lender;
(vi) all benefits of any statute of limitations
affecting the Borrower's liability under or the enforcement of
the guaranty provided in this Section 3.13 or any of the
Subsidiary LC Obligations or any collateral;
(vii) all setoffs and counterclaims;
(viii) promptness, diligence, presentment, demand for
performance and protest;
(ix) notice of nonperformance, default, acceleration,
protest or dishonor;
(x) except for any notice otherwise required by
applicable laws that may not be effectively waived by the
Borrower, notice of sale or other disposition of any collateral;
and
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(xi) notice of acceptance of the guaranty provided in
this Section 3.13 and of the existence, creation or incurring of
new or additional Subsidiary Obligations.
SECTION 3.14 Dollar Payment Obligation. Notwithstanding any
other term or provision hereof to the contrary, if the Borrower or any LC
Subsidiary fails to reimburse the respective Issuing Bank for any payment made
by such Issuing Bank under a Letter of Credit denominated in an Alternative
Currency by the close of business on the Business Day when due at the Payment
Office specified for such reimbursement payment, then the payment made by such
Issuing Bank in such Alternative Currency shall be converted into Dollars (the
"Dollar Payment Amount") by such Issuing Bank as provided for herein, and each
of the Borrower and each LC Subsidiary for whose account such Letter of Credit
was Issued agrees that it shall be unconditionally obligated to, and shall
immediately, reimburse such Issuing Bank the Dollar Payment Amount at such
Issuing Bank's then Payment Office for Dollars.
SECTION 3.15 Applications; Survival of Provisions; Cash
Collateral. This Agreement shall control over any provision of any application
and agreement for Letters of Credit to the contrary, but additive or
supplemental provisions of any such application and agreement shall apply to
each Letter of Credit Issued pursuant to such application and agreement. The
provisions in this Article shall survive the Termination Date in respect of all
Letters of Credit outstanding thereafter. On the Termination Date, the Borrower
shall deposit into the L/C Collateral Account (as defined in the Security
Agreement) held by the Collateral Agent cash (in Dollars) in an amount equal to
the undrawn amount of all Letters of Credit as security for the reimbursement of
drawings thereunder which shall be used to reimburse the respective Issuing Bank
promptly upon a drawing under its respective Letter of Credit, with the
respective portion thereof to be returned to the Borrower when the respective
Letter of Credit expires, and in connection therewith the Borrower shall execute
all documents as reasonably requested by the Collateral Agent in accordance with
the Security Agreement.
SECTION 3.16 LC Subsidiaries. Any Subsidiary of the Borrower not
an LC Subsidiary on the date hereof may become an "LC Subsidiary" hereunder by
delivering to the respective Issuing Bank (which shall promptly forward a copy
thereof to each Lender and the Agent) an agreement, in form and substance
satisfactory to such Issuing Bank, wherein such Subsidiary agrees to be bound by
all terms and provisions of this Agreement relating to Letters of Credit to be
issued for the account of such Subsidiary and delivers a written consent of the
Borrower assenting to the inclusion of such Subsidiary as an "LC Subsidiary"
hereunder. Unless objected to by the Majority Lenders within the 10 day period
referred to below, such Subsidiary shall become an "LC Subsidiary" hereunder 10
days after such Issuing Bank notifies the Borrower that such agreement and
consent are in form and substance satisfactory to it; provided, that, no
Subsidiary shall become an "LC Subsidiary" until such Issuing Bank shall have
notified the Borrower in writing that such agreement and consent are in form and
substance satisfactory to such Issuing Bank.
51
ARTICLE IV
PAYMENTS, TAXES, EXTENSIONS, ETC.
SECTION 4.01 Payments and Computations/Borrowings. (a) Except as
otherwise provided in Section 4.02 hereof, the Borrower and each Subsidiary
Borrower, as the case may be, shall make each payment hereunder with respect to
Article II, the Advances, the Lenders and the Agent free and clear of all
claims, charges, offsets or deductions whatsoever not later than 12:00 noon (New
York City time) on the day when due in U.S. dollars to the Agent at its address
referred to in Section 10.02 hereof in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility or utilization fees ratably (other than
amounts payable pursuant to Sections 2.04(c), 2.07, 2.11 or 4.02 hereof) 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 such Lender to be
distributed to the appropriate Lender or Lenders and applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 10.07(d) hereof, from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder 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, each Subsidiary Borrower and each LC
Subsidiary hereby authorize the Agent and each Lender if and to the
extent payment owed to the Agent or such Lender is not paid when due
hereunder to charge from time to time against any or all of the
Borrower's, such Subsidiary Borrower's or such LC Subsidiary's accounts
with the Agent or such Lender any amount so due (it being understood and
agreed that, notwithstanding anything in this Agreement or any of the
other Loan Documents to the contrary, accounts, deposits, sums,
securities or other property of any Foreign Subsidiary or of any
Subsidiary of a Foreign Subsidiary (including any Foreign Subsidiary or
any Subsidiary of a Foreign Subsidiary that is a Subsidiary Borrower or
LC Subsidiary) will not serve at any time, directly or indirectly, to
collateralize or otherwise offset the Obligations of the Borrower or any
Domestic Subsidiary, and, in addition, unless otherwise agreed to by the
Borrower, the accounts, deposits, sums, securities or other property of
a Foreign Subsidiary or Subsidiary of a Foreign Subsidiary will only
serve to collateralize or offset the Obligations of another Foreign
Subsidiary or Subsidiary of a Foreign Subsidiary that is a Subsidiary
Borrower or LC Subsidiary if such former Foreign Subsidiary or
Subsidiary of a Foreign Subsidiary is owned by such latter Foreign
Subsidiary or Subsidiary of a Foreign Subsidiary that is a Subsidiary
Borrower or LC Subsidiary).
(c) All computations of interest based on the Base Rate and
of facility fees shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest
relating to utilization fees, or based on the Eurodollar Rate or the
Federal Funds Rate shall be made by the Agent, and all computations of
interest pursuant to Section 2.07 hereof shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of
days (including the first day but
52
excluding the last day) occurring in the period for which such interest
or fees are payable. Each determination by the Agent (or, in the case of
Section 2.07 hereof, by a Lender) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder 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 facility
or utilization fee, as the case may be; provided, however, 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 Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lender or
Lenders hereunder that the Borrower or such Subsidiary Borrower will not
make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may,
in reliance upon such assumption, cause to be distributed to such Lender
or Lenders on such due date an amount equal to the amount then due such
Lender or Lenders. If and to the extent that the Borrower shall not have
so made such payment in full to the Agent, each such Lender shall repay
to the 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 Agent, at the Federal Funds Rate.
SECTION 4.02 Taxes/Borrowings. (a) Any and all payments by the
Borrower and each Subsidiary Borrower hereunder shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender Party and the Agent, taxes imposed on its
overall net income, and franchise taxes imposed on such Lender Party or the
Agent, by the jurisdiction under the laws of which such Lender Party or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender Party, taxes imposed on its overall net income,
and franchise taxes imposed on such Lender Party, by the jurisdiction of such
Lender Party's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower or
any Subsidiary Borrower shall be required by applicable Requirements of Law to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to any Lender Party or the 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 4.02) such Lender Party
or the 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 and such
Subsidiary Borrower shall make such deductions, (iii) the Borrower or respective
Subsidiary Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Requirements of Law
and (iv) as soon as practicable after the date of any payment of Taxes, the
Borrower or respective Subsidiary Borrower shall furnish to the Agent, at its
address referred to in Schedule I-B, the original or a certified copy of a
receipt evidencing payment
53
thereof, to the extent such a receipt is issued therefore, or other evidence of
payment thereof that is reasonably satisfactory to the Agent.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, performance under or
otherwise with respect to, this Agreement or the Letters of Credit
(hereinafter referred to as "Other Taxes").
(c) The Borrower or the respective Subsidiary Borrower will
indemnify each of the Lender Parties and the Agent for the full amount
of Taxes and Other Taxes (including, without limitation, any taxes of
any kind imposed or asserted by any jurisdiction on amounts payable
under this Section 4.02) imposed on or paid by such Lender Party or the
Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. A reimbursement shall be made within 30 days from
the date such Lender Party or the Agent (as the case may be) makes
written demand therefor. The Agent and each Lender Party, as the case
may be, shall give prompt (within 10 Business Days) notice to the
Borrower of the payment by the Agent or such Lender Party, as the case
may be, of such amounts payable by the Borrower under the indemnity set
forth in this subsection (c), and of the assertion by any governmental
or taxing authority that such amounts are due and payable, but the
failure to give such notice shall not affect the Borrower's or any
Subsidiary Borrower's obligations hereunder to reimburse the Agent and
each Lender Party for such Taxes or Other Taxes or taxes imposed or
asserted on amounts payable under this Section 4.02, except that neither
the Borrower nor any Subsidiary Borrower shall be liable for penalties
or interest accrued or incurred after such 10 Business Day period until
such time as it receives the notice contemplated above, after which time
it shall be liable for interest and penalties accrued or incurred prior
to or during such 10 Business Day period and accrued or incurred after
such receipt. Neither the Borrower nor any Subsidiary Borrower shall be
liable for any penalties, interest, expense or other liability with
respect to such Taxes or Other Taxes after it has reimbursed the amount
thereof to the Agent or the appropriate Lender Party.
(d) Each Lender Party organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each initial
Lender Party and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Lender Party remains lawfully able to
do so), shall provide the Borrower with Internal Revenue Service form
W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender Party is
entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments
of interest payable by the Borrower or certifying that the interest is
effectively connected with the conduct of a trade or business in the
United States. Similarly, with respect to each Subsidiary Borrower
organized under the laws of a jurisdiction outside of the United States,
each Lender Party, on or
54
prior to the date of its execution and delivery of this Agreement in the
case of each initial Lender Party and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of
each other Lender Party, and from time to time thereafter if requested
in writing by the Borrower or such Subsidiary Borrower (but only so long
as such Lender Party remains lawfully able to do so), shall provide the
Borrower or such Subsidiary Borrower with appropriate documentation
certifying applicable exemptions from withholding tax imposed by any
jurisdiction on payments of interest payable by such Subsidiary
Borrower. If the forms provided by a Lender Party at the time such
Lender Party first becomes a party to this Agreement indicate a
withholding tax (including, without limitation, United States interest
withholding tax) rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" unless and until such Lender
Party provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms;
provided however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement, the
Lender Party assignor was entitled to payments under subsection (a) of
this Section 4.02 in respect of withholding tax with respect to interest
paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or
other amounts otherwise includible in Taxes) withholding tax, if any,
applicable with respect to the Lender Party assignee on such date.
(e) For any period with respect to which a Lender Party has
failed to provide the Borrower or any Subsidiary Borrower with the
appropriate form described in Section 4.02(d) hereof (other than if such
failure is due to a change in law occurring subsequent to the date on
which a form originally was required to be provided, or if such form
otherwise is not required under the first two sentences of subsection
(d) above), such Lender Party shall not be entitled to indemnification
under Section 4.02(a) hereof with respect to Taxes imposed by any
jurisdiction (including, without limitation, the United States);
provided, however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the Lender Party shall reasonably
request to assist the Lender Party to recover such Taxes.
(f) Without affecting its rights under this Section 4.02 or
any provision of this Agreement, each Lender Party agrees that if any
Taxes or Other Taxes are imposed and required by law to be paid or to be
withheld from any amount payable to any Lender Party or its Applicable
Lending Office with respect to which the Borrower or any Subsidiary
Borrower would be obligated pursuant to this Section 4.02 to increase
any amounts payable to such Lender Party or to pay any such Taxes or
Other Taxes, such Lender Party shall use reasonable efforts to select an
alternative Applicable Lending Office which would not result in the
imposition of such Taxes or Other Taxes; provided, however, that no
Lender Party shall be obligated to select an alternative Applicable
Lending Office if such Lender Party determines that (i) as a result of
such selection such Lender Party would be in violation of an applicable
law, regulation, or treaty, or would incur unreasonable additional costs
or expenses or (ii) such selection would be inadvisable for regulatory
reasons or inconsistent with the interests of such Lender Party.
55
(g) In the event that an additional payment is made under
this Section 4.02 for the account of any Lender Party and such Lender
Party, in its sole discretion, determines that it has finally and
irrevocably received or been granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it in respect
of or calculated with reference to the deduction or withholding giving
rise to such payment, such Lender Party shall, to the extent that it
determines that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the
Borrower or Subsidiary Borrower, as the case may be, such amount as such
Lender Party shall, in its sole discretion, have determined to be
attributable to such deduction or withholding and which will leave such
Lender Party (after such payment) in no worse position than it would
have been in if the Borrower or Subsidiary Borrower had not been
required to make such deduction or withholding. Nothing herein contained
shall interfere with the right of a Lender Party to arrange its tax
affairs in whatever manner it thinks fit nor oblige any Lender Party to
claim any tax credit or to disclose any information relating to its tax
affairs or any computations in respect thereof or require any Lender
Party to do anything that would prejudice its ability to benefit from
any other credits, reliefs, remissions or repayments to which it may be
entitled.
(h) Each Lender Party agrees with the Borrower that it will
take all reasonable actions by all usual means (i) to secure and
maintain the benefit of all benefits available to it under the
provisions of any applicable double tax treaty concluded by the United
States of America to which it may be entitled by reason of the location
of such Lender Party's Applicable Lending Office or place of
incorporation or its status as an enterprise of any jurisdiction having
any such applicable double tax treaty, if such benefit would reduce the
amount payable by the Borrower or any Subsidiary Borrower in accordance
with this Section 4.02 and (ii) otherwise to cooperate with the Borrower
to minimize the amount payable by the Borrower or any Subsidiary
Borrower pursuant to this Section 4.02; provided, however, that no
Lender Party shall be obliged to disclose to the Borrower or any
Subsidiary Borrower any information regarding its tax affairs or tax
computations nor to reorder its tax affairs or tax planning pursuant
thereto.
(i) Without prejudice to the survival of any other agreement
of the Borrower or any Subsidiary Borrower hereunder, the agreements and
obligations of the Borrower and the Subsidiary Borrowers contained in
this Section 4.02 shall survive the payment in full of the Obligations.
SECTION 4.03 Sharing of Payments, Etc./Borrowings. If any Lender
Party shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of the Advances made
by it (other than pursuant to Section 2.07, 2.11 or 4.02 hereof) in excess of
its ratable share of payments on account of the Advances obtained by all the
Lender Parties, such Lender Party shall forthwith purchase from the other Lender
Parties such participations in the Advances made by them as shall be necessary
to cause such purchasing Lender Party 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 Party, such purchase
from each Lender Party shall be rescinded and such Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such recovery
together with an amount equal to such Lender Party's ratable share (according to
the proportion of (i) the
56
amount of such Lender Party's required repayment to (ii) the total amount so
recovered from the purchasing Lender Party) of any interest or other amount paid
or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 4.03 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 Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 4.04 Evidence of Debt/Borrowings. (a) Each Lender Party
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender Party resulting from
each Advance owing to such Lender Party from time to time, including the amounts
of principal and interest payable and paid to such Lender Party from time to
time hereunder.
(b) The Register maintained by the Agent pursuant to Section
10.07(c) hereof shall include a control account, and a subsidiary
account for each Lender Party, 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 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 Party hereunder, and (iv) the amount of any sum received
by the Agent from the Borrower hereunder and each Lender Party's share
thereof.
(c) The entries made in the Register shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 4.05 Payments and Computations/Letters of Credit. (a)
Except as otherwise provided in Section 4.06 hereof, the Borrower and each LC
Subsidiary, as the case may be, shall make each payment with respect to the
Letters of Credit, the Issuing Banks or the Lenders to be made by it free and
clear of all claims, charges, offsets or deductions whatsoever not later than
(i) if such payment relates to letter of credit facility fees or amounts (other
than reimbursements for payments in an Alternative Currency made under Letters
of Credit) or if such payment relates to a Letter of Credit denominated in
Dollars, 12:00 noon (New York City time) on the day when due in Dollars to the
respective Issuing Bank at its address referred to in Section 10.02 hereof in
same day funds and (ii) if such payment relates to reimbursement of a Letter of
Credit denominated in an Alternative Currency, (A) in such Alternative Currency,
at the respective Issuing Bank's Payment Office therefor so long as such payment
is made by the close of business on the Business Day when due and (B) thereafter
in Dollars (at the then Dollar equivalent of the amount due on such preceding
Business Day), by 12:00 noon (New York City time) to the respective Issuing Bank
at its address referred to in Section 10.02 hereof in same day funds as provided
in Section 3.14 above. The respective Issuing Bank will promptly thereafter (if
amounts are owed to the Lenders by the terms hereof) cause to be distributed
like funds relating to the payment of reimbursement obligations or letter of
credit facility fees ratably (other than amounts payable pursuant to Section
3.04(a), 3.08, or 4.06 hereof) 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 such Issuing Bank or to such Lender to be
distributed to the
57
appropriate Lender or Lenders and applied in accordance with the terms of this
Agreement. Upon the Agent's acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 10.07(d) hereof, from and after the effective date specified in such
Assignment and Acceptance, the respective Issuing Bank shall make all payments
hereunder 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 and each LC Subsidiary hereby authorize
each Lender and the Issuing Banks, if and to the extent payment owed to
such Lender or such Issuing Bank (including the immediate repayments of
participations purchased and funded by a Lender pursuant to Section 3.05
hereof) is not paid when due hereunder to charge from time to time
against any or all of the Borrower's or such LC Subsidiary's accounts
with such Lender or such Issuing Bank any amount so due (it being
understood and agreed that, notwithstanding anything in this Agreement
or any of the other Loan Documents to the contrary, accounts, deposits,
sums, securities or other property of any Foreign Subsidiary or of any
Subsidiary of a Foreign Subsidiary (including any Foreign Subsidiary or
any Subsidiary of a Foreign Subsidiary that is a Subsidiary Borrower or
LC Subsidiary) will not serve at any time, directly or indirectly, to
collateralize or otherwise offset the Obligations of the Borrower or any
Domestic Subsidiary, and, in addition, unless otherwise agreed to by the
Borrower, the accounts, deposits, sums, securities or other property of
a Foreign Subsidiary or Subsidiary of a Foreign Subsidiary will only
serve to collateralize or offset the Obligations of another Foreign
Subsidiary or Subsidiary of a Foreign Subsidiary that is a Subsidiary
Borrower or LC Subsidiary if such former Foreign Subsidiary or
Subsidiary of a Foreign Subsidiary is owned by such latter Foreign
Subsidiary or Subsidiary of a Foreign Subsidiary that is a Subsidiary
Borrower or LC Subsidiary).
(c) All computations of interest based on the Base Rate and
of letter of credit facility fees shall be made by the respective
Issuing Bank on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Federal Funds Rate and
of Letter of Credit fees shall be made by the respective Issuing Bank 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 letter of credit facility fees are
payable. Each determination by an Issuing Bank of an interest rate
hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder 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 letter of
credit facility fee, as the case may be.
(e) Unless the respective Issuing Bank shall have received
notice from the Borrower or an LC Subsidiary prior to the date on which
any payment is due to such Issuing Bank or Lenders hereunder that the
Borrower or such LC Subsidiary will not make such payment in full, such
Issuing Bank may assume that the Borrower or such LC Subsidiary has made
such payment in full to such Issuing Bank on such date and such
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Issuing Bank may, in reliance upon such assumption, cause to be
distributed to such Lender or Lenders on such due date an amount equal
to the amount then due such Lender or Lenders. If and to the extent that
the Borrower or such LC Subsidiary shall not have so made such payment
in full to such Issuing Bank, each such Lender shall repay to such
Issuing Bank 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 such Issuing Bank, at the Federal Funds Rate.
SECTION 4.06 Taxes/Letters of Credit. (a) Any and all payments
by the Borrower and each LC Subsidiary hereunder shall be made free and clear of
and without deduction for any and all present or future Taxes. If the Borrower
or any LC Subsidiary shall be required by applicable Requirements of Law to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to any Lender or Issuing Bank, (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 4.06) such Lender or
Issuing Bank (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 and such LC
Subsidiary shall make such deductions, (iii) the Borrower or respective LC
Subsidiary shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Requirements of Law and (iv) as
soon as practicable after the date of any payment of Taxes, the Borrower or
respective LC Subsidiary shall furnish to the Issuing Bank, at its address
referred to in Schedule I-B, the original or a certified copy of a receipt
evidencing payment thereof, to the extent such a receipt is issued therefore, or
other evidence of payment thereof that is reasonably satisfactory to the Issuing
Bank.
(b) The Borrower or the respective LC Subsidiary will
indemnify each of the Lenders and any Issuing Bank for the full amount
of Taxes and Other Taxes (including, without limitation, any taxes of
any kind imposed or asserted by any jurisdiction on amounts payable
under this Section 4.06) imposed on or paid by such Lender or Issuing
Bank (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. A reimbursement shall be made within 30 days from
the date such Lender or Issuing Bank (as the case may be) makes written
demand therefor. Any Issuing Bank and each Lender, as the case may be,
shall give prompt (within 10 Business Days) notice to the Borrower of
the payment by such Issuing Bank or such Lender, as the case may be, of
such amounts payable by the Borrower under the indemnity set forth in
this subsection (c), and of the assertion by any governmental or taxing
authority that such amounts are due and payable, but the failure to give
such notice shall not affect the Borrower's or any LC Subsidiary's
obligations hereunder to reimburse each Issuing Bank and each Lender for
such Taxes or Other Taxes or taxes imposed or asserted on amounts
payable under this Section 4.06, except that neither the Borrower nor
any LC Subsidiary shall be liable for penalties or interest accrued or
incurred after such 10 Business Day period until such time as it
receives the notice contemplated above, after which time it shall be
liable for interest and penalties accrued or incurred prior to or during
such 10 Business Day period and accrued or incurred after such receipt.
Neither the Borrower nor any LC Subsidiary shall be liable
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for any penalties, interest, expense or other liability with respect to
such Taxes or Other Taxes after it has reimbursed the amount thereof to
an Issuing Bank or the appropriate Lender.
(c) Each Lender Party organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each initial
Lender party and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Lender Party remains lawfully able to
do so), shall provide the Borrower with Internal Revenue Service form
W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender Party is
entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments
of interest payable by the Borrower or certifying that the interest is
effectively connected with the conduct of a trade or business in the
United States. Similarly, with respect to each LC Subsidiary organized
under the laws of a jurisdiction outside the United States, each Lender
Party, on or prior to the date of its execution and delivery of this
Agreement in the case of each initial Lender Party and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender
Party in the case of each other Lender Party, and from time to time
thereafter if requested in writing by the Borrower or such LC Subsidiary
(but only so long as such Lender Party remains lawfully able to do so),
shall provide the Borrower or such LC Subsidiary with appropriate
documentation certifying applicable exemptions from withholding tax
imposed by any jurisdiction on payments of interest payable by such LC
Subsidiary. If the forms provided by a Lender Party at the time such
Lender Party first becomes a party to this Agreement indicate a
withholding tax (including, without limitation, United States interest
withholding) tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from "Taxes" unless and until such Lender
Party provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms;
provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement, the
Lender Party assignor was entitled to payments under subsection (a) of
this Section 4.06 in respect of withholding tax with respect to interest
paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or
other amounts otherwise includible in Taxes) withholding tax, if any,
applicable with respect to the Lender Party assignee on such date.
(d) For any period with respect to which a Lender Party has
failed to provide the Borrower or any LC Subsidiary with the appropriate
form described in Section 4.06(c) (other than if such failure is due to
a change in law occurring subsequent to the date on which a form
originally was required to be provided, or if such form otherwise is not
required under the first two sentences of subsection (c) above), such
Lender Party shall not be entitled to indemnification under Section
4.06(a) hereof with respect to Taxes imposed by any jurisdiction
(including, without limitation, the United States); provided, however,
that should a Lender Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take
such steps as
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the Lender Party shall reasonably request to assist the Lender Party to
recover such Taxes.
(e) Without affecting its rights under this Section 4.06 or
any provision of this Agreement, each Lender Party agrees that if any
Taxes or Other Taxes are imposed and required by law to be paid or to be
withheld from any amount payable to any Lender Party or its Applicable
Lending Office with respect to which the Borrower or any LC Subsidiary
would be obligated pursuant to this Section 4.06 to increase any amounts
payable to such Lender Party or to pay any such Taxes or Other Taxes,
such Lender Party shall use reasonable efforts to select an alternative
Applicable Lending Office which would not result in the imposition of
such Taxes or Other Taxes; provided, however, that no Lender Party shall
be obligated to select an alternative Applicable Lending Office if such
Lender Party determines that (i) as a result of such selection such
Lender Party would be in violation of an applicable law, regulation, or
treaty, or would incur unreasonable additional costs or expenses or (ii)
such selection would be inadvisable for regulatory reasons or
inconsistent with the interests of such Lender Party.
(f) In the event that an additional payment is made under
this Section 4.06 for the account of any Lender Party and such Lender
Party, in its sole discretion, determines that it has finally and
irrevocably received or been granted a credit against or release or
remission for, or repayment of, any tax paid or payable by it in respect
of or calculated with reference to the deduction or withholding giving
rise to such payment, such Lender Party shall, to the extent that it
determines that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the
Borrower or LC Subsidiary, as the case may be, such amount as such
Lender Party shall, in its sole discretion, have determined to be
attributable to such deduction or withholding and which will leave such
Lender Party (after such payment) in no worse position than it would
have been in if the Borrower or LC Subsidiary had not been required to
make such deduction or withholding. Nothing herein contained shall
interfere with the right of a Lender Party to arrange its tax affairs in
whatever manner it thinks fit nor oblige any Lender Party to claim any
tax credit or to disclose any information relating to its tax affairs or
any computations in respect thereof or require any Lender Party to do
anything that would prejudice its ability to benefit from any other
credits, reliefs, remissions or repayments to which it may be entitled.
(g) Each Lender Party agrees with the Borrower that it will
take all reasonable actions by all usual means (i) to secure and
maintain the benefit of all benefits available to it under the
provisions of any applicable double tax treaty concluded by the United
States of America to which it may be entitled by reason of the location
of such Lender Party's Applicable Lending Office or place of
incorporation or its status as an enterprise of any jurisdiction having
any such applicable double tax treaty, if such benefit would reduce the
amount payable by the Borrower or any LC Subsidiary in accordance with
this Section 4.06 and (ii) otherwise to cooperate with the Borrower to
minimize the amount payable by the Borrower or any LC Subsidiary
pursuant to this Section 4.06; provided, however, that no Lender Party
shall be obliged to disclose to the Borrower or any LC Subsidiary any
information regarding its tax affairs or tax computations nor to reorder
its tax affairs or tax planning pursuant hereto.
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(h) Without prejudice to the survival of any other agreement
of the Borrower or any LC Subsidiary hereunder, the agreements and
obligations of the Borrower and the LC Subsidiaries contained in this
Section 4.06 shall survive the payment in full of the Obligations.
SECTION 4.07 Sharing of Payments, Etc./Letters of Credit. If any
Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) on account of any Letter of
Credit Liability of the Borrower or any LC Subsidiary hereunder (other than
pursuant to Section 3.08 or 4.06 hereof) in excess of its Commitment Percentage
of any such payments on account of such Letter of Credit Liability obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in such other Lenders' participations purchased pursuant to
Section 3.05 hereof as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each other Lender, provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Lender such purchase from each other Lender shall be rescinded and
each such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to each such Lender's
ratable share (according to the proportion of (i) the amount of such 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 and each LC Subsidiary
agree that any Lender so purchasing a sub-participation from another Lender
pursuant to this Section 4.07 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such sub-participation as fully as if such Lender were the direct creditor of
the Borrower or each LC Subsidiary in the amount of such participation.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01 Conditions Precedent to Effectiveness of this
Agreement. 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) 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.
(b) The Agent shall have received the following in form and
substance satisfactory to the Agent:
(i) The notes to the order of the Lenders to the
extent requested by any Lender pursuant to Section 2.02(g)
hereof.
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(ii) Certified copies of the resolutions of the board
of directors (or persons performing similar functions) of each
domestic Loan Party approving the Agreement and each of the Loan
Documents to which it is or is to be a party, and of all
documents evidencing other necessary Governmental
Authorizations, or other necessary consents, approvals,
authorizations, notices, filings or actions, with respect to
this Agreement and any of the Loan Documents to which it is or
is to be a party.
(iii) A copy of a certificate of the Secretary of
State (or equivalent Governmental Authority) of the jurisdiction
of organization of each domestic Loan Party listing the
certificate or articles of incorporation (or similar
Constitutive Document) of each such Loan Party and each
amendment thereto on file in the office of such Secretary of
State (or such governmental authority) and certifying (A) that
such amendments are the only amendments to such Person's
certificate or articles of incorporation (or similar
constitutive document) on file in its office, (B) if customarily
available in such jurisdiction, that such Person has paid all
franchise taxes (or the equivalent thereof) to the date of such
certificate and (C) that such Person is duly organized and is in
good standing under the laws of the jurisdiction of its
organization.
(iv) A certificate of the Secretary or an Assistant
Secretary of each domestic Loan Party certifying the names and
true signatures of the officers of such Loan Party authorized to
sign each Loan Document to which it is a party and the other
documents to be delivered hereunder.
(v) A guarantee, in substantially the form of
Exhibit D hereto (the "Subsidiary Guaranty"), duly executed by
each wholly-owned Domestic Subsidiary (other than the Excluded
Subsidiaries).
(vi) A security agreement in substantially the form
of Exhibit E hereto (together with each other security agreement
and security agreement supplement delivered pursuant to Section
7.01(i) hereof, the "Security Agreement"), duly executed by the
Borrower and each wholly-owned Domestic Subsidiary (other than
the Excluded Subsidiaries), together with:
(A) to the extent available on the Effective Date,
certificates representing the Initial Pledged Equity (as defined
in the Security Agreement, other than equity interests in
Excluded Subsidiaries, but including equity interests in
first-tier Special Purpose Subsidiaries) accompanied by undated
stock powers (or similar instruments) executed in blank;
(B) appropriate UCC-1 financing statements under the
Uniform Commercial Code of all jurisdictions that the Agent may
deem necessary or desirable in order to perfect and protect the
first priority Liens created under the Security Agreement,
covering the Collateral described in the Security Agreement;
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(C) evidence that all other action that the Agent
and, as the case may be, the Collateral Agent may deem necessary
or desirable in order to perfect and protect the first priority
liens and security interests created under the Security
Agreement has been taken.
(vii) The Intercreditor Agreement duly executed by the
Agent on behalf of the Lenders, the Collateral Agent, as defined
therein, and any Lender who is then a party to a Hedge
Agreement.
(viii) A favorable opinion of General Counsel or
Associate General Counsel to the Loan Parties, substantially in
the form of Exhibit F-1 hereto and as to such other matters as
any Lender through the Agent may reasonably request.
(ix) Favorable opinions of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New York counsel to the Loan
Parties, in substantially the forms of Exhibits F-2 and F-3
hereto and as to such other matters as any Lender through the
Agent may reasonably request.
(x) A favorable opinion of Shearman & Sterling,
special New York counsel to the Agent, in substantially the form
of Exhibit G hereto and as to such other matters as any Lender
through the Agent may reasonably request.
(xi) Such other approvals, opinions or documents as
the Agent may reasonably request.
(c) The Borrower shall have paid all accrued fees and
expenses of the Agent and the Lenders (including the accrued fees and
expenses of counsel to the Agent).
(d) All amounts owing by the Borrower or any of its
Subsidiaries to the lenders and agents under the Existing Credit
Agreement shall have been, or concurrently with the initial extension of
credit made on the Effective Date shall be, paid in full, and all
commitments of the lenders under the Existing Credit Agreement (except
for the Existing Letters of Credit issued thereunder and except for
Trade Letters of Credit issued under the Existing Credit Agreement that
will be deemed issued under the LC Facilities) shall have been, or
concurrently with the initial extension of credit made on the Effective
Date shall be, terminated in accordance with the terms of the Existing
Credit Agreement, and all guarantees given, and all security interests
granted, in connection therewith shall have been terminated.
(e) A preliminary updated valuation review of the domestic
inventories of the Loan Parties that is satisfactory to the Agent and
the Joint Lead Arrangers.
SECTION 5.02 Conditions Precedent to Each Advance/Issuance. The
obligation of each Lender to make an Advance (including a Swing Line Advance),
including on the occasion of each Borrowing (including the initial Borrowing),
and the obligation of each Issuing Bank to Issue each Letter of Credit
(including the initial Letter of Credit) shall be subject to the further
conditions precedent that on the date of such Advance or Issuance the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing and the
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acceptance by the Borrower or the respective Subsidiary Borrower of the proceeds
of such Advance and the request for Issuance by the Borrower, a Subsidiary
Borrower or an LC Subsidiary shall constitute a representation and warranty by
the Borrower, such Subsidiary Borrower or such LC Subsidiary that on the date of
such Borrowing or Issuance such statements are true):
(a) The representations and warranties contained in Section
6.01 hereof (other than, in the case of any Advance or Issuance that
does not increase the outstanding principal amount of the Advances or
Letter of Credit Liability, the representations and warranties contained
in Section 6.01(f) hereof and in Section 6.01(g) hereof), Section 6 of
the Security Agreement and Section 6 of the Subsidiary Guaranty are
correct on and as of the date of such Borrowing or Issuance, before and
after giving effect to such Borrowing or 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 Borrowing or from the application of the proceeds therefrom or
from such Issuance, which constitutes an Event of Default or Default;
and
(c) The making of such Advance will be in compliance with
the respective criteria set forth in Section 2.01(a) and Section
2.01(b)(i) and (ii) hereof, as the case may be, or the Issuance of such
Letter of Credit will be in compliance with the criteria set forth in
Section 3.01(a)(i) and (ii) hereof, as the case may be.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 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 Delaware; each LC
Subsidiary and each Subsidiary Borrower is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation. The Borrower and each of its Subsidiaries possess all
powers (corporate or otherwise) and all other authorizations and
licenses necessary to engage in their respective businesses, except
where the failure to so possess would not have a Material Adverse
Effect.
(b) The execution, delivery and performance by each Loan
Party of the Loan Documents to which it is a party and the consummation
of the transactions contemplated thereby are within such Loan Party's
respective powers (corporate or otherwise), have been duly authorized by
all necessary action (corporate or otherwise), and do not (i) contravene
such Loan Party's Constitutive Documents, (ii) violate any Requirements
of Law, (iii) conflict with or result in the breach of, or constitute a
default or require any payment to be made under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party or any of
65
its properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party. No Loan
Party is in violation of any such Requirements of Law or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which would be
reasonably likely to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by any Loan
Party of the Loan Documents to which it is a party.
(d) Each Loan Document is the legal, valid and binding
obligation of the Loan Party thereto enforceable against such Loan Party
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting
the enforcement of creditors' rights generally and general principles of
equity (regardless of whether considered in a proceeding in equity or at
law).
(e) The Consolidated balance sheets of the Borrower and its
Subsidiaries as of February 1, 2003, and the related Consolidated
statements of income and retained earnings of the Borrower and its
Subsidiaries for the Fiscal Year then ended, certified by Deloitte &
Touche LLP, copies of which have been furnished to each Lender Party,
fairly present the Consolidated financial condition of the Borrower and
its Subsidiaries as at such date and the 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.
(f) Since February 1, 2003, there has been no Material
Adverse Change.
(g) There is no pending or, to the best of Borrower's
knowledge, threatened action or proceeding affecting the Borrower or any
of its Subsidiaries before any court, governmental agency or arbitrator,
(i) which has a reasonable probability (taking into account the
exhaustion of all appeals and the assertion of all defenses) of having a
Material Adverse Effect or (ii) which purports to affect the legality,
validity or enforceability of any Loan Document.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawing under any Letter of Credit will be
used to purchase any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock.
(i) Neither the Borrower nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(j) Set forth on Schedule VIII hereto is a complete and
accurate list, as of the date hereof, of all Plans of the Borrower and
its Subsidiaries. Neither the Borrower nor
66
any ERISA Affiliate is a party or subject to, or has any obligation to
make payments, or incur any material Withdrawal Liability, to, any
Multiemployer Plan.
(k) Except as provided in Schedule X, no ERISA Event has
occurred with respect to any Plan or is reasonably expected to occur
with respect to any Plan that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur would
reasonably be likely to result in a Material Adverse Effect.
(l) Except as provided in Schedule X, Schedule B (Actuarial
Information) to the most recently completed annual report (Form 5500
Series) for each Plan of the Borrower or its Subsidiaries, copies of
which have been or will be filed with the Internal Revenue Service, is
complete and accurate in all material respects and fairly presents the
funding status of such Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status which would
reasonably be likely to result in a Material Adverse Effect.
(m) Except as provided in Schedule X, neither the Borrower
nor any ERISA Affiliate has been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA and no
Multiemployer Plan is reasonably expected to be in reorganization or to
be terminated, within the meaning of Title IV of ERISA.
(n) Each of Borrower and its Subsidiaries is in compliance
with all Requirements of Law applicable to their properties, assets and
business where the failure to so comply would (as to all such failures
to comply in the aggregate) have a Material Adverse Effect. There are no
proceedings pending or, to the knowledge of any Loan Party, threatened
in writing, to terminate or modify any license, permit or other approval
issued by a Governmental Authority, the termination or modification of
which (in the aggregate as to all such matters) would have a Material
Adverse Effect.
(o) The Borrower is, individually and together with its
Subsidiaries, Solvent.
(p) As of the Effective Date, set forth on Schedule XI
hereto is a complete and accurate list of all Subsidiaries of the
Borrower (except Excluded Subsidiaries but including Special Purpose
Subsidiaries), showing as of the Effective Date hereof (as to each such
Subsidiary) the jurisdiction of its organization, the number of shares
or other units of each class of its Equity Interests authorized, and the
number outstanding, on the date hereof and the percentage of each such
class of its Equity Interests owned (directly or indirectly) by the
Borrower or any Subsidiary thereof and the number of shares or other
units covered by all outstanding options, warrants, rights of conversion
or purchase and similar rights at the date hereof, except for any
obligations or rights of the Borrower or any of its Subsidiaries to
acquire any minority interest in any Subsidiary of the Borrower that is
a partnership; and in the case of each Special Purpose Subsidiary a
summary of the material assets in each such Special Purpose Subsidiary.
All of the outstanding Equity Interests in each such Subsidiary have (A)
(in the case of Subsidiaries that are corporations) been validly issued,
are fully paid and non-assessable and are (B) to
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the extent owned by the Borrower or one or more of its Subsidiaries,
free and clear of all Liens, except those created under the Collateral
Documents or Permitted Liens.
(q) As of the Effective Date, neither the Information
Memorandum nor any other information, exhibit or report furnished by any
Loan Party to any Agent or any Lender Party in connection with the
negotiation and syndication of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements made therein not misleading; provided that all financial
projections, if any, that have been or will be prepared by the Borrower
and made available to the Joint Lead Arrangers, the Agent, any Lender or
any potential Lender, or any other party hereto, including, without
limitation, any projections described in or otherwise contemplated by
Section 7.04(ix) hereof, have been or will be prepared in good faith
based upon reasonable assumptions, it being understood by the Lenders
and all the other parties hereto that such projections are subject to
significant uncertainties and contingencies, many of which are beyond
the Borrower's control, and that no assurances can be given that the
projections will be realized.
(r) Except as described on Schedule XII hereto, the
operations and properties of each Loan Party comply in all material
respects with all applicable Environmental Laws and Environmental
Permits, except where any such failure to comply would not be reasonably
expected to have a Material Adverse Effect, and no Environmental Action
is pending or, to Borrower's knowledge, is threatened against any Loan
Party or any of their properties that would be reasonably likely to have
a Material Adverse Effect.
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01 Affirmative Covenants. The Borrower will, unless
the Majority Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
laws (including, without limitation, all Environmental Laws), rules,
regulations and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the
extent contested in good faith or where the failure to comply would not
have a Material Adverse Effect.
(b) Preservation of Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its
existence (corporate or otherwise), rights (charter and statutory), and
franchises except if, in the reasonable business judgment of the
Borrower or such Subsidiary, as the case may be, it is in its best
economic interest not to preserve and maintain such rights or franchises
and such failure to preserve and maintain such rights or franchises
would not materially adversely affect the rights of the Lenders or the
Issuing Banks hereunder or the ability of any Loan Party to perform its
obligations under the respective Loan Documents (it being understood
that the foregoing
68
shall not prohibit, or be violated as a result of, any transactions by
or involving any Loan Party or other Subsidiary otherwise permitted
under Section 7.02 below).
(c) Visitation Rights. Permit, and cause each of its
Subsidiaries to permit, the Agent, any Issuing Bank and any Lender or
any agents or representatives thereof from time to time, during
reasonable business hours, without hindrance or delay, and upon
reasonable prior notice, to examine and make copies of and abstracts
from its records and books of account, to visit its properties, and to
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with any of their respective directors, officers or agents.
(d) 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 of its Subsidiaries in
accordance with sound business practice.
(e) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties which are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted,
consistent with sound business practice, except where the failure to so
maintain and preserve would not have a Material Adverse Effect.
(f) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance (other than earthquake or
terrorism insurance) in amounts, from responsible and reputable
insurance companies or associations, with limitations, of types and on
terms as is customary for the industry; provided, that, the Borrower and
each of its Subsidiaries may self-insure risks and liabilities in
accordance with its practice as of the date hereof and may in addition
self-insure risks and liabilities in amounts as are customarily
self-insured by similarly situated Persons in the industry.
(g) Employment of Technology, Disposal of Hazardous
Materials, Etc. (i) Employ, and cause each of its Subsidiaries to
employ, appropriate technology and compliance procedures to maintain
compliance with any applicable Environmental Laws except where the
failure to so employ would not have a Material Adverse Effect, (ii)
obtain and maintain, and cause each of its Subsidiaries to obtain and
maintain, any and all material permits required by applicable
Environmental Laws in connection with its or its Subsidiaries'
operations and (iii) dispose of, and cause each of its Subsidiaries to
dispose of, any and all Hazardous Substances only at facilities and with
carriers reasonably believed to possess valid permits under RCRA, if
applicable, and any applicable state and local Environmental Laws except
where the failure to so dispose would not have a Material Adverse
Effect. The Borrower shall use its best efforts, and cause each of its
Subsidiaries to use its best efforts, to obtain all certificates
required by law to be obtained by the Borrower and its Subsidiaries from
all contractors employed by the Borrower or any of its Subsidiaries in
connection with the transport or disposal of any Hazardous Substances
except where failure to transport or dispose in accordance with any
applicable Environmental Laws would not have a Material Adverse Effect.
69
(h) Environmental Matters. If the Borrower or any of its
Subsidiaries shall:
(i) receive written notice that any material
violation of any Environmental Laws may have been committed or
is about to be committed by the Borrower or any of its
Subsidiaries the cure of which would result in expenditures
exceeding $20,000,000;
(ii) receive written notice that any administrative
or judicial complaint or order has been filed or is about to be
filed against the Borrower or any of its Subsidiaries alleging
any material violation of any Environmental Laws or requiring
the Borrower or any of its Subsidiaries to take any action
(which, if taken, would result in expenditures exceeding
$20,000,000) in connection with the release or threatened
release of Hazardous Substances or solid waste into the
environment; or
(iii) receive written notice from a federal, state,
foreign or local governmental agency or private party alleging
that the Borrower or any of its Subsidiaries is liable or
responsible for costs in excess of $20,000,000 associated with
the response to cleanup, stabilization or neutralization of any
Environmental Activity;
then it shall provide the Agent with a copy of such notice within five Business
Days of the Borrower's or such Subsidiary's receipt thereof.
(i) Covenant to Guarantee Obligations and Give Security. The
Borrower shall, in each case at the Borrower's expense:
(i) in connection with the formation or acquisition
of a wholly-owned Domestic Subsidiary or in the event a
wholly-owned Domestic Subsidiary which was an Excluded
Subsidiary (pursuant to clause (b) or (e) of the definition
thereof) ceases to be such, within 45 days after each such
circumstance (A) furnish to the Agent a description of the
material personal properties of such wholly-owned Domestic
Subsidiary and (B) cause each such Domestic Subsidiary (except
any Excluded Subsidiary) to duly execute and deliver to the
Agent a counterpart to the Subsidiary Guaranty (in the form of
the supplement attached as an exhibit thereto),
(ii) (A) within 45 days after the formation or
acquisition of a wholly-owned Domestic Subsidiary (except any
Excluded Subsidiary) or after a wholly-owned Domestic Subsidiary
which was an Excluded Subsidiary (pursuant to clause (b) or (e)
of the definition thereof) ceases to be such, duly execute and
deliver, and cause each such wholly-owned Domestic Subsidiary
and each direct and indirect parent of such wholly-owned
Domestic Subsidiary (if it has not already done so) to duly
execute and deliver, to the Collateral Agent a counterpart to
the Security Agreement (in the form of the supplement attached
as an exhibit thereto), with respect to the Equity Interests in
and assets of such wholly-owned Domestic Subsidiary, to the
extent contemplated by the Security Agreement, (B)
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within 45 days after the formation or acquisition of a
non-wholly-owned Domestic Subsidiary (except any Excluded
Subsidiary), duly execute and deliver, and cause each direct and
indirect Domestic Subsidiary which is a direct or indirect
parent of such non-wholly-owned Domestic Subsidiary (if it has
not already done so) to duly execute and deliver, to the
Collateral Agent a counterpart to the Security Agreements (in
the form of the supplement attached as an exhibit thereto), with
respect to the Equity Interests held by the Borrower or such
Domestic Subsidiaries in such non-wholly owned Domestic
Subsidiary and (C) within 45 days after the formation or
acquisition of a first-tier Special Purpose Subsidiary, duly
execute and deliver, and cause each respective Domestic
Subsidiary which is a direct parent of such Special Purpose
Subsidiary (if it has not already done so) to duly execute and
deliver to the Collateral Agent a counterpart to the Security
Agreement (in the form of a supplement attached as an exhibit
thereto) with respect to the Equity Interests held by the
Borrower or such Domestic Subsidiaries in such Special Purpose
Subsidiary.
(iii) within 45 days after such formation or
acquisition of a wholly-owned Domestic Subsidiary (except any
Excluded Subsidiary) or after a wholly-owned Domestic Subsidiary
which was an Excluded Subsidiary (pursuant to clause (b) or (e)
of the definition thereof) ceases to be such, take, and cause
such wholly-owned Domestic Subsidiary or such parent to take,
whatever action (including, without limitation, the filing of
Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may
be necessary or advisable in the opinion of the Collateral Agent
to vest in the Collateral Agent valid and subsisting Liens on
the properties purported to be subject to the pledges,
assignments, security agreements and security agreement
supplements delivered pursuant to this Section 7.01(i),
enforceable against all third parties in accordance with their
terms,
(iv) within 60 days after such formation or
acquisition of a wholly-owned Domestic Subsidiary (except any
Excluded Subsidiary) or after a wholly-owned Domestic Subsidiary
which was an Excluded Subsidiary (pursuant to clause (b) or (e)
of the definition thereof) ceases to be such deliver to the
Agent, upon the request of the Agent in its sole discretion, a
signed copy of a favorable opinion (subject to customary
qualifications, limitations and exceptions), addressed to the
Agent and the other Lender Parties, of counsel for such Domestic
Subsidiary as a Loan Party acceptable to the Agent as to the
matters contained in clauses (i) and (ii) above, as to such
guaranties, guaranty supplements, pledges, assignments, security
agreements and security agreement supplements being legal, valid
and binding obligations of the respective Domestic Subsidiary as
a Loan Party thereto enforceable in accordance with their terms,
as to the matters contained in clause (iii) above, as to such
recordings, filings, notices, endorsements and other actions
being sufficient to create valid perfected Liens on such
properties, and as to such other matters as the Agent may
reasonably request, which opinions shall be substantially
equivalent to the opinions of counsel to the Loan Parties as to
such matters delivered on the Effective Date, and
71
(v) at any time and from time to time, promptly
execute and deliver any and all further instruments and
documents and take all such other action as the Agent may deem
necessary or desirable in obtaining the full benefits of, or in
perfecting and preserving the Liens of, such guaranties,
pledges, assignments, security agreements and security agreement
supplements, to the extent required by this Agreement, the
Security Agreement or the Subsidiary Guaranty.
Provided that nothing in this Section 7.01(i) shall require any Excluded
Subsidiary to guarantee the Obligations of any Loan Party hereunder or
grant a Security Interest in any of its assets to secure the payment of
such Obligations.
(j) Further Assurances.
(i) Promptly upon request by the Agent, or any
Lender Party through the Agent, correct, and cause each of its
Subsidiaries promptly to correct, any material defect or error
that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof.
(ii) Within 30 days of the Borrower or any domestic
Loan Party obtaining any rights in any trademarks or service
marks, unless within such period such rights are transferred to
a Special Purpose Subsidiary, the Borrower will, or will cause
such Loan Party, to enter into such Security Agreements,
Security Agreement Supplements and other documents and take such
other actions, in each case as reasonably requested by the
Collateral Agent so that the Collateral Agent will obtain a
first priority security interest in such trademarks and service
marks.
(iii) Promptly upon request by the Agent, or any
Lender Party through the Agent, do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, pledge agreements,
assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as the Agent, or
any Lender Party through the Agent, may reasonably require from
time to time in order to (A) carry out more effectively the
purposes of the Loan Documents, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's
properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral
Documents, (C) perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (D) assure, convey,
grant, assign, transfer, preserve, protect and confirm more
effectively unto the Secured Parties the rights granted or now
or hereafter intended to be granted to the Secured Parties under
any Loan Document or under any other instrument executed in
connection with any Loan Document to which any Loan Party is or
is to be a party, and cause each of its Subsidiaries to do so.
(iv) No later than sixty (60) days after the
Effective Date, deliver to the Agent certified copies of
resolutions of the board of directors (or persons performing
similar functions) of each foreign Loan Party approving this
72
Agreement and each of the other Loan Documents to which it is or
is to be a party, and of all documents evidencing other
necessary Governmental Authorizations, if any, or other
necessary consents, approvals, authorizations, notices, filings
or actions, with respect to this Agreement and any of the other
documents to which it is or is to be a party, together with a
certificate of the Secretary or an Assistant Secretary (or
equivalent officer) certifying the names of each such Loan Party
authorized to sign each Loan Document to which it is or is to be
a party and the other documents delivered hereunder and that its
Constitutive Documents are still in force and effect, and if
customarily available, with a certificate from the appropriate
Governmental Authority as to the good standing of such Loan
Party under the laws of the jurisdiction of its organization,
with such resolutions and certificates, if in another language,
to be translated into English. To the extent that such documents
with respect to any foreign Loan Party are not delivered within
the time period specified in this Section 7.01(j)(iv) and
thereafter until such documents are delivered to the Agent, (A)
in the case of a Subsidiary Borrower, such Subsidiary Borrower
may not request, and no Swing Line Lender shall make to such
Subsidiary Borrower, any Swing Line Advance; and (B) in the case
of an LC Subsidiary, such LC Subsidiary may not request the
Issuance of, and no Issuing Bank shall Issue, any Letter of
Credit for its account, and (x) the failure to make such
deliveries shall not constitute a Default or Event of Default
hereunder and (y) the remedies provided in clauses (A) and (B)
of this Section 7.01(j)(iv) are the exclusive remedies for the
failure to timely deliver the respective documents herein
referred to.
(k) Use of Proceeds. Use the proceeds of the Advances and
issuances of Letters of Credit solely to repay amounts owing under the
Existing Credit Agreement and for general corporate purposes of the
Borrower and its Subsidiaries.
SECTION 7.02 Negative Covenants. The Borrower will not, without
the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien (including an
assignment of any right to receive income), other than:
(i) Permitted Liens;
(ii) Liens upon or in any real property, equipment,
fixed asset or capital asset acquired, constructed, improved or
held by the Borrower or any Subsidiary in the ordinary course of
business to secure the cost of acquiring, constructing or
improving such property, equipment or asset or to secure Debt
incurred solely for the purpose of financing the acquisition of
such property, equipment or asset, or Liens existing on such
property, equipment or asset at the time of its acquisition
(other than any such Liens created in contemplation of such
acquisition, construction or improvement that were not incurred
to finance the acquisition, construction or improvement of such
property, equipment or asset) or extensions, renewals or
replacements of any of the foregoing for the same or a
73
lesser amount, provided, however, that no such Lien shall extend
to or cover any properties of any character other than the real
property, equipment or asset being acquired, constructed or
improved, and no such extension, renewal or replacement shall
extend to or cover any properties not theretofore subject to the
Lien being extended, renewed or replaced,
(iii) Liens upon existing real property interests of
the Borrower or any of its Subsidiaries to secure Debt in an
aggregate principal amount not in excess of $600,000,000, less
(without duplication) the value of real property interests sold
as contemplated by Section 7.02(g)(iv) hereof,
(iv) Liens existing on property prior to the
acquisition thereof by the Borrower or any of its Subsidiaries
in the ordinary course of business or on property of a Person
existing at the time such Person is merged into or consolidated
with the Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower; provided that such Liens were not
created in contemplation of such merger, consolidation or
acquisition and do not extend to any other assets of the
Borrower or such Subsidiary, and the replacement, extension or
renewal of any such Lien upon or in the same property subject
thereto or the replacement, extension or renewal (without
increase in the amount, shortening the maturity or change in any
direct or contingent obligor if such change would be adverse to
the Borrower) of the Debt permitted hereunder secured thereby,
(v) Liens arising pursuant to the LC Facilities
securing obligations in respect of letters of credit issued
thereunder in an aggregate amount outstanding at any time not in
excess of the maximum amount of letters of credit available to
be issued under the LC Facilities on the date of this Agreement,
(vi) Liens securing obligations, in an aggregate
amount outstanding at any time not in excess of $400,000,000,
arising under or from letters of credit issued (and outstanding)
for the account of the Borrower or any of its Subsidiaries, and
(vii) other Liens securing Debt and Hedge Agreements,
provided that the aggregate amount of the Obligations secured
thereby does not exceed $70,000,000 at any time outstanding.
(b) Debt. Permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Debt, except:
(i) Debt under the Loan Documents;
(ii) Debt under the LC Facilities and in respect of
the letters of credit referred to in Section 7.02(a)(vi) hereof;
(iii) Debt existing on the Effective Date and
described on Schedule XIII hereto;
74
(iv) Debt of any Subsidiary of the Borrower which is
not a Guarantor owed to any other such Subsidiary, and Debt of a
Guarantor owed to the Borrower or any Subsidiary of the
Borrower;
(v) Debt incurred after the date of this Agreement
and secured by Liens expressly permitted under Section
7.02(a)(ii) hereof in an aggregate principal amount not to
exceed, when aggregated with the principal amount of all Debt
incurred under clause (vi) of this Section 7.02(b), $50,000,000
any time outstanding;
(vi) Capitalized Leases incurred after the date of
this Agreement which, when the principal amount thereof is
aggregated with the principal amount of all Debt incurred under
clause (v) of this Section 7.02(b), do not exceed $50,000,000 at
any time outstanding;
(vii) Unsecured Debt not otherwise permitted under
this Section 7.02(b) in an aggregate amount not to exceed
$200,000,000 at any time outstanding;
(viii) Endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business;
(ix) Debt referred to in Section 7.02(a)(iii) hereof
in a principal amount not in excess of the amount referred to
therein;
(x) Debt extending the maturity of, or refunding,
refinancing or replacing, in whole or in part, any Debt incurred
under clause (iii) of this Section 7.02(b); provided, however,
that (A) the aggregate principal amount of such extended,
refunding, refinancing or replacement Debt shall not be
increased above the principal amount thereof and the premium, if
any, thereon outstanding immediately prior to such extension,
refunding, refinancing or replacement, (B) the direct and
contingent obligors therefor shall not be changed as a result of
or in connection with such extension, refunding, refinancing or
replacement if such change would be adverse to the interests of
the Borrower, (C) such extended, refunding, refinancing or
replacement Debt shall not mature prior to the stated maturity
date or mandatory redemption date of the Debt being so extended,
refunded, refinanced or replaced, and (D) if the Debt being so
extended, refunded, refinanced or replaced is subordinated in
right of payment or otherwise to the Obligations or any of the
Borrower's Subsidiaries under and in respect of the Loan
Documents, such extended, refunding, refinancing or replacement
Debt shall be subordinated to such Obligations to at least the
same extent;
(xi) Guarantees by a Guarantor of Debt of another
Guarantor permitted hereunder or Guarantees by a Subsidiary of
the Borrower which is not a Guarantor of Debt permitted
hereunder of a Guarantor or of another such Subsidiary; and
(xii) Debt of any Subsidiary of the Borrower which is
not a Guarantor owed to the Borrower or a Guarantor in an
outstanding principal amount, when
75
combined with the aggregate purchase price of securities and
dollar amount of capital contributions made pursuant to Section
7.02(d)(ii) hereof, not in excess of the then applicable
limitation on Investments in such Section.
(c) Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person, or
permit any of its Subsidiaries to do so, except (i) that any Guarantor
may merge or consolidate with or into, or dispose of assets to, any
other Guarantor or the Borrower, (ii) that any Subsidiary of the
Borrower (which is not a Guarantor but including a Special Purpose
Subsidiary) may merge or consolidate with or into, or dispose of assets
to, any other Subsidiary of the Borrower or the Borrower and (iii) as
otherwise provided in Section 7.02(d) or (g) hereof. Notwithstanding any
other provision of this Agreement, (x) a Subsidiary that is not a
Guarantor may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of
the Borrower and (y) a Guarantor may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution
is in the best interests of the Borrower and the assets or proceeds from
the liquidation or dissolution of such Guarantor are transferred to the
Borrower or another Guarantor.
(d) Acquisition, Investments.
(i) Acquisitions. Without limitation of Section
7.02(c) above or Section 7.02(d)(ii) below, purchase, or permit
any of its Subsidiaries to purchase, all or substantially all
the assets of any Person (which is not a Loan Party) or merge or
consolidate with, or permit any Subsidiary to merge or
consolidate with, any Person (which is not a Loan Party) (in
each case, an "Acquisition") unless (A) each such Acquisition is
for the purchase of Retail Assets and the purchase price in
respect of any such Acquisition is less than 10% for each year
of the initial two-year period beginning on the Effective Date,
and 15% for the third year of this Agreement, of the amount
equal to the "stockholders' equity" of the Borrower (as
reflected in the respective financial statements delivered to
the Lenders) as of end of the Fiscal Quarter immediately
preceding such Acquisition less the aggregate purchase price in
respect of all Acquisitions during the period from the Effective
Date to the date of such Acquisition, (B) immediately prior to
and after giving effect to such Acquisition no Event of Default
or Default shall exist, and (C) in the case of any merger or
consolidation, the Borrower or such Subsidiary is the surviving
entity, except in the case of any Subsidiary to the extent
permitted by Section 7.02(g) hereof.
(ii) Investments. Without limitation of Section
7.02(c) above or Section 7.02(j) below, make, or permit any of
its Subsidiaries to make, an investment in any Person by way of
the purchase of such Person's capital stock or securities or the
making of capital contributions with respect thereto (an
"Investment") unless (A) each such Investment is in a Person
predominantly engaged in the Retail Business or is in a
Subsidiary of the Borrower and the purchase price and dollar
amount of capital contributions made with respect to
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any such Investment is less than 10% for each year of the
initial two-year period beginning on the Effective Date, and 15%
for the third year of this Agreement, in each case (for each
such year) reduced by the principal amount of the Debt then
outstanding and incurred (for such year) under Section
7.02(b)(xii) hereof, of the amount equal to the "stockholders'
equity" of the Borrower (as reflected in the respective
financial statements delivered to the Lenders) as of the end of
the Fiscal Quarter immediately preceding such Investment less
the aggregate purchase price and dollar amount of capital
contributions made with respect to all Investments during the
period from the Effective Date to the date of such Investment
and (B) at the time such Investment is initially announced, such
Investment is made with the permission of the Board of Directors
of the Person in whom the Investment is being made and
immediately prior to and after giving effect to such Investment
no Event of Default or Default shall exist, provided, that this
Section 7.02(d)(ii) shall not permit any transaction otherwise
prohibited by Section 7.02(f) hereof. The foregoing limitation
shall not restrict (v) the Borrower's and its Subsidiaries'
ability to form a Subsidiary in which the Borrower or any
Subsidiary owns, individually or collectively, all of the
capital stock, securities or other ownership interests of such
Subsidiary, (w) Investments by the Borrower or a Guarantor in
any other Guarantor which is a Subsidiary of the Borrower or
such Guarantor, (x) Investments by a Subsidiary of the Borrower
which is not a Guarantor in any of the Borrower's Subsidiaries,
(y) the Borrower's and its Subsidiaries' ability to make an
investment in the instruments described in Schedule VII hereto
(provided, that with respect to securities of tax-exempt
issuers, the Borrower and its Subsidiaries will use commercially
reasonable efforts to invest in such securities rated Aa by
▇▇▇▇▇'▇ or AA by S&P) as such Schedule may be amended from time
to time by the Borrower with consent of the Agent or to make any
Investments specifically permitted pursuant to the LC Facilities
or (z) the conversion of Debt of a Subsidiary of the Borrower
which is not a Guarantor owed to the Borrower or a Guarantor
identified on Schedule XIII to common Equity Interests of such
Subsidiary. The Borrower shall provide the Agent and each Lender
a copy of each change or amendment made to Schedule VII hereto
promptly after each such change or amendment thereof.
(e) Change in Nature of Business. Make any material change
in the nature of the business of the Borrower and its Subsidiaries as
conducted as of the date hereof.
(f) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or
the equivalent Persons thereof) as such, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Borrower, except that, so long as
no Default shall have occurred and be continuing at the time of any
action described below or would result therefrom:
77
(i) the Borrower may (A) declare and pay dividends
and distributions, or make other purchases or redemptions,
payable either (1) in its common Equity Interests or (2) in cash
dividends in respect of each share of its common stock in an
amount with respect to such cash dividends not in excess of
$.0888 per year per share, with such per share amount to be
adjusted ratably in respect of common stock distributions to
holders of its Equity Interests, recapitalizations, stock splits
or any similar event, (B) purchase, redeem, retire, defease or
otherwise acquire Equity Interests with the proceeds received
contemporaneously from the issue of new Equity Interests with
equal or inferior voting powers, designations, preferences and
rights, provided, that with respect to Equity Interests that
also constitute Funded Debt, such transaction shall also be
permitted to the extent provided in Section 7.02(j) hereof, and
(C) repurchase its Equity Interests owned by management or
employees and consultants under contract with the Borrower or
any of its Subsidiaries in an amount not in excess of
$10,000,000 in the aggregate for all such repurchases in any
twelve month period;
(ii) any Subsidiary of the Borrower may declare and
pay or make dividends and other distributions (A) to the
Borrower or any other Loan Party and (B) to a Subsidiary of any
Loan Party (including, without limitation, in connection with
any transaction permitted by Section 7.02(c) hereof);
(iii) any of the non-wholly owned Subsidiaries of the
Borrower may declare and pay or make dividends and other
distributions to its shareholders, partners or members (or the
equivalent persons thereof) generally so long as the Borrower
and each of the Subsidiaries that own any of the Equity
Interests therein receive at least their respective
proportionate shares of any such dividend, distribution (based
on upon their relative holdings of the Equity Interests therein
and taking into account the relative preferences, if any, of the
various classes of the Equity Interests therein); and
(iv) the Borrower and any of its Subsidiaries may
purchase, redeem, retire, defease or otherwise acquire any of
its Equity Interests in any transaction permitted by Section
7.02(j) hereof.
(g) Sale 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) the Borrower and its Subsidiaries may sell
inventory in the ordinary course of business;
(ii) (A) the Borrower may sell, lease, transfer or
otherwise dispose of any of its property or assets to any
Guarantor or, to the extent permitted by Section 7.02(i) hereof,
to any Special Purpose Subsidiary, (B) any Guarantor may sell,
lease, transfer or otherwise dispose of any of its property or
assets to the Borrower or any other Guarantor or, to the extent
permitted by Section 7.02(i) hereof, to any Special Purpose
Subsidiary, and (C) any Subsidiary of the
78
Borrower which is not a Guarantor may sell, lease transfer or
otherwise dispose of any of its property or assets to the
Borrower, any Guarantor or to any other such Subsidiary;
(iii) the Borrower and its Subsidiaries may, directly
or indirectly through the Borrower or one or more of its
Subsidiaries, sell, lease, transfer or otherwise dispose of any
obsolete, damaged or worn-out property or any other property
that is otherwise no longer useful in the conduct of their
business;
(iv) the Borrower and its Subsidiaries may sell real
property interests as part of one or more sale leaseback
transactions provided that the value of such real property
interests shall not be in excess of $600,000,000 less, without
duplication, the amount of Debt incurred as contemplated by
Section 7.02(a)(iii) hereof;
(v) the Borrower and its Subsidiaries may sell cash
equivalents and other instruments described in Schedule VII
hereto in which it has invested from time to time; and
(vi) the Borrower and its Subsidiaries may sell,
lease, transfer or otherwise dispose of property and assets not
otherwise permitted pursuant to this Section 7.02(g) hereof so
long as the aggregate net book value of all of the property and
assets of the Borrower and its Subsidiaries sold, leased,
transferred or otherwise disposed of pursuant to this clause
(vi) in any year does not exceed 15% of the net book value of
the Total Assets of the Borrower and its Subsidiaries as of the
beginning of such year, provided, that, the gross proceeds
received from such sale, lease, transfer or other disposition
shall be at least equal to the fair market value of the property
and assets so sold, transferred or otherwise disposed of,
determined at the time of such sale, lease, transfer or other
disposition.
(h) Hedge Agreements. Enter into, or permit any of its
Subsidiaries to enter into, after the date hereof any Hedge Agreement,
except that the Borrower or any Hedge Subsidiary may enter into ordinary
course non-speculative interest rate or currency swaps or exchange
agreements with a tenor, in the case of such currency agreements, not in
excess of two years and, in the case of such interest rate agreements,
not in excess of ten years, in each case from the date the Borrower or
such Hedge Subsidiary enters into any such agreement, provided, that, at
the time the Borrower or Hedge Subsidiary enters into any such Hedge
Agreement, and after giving effect thereto, the amount of Advances then
available to the Borrower under Section 2.01(a) hereof is not less than
the then outstanding Hedge Agreements Exposure, provided, further, that
at the time the Borrower or any Hedge Subsidiary enters into any such
Hedge Agreement with any Lender or Affiliate thereof, such Lender or
Affiliate is then a party to the Intercreditor Agreement.
(i) Special Purpose Subsidiaries. Transfer any property or
assets (other than trademarks and service marks) or make any capital
contribution (other than in the ordinary course of business), or permit
any other Loan Party to transfer any property or assets (other than
trademarks and service marks) or make any capital contribution (other
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than in the ordinary course of business), to any Special Purpose
Subsidiary, except as provided in Section 7.02(g)(iii) hereof; or permit
any Special Purpose Subsidiary to engage in any material activities
other than those of the type conducted as of the date hereof or to incur
any Liens or to incur any obligations to third parties other than
obligations of an amount and of a nature not materially greater or
different than those incurred prior to the date hereof; or modify or
amend any, or permit any other Loan Party to modify or amend any,
royalty or similar agreements with any Special Purpose Subsidiary
(except changes in connection with Requirements of Law) if such
modification or amendment would materially increase the financial
obligations of the Borrower or such Loan Party thereunder in excess of
its financial obligations on the date hereof, or enter into, or permit
any other Loan Party to enter into, a royalty or similar agreement with
any Special Purpose Subsidiary which contains financial obligations of
the Borrower or such Loan Party materially more burdensome (other than
additional financial obligations resulting from changes in connection
with Requirements of Law) than in such agreements on the date hereof; or
permit any Special Purpose Subsidiary to transfer any assets to any
Person other than a Loan Party or another Special Purpose Subsidiary (or
to a Subsidiary of the Borrower that becomes or otherwise qualifies as a
Special Purpose Subsidiary as a result of any such transfer), except for
transfers in the ordinary course of business of such Special Purpose
Subsidiary as conducted prior to the date hereof; provided, that,
notwithstanding any other provision of this Agreement, any Loan Party or
any Subsidiary thereof may convey or otherwise transfer trademarks and
service marks to a Special Purpose Subsidiary (or to a Subsidiary of the
Borrower that becomes or otherwise qualifies as a Special Purpose
Subsidiary as a result of any such transfer).
(j) Prepayment, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, in each case in whole or in part (each an "Early
Redemption"), any Funded Debt, except (i) Early Redemptions of Funded
Debt during the term of this Agreement in an aggregate principal amount
not in excess of $1,000,000,000 (the "Maximum Repurchase Amount"),
provided, that, the Maximum Repurchase Amount shall be reinstated to the
extent of any proceeds received by the Borrower or any of its
Subsidiaries from the issuance of Funded Debt or Equity Interests not
more than 90 days after any such Early Redemption, provided, that any
such Funded Debt shall not have a stated maturity or have any scheduled
mandatory principal redemption, sinking fund, repayment or similar
payments prior to the Termination Date; (ii) any Early Redemption of
Funded Debt with proceeds received by the Borrower or any of its
Subsidiaries from the issuance of Funded Debt or Equity Interests within
90 days prior to such Early Redemption, provided, that any such Debt
shall not have a stated maturity or have any scheduled mandatory
principal redemption, sinking fund, repayment or similar payments prior
to the Termination Date; (iii) payments of regularly scheduled principal
or interest, or other amounts as and when due (including, without
limitation, any mandatory prepayments or redemptions); or (iv) any Early
Redemption of Funded Debt made solely with common Equity Interests.
SECTION 7.03 Financial Covenants. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of
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Credit shall be outstanding or any Lender Party shall have any Commitment
hereunder, the Borrower will, unless it has the written consent of the Majority
Lenders to do otherwise:
(a) Leverage Ratio. Maintain a Leverage Ratio as of the last
day of each Fiscal Quarter, determined on the basis of the most recently
completed four consecutive Fiscal Quarters ending on such day, of not
greater than 5.00:1.00.
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio as of the last day of each Fiscal Quarter set forth
below, determined on the basis of the most recently completed four
consecutive Fiscal Quarters ending on such day, of not less than the
amount set forth below opposite such Fiscal Quarter:
FISCAL QUARTER RATIO
------------------------- ---------
Second Fiscal Quarter 2003 1.75:1.00
Third Fiscal Quarter 2003 1.75:1.00
Fourth Fiscal Quarter 2003 1.75:1.00
First Fiscal Quarter 2004 1.90:1.00
Second Fiscal Quarter 2004 1.90:1.00
Third Fiscal Quarter 2004 1.90:1.00
Fourth Fiscal Quarter 2004 1.90:1.00
First Fiscal Quarter 2005 2.00:1.00
Second Fiscal Quarter 2005 2.00:1.00
Third Fiscal Quarter 2005 2.00:1.00
Fourth Fiscal Quarter 2005 2.00:1.00
First Fiscal Quarter 2006 2.00:1.00
Second Fiscal Quarter 2006 2.00:1.00
(c) Maximum Capital Expenditures. Not make Capital
Expenditures, and cause its Subsidiaries not to make Capital
Expenditures, in any Fiscal Year in an aggregate amount for the Borrower
and its Subsidiaries in excess of $625,000,000.
SECTION 7.04 Reporting Requirements. The Borrower will furnish
to the Lenders:
(i) as soon as available and in any event within 45
days after the end of each of the first three Fiscal Quarters of
the Borrower, Consolidated balance sheets of the Borrower and
its Subsidiaries as of the end of such Fiscal Quarters and
Consolidated statements of income and retained earnings of the
Borrower and its Subsidiaries for the period commencing at the
end of the previous Fiscal Year
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and ending with the end of such Fiscal Quarter, certified by the
chief financial officer or treasurer of the Borrower and
accompanied by a certificate of said officer stating (i) that
such have been prepared in accordance with generally accepted
accounting principles, (ii) whether or not he or she has
knowledge of the occurrence of any Event of Default or Default
and, if so, stating in reasonable detail the facts with respect
thereto and (iii) whether or not the Borrower is in compliance
with the requirements set forth in Section 7.03 hereof (which
certificate shall contain the computations used by such chief
financial officer or treasurer in determining such compliance or
non-compliance and shall be in the form of the Compliance
Certificate attached hereto as Exhibit I);
(ii) as soon as available and in any event within 90
days after the end of each Fiscal Year of the Borrower, a copy
of the annual report for such year for the Borrower and its
Subsidiaries, containing Consolidated financial statements of
the Borrower and its Subsidiaries for such Fiscal Year certified
by Deloitte & Touche LLP or other independent public accountants
reasonably acceptable to the Majority Lenders;
(iii) within 90 days after the end of each Fiscal Year
of the Borrower, a certificate of the chief financial officer or
treasurer of the Borrower stating (i) whether or not he or she
has knowledge of the occurrence of any Event of Default or
Default and, if so, stating in reasonable detail the facts with
respect thereto, and (ii) whether or not the Borrower is in
compliance with the requirements set forth in Section 7.03
hereof (which certificate shall contain the computations used by
such chief financial officer or treasurer in determining such
compliance or non-compliance and shall be in the form of the
Compliance Certificate attached hereto as Exhibit I);
(iv) as soon as possible and in any event within five
days after a Responsible Officer becomes aware of each Event of
Default and Default, a statement of a Responsible Officer of the
Borrower setting forth details of such Event of Default or
Default and the action which the Borrower has taken and proposes
to take with respect thereto;
(v) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to any of its
security holders, and copies of all reports and registration
statements which the Borrower or any Subsidiary files with the
Securities and Exchange Commission (the "SEC") or any national
securities exchange;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices which the Borrower or any
Subsidiary files under ERISA with the Internal Revenue Service
or the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which the Borrower or any Subsidiary
receives from such entities other than immaterial regular
periodic notices and reports and notices and reports of general
circulation;
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(vii) within 90 days after the end of each Fiscal Year
of the Borrower, a summary, prepared by a Responsible Officer of
the Borrower, of the Borrower's (and its Subsidiaries') major
insurance coverages (and the amount of self-insurance) then in
effect;
(viii) within 30 days after the end of each Fiscal
Quarter of the Borrower, a schedule of each Hedge Agreement
outstanding as at the end of each Fiscal Quarter, containing
calculations in reasonable detail used in determining the Hedge
Agreements Exposure, if any, as of the end of such Fiscal
Quarter; and
(ix) within 30 days after the end of Fiscal Year
2003, projections for Fiscal Year 2004, and within 30 days after
the end of Fiscal Year 2004, projections for Fiscal Year 2005,
in each case prepared on the basis of the most current
information then available to the Borrower in substantially the
same format and containing substantially the same types of
information as the projections for Fiscal Year 2003 which were
set forth in the Information Memorandum and with the projections
to be prepared on a quarterly basis; and
(x) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any of
its Subsidiaries as any Issuing Bank, or any Lender through the
Agent, may from time to time reasonably request, including,
without limitation, the condition, status or other information
relating to the Collateral as provided in Section 7(c) of the
Security Agreement.
Notwithstanding the foregoing, the financial statements required to be delivered
by the Borrower pursuant to clauses (i) and (ii) above and the reports and
statements required to be delivered by the Borrower pursuant to clause (v) above
shall be deemed to have been delivered on the date on which the Borrower posts
reports containing such financial statements or other materials on the
Borrower's website on the internet at "▇▇▇.▇▇▇▇▇▇.▇▇▇" or when such reports
containing such financial statements or other materials are posted on the SEC's
website on the internet at "▇▇▇.▇▇▇.▇▇▇"; provided, however, that the Borrower
shall deliver paper copies of such financial statements or other materials to
any Lender who so requests until the Borrower receives written notice from such
Lender to cease delivering paper copies.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Any Loan Party shall fail to pay any principal of any
Advance or any reimbursement obligation under any Letter of Credit when
the same becomes due and payable; or shall fail to pay any interest on
any Advance, fees or any other amounts hereunder within five days after
the same become due and payable by it; or
83
(b) Any representation or warranty made by any Loan Party
in any Loan Document (whether made on behalf of itself or otherwise) or
by any Loan Party (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) Any Loan Party shall fail to perform or observe (i) any
covenant contained in Section 7.02 or 7.03 hereof or Section 4, 5 or 12
of the Security Agreement (to the extent such Loan Party is a party
thereto); or (ii) such other term, covenant or agreement contained in
any Loan Document on its part to be performed or observed if the failure
to perform or observe such other term, covenant or agreement shall
remain unremedied for 30 days after written notice thereof shall have
been given to such Loan Party by an Issuing Bank, the Agent or any
Lender; or
(d) Any Loan Party shall fail to pay any principal of or
premium or interest on any Debt which is outstanding in a principal
amount of at least $50,000,000 in the aggregate (but excluding Debt
hereunder) of such Loan Party or any Obligations under any Hedge
Agreement to which it is a party, with a "Hedge Principal Amount" (as
hereinbelow defined) of not less than $50,000,000, 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 in such Hedge Agreement; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt or in such Hedge Agreement 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 in such Hedge Agreement; or any such Debt shall be declared to
be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required
to be made as a result of a default thereunder, in each case prior to
the stated maturity thereof or the Obligations under such Hedge
Agreement shall be accelerated (for purposes of this paragraph, "Hedge
Principal Amount" in respect of any Hedge Agreement at any time shall be
the maximum aggregate amount (after giving effect to any netting
arrangements) that the respective Loan Party would be required to pay if
such Hedge Agreement were terminated at such time); or
(e) Any Loan Party 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 any Loan
Party seeking to adjudicate it a 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 60 days,
or any of the actions sought in such proceeding (including, without
84
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 any Loan Party
shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or
(f) One or more judgments or orders for the payment of money
in excess of $50,000,000 in the aggregate shall be rendered against any
Loan Party 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 forty-five (45) 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 give rise to an Event of Default under
this Section 8.01(f) if and so long as (A) the amount of such judgment
or order which remains unsatisfied is covered by a valid and binding
policy of insurance between the respective Loan Party and the insurer
covering full payment of such unsatisfied amount and (B) such insurer
has been notified, and has not disputed the claim made for payment, of
the amount of such judgment or order; or
(g) A Change of Control shall have occurred; or
(h) Any material provision of any of the Loan Documents
after delivery thereof pursuant to Sections 5.01, 7.01(i) or 7.01(j)
hereof shall for any reason (other than pursuant to the terms thereof)
cease to be valid and binding on or enforceable against any of the Loan
Parties intended to be a party to it, or any such Loan Party shall so
state in writing; or
(i) Any Collateral Document after delivery thereof pursuant
to Sections 5.01, 7.01(i) or 7.01(j) hereof shall for any reason (other
than pursuant to the terms thereof) cease to create a valid and
perfected Lien on any material portion of the Collateral purported to be
covered thereby subject only to Liens permitted thereby; or
(j) Any of the following events or conditions shall have
occurred and such event or condition, when aggregated with any and all
other such events or conditions set forth in this subsection (j), has
resulted or is reasonably expected to result in liabilities of the Loan
Parties and/or the ERISA Affiliates in an aggregate amount that would
have a Material Adverse Effect:
(i) any ERISA Event shall have occurred with respect
to a Plan; or
(ii) any of the Loan Parties or any of the ERISA
Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan; or
(iii) any of the Loan Parties or any of the ERISA
Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in
reorganization, is insolvent or is being terminated, within the
meaning of Title IV of ERISA, and, as a result of such
reorganization, insolvency or termination, the aggregate annual
contributions of the Loan Parties and the
85
ERISA Affiliates to all of the Multiemployer Plans that are in
reorganization, are insolvent or being terminated at such time
have been or will be increased over the amounts contributed to
such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which
such reorganization, insolvency or termination occurs; or
(iv) any "accumulated funding deficiency" (as defined
in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not waived, shall exist with respect to one or
more of the Plans; or
(v) or any Lien shall exist on the property and
assets of any of the Loan Parties or any of the ERISA Affiliates
in favor of the PBGC,
then, and in any such event, the Agent shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, (A) declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, (B) 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,
(C) declare the obligation of the Issuing Banks to issue further Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and/or
(D) demand from time to time that the Borrower, and if such demand is made the
Borrower shall, pay to the Agent for the benefit of the Issuing Banks, an amount
in immediately available funds equal to the then outstanding Letter of Credit
Liability (plus the additional amounts specified by Section 3.12(c) hereof, if
applicable) which shall be held by the Agent (or the applicable Issuing Bank) as
cash collateral in a cash collateral account under the exclusive control and
dominion of the Agent (or applicable Issuing Bank) and applied to the reduction
of such Letter of Credit Liability as drawings are made on outstanding Letters
of Credit; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party under the Federal Bankruptcy
Code, the obligation of each Lender to make Advances shall automatically be
terminated, the then outstanding 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 and the obligation of the Issuing Bank to Issue Letters
of Credit shall automatically be terminated.
ARTICLE IX
THE AGENT
SECTION 9.01 Authorization and Action. Each Lender and each
Issuing Bank hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers 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), the Agent shall not 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
86
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that the
Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or applicable law. The
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 and any other Loan Document
unless the distribution of such notice is otherwise provided for herein or
therein.
Each Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may elect to act
for each Issuing Bank with respect thereto; provided, however, that such Issuing
Bank shall have all of the benefits and immunities (i) provided to the Agent in
this Article IX with respect to any acts taken or omissions suffered by such
Issuing Bank in connection with Letters of Credit Issued by it or proposed to be
Issued by it and the applications and agreements for letters of credit
pertaining to the Letters of Credit as fully as if the term "Agent," as used in
this Article IX, included such Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect to
such Issuing Bank.
SECTION 9.02 Agent's Reliance, Etc. Neither the 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 Agent: (i) may treat
the Lender which made any Advance (or purchased or funded a participation with
respect to a Letter of Credit) as the holder and owner of the Debt resulting
therefrom until the Agent receives and accepts an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 10.07 hereof; (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) makes 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 or its Subsidiaries; (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)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 9.03 CUSA, Citibank and Affiliates. With respect to
CUSA's Commitment and the Advances made by it, and with respect to Citibank as
an Issuing Bank, CUSA 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 the Agent or an Issuing Bank, as the case may be; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include CUSA and Citibank
in their individual capacities. CUSA, Citibank and each of their respective
Affiliates (and, as applicable, any of their respective officers and directors)
may
87
accept deposits from, lend money to, act as trustee under indentures of, 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 CUSA were not the Agent or Citibank
were not an Issuing Bank, as the case may be, and without any duty to account
therefor to the Lenders.
SECTION 9.04 Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent, any Issuing Bank
or any other Lender and based on the financial statements referred to in Section
6.01 hereof 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 the Agent, any Issuing Bank 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 9.05 Indemnification.
(a) Agent. The Lenders agree to indemnify the Agent (to the
extent not reimbursed by the Borrower or any Guarantor), ratably,
according to their respective Credit Exposures, from and against any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by the Agent under this Agreement, provided,
that, no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Agent in connection with the preparation,
execution, delivery, administration, 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 the Agent is not reimbursed
for such expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs expenses or disbursements, this Section 9.05(a) applies whether
any such investigation, litigation or proceeding is brought by the
Agent, an Issuing Bank, any Lender or a third party.
(b) Issuing Bank. The Lenders agree to indemnify each
Issuing Bank (to the extent not reimbursed by the Borrower or any
Guarantor), ratably according to their respective Commitment
Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Issuing Bank in any way
relating to or arising out of this Agreement and the Letters of Credit
issued by it or any action taken or omitted by such Issuing Bank under
this Agreement or the Letters of Credit Issued by it, provided, that, no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions,
88
judgments, suits, costs, expenses or disbursements 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
out-of-pocket expenses (including reasonable counsel fees) incurred by
such Issuing Bank in connection with the preparation, execution,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or the
Letters of Credit Issued by it, to the extent that the Issuing Bank is
not reimbursed for such expenses by the Borrower. In the case of any
investigation, litigation or proceeding giving rise to any such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs expenses or disbursements, this Section 9.05(b)
applies whether any such investigation, litigation or proceeding is
brought by the Issuing Bank, the Agent, any Lender or a third party.
SECTION 9.06 Successor Agent. The Agent may resign at any time
by giving 30 days' prior written notice thereof to the Lenders and the Borrower
and may be removed at any time with or without cause by the Majority Lenders;
provided, that, the Agent may resign without having given such notice if it is
required to do so as a matter of law. Upon any such resignation or removal, the
Majority Lenders, after consulting with the Borrower and giving due
consideration to any successor agent recommended by the Borrower, shall have the
right to appoint a successor Agent with the consent of the Borrower (which shall
not be unreasonably withheld). If no successor Agent shall have been so
appointed by the Majority Lenders and consented to by the Borrower, and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Majority Lenders' removal of the retiring Agent,
then the retiring Agent may, after consulting with the Borrower and giving due
consideration to any successor agent recommended by the Borrower, on behalf of
the Lenders, appoint a successor Agent, which shall be a commercial bank
organized or licensed to do business under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $100,000,000. 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, 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 IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 9.07 Co-Syndication Agents, Joint Book Managers and
Joint Lead Arrangers. The financial institutions identified as Co-Syndication
Agents, the Joint Book Managers and the Joint Lead Arrangers herein shall not
have any rights, powers, obligations, responsibilities or duties under this
Agreement. Without limiting the foregoing, any Lender so identified as a
Co-Syndication Agent, Joint Book Manager or Joint Lead Arranger shall not have
or be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the financial
institutions so identified as a Co-Syndication Agent, Joint Book Manager or
Joint Lead Arranger in deciding to enter into this Agreement or in taking or not
taking action hereunder.
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SECTION 9.08 Release of Collateral. Without limitation of the
provisions of the Collateral Documents with respect thereto, upon the sale,
lease, transfer or other disposition of any item of Collateral of any Loan Party
as permitted under the terms of the Loan Documents, the Lender Parties hereby
agree that such item of Collateral shall be released from the security interest
granted under the respective Collateral Documents. In connection with the
foregoing, the Lender Parties hereby irrevocably authorize the Agent and the
Collateral Agent to release any such Collateral. The Agent will, at the
Borrower's expense, execute and deliver to the respective Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the security interest granted under the Collateral
Documents.
SECTION 9.09 Release of Guarantor/Domestic Subsidiary. Without
limitation of the provisions of the Collateral Documents with respect thereto,
upon (a) the sale of outstanding shares of capital stock and other equity,
ownership and profit interests in any Guarantor or other Domestic Subsidiary in
a transaction which is permitted under Section 7.02(g) hereof, (b) the
dissolution, liquidation, consolidation or merger of a Guarantor or other
Domestic Subsidiary in a transaction permitted by Section 7.02(c) hereof or (c)
any transfer of trademarks or service marks to a Guarantor such that it becomes
or otherwise qualifies as a Special Purpose Subsidiary, then, in each such case,
upon request by the Borrower, the Agent, on behalf of each Lender Party, shall
confirm in writing that the liability of such Guarantor or other Domestic
Subsidiary under the Subsidiary Guaranty in respect of the Obligations hereunder
and under any of the Collateral Documents is released and discharged effective
when such transaction is consummated and all requirements hereunder in
connection therewith are satisfied, including with respect to the application of
the proceeds of such sale. Each Lender Party hereby irrevocably authorizes the
Agent to release any Guarantor or other Domestic Subsidiary from time to time to
the extent provided for herein and to execute any document reasonably required
in connection therewith.
SECTION 9.10 Actions in Respect of Intercreditor Agreement. The
Lenders and the Issuing Banks hereby authorize the Agent, in its capacity as
Agent on behalf of the Lenders and the Issuing Banks, to enter into the
Intercreditor Agreement and hereby consent to the Agent acting as Collateral
Agent under the Intercreditor Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendments, Etc.
(a) Majority Lenders. Except as is otherwise expressly
provided in this Section 10.01, no amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders, provided, however, that no
amendment, waiver or consent by the Majority Lenders shall, unless in
writing and signed by all the Lenders, do any of the following: (i)
waive any of the conditions specified in Section 5.01 or 5.02 hereof,
(ii) increase the Commitments of the Lenders (other than as provided for
in Section 2.04(b) and 2.04(c) hereof), (iii) reduce the principal of,
or interest on, the Advances made pursuant to Section 2.01(a) hereof or
any
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reimbursement obligation in respect of any Letter of Credit or any fees
or other amounts payable hereunder to the Lenders, (iv) postpone any
date fixed for any payment of principal of, or interest on, the Advances
made pursuant to Section 2.01(a) hereof or any reimbursement obligation
in respect of any Letter of Credit or any fees or other amounts payable
hereunder to the Lenders, (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Advances made
pursuant to Section 2.01(a) hereof or Letter of Credit Liability
hereunder, or the number of Lenders, which shall be required for the
Lenders or any of them to take any action hereunder, (vi) release all or
substantially all the Collateral or all or substantially all the
Guarantors, (vii) release the Borrower as a guarantor under Section 2.13
or Section 3.13 hereof, (viii) subordinate any liens granted under the
Security Agreement or (ix) amend this subsection (a) of this Section
10.01.
(b) Agent and Issuing Banks. No amendment, waiver or consent
given or effected pursuant to this Section 10.01 shall, unless in
writing and signed by the Agent or each Issuing Bank, as the case may
be, in addition to the Lenders required above to take such action,
affect the rights, obligations or duties of the Agent or such Issuing
Bank, as the case may be, under this Agreement.
(c) Limitation of Scope. All waivers and consents granted
under this Section 10.01 shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 10.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier or electronic
mail) and mailed, sent by overnight courier, telecopied, emailed, or delivered,
if to the Borrower or any other Loan Party, at its address at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Treasurer, Telecopier: ▇▇▇-▇▇▇-▇▇▇▇,
email __________; with a copy to ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: General Counsel, Telecopier: ▇▇▇-▇▇▇-▇▇▇▇, email __________ and to ▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Associate General Counsel,
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇, email ▇▇▇_▇▇▇▇@▇▇▇.▇▇▇; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule I-B hereto; if
to any other Lender, at its Domestic Lending Office specified in the Assignment
and Acceptance pursuant to which it became Lender; if to the Agent, at its
address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Credit
Administration, Telecopier: ▇▇▇-▇▇▇-▇▇▇▇, email __________; and if to an Issuing
Bank, at its Domestic Lending Office specified opposite its name in Schedule I-B
hereto; with a copy, in the case of notices to the Agent, to Citicorp North
America, Inc., One Sansome Street, San Francisco, California, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Telecopier: ▇▇▇-▇▇▇-▇▇▇▇, email ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇, or, as
to each party, at such other address or to such other person as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, be effective three days after
being deposited in the mails, when sent by overnight courier, be effective one
day after being sent by overnight courier, and when telecopied or sent by
electronic mail, be effective when received (and, with respect to notices and
communications sent by electronic mail, upon confirmation by the recipient of
the receipt of such notice or communication), respectively; and when delivered
by hand, be effective upon delivery except that notices and communications to
the Agent pursuant
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to Article II or IX and to an Issuing Bank pursuant to Article III or IX shall
not be effective until received by the Agent or such Issuing Bank, as the case
may be.
SECTION 10.03 No Waiver; Remedies. No failure on the part of any
Lender, the Issuing Bank or the Agent to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 10.04 Costs and Expenses.
(a) The Borrower agrees to pay on demand all reasonable and
documented costs and expenses of the Agent incurred in connection with
the preparation, execution, delivery, modification and amendment of this
Agreement, and the other documents to be delivered hereunder, including,
without limitation, the reasonable and documented fees and out-of-pocket
expenses of one counsel for the Agent (and appropriate local counsel)
with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement. The Borrower further
agrees to pay on demand all costs and expenses of the Agent, each
Issuing Bank, each Swing Line Lender and each other Lender Party
(including, without limitation, reasonable counsel fees and expenses),
incurred in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Loan Documents, the
Letters of Credit, the documents delivered in connection with the Swing
Line Advances and the other documents to be delivered hereunder and
thereunder.
(b) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made other than on the last day of the
Interest Period for such Advance, as a result of a payment or Conversion
pursuant to Sections 2.08(d), 2.10, 2.12 hereof, acceleration of the
maturity of the Advances pursuant to Section 8.01 hereof or for any
other reason, or by an Eligible Assignee to a Lender other than on the
last day of an Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 10.07
hereof as a result of a demand by the Borrower pursuant to Section
10.07(a) hereof, or if the Borrower fails for any reason to make any
payment or prepayment of an Advance for which a notice of prepayment was
given or that is otherwise required to be made, whether pursuant to
Sections 2.05, 2.10, 8.01 hereof or otherwise, the Borrower shall, upon
demand by any Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment or Conversion
or such failure to pay or prepay, as the case may be, including, without
limitation, 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 any Lender to fund or maintain such
Advance.
(c) The Borrower agrees to indemnify and hold harmless each
of the Agent, each Lender, each Issuing Bank, each Joint Lead Arranger,
each Co-Syndication Agent and each of their Affiliates and their
respective officers, directors, employees, agents and
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advisors (each, an "Indemnified Party") from and against any and all
claims (other than lost profits), damages, liabilities and expenses
(including, without limitation, reasonable fees and disbursements of
counsel), which may be incurred by or asserted against any Indemnified
Party in connection with or arising out of any investigation,
litigation, or proceeding (whether or not such Indemnified Party is
party thereto) related to any acquisition or proposed acquisition by the
Borrower, or by any Subsidiary of the Borrower, of all or any portion of
the stock or substantially all the assets of any Person or any use or
proposed use of the Advances or Letters of Credit by any Loan Party,
except to the extent such claim, damage, liability or expense shall have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the event this indemnity is unenforceable as a matter of
law as to a particular matter or consequence referred to herein, it
shall be enforceable to the full extent permitted by law. The
indemnification provisions set forth above shall be in addition to any
liability the Borrower may otherwise have. Without prejudice to the
survival of any other obligation of the Borrower hereunder, the
indemnities and obligations of the Borrower contained in this Section
10.04 shall survive the payment in full of all the Obligations.
(d) The Borrower hereby acknowledges that the funding method
by each Lender of its Advances hereunder shall be in the sole discretion
of such Lender. The Borrower agrees that for purposes of any
determination to be made under Sections 2.07, 2.11(a), 2.12 or 10.04(b)
hereof each Lender shall be deemed to have funded its Eurodollar Rate
Advances with proceeds of Dollar deposits in the London interbank
market.
SECTION 10.05 Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 8.01 hereof to
authorize the Agent to declare the Advances due and payable pursuant to the
provisions of Section 8.01 hereof or to demand payment of (or cash
collateralization of) all then outstanding Letter of Credit Liability, each
Lender and each of its Affiliates 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 indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of any Loan Party against any and
all of the obligations of the Loan Parties now or hereafter existing under this
Agreement to such Lender (including, to the fullest extent permitted by law,
obligations indirectly owed to such Lender by virtue of its purchase of a
participation or sub-participation of the Letter of Credit Liability pursuant to
Section 3.05 hereof), whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured (it being
understood and agreed that, notwithstanding anything in this Agreement or any of
the other Loan Documents to the contrary, accounts, deposits, sums, securities
or other property of any Foreign Subsidiary or of any Subsidiary of a Foreign
Subsidiary (including any Foreign Subsidiary or any Subsidiary of a Foreign
Subsidiary that is a Subsidiary Borrower or LC Subsidiary) will not serve at any
time, directly or indirectly, to collateralize or otherwise offset the
Obligations of the Borrower or any Domestic Subsidiary, and, in addition, unless
otherwise agreed to by the Borrower, the accounts, deposits, sums, securities or
other property of a Foreign Subsidiary or Subsidiary of a Foreign Subsidiary
will only serve to collateralize or offset the Obligations of another Foreign
Subsidiary or Subsidiary of a Foreign Subsidiary that is a Subsidiary Borrower
or LC Subsidiary if such
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former Foreign Subsidiary or Subsidiary of a Foreign Subsidiary is owned by such
latter Foreign Subsidiary or Subsidiary of a Foreign Subsidiary that is a
Subsidiary Borrower or LC Subsidiary). Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender or any of its Affiliates, provided, that, the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender and its Affiliates under this Section 10.05 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Lender and its Affiliates may have.
SECTION 10.06 Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, each LC Subsidiary
and each Subsidiary Borrower to be a party hereto on the date hereof, each
Issuing Bank to be a party hereto on the date hereof, and the Agent and when the
Agent shall have been notified by each Lender that such Lender has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrower,
each LC Subsidiary, each Subsidiary Borrower, each Issuing Bank, the Agent and
each Lender and their respective successors and assigns, except that the
Borrower, each LC Subsidiary and each Subsidiary Borrower shall not have the
right to assign its respective rights hereunder or any interest herein without
the prior written consent of the Lenders.
SECTION 10.07 Assignments and Participations. (a) Each Lender
may, and if demanded by the Borrower (following a demand by such Lender pursuant
to Section 2.07, 2.11, 3.08, 4.02 or 4.06 hereof, upon at least 10 days' notice
to such Lender and the Agent) will, assign to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion, respectively, of its
Commitment, the Advances owing to it, its Issuing Commitment and participations
in Letter of Credit Liability and Swing Line Advances); provided, however, that
(i) each such respective assignment shall be of a percentage of all rights and
obligations under this Agreement in respect of the assigning Lender's
Commitment, Advances, its Issuing Commitment and participations in Letter of
Credit Liability and Swing Line Advances, that is constant and not varying over
time, (ii) the respective amounts of the rights and obligations under the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such partial assignment) shall in no event be less than $5,000,000
(or an integral multiple of $1,000,000 in excess thereof), (iii) except during
the continuance of a Default, each such assignment shall be to an Eligible
Assignee consented to by the Borrower (following reasonable advance written
notice to the Borrower, which consent shall not be unreasonably withheld);
provided, that, the Borrower's consent need not be obtained if such assignment
is made to another Lender or to an Affiliate of the assigning Lender, provided
that any Lender so assigning to any of its Affiliates shall give prompt notice
thereof to the Borrower and the Agent, (iv) each such assignment made as a
result of a demand by the Borrower pursuant to this Section 10.07(a) shall be
arranged by the Borrower (at its expense, including, without limitation, payment
of the processing and recordation fee referred to in subclause (vi) hereof)
after consultation with the Agent and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments which together cover all of
the rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 10.07(a) unless and until such Lender
shall have received one
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or more payments from either the Borrower or one or more Eligible Assignees in
an aggregate amount at least equal to the aggregate outstanding principal amount
of the Advances owing to such Lender, together with accrued interest thereon to
the date of payment of such principal amount and all other amounts payable to
such Lender under this Agreement, (vi) each such assignment shall be consented
to by each Issuing Bank and the Agent (which consent of the Agent shall not be
unreasonably withheld) and (vii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500; provided, that, no such fee shall be payable in
connection with an assignment by an assigning Lender to an Affiliate of such
assigning Lender. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and 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).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
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; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower, any LC Subsidiary, any Subsidiary Borrower or
any other Loan Party or the performance or observance by the Borrower,
any LC Subsidiary, any Subsidiary Borrower or any other Loan Party of
any of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 6.01 hereof 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; (iv) such assignee will, independently and without reliance
upon the Agent, any Issuing Bank, 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; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent or the respective Issuing Bank to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent or such Issuing Bank 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 of the obligations which by the terms of
this Agreement are required to be performed by it as Lender.
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(c) The Agent shall maintain at its address referred to in
Section 10.02 hereof a copy of each Assignment and Acceptance delivered
to and accepted by it and a 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 the names
and addresses and the Issuing Commitments of each Issuing Bank from time
to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as 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.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is
an Eligible Assignee, the Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit C hereto,
(i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof
to the Borrower and the Issuing Banks.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the Advances owing to it; provided,
however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall
remain the owner of any Advance for all purposes of this Agreement, and
(iv) the Borrower, the Issuing Banks, the 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, provided, further, that, to the extent of any such
participation (unless otherwise stated therein and subject to the
preceding proviso), the purchaser of such participation shall, to the
fullest extent permitted by law, have the same rights and benefits
hereunder as it would have if it were Lender hereunder; and provided,
further, that each such participation shall be granted pursuant to an
agreement providing that the purchaser thereof shall not have the right
to consent or object to any action by the selling Lender (who shall
retain such right) other than an action which would (i) reduce principal
of or interest on any Advance, any amount due hereunder with respect to
the Letters of Credit or other amounts or fees in which such purchaser
has an interest, (ii) postpone any date fixed for payment of principal
of or interest on any such Advance, such amounts due with respect to
Letters of Credit or other amounts or such fees, (iii) extend the
Termination Date or (iv) release all or substantially all the
Collateral, all or substantially all the Guarantors or the Borrower as a
guarantor under Section 2.13 or Section 3.13 hereof.
(f) Upon written request of the Borrower to a Lender, such
Lender shall, to the extent consistent with the policies of such Lender,
inform the Borrower of the Dollar amount of any Full Term Participation
(as hereinafter defined) that such Lender has entered into; provided,
however, that no Lender shall be obligated to disclose such information
if the disclosure thereof would constitute a violation of law or
regulation or
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violate any confidentiality agreement to which such Lender is subject.
For the purposes of this subsection (f), "Full Term Participation" means
a participation by a Lender to another Person whereby such other Person
has purchased (pursuant to a participation agreement) all or a portion
of such Lender's Commitment from the effective date of such
participation agreement to the Termination Date.
(g) Notwithstanding anything herein contained to the
contrary, each Lender may assign any of its rights and obligations under
this Agreement to any of its Affiliates without the consent of the
Borrower or the Agent, provided that any Lender so assigning to any of
its Affiliates shall give prior notice thereof to the Borrower and the
Agent; and each Lender or any of its Affiliates may assign any of its
rights (including, without limitation, rights to payment of principal
and/or interest hereunder) under this Agreement to any Federal Reserve
Bank without notice to or consent of the Borrower or the Agent.
(h) If any Lender requests any payment from the Borrower
under Section 2.07, 2.11, 3.08, 4.02 or 4.06 hereof, then, subject to
Section 10.07(a) hereof and provided no Default or Event of Default
shall have occurred and be continuing, the Borrower may request such
Lender to (and, upon such request, such Lender, without any obligation
to pay any fees in respect thereof, shall) assign all of its rights and
obligations under this Agreement to one or more Eligible Assignees
acceptable to the Agent in accordance with Section 10.07(a) hereof
provided that at the time of any such assignment the Borrower has paid
to the Lender all amounts due it hereunder.
SECTION 10.08 Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 10.09 Independence of Provisions. All agreements and
covenants hereunder shall be given independent effect such that if a particular
action or condition is prohibited by the terms of any such agreement or
covenant, the fact that such action or condition would be permitted within the
limitations of another agreement or covenant shall not be construed as allowing
such action to be taken or condition to exist.
SECTION 10.10 Confidentiality. Each Lender, each Issuing Bank
and the Agent (for purposes of this Section 10.10, each a "Recipient") agrees
that it will not disclose to any third party any Confidential Information
provided to it by the Borrower; provided, that, the foregoing will not (i)
restrict the ability of the Agent, the Issuing Banks, the Lenders and any loan
participants from freely exchanging Confidential Information among themselves
(and their respective Affiliates, employees, attorneys, agents and advisors),
(ii) restrict the ability to disclose Confidential Information to a prospective
Eligible Assignee or participant, provided, that, such Eligible Assignee or
participant executes a confidentiality agreement with the selling Lender
agreeing to be bound by the terms hereof prior to disclosure of Confidential
Information to such Eligible Assignee or participant or (iii) prohibit the
disclosure of Confidential Information to the extent: (a) the Confidential
Information is or has already become part of the public domain at the time of
disclosure, by publication or otherwise, except by breach of this
97
Section 10.10, (b) the Confidential Information can be established by written
evidence to have already been in the lawful possession of the Recipient prior to
the time of disclosure; or (c) the Confidential Information is received by the
Recipient from a third party not known to have a similar restriction and without
breach of this Section 10.10, or (d) the Confidential Information is required to
be disclosed by order of a court of competent jurisdiction, administrative
agency or governmental body, or by subpoena, summons or other legal process, or
by law, rule or regulation, or by applicable regulatory or professional
standards provided that prior to such disclosure the Borrower and the
non-disclosing party are each given reasonable advance notice of such order and
an opportunity to object to such disclosure; provided, that, no such notice or
opportunity shall be required if disclosure is required in connection with an
examination by a regulatory authority or is required in such circumstances where
the applicable Governmental Authority does not permit such notice or opportunity
(it being understood the Recipient will inform such authority of the
confidential nature of the Confidential Information being disclosed).
Notwithstanding anything herein to the contrary, each Loan Party and each
Recipient, and each of their respective officers, directors, employees,
accountants, attorneys and other advisors, agents and representatives, may
disclose to any and all persons, without limitation of any kind, any information
with respect to the United States tax treatment and tax structure of the
transactions contemplated by the Loan Documents and all materials of any kind
(including opinions or other tax analyses) that are provided to the respective
Loan Party or Recipient, as the case may be, relating to such United States tax
treatment and tax structure, provided, that, the foregoing shall not apply to
the extent reasonably necessary to comply with applicable securities laws.
SECTION 10.11 Headings. Article and Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 10.12 Entire Agreement. This Agreement sets forth the
entire agreement of the parties with respect to its subject matter and, except
for the letter agreements referred to in Sections 2.03(c) and 3.06(b) hereof,
supersedes all previous understandings, written or oral, in respect thereof.
SECTION 10.13 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.
SECTION 10.14 Consent to Jurisdiction. (a) Each of the parties
hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New
York State or Federal court sitting in the County of New York, The City of New
York, in any action or proceeding arising out of or relating to this Agreement,
and each of the parties hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such New York State
court or such Federal court. Each of the parties hereby irrevocably agrees, to
the fullest extent each may effectively do so, that each will not assert any
defense that such courts do not have subject matter or personal jurisdiction of
such action or proceeding or over any party hereto. Each of the parties hereby
irrevocably consents to the service of copies of the summons and complaint and
any other process which may be served in any such action or proceeding by
98
certified mail, return receipt requested, or by delivering of a copy of such
process to such party at its address specified in Section 10.02 hereof or by any
other method permitted by law. Each of the parties hereby 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 by any other manner
provided by law.
(b) Nothing in this Section 10.14 shall affect the right of
any of the parties hereto to serve legal process in any other manner
permitted by law or affect the right of any of the parties to bring any
action or proceeding against any of the parties or their property in the
courts of other jurisdictions.
SECTION 10.15 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT,
IN THE CASE OF ARTICLE III, TO THE EXTENT SUCH LAWS ARE INCONSISTENT WITH THE
UCP.
SECTION 10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LC
SUBSIDIARIES, THE SUBSIDIARY BORROWERS, THE AGENT, THE LENDERS AND EACH ISSUING
BANK HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE ADVANCES OR THE LETTERS OF CREDIT, OR THE ACTIONS OF THE AGENT, ANY LENDER
OR THE ISSUING BANK IN CONNECTION WITH THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
[The remainder of this page intentionally left blank.]
99
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 BORROWER:
THE GAP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
THE LC SUBSIDIARIES:
BANANA REPUBLIC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (CANADA) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
100
GAP (DEUTSCHLAND) GMBH
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (FRANCE) S.A.S.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING FZE
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
101
GAP INTERNATIONAL SOURCING
(HOLDINGS) LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(MEXICO) S.A. DE C.V.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
PTE. LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
102
GAP (JAPAN) K.K.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
103
GAP (RHC) B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
104
GAP (NETHERLANDS) B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS CONSUMER DIRECT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS (GREAT BRITAIN) LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (CANADA) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
105
OLD NAVY INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
106
SUBSIDIARY BORROWERS:
GAP (CANADA) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (DEUTSCHLAND) GMBH
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (FRANCE) S.A.S.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
107
GAP INTERNATIONAL SOURCING
(HOLDINGS) LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
PTE. LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
108
GAP (JAPAN) K.K.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
109
GAP (RHC) B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
110
GAP (NETHERLANDS) B.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS (GREAT BRITAIN) LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (CANADA) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
111
THE AGENT:
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
THE JOINT BOOK MANAGERS:
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
THE CO-SYNDICATION AGENTS:
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
HSBC BANK USA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
THE JOINT LEAD ARRANGERS:
CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-Fact
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Principal
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
THE SENIOR MANAGING AGENTS:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
THE MANAGING AGENTS:
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇ Noique
---------------------------------------------
Name: ▇▇▇▇▇▇ Noique
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE LENDERS:
CITICORP USA, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
HSBC BANK USA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
THE BANK OF NOVA SCOTIA
By: /s/ Maarten Van Otterloo
---------------------------------------------
Name: Maarten Van Otterloo
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: U.S. Bank
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇ Noique
---------------------------------------------
Name: ▇▇▇▇▇▇ Noique
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
Title: Assistant Vice President
▇▇▇▇▇ FARGO BANK N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Portfolio Manager
FIFTH THIRD BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Relationship Manager-Large Corporate
FIRST NATIONAL BANK OF OMAHA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE ISSUING BANKS:
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
HSBC BANK USA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE SWING LINE LENDERS:
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
HSBC BANK USA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇ Noique
---------------------------------------------
Name: ▇▇▇▇▇▇ Noique
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ III
Title: Assistant Vice President
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
Schedule I-B: List of Applicable Lending Offices
Citi provides
Schedule I-A
COMMITMENT AMOUNTS
LENDER / ISSUING BANK COMMITMENT ISSUING COMMITMENT
------------------------------------------ -------------- ------------------
Citicorp USA, Inc., as Lender $ 90,000,000 N/A
JPMorgan Chase Bank, as Lender $ 90,000,000 N/A
Bank of America, N.A., as Lender $ 90,000,000 N/A
HSBC Bank USA, as Lender $ 90,000,000 N/A
GE Capital Corporation, as Lender $ 55,000,000 N/A
The Bank of Nova Scotia, as Lender $ 55,000,000 N/A
U.S. Bank National Association, as Lender $ 55,000,000 N/A
Fleet Bank, as Lender $ 55,000,000 N/A
ABN Amro Bank N.V., as Lender $ 45,000,000 N/A
▇▇▇▇▇ Fargo Bank N.A., as Lender $ 45,000,000 N/A
KeyBank National Association, as Lender $ 37,500,000 N/A
Fifth Third Bank, as Lender $ 25,000,000 N/A
First National Bank of Omaha, as Lender $ 17,500,000 N/A
Citibank, N.A., as Issuing Bank N/A $ 250,000,000
Bank of America, N.A., as Issuing Bank N/A $ 250,000,000
HSBC Bank USA, as Issuing Bank N/A $ 250,000,000
TOTAL $ 750,000,000* $ 750,000,000
----------
* The total of $750,000,000 of Commitments includes the Swing Line
Commitment as then in effect.
Schedule I-B
LIST OF APPLICABLE LENDING OFFICES
------------------------------------------------------------------------------------------------------------------
Lender Domestic Lending Office Eurodollar Lending Office
------ ----------------------- -------------------------
------------------------------------------------------------------------------------------------------------------
Citicorp USA Inc./ ▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank 1111 ▇▇▇▇▇▇, 10/th/ Floor 1111 ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
HSBC Bank USA One HSBC Center, ▇▇/▇▇/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇ Fax: ▇▇▇ ▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Loan Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or Loan
Administration Administration
Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Bank of America N.A. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
U.S. Bank National Association ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇
Mail Code PD-OR-P7LN Mail Code PD-OR-P7LN
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
First National Bank of Omaha ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 2100 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
1
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Fargo Bank NA ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇-▇▇▇ MAC ▇▇▇▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Fifth Third Bank ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
KeyBank National Association ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 6/th/ Floor 127 Public Square, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇-▇▇-▇▇-▇▇▇▇ Mail Code OH-01-27-0606
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
General Electric Capital ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Fleet National Bank ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Tel: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------------------------------------------------
2
Schedule II
EXISTING LIENS
LANDLORD LIENS:
Lease Agreement, between Metropolitan Life Insurance Company, on behalf of the
Tower Fund, a commingled separate account, as Landlord and The Gap, Inc., as
Tenant for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ #▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, dated
January 29, 1998 (the Ohio Catalog Center)
Amended and Restated Industrial Lease Agreement, between Industrial Developments
International, Inc., as Landlord and The Gap, Inc., as Tenant for ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, dated March 10, 1998 (the Gap Outlet Distribution
Center)
Industrial Lease Agreement, between Industrial Developments International, Inc.,
as Landlord, and The Gap, Inc., as Tenant for ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, dated June 15, 2000 (the Old Navy Outlet Distribution Center)
Schedule III
CHANGE OF CONTROL
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
2. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
3. Any person related by blood or marriage to any of the foregoing persons
and any trust as to which any of such persons has beneficial ownership
of the assets of the trust.
4. The executive officers of The Gap, Inc. as of June 24, 2003.
Schedule IV
Outstanding Balance of Existing Letters of Credit
Schedule V
LC SUBSIDIARIES
1. Banana Republic, Inc.
2. Gap (Canada) Inc.
3. Gap (Deutschland) GmbH
4. Gap (France) S.A.S.
5. Gap International BV
6. Gap International Sourcing FZE
7. Gap International Sourcing (Holdings) Limited
8. Gap International Sourcing Limited
9. Gap International Sourcing (Mexico) S.A. de C.V.
10. Gap International Sourcing Pte. Ltd.
11. Gap (Japan) K.K.
12. Gap (Netherlands) B.V.
13. GPS Consumer Direct, Inc.
14. GPS (Great Britain) Limited
15. Old Navy (Canada) Inc.
16. Old Navy Inc.
17. Gap (RHC) B.V.
Schedule VI
SUBSIDIARY BORROWERS
1. Gap (Canada) Inc.
2. Gap (Deutschland) GmbH
3. Gap (France) S.A.S.
4. Gap International B.V.
5. Gap International Sourcing (Holdings) Limited
6. Gap International Sourcing Limited
7. Gap (Japan) K.K.
8. Gap (Netherlands) B.V.
9. GPS (Great Britain) Limited
10. Old Navy (Canada) Inc.
11. Gap International Sourcing Pte. Ltd.
12. Gap (RHC) B.V.
Schedule VII
PERMITTED INVESTMENTS
1. Obligations issued or guaranteed by the United States Government.
2. Commercial paper of U.S. issuers having a rating of P-1 by Moodys or A-1
by S&P.
3. Dollar denominated investments in money market funds.
4. Banker's acceptances, certificates of deposit, eurodollar time deposits
(including bank money market funds) and secured repurchase agreements
involving any of the investments referred to above and having the
ratings specified above, as applicable, with an institution or
institutions whose commercial paper satisfies the criteria specified in
2 above.
5. Tax-exempt securities and taxable securities issued by tax-exempt
entities with maturities less than 365-days at the time of such
investment rated Aaa by Moodys or AAA by S&P or Aa by Moodys or AA by
S&P.
6. Investments of a similar type by Foreign Subsidiaries in jurisdictions
where such Foreign Subsidiaries do business.
Moodys = ▇▇▇▇▇'▇ Investors Service, Inc.
S&P = Standard & Poor's Ratings Services, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
Schedule VIII
PLANS
1. GapShare 401(k) Plan
2. Gap Inc. Employee Benefits Premium Payment Plan
3. Gap Inc. Life and Accidental Death and Dismemberment Plan (includes the
Business Travel Accident Plan)
4. Gap Inc. Health Insurance Plan
5. Gap Inc. Short-Term Disability Plan
6. Gap Inc. Long-Term Disability Plan
7. Gap Inc. Tuition Reimbursement Program
8. Gap Inc. Vision Plan
9. Gap Inc. Dependent Care Flexible Spending Account Plan
10. Gap Inc. Health Care Flexible Spending Account Plan
11. The Gap, Inc. 2001 Workforce Review Transition Benefits Plan for
Employees in Grades 23 and Below
12. The Gap, Inc. 2001 Workforce Review Transition Benefits Plan for
Employees in Grades 24 and Above
13. Banana Republic, Inc. 2001 Field Reorganization Benefits Plan
14. The Gap, Inc. 2002 Distribution Division Transition Benefits Plan for
Employees in Grades 19 and Below
15. The Gap, Inc. 2002 Distribution Division Transition Benefits Plan for
Employees in Grades 20 and Above
16. The Gap Inc. 2002 Transition Benefits Plan for Employees in Grades 19
and Below
17. The Gap Inc. 2002 Transition Benefits Plan for Employees in Grades 20
and Above
Schedule IX
SPECIAL PURPOSE SUBSIDIARIES
1. Banana Republic (Apparel) Inc.
2. Banana Republic (ITM) Inc.
3. Gap (Apparel) Inc.
4. Gap (ITM) Inc.
5. Old Navy (Apparel) Inc.
6. Old Navy (ITM) Inc.
7. GPSDC (Fresno) LLC
8. GPSDC (CADC) LLC
9. GPSDC (WDC) LLC
Schedule X
ERISA Matters
None.
Schedule XI
SUBSIDIARIES OF THE BORROWER
SUBSIDIARIES OF THE
BORROWER (EXCEPT NUMBER OF
EXCLUDED PERCENTAGE SHARES/UNITS
SUBSIDIARIES, BUT NUMBER OF OWNED COVERED BY OPTIONS,
INCLUDING SPECIAL JURISDICTION NUMBER OF EQUITY BY BORROWER WARRANTS, RIGHTS OF
PURPOSE OF SHARES/UNITS INTERESTS OR ANY CONVERSION OR MATERIAL ASSETS (IF A
SUBSIDIARIES) ORGANIZATION AUTHORIZED OUTSTANDING SUBSIDIARY PURCHASE SPECIAL PURPOSE SUBSIDIARY)
-------------------- ------------- -------------- ------------- ------------ ------------------- -----------------------------
Banana Republic Holds all U.S. trademarks for
(Apparel) Inc. CA 1,000 100 100% None. the Banana Republic brand.
Banana Republic
(California) LLC DE n/a n/a 100% None. n/a
Banana Republic
(Florida) LLC CA n/a n/a 100% None. n/a
Banana Republic
(Holdings) Inc. CA 1,000 100 100% None. n/a
Holds all international
Banana Republic trademarks for the Banana
(ITM) Inc. CA 1,000 100 100% None. Republic brand.
Banana Republic
(New York) LLC DE n/a n/a 100% None. n/a
Banana Republic,
Inc. DE 1,000 100 100% None. n/a
Holds all U.S. trademarks
Gap (Apparel) Inc. CA 1,000 1,000 100% None. for the Gap brand.
Gap (Florida) LLC CA n/a Nn/a 100% None. n/a
Gap (Georgia) L.P. CA n/a 999 LP; 1 GP 100% None. n/a
Gap (Indiana) L.P. CA n/a 999 LP; 1 GP 100% None. n/a
Will hold all international
Gap (ITM) Inc. CA 100,000 100 100% None. trademarks for the Gap brand.
Gap (Kentucky) L.P. CA n/a 999 LP; 1 GP 100% None. n/a
Gap (Tennessee) L.P. CA n/a 999 LP; 1 GP 100% None. n/a
Gap (Wisconsin) L.P. CA n/a 999 LP; 1 GP 100% None. n/a
Gap Holdings, Inc. CA 1,000 700 100% None. n/a
SUBSIDIARIES OF THE
BORROWER (EXCEPT NUMBER OF
EXCLUDED PERCENTAGE SHARES/UNITS
SUBSIDIARIES, BUT NUMBER OF OWNED COVERED BY OPTIONS,
INCLUDING SPECIAL JURISDICTION NUMBER OF EQUITY BY BORROWER WARRANTS, RIGHTS OF
PURPOSE OF SHARES/UNITS INTERESTS OR ANY CONVERSION OR MATERIAL ASSETS (IF A
SUBSIDIARIES) ORGANIZATION AUTHORIZED OUTSTANDING SUBSIDIARY PURCHASE SPECIAL PURPOSE SUBSIDIARY)
-------------------- ------------- -------------- ------------- ------------ ------------------- -----------------------------
Gap International
Sourcing (Americas)
LLC CA n/a n/a 100% None. n/a
Gap International
Sourcing
(California), Inc. CA 1,000 100 100% None. n/a
Gap International
Sourcing (JV), LLC CA n/a n/a 100% None. n/a
Gap International
Sourcing (U.S.A.)
Inc. CA 100 100 100% None. n/a
Gap International
Sourcing, Inc. CA 1,000 1100 100% None. n/a
GPS (Maryland), Inc. MD 10,000 100 100% None. n/a
GPS Brand Services,
Inc. CA 10,000 1,000 100% None. n/a
GPS Consumer
Direct, Inc. CA 1,000 100 100% None. n/a
GPS Corporate
Facilities, Inc. CA 1,000 100 100% None. n/a
GPS Employee
Services, Inc. CA 1,000 100 100% None. n/a
Holds distribution center
GPSDC (CADC) LLC CA n/a n/a 100% None. assets.
Holds distribution center
GPSDC (Fresno) LLC CA n/a n/a 100% None. assets.
GPSDC (New York)
Inc. DE 1,000 100 100% None. n/a
Holds distribution center
GPSDC (WDC) LLC CA n/a n/a 100% None. assets.
GPS Real Estate,
Inc. CA 1,000 100 100% None. n/a
Old Navy (Apparel) Holds all U.S. trademarks
Inc. CA 1,000 100 100% None. for the Old Navy brand.
SUBSIDIARIES OF THE
BORROWER (EXCEPT NUMBER OF
EXCLUDED PERCENTAGE SHARES/UNITS
SUBSIDIARIES, BUT NUMBER OF OWNED COVERED BY OPTIONS,
INCLUDING SPECIAL JURISDICTION NUMBER OF EQUITY BY BORROWER WARRANTS, RIGHTS OF
PURPOSE OF SHARES/UNITS INTERESTS OR ANY CONVERSION OR MATERIAL ASSETS (IF A
SUBSIDIARIES) ORGANIZATION AUTHORIZED OUTSTANDING SUBSIDIARY PURCHASE SPECIAL PURPOSE SUBSIDIARY)
-------------------- ------------- -------------- ------------- ------------ ------------------- -----------------------------
Old Navy
(California) LLC DE n/a n/a 100% None. n/a
Old Navy (East) L.P. CA n/a 99 LP; 1 GP 100% None. n/a
Old Navy (Florida)
LLC CA n/a n/a 100% None. n/a
Old Navy (Holdings)
Inc. CA 1,000 100 100% None. n/a
Holds all international
trademarks for the Old Navy
Old Navy (ITM) Inc. CA 1,000 100 100% None. brand.
Old Navy Inc. DE 1,000 100 100% None. n/a
The ▇▇▇▇▇▇ Gap
Stores, Inc. CA 7,500 1,000 100% None. n/a
WCB Twenty-Eight
Limited Partnership DE n/a 99 LP; 1 GP 100% None. n/a
Schedule XII
Environmental Matters
None.
Schedule XIII
Existing Debt
BORROWER AMOUNT TYPE OF DEBT EXPIRATION
---------------------- ----------------- ------------------- ------------------
Gap International BV Euro 250,000,000 5.0% 5-Year Notes September 30, 2004
Gap (Japan) K.K. US $50,000,000 6.25% ▇▇-▇▇▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ (▇▇▇▇▇▇) SAS Euro 2,145,619 Bank Guarantee for Evergreen
lease payments in
France Societe
Generale
Gap (Deutschland) GmbH Euro 3,536,078 Bank Guarantee for Evergreen
lease payments in
Germany Deutsche
Bank
Gap (RHC) BV USD 2,000,000 Intercompany Evergreen
Revolver
Gap (RHC) BV USD 40,000,000 Intercompany Evergreen
Revolver
Gap (RHC) BV USD 23,000,000 Intercompany Evergreen
Revolver
Gap (France) SAS USD 3,000,000 Intercompany Evergreen
Revolver
Old Navy (Canada) Inc. USD 43,299,038 Intercompany Evergreen
Revolver
Gap (Canada) Inc. USD 26,059,063 Intercompany Evergreen
Revolver
Banana Republic USD 1,015,923 Intercompany Evergreen
(Canada) Inc. Revolver
Schedule XIV
EXCLUDED SUBSIDIARIES
1. GPS Distribution Facilities, LLC
2. GPS (Japan) Limited
3. GPS Management Services, Inc.
4. GPS Park Restaurant, Inc.
5. GPS Realty Company Inc.
6. Real Estate Ventures (Glastonbury), Inc.
7. Real Estate Ventures (▇▇▇▇ Eagle), Inc.
8. Real Estate Ventures (Wheaton), Inc.
Schedule XV
HEDGE SUBSIDIARIES
1. Banana Republic, Inc.
2. Gap (Canada) Inc.
3. Gap (France) SAS
4. Gap International BV
5. Gap International Sourcing (Holdings) Limited
6. Gap International Sourcing Limited
7. Gap (Japan) KK
8. Gap (Netherlands) BV
9. Gap (UK Holdings) Limited
10. GPS (Great Britain) Limited
11. Old Navy (Canada) Inc.
12. Old Navy Inc.
13. Gap (RHC) B.V.
14. Gap (Deutschland) GmbH
EXHIBIT A
NOTICE OF BORROWING
Citicorp USA, Inc., as Agent
for the Lenders Parties
to the Credit Agreement referred to below
Attention:
[Date]
Ladies and Gentlemen:
The undersigned, The Gap, Inc., refers to the Credit Agreement, dated as
of June __, 2003 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain of the undersigned's
Subsidiaries, certain Lenders parties thereto, certain Issuing Banks parties
thereto, certain Joint Book Managers parties thereto, certain Co-Syndication
Agents parties thereto, Citigroup Global Markets Inc., Banc of America
Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. as Joint Lead Arrangers, and
Citicorp USA, Inc., as Agent for said Lenders and the Issuing Banks, and hereby
gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement
that the undersigned hereby requests a Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowing
(the "Proposed Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is _____________,
200_.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________.
(iv) [The Interest Period for each Eurodollar Rate Advance made as
part of the Proposed 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 Borrowing:
(A) the representations and warranties contained in Section 6.01 of
the Credit Agreement (other than, in the case of any Advance that does not
increase the outstanding principal amount of the Advances, the representations
and warranties contained in Sections 6.01(f) and 6.01(g) of the Credit
Agreement), Section 6 of the Security Agreement and Section 6 of the Subsidiary
Guaranty are correct, before and after giving effect to the Proposed Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date;
Exh. A Page 1
(B) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default or Default; and
(C) the making of the Proposed Borrowing is in compliance with the
respective criteria set forth in Section 2.01(a) of the Credit Agreement.
Very truly yours,
THE GAP, INC.
By
--------------------------------------------
Name:
Title:
EXHIBIT B
FORM OF PROMISSORY NOTE
$_______________ Dated: ___________, 200_
FOR VALUE RECEIVED, the undersigned, The Gap, Inc., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
[_________________________] (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (as those terms are defined in the Credit
Agreement referred to below) or prior thereto as provided in such Credit
Agreement the aggregate principal amount of the Advances (as defined below)
owing to the Lender by the Borrower pursuant to the Credit Agreement dated as of
June ___, 2003 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement," terms defined therein,
unless otherwise defined herein, being used herein as therein defined), among
the Borrower, certain subsidiaries of the Borrower, the Lender and certain other
banks and financial institutions party thereto as Lenders, certain Issuing
Banks, certain Joint Book Managers parties thereto, certain Co-Syndication
Agents parties thereto, Citigroup Global Markets Inc., Banc of America
Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. as Joint Lead Arrangers, and
Citicorp USA, Inc. ("CUSA"), as Agent.
The Borrower also promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement. Both principal and interest are payable in
lawful money of the United States of America to CUSA, as Agent, at [399 ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇] (or at such other address as the Agent may
specify to the Borrower in writing) in same day funds, free and clear of and
without any deduction, with respect to the payee named above, subject to Section
4.02 of the Credit Agreement, for any and all present and future taxes,
deductions, charges or withholdings, and all liabilities with respect thereto.
The Lender is authorized to record the date of each Advance or
Conversion or continuation thereof, each payment or prepayment of principal with
respect thereto and, in the case of Eurodollar Rate Advances, each Interest
Period and the interest rate applicable thereto, in the Lender's internal
records and, prior to any transfer hereof, on a schedule annexed hereto and made
a part hereof, and any such notation shall constitute prima facie evidence of
the accuracy of the information so recorded.
This Promissory Note is issued pursuant to Section 2.02(g) of, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Exh. B Page 1
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
THE GAP, INC.
By
--------------------------------------
Name:
Title:
Exh. B Page 2
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated _____________, 200_
Reference is made to the Credit Agreement, dated as of June __, 2003
(the "Credit Agreement"), among The Gap, Inc., a Delaware corporation (the
"Borrower"), certain Subsidiaries of the Borrower, as "LC Subsidiaries" and
"Subsidiary Borrowers," as the case may be, the Lenders (as defined in the
Credit Agreement), certain Issuing Banks, certain Joint Book Managers parties
thereto, certain Co-Syndication Agents parties thereto, Citigroup Global Markets
Inc., Banc of America Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc. as Joint
Lead Arrangers, and Citicorp USA, Inc., as Agent for the Lenders and Issuing
Banks (the "Agent"). Terms defined in the Credit Agreement are used herein with
the same meaning.
____________ (the "Assignor") and ____________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, such respective
interests in and to all of the Assignor's rights and obligations under the
Credit Agreement as of the date hereof which represent the respective percentage
interests specified on Schedule 1 of all outstanding rights and obligations
under the Credit Agreement in respect of (a) the Assignor's Commitment and the
Advances owing to the Assignor and (b) the Issuing Commitment and participations
in Letter of Credit Liability of the Assignor. After giving effect to such sale
and assignment, (i) the Assignee's Commitment and the amount of the Advances
owing to the Assignee and (ii) such Assignee's Issuing Commitment and
participations in Letter of Credit Liability will be as set forth, respectively,
in Section 2 of Schedule 1.
2. The Assignor (a) represents and warrants that it is the legal
and beneficial owner of the interests being assigned by it hereunder and that
such interests are free and clear of any adverse claim; (b) 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 and (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any Subsidiary Borrower or any LC
Subsidiary or the performance or observance by the Borrower, any Subsidiary
Borrower or any LC Subsidiary of any of its respective obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (a) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 6.01 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; (b) agrees that it will, independently and
without reliance upon the Agent, the Issuing Banks, 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
Exh. C - Page 1
Agreement; (c) confirms that it is an Eligible Assignee; (d) appoints and
authorizes the Agent and the Issuing Banks to take such action on its behalf and
to exercise such powers under the Credit Agreement as are delegated to the Agent
and the Issuing Banks by the terms thereof, together with such powers as are
reasonably incidental thereto; (e) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as Lender; [and] (f) specifies as
its Domestic Lending Office (and address for notices) and Eurodollar Lending
Office the offices set forth beneath its name on the signature pages hereof [and
(g) attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such rates at a
rate reduced by an applicable tax treaty].*
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent. The effective date of this Assignment and Acceptance
shall be the date of acceptance thereof by the Agent, unless otherwise specified
on Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (a) 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 Lender thereunder and (b) 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 (and shall direct the Issuing Banks to
make) all payments under the Credit Agreement in respect of the interests
assigned hereby (including, without limitation, all payments of principal,
interest and utilization fees, facility fees and letter of credit facility fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement 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.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
----------
.. If the Assignee is organized under the laws of a jurisdiction outside
the United States.
Exh. C - Page 2
Schedule 1 to
Assignment and Acceptance
Dated ____________, 200_
SECTION 1.
Percentage Interest in Commitment and Advances: _______%
Percentage Interest in participations in Letter of Credit Liability: _______%
SECTION 2.
Assignee's Commitment: $________
Issuing Commitment $________
Aggregate outstanding principal amount of Advances owing to Assignee: $________
Aggregate outstanding amount of Assignee's participations in
Letter of Credit Liability: $________
SECTION 3.
Effective Date1: __________________, 200_
[NAME OF ASSIGNOR]
By:
-------------------------------------
Name
Title:
[NAME OF ASSIGNEE]
By:
-------------------------------------
Name
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
----------
1 This date should be no earlier than the date of acceptance by the Agent.
Schedule I to Assignment and Acceptance - Page 1
Accepted this _____ day
of _____________, 200_
CITICORP USA, INC., as Agent
By:
------------------------------------
Name
Title:
[Accepted this ____ day
of ___, 200___
THE GAP, INC.
By:------------------------------------
Name:
Title:]2
___________
2 If required under Section 10.07 (a) of the Credit Agreement
Schedule I to Assignment and Acceptance - Page 2
EXHIBIT D
SUBSIDIARY GUARANTY dated as of June __, 2003 made by the
Persons listed on the signature pages hereof and the Additional Guarantors (as
defined in Section 8(b) hereof) (such Persons so listed and the Additional
Guarantors being, collectively, the "Guarantors" and, individually, each a
"Guarantor") in favor of the Lender Parties (as defined in the Credit Agreement
referred to below).
PRELIMINARY STATEMENTS.
(1) The Gap, Inc., a Delaware corporation (the "Borrower"),
is party to a Credit Agreement dated as of June __, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; the capitalized terms defined therein being used herein as therein
defined) with certain Subsidiaries of the Borrower, certain Lender Parties party
thereto, certain other financial institutions and Citicorp USA, Inc. as Agent
for such Lender Parties. Each Guarantor will derive substantial direct and
indirect benefits from the transactions contemplated by the Credit Agreement.
(2) It is a condition precedent to the making of Advances
and the issuance of Letters of Credit by the Lender Parties under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to issue Letters of Credit under
the Credit Agreement, each Guarantor, jointly and severally with each other
Guarantor, hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Each Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of the
Borrower, each Subsidiary Borrower and each LC Subsidiary now or hereafter
existing under or in respect of the Credit Agreement, of all Obligations of the
Borrower and the Hedge Subsidiaries now or hereafter existing under the Hedge
Agreements, and of all Obligations of the Borrower and its Subsidiaries now or
hereafter existing under Operating Indebtedness Agreements (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise, (such
Obligations being the "Guaranteed Obligations"), and agrees to pay any and all
reasonable and documented expenses (including, without limitation, reasonable
and documented fees and out-of-pocket expenses of counsel) incurred by the
Agent, any other Lender Party, or any Hedge Bank in enforcing any rights under
this Guaranty. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed to any Lender Party under or in respect
of the Credit Agreement or to any Hedge Bank under or in respect of a Hedge
Agreement or to any Operating Lender under or in respect of an Operating
Indebtedness Agreement but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.
2
(b) Each Guarantor, and by its acceptance of this Guaranty,
the Agent and each other Lender Party, hereby confirm that it is the
intention of all such Persons that this Guaranty and the Obligations of
each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law (as hereinafter defined), the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar foreign, federal or state law to the extent applicable to
this Guaranty and the Obligations of each Guarantor hereunder. To
effectuate the foregoing intention, the Agent, the other Lender Parties,
any Hedge Bank and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time and all of
the other liabilities of each of the Guarantors under this Guaranty
shall be limited to the maximum amount as will, after giving effect to
such maximum amount and all of the other contingent and fixed
liabilities of such Guarantor that are relevant under such requirements
of law, and after giving effect to any collections from, any rights to
receive contributions from, or any payments made by or on behalf of, any
of the other Guarantors in respect of the Obligations of such other
Guarantor under this Guaranty, result in the Obligations of such
Guarantor under this Guaranty not constituting a fraudulent transfer or
conveyance. For purposes hereof, "Bankruptcy Law" means any proceeding
of the type referred to in Section 8.01(e) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for
the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made to any
Lender Party, or Hedge Bank or Operating Lender under this Guaranty or
any other guaranty, such Guarantor will contribute, to the maximum
extent permitted by law, such amounts to each other Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the
Lender Parties under or in respect of the Credit Agreement, the Hedge
Bank under or in respect of the respective Hedge Agreement, or the
Operating Lender under or in respect of the respective Operating
Indebtedness Agreement.
(d) Notwithstanding anything to the contrary set forth
herein and, with respect to the Guarantors on the one hand, and the
Lender Parties and the Hedge Banks on the other, the Intercreditor
Agreement, it is understood and agreed by the parties hereto and by any
Hedge Bank seeking to enforce this Guaranty or to otherwise obtain any
benefit under this Guaranty or any Operating Lender seeking to enforce
this Guaranty or otherwise obtain any benefit under this Guaranty that
(i) any such Hedge Bank or Operating Lender shall be bound by all of the
provisions of this Guaranty, (ii) the Guaranteed Obligations hereunder
in favor of the Lender Parties with respect to the Credit Agreement, and
the Guaranteed Obligations in favor of the Operating Lenders with
respect to the Operating Indebtedness Agreements and the Guaranteed
Obligations hereunder in favor of the Hedge Banks with respect to the
Hedge Agreements entered into by the Hedge Subsidiaries are separate,
(iii) no Lender Party or Operating Lender shall have any claim under
this Guaranty or under any other Loan Document or any Operating
Indebtedness Agreement solely as a result of a claim by any Hedge Bank
under this Guaranty, and no Hedge Bank shall have any claim under this
Guaranty solely as a result of a claim by any Lender Party or Operating
Lender hereunder or under any other Loan Document or any Operating
Indebtedness Agreement or by any other Hedge Bank under this Guaranty,
(iv) with respect to Guaranteed Obligations under Hedge
3
Agreements entered into by Hedge Subsidiaries, this Guaranty shall
operate in favor of only those Lenders or Affiliates of a Lender which
are Hedge Banks prior to the termination of this Guaranty, and then only
with respect to the Obligations incurred under Hedge Agreements with
Hedge Banks in effect prior to such termination, and (v) with respect to
the Guaranteed Obligations under Operating Indebtedness Agreements, this
Guaranty shall operate in favor of only those Lenders or Affiliates of
Lenders which are Operating Lenders prior to the termination of this
Guaranty, and then only with respect to the Obligations incurred under
Operating Indebtedness Agreements in effect prior to such termination.
Section 2. Guaranty Absolute. Each Guarantor jointly and
severally guarantees that all of the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Credit Agreement, the respective
Hedge Agreement or the respective Operating Indebtedness Agreement, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Lender Party, Hedge Bank or
Operating Lender with respect thereto. The Obligations of each Guarantor under
or in respect of this Guaranty are independent of the Guaranteed Obligations or
any other Obligations of any other Loan Party under or in respect of the Loan
Documents, the Hedge Agreements or the Operating Indebtedness Agreements and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guaranty, irrespective of whether any action is brought against
the Borrower, any other Loan Party, any Hedge Subsidiary or any Subsidiary of
the Borrower party to an Operating Indebtedness Agreement or whether the
Borrower or any other Loan Party or any Hedge Subsidiary is joined in any such
action or actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document, Hedge Agreement, Operating Indebtedness Agreement or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any
other Obligations of any other Loan Party or any Hedge Subsidiary or any
such Subsidiary of the Borrower under or in respect of the Loan
Documents, the Hedge Agreements or the Operating Indebtedness
Agreements, or any other amendment or waiver of or any consent to
departure from any Loan Document, any Hedge Agreement or any Operating
Indebtedness Agreement, including, without limitation, any increase in
the Guaranteed Obligations resulting from the extension of additional
credit to any Loan Party or the execution of additional Hedge Agreements
or additional Operating Indebtedness Agreements or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral or any other collateral, or any taking, release or amendment
or waiver of, or consent to departure from, any other guaranty, for all
or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other
collateral, or proceeds thereof, to all or any of the Guaranteed
Obligations, or any manner of sale or other
4
disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or of the Borrower or any Hedge Subsidiary
under any Hedge Agreement or the Borrower or any of its Subsidiaries
party to any Operating Indebtedness Agreement or any other assets of the
Borrower, any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, any Loan Party or any
of its Subsidiaries;
(f) any failure of any Lender Party or any Hedge Bank or
Operating Lender to disclose to any Loan Party or Hedge Subsidiary or
other Subsidiary of the Borrower any information relating to the
business, condition (financial or otherwise), operations, liabilities
(actual or contingent), performance, properties or prospects of any
other Loan Party or Hedge Subsidiary or such Subsidiaries now or
hereafter known to such Lender Party or such Hedge Bank or such
Operating Lender (each Guarantor waiving any duty on the part of the
Lender Parties or such Hedge Banks or such Operating Lenders to disclose
such information);
(g) the failure of any other Person to execute or deliver
this Guaranty, any Guaranty Supplement (as hereinafter defined) or any
other guaranty or agreement or the release or reduction of liability of
any Guarantor or other guarantor or surety with respect to the
Guaranteed Obligations; or
(h) any other circumstance (including, without limitation,
any statute of limitations) or any existence of or reliance on any
representation by any Lender Party or any Hedge Bank or Operating Lender
that might otherwise constitute a defense available to, or a discharge
of, the Borrower, any Loan Party, any Hedge Subsidiary, any other such
Subsidiary of the Borrower or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Lender Party or any Hedge Bank or any
Operating Lender or any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower, any other Loan Party, any Hedge Subsidiary, any
other such Subsidiary of the Borrower, or otherwise, all as though such payment
had not been made.
Each of the Guarantors hereby further agrees that, as between such
Guarantor, on the one hand, and the Agent and the Lender Parties on the other
hand, (i) the Guaranteed Obligations of such Guarantor in respect of the Credit
Agreement may be declared to be forthwith due and payable upon an Event of
Default as provided in Section 8.01 of the Credit Agreement (and shall be deemed
to have become automatically due and payable in the circumstances provided
therefor in Section 8.01 of the Credit Agreement) for all purposes of this
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such declaration in respect of the Obligations of any of the Loan Parties or any
of the Obligations guaranteed hereunder (or preventing such Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and (ii) in the event of any declaration of acceleration of such
Guaranteed Obligations (or such Guaranteed Obligations being deemed to have
become automatically due and payable) as
5
provided in Section 8.01 of the Credit Agreement, such Guaranteed Obligations
(whether or not due and payable by any other Person) with respect to the Lender
Parties (but not with respect to the Hedge Banks or the Operating Lenders) shall
forthwith become due and payable by such Guarantor for all purposes of this
Guaranty.
Each of the Guarantors hereby further agrees that, as between such
Guarantor on the one hand, and each Hedge Bank, on the other hand, (i) the
Guaranteed Obligations of such Guarantor in respect of each Hedge Agreement may
be declared to be forthwith due and payable upon an event under such Hedge
Agreement that permits such Hedge Bank to exercise its remedies thereunder for
all purposes of this Guaranty, notwithstanding any stay, injunction or other
prohibition preventing such declaration in respect of the Obligations of the
Borrower or any of the Hedge Subsidiaries or any of the Obligations guaranteed
hereunder as against any other Person and (ii) in the event of any acceleration
of any such Guaranteed Obligations as provided in such Hedge Agreement, such
Guaranteed Obligations (whether or not due and payable by any other Person) with
respect to the Hedge Banks (but not with respect to the Lender Parties or the
Operating Lenders) shall forthwith become due and payable by such Guarantor for
all purposes of this Guaranty.
Each of the Guarantors hereby further agrees that, as between such
Guarantor, on the one hand, and each Operating Lender, on the other hand, (i)
the Guaranteed Obligations of such Guarantor in respect of such Operating
Indebtedness Agreement may be declared to be forthwith due and payable upon an
event under such Operating Indebtedness Agreement that permits such Operating
Lender to exercise its remedies thereunder for all purposes of this Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
declaration in respect of the Obligations of the Borrower or any of its
Subsidiaries or any of the Obligations guaranteed hereunder as against any other
Person, and (ii) in the event of any acceleration of any such Guaranteed
Obligations as provided in such Operating Indebtedness Agreement, such
Guaranteed Obligations (whether or not due and payable by any other Person) with
respect to the Operating Lenders (but not with respect to the Lender Parties or
Hedge Banks) shall forthwith become due and payable by such Guarantor for all
purposes of this Guaranty.
Section 3. Waivers and Acknowledgments. (a) Each Guarantor
hereby unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Lender Party, any Hedge Bank or any Operating Lender protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against the Borrower, any Loan Party, any Hedge Subsidiary, any other
Subsidiary of the Borrower party to any Operating Indebtedness Agreement or any
other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably
waives any right to revoke this Guaranty and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.
(c) Each Guarantor hereby unconditionally and irrevocably
waives (i) any defense arising by reason of any claim or defense based
upon an election of remedies by
6
any Lender Party or any Hedge Bank or any Operating Lender that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification
rights of such Guarantor or any other rights of such Guarantor to
proceed against any of the other Loan Parties, any Hedge Subsidiary, any
such Subsidiary of the Borrower, any other guarantor or any other Person
or any Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of such Guarantor
hereunder.
(d) Each Guarantor acknowledges that the Agent may, without
notice to or demand upon such Guarantor and without affecting the
liability of such Guarantor under this Guaranty, foreclose under any
mortgage by nonjudicial sale, and each Guarantor hereby waives any
defense to the recovery by the Agent and the other Lender Parties and
the Hedge Banks and the Operating Lenders against such Guarantor of any
deficiency after such nonjudicial sale and any defense or benefits that
may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably
waives any duty on the part of any Lender Party, any Hedge Bank, or any
Operating Lender to disclose to such Guarantor any matter, fact or thing
relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower, any
other Loan Party or any of its Subsidiaries now or hereafter known by
such Lender Party, Hedge Bank or Operating Lender.
(f) Each Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents, the Hedge Agreements and the
Operating Indebtedness Agreements, and that the waivers set forth in
Section 2 hereof and this Section 3 are knowingly made in contemplation
of such benefits.
Section 4. Subrogation. Each Guarantor hereby unconditionally
and irrevocably agrees not to exercise any rights that it may now have or may
hereafter acquire against the Borrower, any Loan Party, any Hedge Subsidiary,
any other Subsidiary of the Borrower party to any Operating Indebtedness
Agreement or any other insider guarantor that arise from the existence, payment,
performance or enforcement of such Guarantor's Obligations under or in respect
of this Guaranty or any other Loan Document, any Hedge Agreement, or any
Operating Indebtedness Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Lender Party or any Hedge
Bank or Operating Lender against the Borrower, any Loan Party, any Hedge
Subsidiary, any such Subsidiary of the Borrower or any other insider guarantor
or any Collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Borrower, any Loan Party, any Hedge
Subsidiary, any such Subsidiary of the Borrower or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, all Letters of Credit shall
have expired or been terminated and all Commitments, all Hedge Agreements and
all Operating Indebtedness Agreements shall have
7
expired or been terminated. If any amount shall be paid to any Guarantor in
violation of the immediately preceding sentence at any time prior to the latest
of (a) the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guaranty, (b) the Termination Date and (c) the latest
date of expiration or termination of all Letters of Credit, all Hedge
Agreements, and all Operating Indebtedness Agreements such amount shall be
received and held in trust for the benefit of the Lender Parties, the Hedge
Banks or the Operating Lenders, as the case may be, shall be segregated from
other property and funds of such Guarantor and shall forthwith be paid or
delivered to the Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, or to be held as Collateral for any unpaid Guaranteed Obligations
or other amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to any Lender Party, any Hedge Bank or any
Operating Lender of all or any part of the respective Guaranteed Obligations,
(ii) all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, (iii) the Termination Date shall
have occurred and (iv) all Letters of Credit, all Hedge Agreements, and all
Operating Indebtedness Agreements shall have expired or been terminated, the
Lender Parties, the Hedge Banks and Operating Lenders, respectively, will, at
such Guarantor's request and expense, 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 Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. Any and all
payments by any Guarantor hereunder shall be made in accordance with Section
4.02 (as modified by Section 2.13(e)(A) thereof) and Section 4.06 of the Credit
Agreement by treating such Guarantor for all purposes of Section 4.02 (as
modified by Section 2.13(e)(A) thereof) and Section 4.06 of the Credit Agreement
as the Borrower, Subsidiary Borrower, LC Subsidiary or Subsidiary of the
Borrower party to an Operating Indebtedness Agreement, as the case may be, who
would otherwise be required to make such payment under the Credit Agreement with
all the benefits and burdens associated with such treatment.
Section 6. Representations and Warranties. Each Guarantor hereby
makes each representation and warranty made in the Loan Documents, by the
Borrower, with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) Each of the Guarantors is a corporation, limited
liability company or other legal entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization. Each of the Guarantors possesses all powers (corporate or
otherwise) and all other authorizations and licenses necessary to engage
in its respective businesses, except where the failure to so possess
would not have a Material Adverse Effect.
(b) The execution, delivery and performance by such
Guarantor of each Loan Document to which it is a party and the
consummation of the transactions contemplated thereby are within such
Guarantor's respective powers (corporate or otherwise), have been duly
authorized by all necessary action (corporate or otherwise), and do not
(i) contravene such Guarantor's Constitutive Documents, (ii) violate any
Requirements of
8
Law, (iii) conflict with or result in the breach of, or constitute a
default or require any payment to be made under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party or any of its
properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party. Such
Guarantor is not in violation of any such Requirements of Law or in
breach of any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach of which
would be reasonably likely to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by such
Guarantor of any Loan Document to which it is a party.
(d) Each Loan Document to which such Guarantor is a party
has been duly executed and delivered by such Guarantor and is the legal,
valid and binding obligation of such Guarantor enforceable against any
such Guarantor in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to
or affecting the enforcement of creditors' rights generally and general
principles of equity (regardless of whether considered in a proceeding
in equity or at law).
(e) Such Guarantor has, independently and without reliance
upon any Lender Party, any Hedge Bank or any Operating Lender and based
on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Guaranty and each
other Loan Document to which it is or is to be a party, and such
Guarantor has established adequate means of obtaining from the Borrower,
each Loan Party, each Hedge Subsidiary and each Subsidiary of the
Borrower party to an Operating Indebtedness Agreement on a continuing
basis information pertaining to, and is now and on a continuing basis
will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such
Person.
Section 7. Covenants. Each Guarantor covenants and agrees that,
so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding, or any Lender Party shall have any
Commitment or any Hedge Agreement or Operating Indebtedness Agreement shall be
in effect, such Guarantor will perform and observe, and cause each of its
Subsidiaries to perform and observe, all of the terms, covenants and agreements
set forth in the Loan Documents on its or their part to be performed or observed
or that the Borrower has agreed to cause such Guarantor or such Subsidiaries to
perform or observe.
Section 8. Amendments, Guaranty Supplements, Etc. (a) No
amendment, modification or waiver of any provision of this Guaranty and no
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed, (i) with respect to
the Lender Parties and any Guaranteed Obligations arising hereunder with respect
to the Lender Parties, and as long as the Credit Agreement is in effect, by the
Agent and the Majority Lenders, and (ii) with respect to any Hedge Bank and any
Guaranteed
9
Obligations arising hereunder with respect to such Hedge Bank, and as long as
any Hedge Agreement with respect to such Hedge Bank is in effect, by such Hedge
Bank, and (iii) with respect to any Operating Lender and any Guaranteed
Obligations arising hereunder with respect to such Operating Lender, and as long
as any Operating Indebtedness Agreement with respect to such Operating Lender is
in effect, by such Operating Lender, in the case of any such amendment or
modification, by the Guarantors, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that this Guaranty may be modified by the execution of a
Guaranty Supplement by an Additional Guarantor in accordance with Section 8(b)
hereof; provided, however, (i) with respect to the Lender Parties and any
Guaranteed Obligations arising hereunder with respect to the Lender Parties, no
amendment, waiver or consent shall, unless in writing and signed by all of the
Lender Parties (other than any Lender Party that is, at such time, a Defaulting
Lender), (a) reduce or limit such Guaranteed Obligations of all or substantially
all Guarantors hereunder, release all or substantially all Guarantors hereunder
or otherwise limit the liability of all or substantially all Guarantors with
respect to such Guaranteed Obligations except as provided in Section 17 hereof,
(b) postpone any date fixed for payment hereunder or (c) change the number of
Lender Parties or the percentage of (x) the Obligations, (y) the aggregate
unpaid principal amount of the Advances or (z) the aggregate outstanding Letter
of Credit Liability that, in each case, shall be required for the Lender
Parties, or any of them to take any action hereunder.
(b) Upon the execution and delivery by any Person of a
guaranty supplement in substantially the form of Exhibit A hereto (each,
a "Guaranty Supplement"), (i) such Person shall be referred to as an
"Additional Guarantor" and shall become and be a Guarantor hereunder,
and each reference in this Guaranty to a "Guarantor" shall also mean and
be a reference to such Additional Guarantor, and each reference in any
other Loan Document to a "Guarantor" shall also mean and be a reference
to such Additional Guarantor, and (ii) each reference herein to "this
Guaranty", "hereunder", "hereof" or words of like import referring to
this Guaranty, and each reference in any other Loan Document to the
"Subsidiary Guaranty", "thereunder", "thereof" or words of like import
referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be either in writing (including telecopy
communication) and mailed, sent by overnight courier, telecopied or otherwise
delivered to it:
(a) if to any Guarantor, addressed to it in care of the
Borrower at the Borrower's address specified in Section 10.02 of the
Credit Agreement;
(b) if to any Agent or any Lender Party, at its address
specified in Section 10.02 of the Credit Agreement;
(c) if to any Hedge Bank, at its address specified in the
respective Hedge Agreement;
(d) if to any Operating Lender at its address specified in
the respective Operating Indebtedness Agreement;
10
(e) or, as to any party, at such other address or to such
other person as shall be designated by such party in a written notice to
each other party.
All such notices and other communications shall, when mailed be
effective three days after being deposited in the mail, when sent by overnight
courier, be effective one day after being sent by overnight courier, and when
telecopied, be effective when received, respectively; and when delivered by
hand, be effective upon delivery. Delivery by telecopier of an executed
counterpart of a signature page to any amendment or waiver of any provision of
this Guaranty or of any Guaranty Supplement to be executed and delivered
hereunder shall be effective as delivery of an original executed counterpart
thereof.
Section 10. No Waiver; Remedies. No failure on the part of any
Lender Party or Hedge Bank or Operating Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11. Right of Set-off. In respect of the Guaranteed
Obligations relating to the Credit Agreement, upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 8.01 of the Credit Agreement to
authorize the Agent to declare the Advances due and payable pursuant to the
provisions of said Section 8.01 (or the automatic acceleration of such Advances
pursuant to the provisions of said Section 8.01), and in respect of the
Guaranteed Obligations relating to a Hedge Agreement, upon the occurrence of an
event which permits the respective Hedge Bank to exercise its remedies under
such an agreement, and in respect to the Guaranteed Obligations relating to an
Operating Indebtedness Agreement, upon the occurrence of an event which permits
the respective Operating Lender to exercise its remedies under such an
agreement, the Agent and each Lender Party, each Hedge Bank and each Operating
Lender, as the case may be, and each of their respective Affiliates are 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 indebtedness at any
time owing by the Agent, such Lender Party, such Hedge Bank, such Operating
Lender or such Affiliate to or for the credit or the account of any Guarantor
against any and all of the respective Guaranteed Obligations of such Guarantor,
irrespective of whether the Agent or such Lender Party or such Hedge Bank or
such Operating Lender shall have made any demand under this Guaranty or any
other Loan Document or any Hedge Agreement or any Operating Indebtedness
Agreement and although such Guaranteed Obligations may be unmatured. The Agent,
each Hedge Bank, each Lender Party and each Operating Lender agree promptly to
notify such Guarantor after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Agent, each Lender Party, each Hedge
Bank and each Operating Lender, as the case may be, and their respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Agent, such
Lender Party, such Hedge Bank, such Operating Lender and their respective
Affiliates may have.
Section 12. Indemnification. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Lender Parties or Hedge Banks or
Operating Lenders under
11
this Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, and hold harmless each Lender Party, Hedge Bank and Operating Lender
and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against,
and shall pay on demand, any and all claims (other than lost profits), damages,
liabilities and expenses (including, without limitation, reasonable and
documented fees and disbursements of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party in connection with or as a
result of any failure of any Guaranteed Obligations to be the legal, valid and
binding commitments of any Guarantor enforceable against such Guarantor in
accordance with their terms.
(b) Each Guarantor hereby agrees not to assert any claim
against any Indemnified Party on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise
relating to the actual or proposed use of the proceeds of the Advances
or the Letters of Credit, the Credit Agreement, the Hedge Agreements,
the Operating Indebtedness Agreements or any of the transactions
contemplated thereby.
(c) Without prejudice to the survival of any of the other
agreements of any Guarantor under this Guaranty, the agreements and
commitments of each Guarantor contained in Section 1(a) hereof (with
respect to enforcement expenses), the last sentence of Section 2 hereof,
Section 5 hereof and this Section 12 shall survive the payment in full
of the Guaranteed Obligations and all of the other amounts payable under
this Guaranty.
Section 13. Subordination. Each Guarantor hereby subordinates
any and all debts, liabilities and other Obligations for borrowed money owed to
such Guarantor by each other Loan Party or arising from subrogation rights with
respect to guaranties issued by such Guarantor in respect of Obligations to
third-parties in respect of which another Loan Party is the primary obligor (the
"Subordinated Obligations") to the Guaranteed Obligations to the extent and in
the manner hereinafter set forth in this Section 13:
(a) Prohibited Payments, Etc. Except during the continuance
of an Event of Default while the Credit Agreement is in effect, and
thereafter an event (if any) which would permit a Hedge Bank or
Operating Lender to exercise its remedies under a Hedge Agreement or
Operating Indebtedness Agreement, respectively, each Guarantor may
receive regularly scheduled payments from any other Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party) or such event, however, unless the Agent, on behalf of
the Lender Parties, each Hedge Bank and each Operating Lender otherwise
agree, no Guarantor shall demand, accept or take any action to collect
any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any
proceeding under any Bankruptcy Law relating to any other Loan Party,
each Guarantor agrees that the Lender Parties, Hedge Banks and Operating
Lenders shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing
after the commencement of a proceeding under any Bankruptcy Law, whether
or not
12
constituting an allowed claim in such proceeding ("Post Petition
Interest")) before such Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the
continuance of any Event of Default or event referred to in subclause
(a) above, each Guarantor shall, if the Agent, on behalf of the Lender
Parties, each Hedge Bank and each Operating Lender so request, collect,
enforce and receive payments on account of the Subordinated Obligations
as trustee for such Persons and deliver such payments to the Agent, such
Hedge Bank or such Operating Lender, as the case may be, on account of
the Guaranteed Obligations (including all Post Petition Interest),
together with any necessary endorsements or other instruments of
transfer, but without reducing or affecting in any manner the liability
of such Guarantor under the other provisions of this Guaranty.
(d) Agent Authorization. After the occurrence and during the
continuance of any Event of Default referred to in Section 8.01(e) of
the Credit Agreement, the Agent, on behalf of the Lender Parties, each
Hedge Bank and each Operating Lender, are authorized and empowered (but
without any obligation to so do), each in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and to apply any amounts received
thereon to the respective Guaranteed Obligations (including any and all
Post Petition Interest), and (ii) to require each Guarantor (A) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such commitments to
the Agent, such Hedge Bank or such Operating Lender respectively for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
Section 14. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) with respect to
the Lender Parties, remain in full force and effect until the latest of (i) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (ii) the Termination Date and (iii) the latest date
of expiration or termination of all Letters of Credit, (b) with respect to any
Hedge Bank until the termination of its respective Hedge Agreement, (c) with
respect to any Operating Lender until the termination of its respective
Operating Indebtedness Agreement, (d) be binding upon the Guarantor, its
successors and assigns and (e) inure to the benefit of and be enforceable by the
Lender Parties, the Hedge Banks and their successors, transferees and assigns.
Without limiting the generality of clause (e) of the immediately preceding
sentence, any Lender Party may assign or otherwise transfer all or any portion
of its rights and commitments under the Credit Agreement (including, without
limitation, all or any portion of its Obligations, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender Party herein or otherwise, in each case as and to the extent provided in
Section 10.07 of the Credit Agreement. No Guarantor shall have the right to
assign its rights hereunder or any interest herein (x) with respect to the
Guaranteed Obligations owed to the Lender Parties, without the prior written
consent of the Lender Parties, (y) with respect to the Guaranteed Obligations
owed to a Hedge Bank, without the prior written consent of such Hedge Bank, and
(z) with respect to the Guaranteed Obligations owed to an Operating Lender under
an Operating Indebtedness Agreement, without prior written consent of such
Operating Lender.
13
Section 15. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto 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 Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc. (a) This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of New York.
(b) Each of the Guarantors and Lender Parties, and each
Hedge Bank and Operating Lender seeking to enforce this Guaranty, hereby
irrevocably submits to the non-exclusive jurisdiction of any New York
State or Federal court sitting in the County of New York, The City of
New York, in any action or proceeding arising out of or relating to this
Agreement, and each of the Guarantors and Lender Parties, and each Hedge
Bank and Operating Lender seeking to enforce this Guaranty, hereby
irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or
such Federal court. Each of the Guarantors and Lender Parties, and each
Hedge Bank and Operating Lender seeking to enforce this Guaranty, hereby
irrevocably agrees, to the fullest extent each may effectively do so,
that each will not assert any defense that such courts do not have
subject matter or personal jurisdiction of such action or proceeding or
over any party hereto. Each of the Guarantors and Lender Parties, and
each Hedge Bank and Operating Lender seeking to enforce this Guaranty,
hereby irrevocably consents to the service of copies of the summons and
complaint and any other process which may be served in any such action
or proceeding by certified mail, return receipt requested, or by
delivering of a copy of such process, in the case of each Guarantor, in
care of the Borrower at its address specified in Section 10.02 of the
Credit Agreement, in the case of each Lender Party, at its address
specified in Section 10.02 of the Credit Agreement, with respect to each
Hedge Bank seeking to enforce this Guaranty as specified in its
respective Hedge Agreement, with respect to each Operating Lender
seeking to enforce this Guaranty as specified in the respective
Operating Indebtedness Agreement or by any other method permitted by
law. Each of the Guarantors and Lender Parties, each Hedge Bank and each
Operating Lender seeking to enforce this Guaranty hereby 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 by any
other manner provided by law.
(c) Nothing in this Section 16 shall affect the right of any
of the Guarantors, the Lender Parties, the Hedge Banks or the Operating
Lenders to serve legal process in any other manner permitted by law or
affect the right of any of the parties to bring any action or proceeding
against any of the parties or their property in the courts of other
jurisdictions.
(d) EACH GUARANTOR AND EACH LENDER PARTY BY ITS ACCEPTANCE
OF THIS GUARANTY, AND EACH HEDGE BANK AND OPERATING LENDER SEEKING TO
ENFORCE THIS GUARANTY, HEREBY
14
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE CREDIT AGREEMENT, THE HEDGE AGREEMENTS, THE OPERATING
INDEBTEDNESS AGREEMENTS OR THE ACTIONS OF THE AGENT, ANY LENDER PARTY,
ANY HEDGE BANK OR ANY OPERATING LENDER IN CONNECTION WITH THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 17. Termination.
(a) With respect to the Lender Parties, upon the latest of
(i) the payment in full in cash of the Guaranteed Obligations then owing
to the Lender Parties, (ii) the Termination Date and (iii) the
termination or expiration of all Letters of Credit, this Guaranty shall
immediately and automatically terminate, and the Guaranteed Obligations
of the Guarantors hereunder with respect to the Lender Parties shall
automatically be discharged and released, in each case without any
further action by the Lender Parties, any Hedge Bank or any other
Person.
(b) With respect to each Hedge Bank, upon the latest of (i)
the payment in full in cash of the Guaranteed Obligations then owing to
such Hedge Bank and (ii) the termination of all Hedge Agreements with
respect to such Hedge Bank, this Guaranty shall immediately and
automatically terminate, and the Guaranteed Obligations of the
Guarantors hereunder with respect to such Hedge Agreements shall
automatically be discharged and released, in each case without any
further action by the Lender Parties, any Hedge Bank or any other
Person.
(c) With respect to each Operating Lender, upon the latest
of (i) the payment in full in cash of the Guaranteed Obligations then
owing to such Operating Lender and (ii) the termination of all Operating
Indebtedness Agreements with respect to such Operating Lender, this
Guaranty shall immediately and automatically terminate, and the
Guaranteed Obligations of the Guarantors hereunder with respect to such
Operating Indebtedness Agreements shall automatically be discharged and
released, in each case without any further action by the Lender Parties,
any Operating Lender or any other Person.
(d) (i) While the Credit Agreement is in effect, if (A) all
or a majority of the stock of a Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of
(including by merger or consolidation) in a sale not prohibited by the
Credit Agreement or otherwise consented to by the Majority Lenders, (B)
a Guarantor shall liquidate or dissolve in accordance with the terms of
the Credit Agreement or (C) trademarks or service marks are transferred
to a Guarantor such that it becomes or otherwise qualifies as a Special
Purpose Subsidiary, and (ii) if the Credit Agreement is no longer in
effect, in accordance with the requirements (if any) of the Hedge
Agreements and any Operating Indebtedness Agreements, then, in each
case, the obligations of such Guarantor or such successor in interest,
as the case may be, hereunder
15
shall automatically be discharged and released without any further
action by the Lender Parties, the Hedge Banks, the Operating Lenders or
any other Person effective as of the time of such sale, merger,
liquidation or dissolution.
(e) Upon any termination of the Guaranty or any discharge
and release of a Guarantor's obligations hereunder, in each case as
described subsections (a), (b), (c) and (d) of this Section 17, the
Lender Parties, the Hedge Banks and the Operating Lenders as the case
may be, will, at the applicable Guarantor's expense, execute and deliver
to such Guarantor such documents as such Guarantor shall reasonably
request to evidence such termination, discharge or release.
16
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
BANANA REPUBLIC (CALIFORNIA) LLC
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC (FLORIDA) LLC
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC (HOLDINGS) INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇) LLC
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS (MARYLAND), INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
18
GPS BRAND SERVICES, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS CONSUMER DIRECT, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS CORPORATE FACILITIES, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
19
GPS EMPLOYEE SERVICES, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS REAL ESTATE, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPSDC (NEW YORK) INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
20
GAP (FLORIDA) LLC
By The Gap, Inc., as Manager
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (GEORGIA) L.P.
By The Gap, Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (INDIANA) L.P.
By The Gap, Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
21
GAP (KENTUCKY) L.P.
By The Gap, Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (TENNESSEE) L.P.
By The Gap, Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (WISCONSIN) L.P.
By The Gap, Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
22
GAP HOLDINGS, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(AMERICAS) LLC
By The Gap, Inc., as Manager
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(CALIFORNIA), INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
23
GAP INTERNATIONAL SOURCING (JV), LLC
By Gap International Sourcing, Inc., as Manager
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING (U.S.A.) INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
24
OLD NAVY (CALIFORNIA) LLC
By Old Navy Inc., as Manager
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (EAST) L.P.
By Old Navy Inc., as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (FLORIDA) LLC
By Old Navy Inc., as Manager
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
25
OLD NAVY (HOLDINGS) INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
THE ▇▇▇▇▇▇ GAP STORES, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
▇▇
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ LIMITED PARTNERSHIP
By GPS Corporate Facilities, Inc.,
as General Partner
By:
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
EXHIBIT A
TO THE SUBSIDIARY GUARANTY
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
___________ ___, ____
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Credit Administration
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Credit Agreement dated as of June 24, 2003 among
The Gap, Inc., a Delaware corporation (the "Borrower"), the Lender Parties
party to the Credit Agreement and Citicorp USA, Inc., as Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to
the Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as in
effect on the date hereof and as it may hereafter be amended, supplemented or
otherwise modified from time to time, together with this Guaranty Supplement,
being the "Subsidiary Guaranty"). The capitalized terms defined in the
Subsidiary Guaranty or in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.
Section 1. Guaranty; Limitation of Liability. (a) The
undersigned hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment when due, whether at scheduled maturity or on any date of a
required prepayment or by acceleration, demand or otherwise, of all Obligations
of the Borrower, each Subsidiary Borrower and each LC Subsidiary now or
hereafter existing under or in respect of the Credit Agreement, all Obligations
of the Borrower and the Hedge Subsidiaries now or hereinafter existing under
each Hedge Agreement and all Obligations of the Borrower and the Subsidiaries
now or hereafter existing under each Operating Indebtedness Agreement
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations), whether
direct or indirect, absolute or contingent, and whether for principal, interest,
premium, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the
2
"Guaranteed Obligations"), and agrees to pay any and all reasonable and
documented expenses (including, without limitation, reasonable and documented
fees and out-of-pocket expenses of counsel) incurred by the Agent, any other
Lender Party, any Hedge Bank or any Operating Lender in enforcing any rights
under this Guaranty Supplement or the Subsidiary Guaranty. Without limiting the
generality of the foregoing, the undersigned's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed to
any Lender Party under or in respect of the Credit Agreement, to any Hedge Bank
under or in respect of the Hedge Agreements or to any Operating Lender under or
in respect of the Operating Indebtedness Agreements but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) The undersigned, and by its acceptance of this Guaranty
Supplement, the Agent and each other Lender Party, each Hedge Bank and
each Operating Lender, hereby confirms that it is the intention of all
such Persons that this Guaranty Supplement, the Subsidiary Guaranty and
the Obligations of the undersigned hereunder and thereunder not
constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to
the extent applicable to this Guaranty Supplement, the Subsidiary
Guaranty and the Obligations of the undersigned hereunder and
thereunder. To effectuate the foregoing intention, the Agent, the other
Lender Parties, the Hedge Banks, the Operating Lenders and the
undersigned hereby irrevocably agree that the Obligations of the
undersigned under this Guaranty Supplement and the Subsidiary Guaranty
at any time shall be limited to the maximum amount as will result in the
Obligations of the undersigned under this Guaranty Supplement and the
Subsidiary Guaranty not constituting a fraudulent transfer or
conveyance.
(c) The undersigned hereby unconditionally and irrevocably
agrees that in the event any payment shall be required to be made to any
Lender Party, Hedge Bank or Operating Lender under this Guaranty
Supplement, the Subsidiary Guaranty, or any other guaranty, the
undersigned will contribute, to the maximum extent permitted by
applicable law, such amounts to each other Guarantor and each other
guarantor so as to maximize the aggregate amount paid to the Lender
Parties, the Hedge Banks and the Operating Lenders, respectively, under
or in respect of the Credit Agreement, the Hedge Agreements or the
Operating Indebtedness Agreements, as the case may be.
Section 2. Obligations Under the Guaranty. The undersigned
hereby agrees, as of the date first above written, to be bound as a Guarantor by
all of the terms and conditions of the Subsidiary Guaranty to the same extent as
each of the other Guarantors thereunder. The undersigned further agrees, as of
the date first above written, that each reference in the Subsidiary Guaranty to
an "Additional Guarantor" or a "Guarantor" shall also mean and be a reference to
the undersigned, and each reference in any other Loan Document to a "Guarantor"
or a "Loan Party" shall also mean and be a reference to the undersigned.
Section 3. Representations and Warranties. The undersigned
hereby makes each representation and warranty set forth in Section 6 of the
Subsidiary Guaranty to the same extent as each other Guarantor.
3
Section 4. Delivery by Telecopier. Delivery of an executed
counterpart of a signature page to this Guaranty Supplement by telecopier shall
be effective as delivery of an original executed counterpart of this Guaranty
Supplement.
Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc. (a) This Guaranty Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The undersigned, and each Lender Party, Hedge Bank and
Operating Lender seeking to enforce the Subsidiary Guaranty, hereby
irrevocably submit to the non-exclusive jurisdiction of any New York
State or Federal court sitting in the County of New York, The City of
New York, in any action or proceeding arising out of or relating to this
Agreement, and the undersigned, and each Lender Party, Hedge Bank and
Operating Lender seeking to enforce the Subsidiary Guaranty, hereby
irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or
such Federal court. The undersigned, and each Lender Party, Hedge Bank
and Operating Lender seeking to enforce the Subsidiary Guaranty, hereby
irrevocably agree, to the fullest extent each may effectively do so,
that each will not assert any defense that such courts do not have
subject matter or personal jurisdiction of such action or proceeding or
over any party hereto. The undersigned, and each Lender Party, Hedge
Bank and Operating Lender seeking to enforce the Subsidiary Guaranty,
hereby irrevocably consent to the service of copies of the summons and
complaint and any other process which may be served in any such action
or proceeding by certified mail, return receipt requested, or by
delivering of a copy of such process to the undersigned in care of the
Borrower at its address specified in Section 10.02 of the Credit
Agreement, with respect to each Lender Party, at its address specified
in Section 10.02 of the Credit Agreement, with respect to each Operating
Lender seeking to enforce this Guaranty, at its address specified in the
respective Operating Indebtedness Agreement, with respect to each Hedge
Bank seeking to enforce this Guaranty at its address specified in its
respective Hedge Agreement, or by any other method permitted by law. The
undersigned, and each Lender Party, Hedge Bank and Operating Lender
seeking to enforce the Subsidiary Guaranty, hereby agree 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 by any other
manner provided by law.
(c) Nothing in this Section 5 shall affect the right of any
of the parties hereto to serve legal process in any other manner
permitted by law or affect the right of any of the parties to bring any
action or proceeding against any of the parties or their property in the
courts of other jurisdictions.
(d) EACH GUARANTOR AND EACH LENDER PARTY BY ITS ACCEPTANCE
OF THIS GUARANTY, AND EACH HEDGE BANK AND OPERATING LENDER SEEKING TO
ENFORCE THIS GUARANTY, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE
4
CREDIT AGREEMENT, THE HEDGE AGREEMENTS, THE OPERATING INDEBTEDNESS
AGREEMENTS OR THE ACTIONS OF THE AGENT, ANY LENDER PARTY, ANY HEDGE BANK
OR ANY OPERATING LENDER IN CONNECTION WITH THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By:
------------------------------
Name:
Title:
EXHIBIT E
SECURITY AGREEMENT
Dated as of June __, 2003
From
The Grantors referred to herein
as Grantors
to
Citicorp USA, Inc.
as Collateral Agent
T A B L E O F C O N T E N T S
SECTION PAGE
SECTION 1. Grant of Security.........................................................................2
SECTION 2. Security for Obligations..................................................................3
SECTION 3. Grantors Remain Liable....................................................................4
SECTION 4. Delivery and Control of Security Collateral...............................................4
SECTION 5. Maintaining the Account Collateral........................................................5
SECTION 6. Representations and Warranties............................................................6
SECTION 7. Further Assurances........................................................................7
SECTION 8. As to Inventory...........................................................................8
SECTION 9. Insurance.................................................................................9
SECTION 10. Post-Closing Changes; Bailees.............................................................9
SECTION 11. Voting Rights; Dividends; Etc.............................................................9
SECTION 12. Transfers and Other Liens; Additional Shares..............................................11
SECTION 13. Collateral Agent Appointed Attorney-in-Fact...............................................11
SECTION 14. Collateral Agent May Perform..............................................................11
SECTION 15. The Collateral Agent's Duties.............................................................12
SECTION 16. Remedies 12
SECTION 17. Indemnity and Expenses....................................................................14
SECTION 18. Amendments; Waivers; Additional Grantors; Etc.............................................15
SECTION 19. Notices; Etc..............................................................................15
SECTION 20. Continuing Security Interest; Assignments under the Credit Agreement......................16
SECTION 21. Release; Termination......................................................................16
SECTION 22. Execution in Counterparts.................................................................17
SECTION 23. Governing Law.............................................................................18
i
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of June __, 2003 (the "Agreement")
made by The Gap Inc., a Delaware corporation (the "Borrower"), the other Persons
listed on the signature pages hereof and the Additional Grantors (as defined in
Section 18 hereof) (the Borrower, the Persons so listed and the Additional
Grantors being, collectively, the "Grantors"), to Citicorp USA, Inc., as
collateral agent (in such capacity, together with any successor collateral agent
appointed pursuant to the Intercreditor Agreement (as hereinafter defined, the
"Collateral Agent")) for the Secured Parties (as defined in the Credit Agreement
referred to below).
PRELIMINARY STATEMENTS.
(1) The Borrower has entered into a Credit Agreement dated
as of June __, 2003 with the Loan Parties, the Lenders and the Agent (each as
defined therein) and other financial institutions (said agreement, as it may
hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the "Credit Agreement").
(2) The Grantors (other than the Borrower) have guaranteed
the Obligations of the Borrower and certain of its Subsidiaries under the Credit
Agreement and the Obligations of the Borrower and the Hedge Subsidiaries (as
defined in the Credit Agreement) under the Secured Hedge Agreements (as
hereinafter defined) pursuant to a Guaranty dated as of June __, 2003, by each
such Grantor (and certain other Persons party thereto as Guarantor).
(3) Pursuant to the Credit Agreement, the Grantors are
entering into this Agreement in order to grant to the Collateral Agent for the
ratable benefit of the Secured Parties a security interest in the Collateral (as
hereinafter defined).
(4) The Borrower and/or the Hedge Subsidiaries have entered
into certain Hedge Agreements including, without limitation, those set forth on
Schedule I hereto and the Borrower and the Hedge Subsidiaries may from time to
time hereafter enter into Hedge Agreements permitted under the Credit Agreement,
in each case, with any Lender party to the Credit Agreement (or an affiliate
thereof) (collectively, "Secured Hedge Agreements"), such Lenders or such
affiliate that are and hereafter become counterparty to a Secured Hedge
Agreement being the "Hedge Banks".
(5) One or more Operating Lenders (as defined in the Credit
Agreement) have extended or hereafter may from time to time extend Operating
Indebtedness (as defined in the Credit Agreement) to the Borrower or one or more
of its Subsidiaries pursuant to Operating Indebtedness Agreements (as defined in
the Credit Agreement).
(6) Each Grantor is the owner of the shares of stock or
other equity interests set forth opposite such Grantor's name on and as
otherwise described in Schedule III hereto and issued by the Persons named
therein (the "Initial Pledged Equity").
(7) The Secured Parties have agreed that their respective
rights to the Collateral are to be governed by an Intercreditor and Collateral
Agency Agreement dated as of the date of this Agreement (as amended, restated or
otherwise modified from time to time, the
"Intercreditor Agreement"), among the Collateral Agent on behalf of the Banks
and the Hedge Banks.
(8) For purposes of Sections 3.12(c) and 3.15 of the Credit
Agreement, as provided in Section 5(a) hereof, the Borrower will open a letter
of credit collateral deposit account (the "L/C Collateral Account"), with the
Collateral Agent, in the name of the Collateral Agent and under the sole control
and dominion of the Collateral Agent and subject to the terms of this Agreement.
(9) It is a condition precedent to, among other things, the
making of Advances and the issuance of Letters of Credit under the Credit
Agreement from time to time that the Grantors shall have granted the assignment
and security interest and made the pledge and assignment contemplated by this
Agreement.
(10) Each Grantor will derive substantial direct and indirect
benefit from the transactions contemplated by the Loan Documents.
(11) Terms defined in the Credit Agreement and not otherwise
defined in this Agreement are used in this Agreement as defined in the Credit
Agreement. Further, unless otherwise defined in this Agreement or in the Credit
Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) are
used in this Agreement as such terms are defined in such Article 8 or 9. "UCC"
means the Uniform Commercial Code as in effect, from time to time, in the State
of New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Loan Parties to make Advances and issue Letters of Credit under the
Credit Agreement and to induce Hedge Banks to enter additional Secured Hedge
Agreements, each Grantor hereby agrees with the Collateral Agent for the ratable
benefit of the Secured Parties as follows:
SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "Collateral"):
(a) all "inventory" as defined in the UCC, which is located
in the United States, in all of its forms, including, without
limitation, (i) all raw materials, work in process, finished goods and
materials used or consumed in the manufacture, production, preparation
or shipping thereof, (ii) goods in which such Grantor has an interest in
mass or a joint or other interest or right of any kind (including,
without limitation, goods in which such Grantor has an interest or right
as consignee) and (iii) goods that are returned to or repossessed or
stopped in transit by such Grantor, and all accessions thereto and
products thereof and documents therefor, and all software related
thereto, including,
2
without limitation, software that is imbedded in and is part of the
inventory (any and all such property being the "Inventory");
(b) the following (the "Security Collateral"):
(i) the Initial Pledged Equity and the certificates,
if any, representing the Initial Pledged Equity, and all
dividends, distributions, return of capital, 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 Initial Pledged Equity and all subscription warrants,
rights or options issued thereon or with respect thereto; and
(ii) all additional shares of stock and other equity
interests of or in any issuer of the Initial Pledged Equity, or
any successor entity from time to time acquired by such Grantor
in any manner, and all shares of stock and other equity
interests of or in any other Domestic Subsidiary (other than
Excluded Subsidiaries but including first-tier Special Purpose
Subsidiaries) from time to time acquired by such Grantor (such
shares and other equity interests, together with the Initial
Pledged Equity, being the "Pledged Equity"), and the
certificates, if any, representing such additional shares or
other equity interests, and all dividends, distributions, return
of capital, 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 such shares or other equity
interests and all subscription warrants, rights or options
issued thereon or with respect thereto;
(c) the L/C Collateral Account of such Grantor and all funds
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such funds,
and all certificates and instruments, if any, from time to time
representing or evidencing the L/C Collateral Account (the "Account
Collateral").
(d) all books and records (including, without limitation,
customer lists, credit files, computer programs, software, printouts and
other computer materials and records) of such Grantor pertaining to any
of the Collateral; and
(e) all proceeds of, collateral for, and supporting
obligations relating to, any and all of the foregoing (including,
without limitation, proceeds, collateral and supporting obligations that
constitute property of the types described in clauses (a) through (d) of
this Section 1 and this clause (e)).
SECTION 2. Security for Obligations. (a) This Agreement secures,
in the case of each Grantor, the payment of all Obligations of such Grantor now
or hereafter existing under the Loan Documents, the payment of all Obligations
of the Borrower or the Hedge Subsidiaries now or hereafter existing under the
Secured Hedge Agreements and the payment of all Obligations of the Borrower or
its Subsidiaries under Operating Indebtedness Agreements, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, fees, premiums, penalties, indemnifications, contract
causes of action, costs,
3
expenses or otherwise (all such Obligations being the "Secured Obligations").
(b) Notwithstanding anything to the contrary set forth
herein, and with respect to the Grantors on the one hand, and the Lender
Parties, the Operating Lenders and the Hedge Banks on the other, or in
the Intercreditor Agreement, it is understood and agreed by the parties
hereto and by any Hedge Bank or Operating Lender seeking to enforce this
Agreement or to otherwise obtain any benefit under this Agreement that
(i) any such Hedge Bank or Operating Lender shall be bound by all of the
provisions of this Agreement, (ii) the Secured Obligations hereunder in
favor of the Collateral Agent for the benefit of the Lender Parties, the
Secured Obligations in favor of the Collateral Agent for the benefit of
the Operating Lenders and the Secured Obligations hereunder in favor of
the Collateral Agent for the benefit of the Hedge Banks are separate,
(iii) no claim shall be made hereunder by the Collateral Agent on behalf
of any Lender Party against any of the Collateral solely as a result of
a claim hereunder by the Collateral Agent on behalf of any Hedge Bank or
any Operating Lender, and no claim shall be made hereunder by the
Collateral Agent on behalf of any Hedge Bank or any Operating Lender
against any of the Collateral solely as a result of a claim hereunder by
the Collateral Agent on behalf of any Lender Party, any other Operating
Lender or any other Hedge Bank, (iv) with respect to the Secured
Obligations incurred in favor of the Collateral Agent for the benefit of
the Hedge Banks, this Agreement shall operate in favor of only those
Secured Obligations with respect to Lenders or Affiliates of a Lender
which are Hedge Banks prior to the termination of this Agreement with
respect to the Loan Parties, and then only with respect to such Secured
Obligations incurred under Secured Hedge Agreements in effect prior to
such termination and (v) with respect to the Secured Obligations
incurred in favor of the Collateral Agent for the benefit of the
Operating Lenders, this Agreement shall operate in favor of only those
Secured Obligations with respect to Lenders or Affiliates of a Lender
which are Operating Lenders prior to the termination of this Agreement
with respect to the Loan Parties, and then only with respect to such
Secured Obligations incurred under Operating Indebtedness Agreements in
effect prior to such termination.
SECTION 3. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in such Grantor's Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Collateral Agent of any of the rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other Loan Document, nor shall any Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Delivery and Control of Security Collateral. So long
as any Advance or any other Obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement or Operating Indebtedness Agreement shall be in effect or any
Lender Party shall have any Commitment:
4
(a) All certificates or instruments representing or
evidencing Security Collateral shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Collateral Agent. The
Collateral Agent shall have the right at any time, if it believes such
is reasonably necessary or proper to better preserve and protect its
rights hereunder, and with notice to the respective Grantor, to transfer
to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Security Collateral, subject only to the
revocable rights specified in Section 11(a) hereof. In addition, the
Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger
denominations.
(b) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes an
uncertificated security, such Grantor, at the request from time to time
of the Collateral Agent, will cause the issuer thereof either (i) to
register the Collateral Agent as the registered owner of such security
or (ii) to agree in an authenticated record with such Grantor and the
Collateral Agent that such issuer will comply with instructions with
respect to such security originated by the Collateral Agent without
further consent of such Grantor, such authenticated record to be in form
and substance reasonably satisfactory to the Collateral Agent.
(c) With respect to any Security Collateral in which any
Grantor has any right, title or interest and that constitutes a security
entitlement in which the Collateral Agent is not the entitlement holder,
such Grantor will cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the
Collateral Agent as the entitlement holder of such security entitlement
against such securities intermediary or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that
such securities intermediary will comply with entitlement orders (that
is, notifications communicated to such securities intermediary directing
transfer or redemption of the financial asset to which such Grantor has
a security entitlement) originated by the Collateral Agent without
further consent of such Grantor, such authenticated record to be in form
and substance satisfactory to the Collateral Agent.
(d) No Grantor will change or add any securities
intermediary that maintains any securities account in which any of the
Security Collateral is credited or carried, or change or add any such
securities account, in each case without first complying with the above
provisions of this Section 4 in order to perfect the security interest
granted hereunder in such Security Collateral.
SECTION 5. Maintaining the Account Collateral. So long as any
Advance or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding, any Secured Hedge
Agreement or Operating Indebtedness Agreement shall be in effect or any Lender
Party shall have any Commitment:
(a) No later than 30 days of the date hereof, the Borrower
shall take all necessary actions to establish the L/C Collateral Account
and thereafter the Borrower will
5
at all times maintain the L/C Collateral Account only with the
Collateral Agent. Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent shall have sole right to direct
the disposition of funds with respect to the L/C Collateral Account as
provided in Section 16 hereof. Prior to the occurrence and continuance
of an Event of Default, funds held in the L/C Collateral Account,
(including, without limitation, interest on Cash Equivalents credited
thereto) will be paid or released to or for the account of, or withdrawn
by or for the account of, the Borrower or any other Person from the L/C
Collateral Account, in accordance with Sections 3.12(c) and 3.15 of the
Credit Agreement, as applicable, and, further, upon the release and
termination of the security interest hereunder as provided in Section 21
hereof.
(b) The Collateral Agent may, at any time and without notice
to, or consent from the Grantor, transfer or direct the transfer of,
funds from the Account Collateral to satisfy the Grantor's obligations
under the Loan Documents and the Secured Hedge Agreements if an Event of
Default shall have occurred and be continuing.
SECTION 6. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) Such Grantor's exact legal name, as defined in Section
9-503(a) of the UCC, is correctly set forth in Schedule II hereto. Such
Grantor is located (within the meaning of Section 9-307 of the UCC) and
has its chief executive office in the state or jurisdiction set forth in
Schedule II hereto. The information set forth in Schedule II hereto with
respect to such Grantor is true and accurate in all respects. No Grantor
has permitted a uniform commercial code financing statement to be filed
in respect of it as debtor with respect to the Collateral under any
other name, location, chief executive office, type of organization,
jurisdiction of organization or organizational identification number
than those set forth in Schedule II hereto except as disclosed in
Schedule V hereto.
(b) As of the Effective Date, the Inventory of such Grantor
which is located at a distribution center, is located at a distribution
center specified therefor in Schedule IV hereto, and such Grantor has
exclusive possession and control of such Inventory other than such
Inventory stored at any leased distribution center (which leased
distribution center is so indicated by an asterisk on Schedule IV
hereto), as Schedule IV may be amended from time to time pursuant to
Section 8(a) hereof. All material Inventory of the Grantors, except
Inventory in transit, is maintained in one or more States of the United
States of America. All Initial Pledged Equity consisting of certificated
securities and instruments as of the Effective Date have been delivered
to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the
Collateral of such Grantor free and clear of any Lien, claim, option or
right of others, except for (i) the security interest created under this
Agreement, (ii) Liens in favor of landlords to secure payments under
leases, in respect of that portion of the Inventory held at distribution
centers leased from the respective landlord and (iii) Liens to secure
obligations described in clauses (i) and (ii) of the definition of
Permitted Lien in the Credit Agreement (provided that such Liens are not
material). No effective financing statement or other
6
instrument similar is in effect covering all or any part of such
Collateral, except such as may have been filed in favor of the
Collateral Agent relating to the Loan Documents or in respect of
landlord Liens described in this Section 6(c). No Grantor has any trade
names, except as listed on Schedule VI hereto.
(d) The Pledged Equity pledged by such Grantor hereunder has
been duly authorized and validly issued and is fully paid and
non-assessable.
(e) The Initial Pledged Equity pledged by such Grantor
constitutes the percentage of the issued and outstanding shares of stock
or equity interest of the issuers thereof indicated on Schedule III
hereto.
(f) All filings and other actions (including, without
limitation, (A) actions necessary to obtain control of Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and (B)
actions necessary to perfect the Collateral Agent's security interest
with respect to Security Collateral evidenced by a certificate)
necessary to perfect the security interest in the Collateral of such
Grantor created under this Agreement have been duly made or taken or
will be duly made or taken, to the extent contemplated by the Credit
Agreement, and upon the occurrence of such filings or actions, this
Agreement will create in favor of the Collateral Agent for the benefit
of the Secured Parties a valid and, together with such filings and other
actions, perfected first priority security interest in such Security
Collateral of such Grantor (except for Liens referred to in Section
6(c)(ii) and (iii) hereof), securing the payment of the Secured
Obligations.
(g) 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 (i) the grant by such Grantor
of the security interest granted hereunder or for the execution,
delivery or performance of this Agreement by such Grantor, (ii) the
perfection or maintenance of the security interest created hereunder
(including the first priority nature of such security interest), except
for the filing of financing and continuation statements under the UCC,
and the actions described in Section 4 hereof with respect to Security
Collateral, which actions have been taken and are in full force and
effect, or (iii) the exercise by the Collateral Agent of its voting or
other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except as may be required
in connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities
generally.
(h) No Grantor manufactures Inventory. All Inventory is
manufactured by third parties under purchase orders which require
compliance with among other things all applicable wage and hour and
child labor laws (including the Fair Labor Standards Act of 1938 to the
extent applicable).
SECTION 7. Further Assurances. (a) Each Grantor agrees that from
time to time, at the expense of such Grantor, such Grantor will promptly execute
and deliver, or otherwise authenticate, all further instruments and documents,
and take all further action that, in each case, may be necessary or proper, or
that the Collateral Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted by
7
such Grantor hereunder or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral of such
Grantor. Without limiting the generality of the foregoing, each Grantor will
promptly with respect to Collateral of such Grantor: (i) execute or authenticate
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or proper, or as the
Collateral Agent may reasonably request, in order to perfect and preserve the
security interest granted or purported to be granted by such Grantor hereunder;
(ii) deliver and pledge to the Collateral Agent for benefit of the Secured
Parties certificates representing Security Collateral that constitutes
certificated securities, accompanied by undated stock or bond powers executed in
blank; and (iii) take all action reasonably necessary to ensure that the
Collateral Agent has control of Collateral consisting of investment property and
transferable records as provided in Sections 9-105, 9-106 and 9-107 of the UCC.
(b) Each Grantor hereby authorizes the Collateral Agent to
file one or more financing or continuation statements, and amendments
thereto, including, without limitation, one or more financing statements
indicating that such financing statements cover all or any part of the
Collateral of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in
such financing statements falls within the scope of the UCC. A photocopy
or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Each Grantor will furnish to the Collateral Agent from
time to time (i) statements and schedules further identifying and
describing the Collateral of such Grantor and such other reports in
connection with such Collateral as the Collateral Agent may reasonably
request, all in reasonable detail, in order to perfect and preserve the
security interests granted or purported to be granted hereunder; and
such other information as may be reasonably requested by the Collateral
Agent from time to time with respect to the Collateral (with any
information request with respect to Inventory to be to the extent
practicable consistent with such Grantor's existing internal management
information reporting systems), and (ii) such information as is
reasonably necessary so that the Collateral Agent from time to time and
at any time can conduct or cause to be conducted a valuation of the
Collateral (and with the out-of-pocket and documented expenses of the
Collateral Agent in connection therewith to be paid by the Borrower
pursuant to Section 17 hereof); provided, however, that except during
the continuance of any Event of Default, during the term of this
Agreement, the Collateral Agent shall have the right to conduct or cause
to be conducted only one such valuation.
SECTION 8. As to Inventory. (a) To the extent Inventory of a
Grantor is kept at a distribution center, such Grantor will keep such Inventory
at the distribution centers specified on Schedule IV or, at such other
distribution centers designated in a written notice by the Grantor to the
Collateral Agent. Upon the giving of such notice, Schedule IV shall be
automatically amended to add any new locations specified in the notice.
(b) Each Grantor will pay promptly when due all property and
other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including, without limitation, claims for labor,
materials and supplies) against, the Inventory of such
8
Grantor, except to the extent payment thereof is not required by Article
IV of the Credit Agreement. The purchase orders for all Inventory
manufactured by third parties will require compliance with among other
things all applicable wage and hour and child labor laws (including the
Fair Labor Standards Act of 1938 to the extent applicable).
SECTION 9. Insurance. Each Grantor will, at its own expense,
maintain insurance with respect to the Inventory of such Grantor in such
amounts, against such risks, in such form and with such insurers, as is
customary for the industry; provided, that the Grantors may self-insure such
risks in accordance with its past practices as of the date hereof and may in
addition self-insure risks in amounts as are customarily self-insured by
similarly situated Persons in the industry.
SECTION 10. Post-Closing Changes; Bailees. (a) Each Grantor will
provide written notice to the Collateral Agent of a change in such Grantor's
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth on Schedule II of this
Agreement within 30 days of such change, and shall take all action reasonably
required by the Collateral Agent for the purpose of perfecting or protecting the
security interest granted by this Agreement. No Grantor will become bound by a
security agreement with respect to any of the Collateral authenticated by
another Person (determined as provided in Section 9-203(d) of the UCC) without
giving the Collateral Agent 30 days' prior written notice thereof and taking all
action required by the Collateral Agent to ensure that the perfection and first
priority nature of the Collateral Agent's security interest in the Collateral
will be maintained. Each Grantor will hold and preserve its records relating to
the Collateral and will permit representatives of the Collateral Agent at any
time during normal business hours and upon reasonable prior notice to inspect
and make abstracts from such records. If the Grantor does not have an
organizational identification number and later obtains one, it will forthwith
notify the Collateral Agent of such organizational identification number.
(b) If any material Inventory of any Grantor is at any time
in the possession or control of a warehouseman, bailee or agent, and if
any such Inventory is subject to a Lien based on statute or contract in
favor of such warehouseman, bailee or agent and the Collateral Agent so
requests such Grantor will (i) notify such warehouseman, bailee or agent
of the security interest created hereunder, and (ii) instruct such
warehouseman, bailee or agent to hold all such Inventory solely for the
Collateral Agent's account subject only to the Collateral Agent's
instructions (which shall permit such Inventory to be removed by such
Grantor in the ordinary course of business until the Collateral Agent
notifies such warehouseman, bailee or agent that an Event of Default has
occurred and is continuing).
SECTION 11. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing or, if the Credit
Agreement is no longer in effect, so long as no event has occurred and is
continuing under any Secured Hedge Agreement or Operating Indebtedness Agreement
which permits the respective Hedge Bank or Operating Lender to exercise its
remedies thereunder:
9
(i) Each Grantor shall be entitled to exercise or
refrain from exercising any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or
any part thereof for any purpose.
(ii) Each Grantor shall be entitled to receive and
retain any and all dividends, interest and other distributions
paid in respect of the Security Collateral of such Grantor if
and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents; provided,
however, that any and all dividends, interest and other
distributions paid or payable other than in cash in respect of,
and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Security Collateral, shall be, and shall be forthwith delivered
to the Collateral Agent to hold as Security Collateral in
accordance with the terms of this Agreement in the same form as
so received (with any necessary indorsement).
(iii) The Collateral Agent will execute and deliver
(or cause to be executed and delivered) to each Grantor all such
proxies and other instruments as such Grantor may reasonably
request for the purpose of enabling such Grantor to exercise the
voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or interest
payments that it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default or, if the Credit Agreement is no longer in effect,
upon the occurrence and during the continuance of an event under any
Secured Hedge Agreement or Operating Indebtedness Agreement which
permits the respective Hedge Bank or Operating Lender to exercise its
remedies thereunder:
(i) All rights of each Grantor (x) to exercise or
refrain from exercising the voting and other consensual rights
that it would otherwise be entitled to exercise pursuant to
Section 11(a)(i) hereof shall, upon notice to such Grantor by
the Collateral Agent, cease and (y) to receive the dividends,
interest and other distributions that it would otherwise be
authorized to receive and retain pursuant to Section 11(a)(ii)
hereof shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to
receive and hold as Security Collateral such dividends, interest
and other distributions.
(ii) All dividends, interest and other distributions
that are received by any Grantor contrary to the provisions of
paragraph (i) of this Section 11(b) shall be received in trust
for the benefit of the Collateral Agent, shall be segregated
from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent as Security Collateral in the same
form as so received (with any necessary indorsement).
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SECTION 12. Transfers and Other Liens; Additional Shares. (a)
Each Grantor agrees that it will not (i) sell, assign or otherwise dispose of,
or grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of the Collateral, and options relating to
the Collateral, permitted under the terms of this Agreement or the Credit
Agreement, or (ii) create or suffer to exist any Lien upon or with respect to
any of the Collateral of such Grantor except for the pledge, assignment and
security interest created under this Agreement and those Liens referred to in
Section 6(c)(ii) and (iii) hereof.
(b) Each Grantor agrees that it will (i) cause each of its
wholly-owned Domestic Subsidiaries (other than Excluded Subsidiaries but
including first-tier Special Purpose Subsidiaries) which is the issuer
of the Pledged Equity pledged by such Grantor not to issue any stock or
other Equity Interests or other securities in addition to or in
substitution for the Pledged Equity issued by such issuer, except to
such Grantor, and (ii) pledge hereunder, promptly following its
acquisition (directly or indirectly) thereof, any and all additional
Pledged Equity and other equity interests in accordance with the Credit
Agreement.
SECTION 13. Collateral Agent Appointed Attorney-in-Fact. (a)
Each Grantor hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default or, if the Credit Agreement is
no longer in effect, upon the occurrence and during the continuance of an event
under a Secured Hedge Agreement or Operating Indebtedness Agreement which
permits the respective Hedge Bank or Operating Lender to exercise its remedies
thereunder, in the Collateral Agent's discretion, to take any action and to
execute any instrument that the Collateral Agent may deem reasonably necessary
or proper to accomplish the purposes of this Agreement, including, without
limitation:
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above, and
(d) to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem reasonably necessary or
proper for the collection of any of the Collateral or otherwise to
enforce the rights of the Collateral Agent with respect to any of the
Collateral.
SECTION 14. Collateral Agent May Perform. If any Grantor fails
to perform any agreement contained herein after receipt of written notice
thereof from the Collateral Agent, the Collateral Agent may, but without any
obligation to do so, itself perform, or cause performance of, such agreement,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by such Grantor under Section 17 hereof.
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SECTION 15. The Collateral Agent's Duties. (a) The powers
conferred on the Collateral Agent hereunder are solely to protect the Secured
Parties' interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not any Secured Party has or is deemed to have knowledge
of such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which it accords its own
property.
(b) The Collateral Agent may from time to time, upon prior
written notice to the Borrower, when the Collateral Agent deems it to be
reasonably necessary in order to preserve and protect the Collateral,
appoint one or more subagents (each a "Subagent") for the Collateral
Agent hereunder with respect to all or any part of the Collateral. In
the event that the Collateral Agent so appoints any Subagent with
respect to any Collateral, (i) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by each
Grantor hereunder shall be deemed for purposes of this Security
Agreement to have been made to such Subagent, in addition to the
Collateral Agent, for the ratable benefit of the Secured Parties, as
security for the Secured Obligations of such Grantor, (ii) such Subagent
shall automatically be vested, in addition to the Collateral Agent, with
all rights, powers, privileges, interests and remedies of the Collateral
Agent hereunder with respect to such Collateral, and (iii) the term
"Agent," when used herein in relation to any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such
Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in
writing by the Collateral Agent.
SECTION 16. Remedies. If any Event of Default shall have
occurred and be continuing or, if the Credit Agreement is no longer in effect,
then if an event shall have occurred and be continuing under a Secured Hedge
Agreement or Operating Indebtedness Agreement which permits the respective Hedge
Bank or Operating Lender to exercise its remedies thereunder:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to 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 UCC (whether or not the UCC applies to the
affected Collateral) and also may: (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of
the Collateral Agent forthwith, assemble all or part of the Collateral
as directed by the Collateral Agent and make it available to the
Collateral Agent at a place and time to be designated by the Collateral
Agent that is reasonably convenient to both parties; (ii) without notice
except as specified below, sell the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
12
commercially reasonable; (iii) occupy any premises owned or leased by
any of the Grantors where the Collateral or any part thereof is
assembled or located for a reasonable period in order to effectuate its
rights and remedies hereunder or under law, without obligation to such
Grantor in respect of such occupation; and (iv) exercise any and all
rights and remedies of any of the Grantors under or in connection with
the Collateral, or otherwise in respect of the Collateral, including,
without limitation, (A) any and all rights of such Grantor to demand or
otherwise require payment of any amount under the Collateral, (B)
withdraw, or cause or direct the withdrawal, of all funds with respect
to the L/C Collateral Account and (C) exercise all other rights and
remedies with respect to the Collateral, including, without limitation,
those set forth in Section 9-607 of the UCC. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten
days' notice to such Grantor 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 Collateral Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. The Collateral 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.
(b) Any cash held by or on behalf of the Collateral Agent in
accordance with this Agreement and all cash proceeds received by or on
behalf of the Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may,
in the discretion of the Collateral Agent, be held by the Collateral
Agent as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to the Collateral Agent pursuant
to Section 17 hereof) in whole or in part by the Collateral Agent for
the ratable benefit of the Secured Parties against, all or any part of
the Secured Obligations, in the following manner:
(i) first, amounts then on deposit in the L/C
Collateral Account shall be applied to reimburse the respective
Issuing Bank for any payments by such Issuing Banks under its
respective Letters of Credit as provided in Sections 3.12(c) and
3.15 of the Credit Agreement, with any surplus after such
reimbursements then to be applied solely in accordance with the
remaining order of priority set out in this Section 16(b);
(ii) second, paid to the Collateral Agent for any
amounts then owing to the Collateral Agent pursuant to Section
10.04 of the Credit Agreement or otherwise under the Loan
Documents;
(iii) third, (A) paid to the Secured Parties, for any
amounts then owing to them, in their capacities as such, under
the Loan Documents, the Secured Hedge Agreements and the
Operating Indebtedness Agreements ratably in accordance with
such respective amounts then owing to such Secured Parties,
provided that, for purposes of this Section 16, the amount owing
to any Hedge Bank pursuant to any Secured Hedge Agreement to
which it is a party (other than any amount theretofore accrued
and unpaid) shall be deemed to be equal to the Agreement Value
(as defined below) therefor and (B) with any surplus to be
deposited as Collateral in the L/C Collateral Account up to an
amount equal to
13
100% of the aggregate outstanding Letter of Credit Liability,
provided that in the event that any such Letter of Credit is
drawn, the Collateral Agent shall pay to the Issuing Bank that
issued such Letter of Credit the amount held in the L/C
Collateral Account in respect of such Letter of Credit, provided
further that, to the extent that any such Letter of Credit shall
expire or terminate undrawn and as a result thereof the amount
of the Collateral in the L/C Collateral Account shall exceed
100% of the aggregate Letter of Credit Liability then
outstanding, such excess amount of such Collateral shall be
applied in accordance with the remaining order of priority set
out in this Section 16(b); and
(iv) fourth, any surplus of such cash or cash
proceeds held by or on the behalf of the Collateral Agent and
remaining after payment in full of all the Secured Obligations
shall be paid over to the applicable Grantor or to whomsoever
may be lawfully entitled to receive such surplus.
For purposes of this Agreement, "Agreement Value" means, for each Secured Hedge
Agreement, on any date of determination, an amount reasonably determined by the
Collateral Agent equal to: (a) in the case of a Secured Hedge Agreement
documented pursuant to the Master Agreement (Multicurrency-Cross Border)
published by the International Swap and Derivatives Association, Inc. (the
"Master Agreement"), the amount, if any, that would be payable by any Loan Party
to its counterparty in respect of such Secured Hedge Agreement, as if (i) such
Secured Hedge Agreement was being terminated early on such date of
determination, (ii) such Loan Party was the sole "Affected Party", and (iii) the
Collateral Agent was the sole party determining such payment amount (with the
Collateral Agent making such determination pursuant to the provisions of that
specific form of Master Agreement); or (b) in the case of a Secured Hedge
Agreement traded on an exchange, the ▇▇▇▇-to-market value of such Secured Hedge
Agreement, which will be unrealized gain or loss on such Secured Hedge Agreement
to the Loan Party to such Secured Hedge Agreement reasonably determined by the
Collateral Agent based on the settlement price of such Secured Hedge Agreement
on such date of determination, or (c) in all other cases, the ▇▇▇▇-to-market
value of such Secured Hedge Agreement, which will be the unrealized gain or loss
on such Secured Hedge Agreement to the Loan Party to such Secured Hedge
Agreement reasonably determined by the Collateral Agent as the amount, if any,
by which (i) the present value of the future cash flows to be paid by such Loan
Party exceeds (ii) the present value of the future cash flows to be received by
such Loan Party pursuant to such Secured Hedge Agreement; capitalized terms used
and not otherwise defined in this definition shall have the respective meaning
set forth in the above described Master Agreement.
(c) All payments received by any Grantor in respect of the
Collateral shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent in the same form as so
received (with any necessary indorsement).
SECTION 17. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify and hold harmless each Secured Party and each of their Affiliates and
their respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against, and shall pay on demand, any and all
claims, damages, losses (other than lost profits), liabilities and expenses
(including, without limitation, reasonable and documented fees and out-of-pocket
14
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
resulting from any enforcement, investigation, litigation or proceeding related
to this Agreement, except to the extent such claim, damage, liability or expense
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
(b) Each Grantor will upon demand pay to the Collateral
Agent the amount of any and all reasonable and documented expenses,
including, without limitation, the reasonable and documented fees and
out-of-pocket expenses of its counsel and of any experts and agents,
that the Collateral Agent may incur in connection with (i) the custody,
preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral of such Grantor, (ii) the
exercise or enforcement of any of the rights of the Collateral Agent or
the other Secured Parties hereunder or (iii) the failure by such Grantor
to perform or observe any of the provisions hereof.
SECTION 18. Amendments; Waivers; Additional Grantors; Etc. (a)
No amendment, modification or waiver of any provision of this Agreement, and no
consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Collateral
Agent, and, in the case of any such amendment or modification by the Grantors,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given, provided, that this Agreement may
be modified to the extent provided therein by the execution of a Security
Agreement Supplement by an Additional Guarantor in accordance with Section 18(b)
hereof. No failure on the part of the Collateral Agent or any other Secured
Party to exercise, and no delay in exercising any right hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.
(b) Upon the execution and delivery, or authentication, by
any Person of a security agreement supplement in substantially the form
of Exhibit A hereto (each a "Security Agreement Supplement"), (i) such
Person shall be referred to as an "Additional Grantor" and shall be and
become a Grantor hereunder, and each reference in this Agreement and the
other Loan Documents to "Grantor" shall also mean and be a reference to
such Additional Grantor, and each reference in this Agreement and the
other Loan Documents to "Collateral" shall also mean and be a reference
to the Collateral of such Additional Grantor, and (ii) the supplemental
schedules I-IX attached to each Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I-IX,
respectively, hereto, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such
Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to each Security Agreement Supplement.
SECTION 19. Notices; Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier or electronic
mail) and mailed, sent by overnight courier, telecopied, emailed, or delivered,
in the case of the Borrower or the Collateral Agent, addressed to it at its
address specified in the Credit Agreement and, in the case of each Grantor other
than the Borrower, addressed to it at its address set forth opposite such
Grantor's
15
name on the signature pages hereto or on the signature page to the
Security Agreement Supplement pursuant to which it became a party hereto; or, as
to any party, at such other address or to such other person as shall be
designated by such party in a written notice to the other parties. All such
notices and other communications shall, when mailed, be effective three days
after being deposited in the mails, when sent by overnight courier, be effective
one day after being sent by overnight courier, and when telecopied or sent by
electronic mail, be effective when received (and, with respect to notices and
communications sent by electronic mail, upon confirmation by the recipient of
the receipt of such notice or communication), respectively; and when delivered
by hand, be effective upon delivery; except that notices and other
communications to the Collateral Agent shall not be effective until received by
the Collateral Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or of any Security
Agreement Supplement or Schedule hereto shall be effective as delivery of an
original executed counterpart thereof.
SECTION 20. Continuing Security Interest; Assignments under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations, (ii) the Termination
Date and (iii) the termination or expiration of all Letters of Credit and all
Secured Hedge Agreements and all Operating Indebtedness Agreements, (b) be
binding upon each Grantor, its successors and assigns and (c) inure, together
with the rights and remedies of the Collateral Agent hereunder, to the benefit
of the Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to
Section 10.07 of the Credit Agreement, any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitments,
the Advances owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party herein or otherwise.
SECTION 21. Release; Termination. (a) While the Credit Agreement
is in effect, upon any sale, lease, transfer or other disposition of any item of
Collateral of any Grantor in accordance with the terms of the Loan Documents and
thereafter in accordance with the requirements (if any) of the Secured Hedge
Agreements and the Operating Indebtedness Agreements, the security interest
granted hereby in such Collateral shall immediately and automatically terminate
and all rights to such Collateral shall revert to the applicable Grantors
without any further action by the Collateral Agent, any Lender Party, any Hedge
Bank, any Operating Lender or any other Person effective as of the time of such
sale, lease, transfer or other disposition.
(b) Except as provided in Section 17 hereof, (which
Obligations shall survive termination), with respect to the Lender
Parties, upon the latest of (i) the payment in full in cash of the
Secured Obligations then owing to the Lender Parties, (ii) the
Termination Date and (iii) the termination or expiration of all Letters
of Credit, the pledge and security interest granted hereby with respect
to the Secured Obligations with respect to the Lender Parties shall
terminate and all rights to the Collateral in favor of the Lender
Parties shall revert to the applicable Grantor without any further
action by the Collateral Agent, any Lender Party, any Hedge Bank, any
Operating Lender or any other Person.
16
(c) Except as provided in Section 17 hereof (which
Obligations shall survive termination), with respect to each Hedge Bank,
upon the latest of (i) the payment in full in cash of the Secured
Obligations then owing to such Hedge Bank and (ii) the termination of
the Secured Hedge Agreement with respect to such Hedge Bank, the pledge
and security interest granted hereby with respect the Secured
Obligations with respect to such Hedge Bank shall terminate and all
rights to the Collateral in favor of such Hedge Bank shall revert to the
applicable Grantor without any further action by the Collateral Agent,
any Lender Party, any Hedge Bank, any Operating Lender or any other
Person.
(d) Except as provided in Section 17 hereof (which
Obligations shall survive termination), with respect to each Operating
Lender, upon the latest of (i) the payment in full in cash of the
Secured Obligations then owing to such Operating Lender and (ii) the
termination of the Operating Indebtedness Agreement with respect to such
Operating Lender, the pledge and security interest granted hereby with
respect the Secured Obligations with respect to such Operating Lender
shall terminate and all rights to the Collateral in favor of such
Operating Lender shall revert to the applicable Grantor without any
further action by the Collateral Agent, any Lender Party, any Hedge
Bank, any Operating Lender or any other Person.
(e) (i) While the Credit Agreement is in effect, if (A) all
or a majority of the stock of a Grantor or any of its successors in
interest under this Agreement shall be sold or otherwise disposed of
(including by merger or consolidation) in a sale not prohibited by the
Credit Agreement or otherwise consented to by the Collateral Agent on
behalf of the Secured Parties, (B) a Grantor shall liquidate or dissolve
in a transaction not prohibited by the terms of the Credit Agreement or
otherwise consented to by the Collateral Agent on behalf of the Secured
Parties or (C) trademarks or service marks are transferred to a Grantor
such that it becomes or otherwise qualifies as a Special Purpose
Subsidiary, and (ii) if the Credit Agreement is no longer in effect, in
accordance with the requirements (if any) of the Secured Hedge
Agreements and the Operating Indebtedness Agreements, then, in each
case, the obligations of such Grantor or such successor in interest, as
the case may be, hereunder shall automatically be discharged and
released without any further action by the Collateral Agent, any Lender
Party, any Hedge Bank, any Operating Lender or any other Person
effective as of the time of such sale, merger, liquidation or
dissolution.
(f) Upon any termination of the security interest with
respect to any of the Collateral hereunder or any discharge and release
of a Grantor's obligations hereunder, in each case as described in
subsections (a) through (e) of this Section 21, the Collateral Agent
will, at the applicable Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to
evidence such termination, discharge or release.
SECTION 22. Execution in Counterparts. This Agreement may be
executed in any number of 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
17
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of an original executed counterpart of this Agreement.
SECTION 23. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New
York.
18
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
THE GAP, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC (CALIFORNIA) LLC
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC (FLORIDA) LLC
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (HOLDINGS) INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC (NEW YORK) LLC
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
BANANA REPUBLIC, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
20
GPS (MARYLAND), INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS BRAND SERVICES, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS CONSUMER DIRECT, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
21
GPS CORPORATE FACILITIES, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS EMPLOYEE SERVICES, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GPS REAL ESTATE, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
22
GPSDC (NEW YORK) INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (FLORIDA) LLC
By The Gap, Inc., as Manager
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (GEORGIA) L.P.
By The Gap, Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
23
GAP (INDIANA) L.P.
By The Gap, Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (KENTUCKY) L.P.
By The Gap, Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP (TENNESSEE) L.P.
By The Gap, Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
24
GAP (WISCONSIN) L.P.
By The Gap, Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP HOLDINGS, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(AMERICAS) LLC
By The Gap, Inc., as Manager
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
25
GAP INTERNATIONAL SOURCING
(CALIFORNIA), INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING (JV), LLC
By Gap International Sourcing, Inc.,
as Manager
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
GAP INTERNATIONAL SOURCING (U.S.A.)
INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
26
GAP INTERNATIONAL SOURCING, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (CALIFORNIA) LLC
By Old Navy Inc., as Manager
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (EAST) L.P.
By Old Navy Inc., as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
27
OLD NAVY (FLORIDA) LLC
By Old Navy Inc., as Manager
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY (HOLDINGS) INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
OLD NAVY INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
28
THE ▇▇▇▇▇▇ GAP STORES, INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
WCB TWENTY-EIGHT LIMITED
PARTNERSHIP
By GPS Corporate Facilities, Inc.,
as General Partner
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President and
Treasurer
Address for Notices:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
29
Schedules
Schedule I - Secured Hedge Agreements
Schedule II - Location, Chief Executive Office, Type Of Organization,
Jurisdiction Of Organization And Organizational
Identification Number
Schedule III - Initial Pledged Equity
Schedule IV - Distribution Centers
Schedule V - Filings with Respect to Other Names, Locations, Etc.
Schedule VI - Trade names
Exhibit
Exhibit A - Form of Security Agreement Supplement
EXHIBIT A TO THE
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date of Security Agreement Supplement]
Citicorp U.S.A., Inc.
as the Collateral Agent for the
Secured Parties referred to in the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Credit Administration
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
The Gap, Inc.
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement dated as of June 24, 2003
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among The Gap, Inc., a Delaware corporation,
as the Borrower, the Loan Parties party thereto, Citicorp USA, Inc., as
Collateral Agent (together with any successor collateral agent appointed
pursuant to Article IX of the Credit Agreement, the "Collateral Agent"), and
(ii) the Security Agreement dated June 24, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Security
Agreement") made by the Grantors from time to time party thereto in favor of the
Collateral Agent for the Secured Parties. Terms defined in the Credit Agreement
or the Security Agreement and not otherwise defined herein are used herein as
defined in the Credit Agreement or the Security Agreement.
SECTION 1. Grant of Security. The undersigned hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of its right, title and interest in and to all of the
Collateral of the undersigned, whether now owned or hereafter
Exh. A Page 1
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Security Agreement.
SECTION 2. Security for Obligations. The grant of a security interest
in, the Collateral by the undersigned under this Security Agreement Supplement
and the Security Agreement secures the payment of all Obligations of the
undersigned now or hereafter existing under the Loan Documents and the payment
of all Obligations of the Borrower or the Hedge Subsidiaries now or hereafter
existing under the Secured Hedge Agreements and the payment of any Obligations
of the Borrower or its Subsidiaries under Operating Indebtedness Agreements,
whether direct or indirect, absolute or contingent, and whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
SECTION 3. Supplements to Security Agreement Schedules. The undersigned
has attached hereto supplemental Schedules I through V to Schedules I through V,
respectively, to the Security Agreement, and the undersigned hereby certifies,
as of the date first above written, that such supplemental schedules have been
prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement and are complete and correct.
SECTION 4. Representations and Warranties. The undersigned hereby makes
each representation and warranty set forth in Section 6 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.
SECTION 5. Obligations Under the Security Agreement. The undersigned
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an "Additional
Grantor" or a "Grantor" shall also mean and be a reference to the undersigned.
SECTION 6. Governing Law. This Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
By
------------------------------
Title:
Address for notices:
---------------------------
---------------------------
---------------------------
Exh. A Page 2
Exhibit F-1
June [ ], 2003
Citicorp USA, Inc.,
as Agent
The Lenders and Issuing Banks
(as defined below) listed
on Schedule I hereto
Re: The Gap, Inc./Credit Agreement
Ladies and Gentlemen:
I am Senior Vice President and General Counsel to The Gap, Inc.,
a Delaware corporation (the "Company"), the domestic subsidiaries of the Company
listed on Schedule II hereto (the "Delaware Subsidiaries"), the domestic
subsidiaries of the Company listed on Schedule III hereto (the "California
Subsidiaries"; and together with the Delaware Subsidiaries, the "Subsidiaries";
and together with the Company and the Delaware Subsidiaries, the "Loan
Parties"), in connection with the preparation, execution and delivery of the
Credit Agreement, dated as of June __, 2003 (the "Credit Agreement"), among the
Company and the Subsidiary Borrowers, the LC Subsidiaries, the Lenders and the
Issuing Banks (as such terms are defined in the Credit Agreement), Citigroup
Global Markets Inc. ("CGMI") and Banc of America Securities LLC ("BAS") as Joint
Book Managers, BAS, HSBC Bank USA and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPM") as
Co-Syndication Agents, CGMI, BAS and JPM as Joint Lead Arrangers, and Citicorp
USA, Inc. as agent for the Lenders and the Issuing Banks (in such capacity, the
"Agent"), and certain other agreements, instruments and documents related to the
Credit Agreement. This opinion is being delivered pursuant to Section
5.01(b)(viii) of the Credit Agreement.
In my examination I have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion which I did not independently
establish or verify, I have relied upon statements and representations of the
Loan Parties and their officers and other representatives and of public
officials, including the facts and conclusions set forth therein.
In rendering the opinions set forth herein, I have examined and
relied on originals or copies of the following:
(a) the Credit Agreement;
(b) the Promissory Notes executed by the Loan Parties;
(c) the Subsidiary Guaranty, dated as of June __, 2003 (the
"Subsidiary Guaranty"), made by the Subsidiaries party thereto in favor of the
Lender Parties;
(d) the Security Agreement, dated as of June __, 2003 (the
"Security Agreement"), from the Loan Parties party thereto (the "Grantors") in
favor of the Agent as Collateral Agent (in such capacity, the "Collateral
Agent");
(e) certified copies of the respective Constitutive Documents
(as defined in the Credit Agreement) of each Loan Party;
(f) certified copies of certain resolutions of the respective
boards of directors, the managers or the partners, as the case may be, of each
Loan Party adopted on May 29, 2003, in the case of the Company, on June 11,
2003, in the case of GPS Brand Services, Inc. and on June 4, 2003, in the case
of each of the other Subsidiaries;
(g) certificates, dated on or about the date hereof, from the
Secretary of State of the State of California and the Secretary of State of the
State of Delaware as to the good standing of each of the Loan Parties in their
respective jurisdictions of organization; and
(h) such other documents as I have deemed necessary or
appropriate as a basis for the opinions set forth below.
I am a member of the bar of the State of California and am
expressing no opinion as to the law of any other jurisdiction other than (i) the
laws of the State of California, (ii) the General Corporation Law of the State
of Delaware, (iii) the Limited Liability Company Act of the State of Delaware,
and (iv) the Delaware Revised Uniform Limited Partnership Act (collectively, the
"Applicable Law").
Capitalized terms used herein and not otherwise defined herein
shall have the same meanings herein as ascribed thereto in the Credit Agreement.
The Credit Agreement, the Promissory Notes, the Security Agreement and the
Subsidiary
2
Guaranty shall hereinafter be referred to collectively as the "Transaction
Agreements." "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
governmental authority pursuant to Applicable Law. "Applicable Contracts" means
those material agreements, indentures or instruments (x) filed with the
Securities and Exchange Commission as exhibits attached to or incorporated by
reference in the Company's Form 10-K for the fiscal year ended February 1, 2003,
and Form 10-Q for the quarterly periods ending May 3, 2003, and which, after due
inquiry, are specifically applicable to any of the Loan Parties in connection
with the Transaction Agreements and the transactions contemplated thereunder or
(y) which, to my knowledge, are specifically applicable to any of the Loan
Parties in connection with the Transaction Agreements and the transactions
contemplated thereunder. The Lenders and the Issuing Banks are collectively
referred to herein as the "Lender Parties".
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. Each of the California Subsidiaries is authorized to exercise
all its powers, rights and privileges and is in good legal standing under the
laws of the State of California, and each of the Company and the Delaware
Subsidiaries is validly existing and in good standing under the Applicable Law
of the State of Delaware.
2. Each Loan Party has the power and authority to execute,
deliver and perform all of its obligations under each of the Transaction
Agreements to which it is a party, and the execution and delivery of each of the
Transaction Agreements by each Loan Party which is a party thereto and the
consummation by each Loan Party of the transactions contemplated thereby have
been duly authorized by all requisite action on the part of each Loan Party.
Each of the Transaction Agreements has been duly executed and delivered by each
Loan Party which is a party thereto.
3. The execution and delivery by each Loan Party of each of the
Transaction Agreements to which it is a party and the performance by each Loan
Party of its obligations under each of the Transaction Agreements, each in
accordance with its terms, does not (i) conflict with the Constitutive Documents
of each of the Loan Parties, (ii) constitute a violation of, or a default under,
any Applicable Contracts or (iii) cause the creation of any security interest or
lien (other than the liens granted under, or created by, the Loan Documents)
upon any of the property of the Loan Parties pursuant to any Applicable
Contracts to which it is a party. I call to your attention that certain of the
Applicable Contracts are governed by laws other
3
than those as to which I express my opinion. I express no opinion as to the
effect of such other laws on the opinions herein stated.
4. Neither the execution, delivery nor performance by any Loan
Party of the Transaction Agreements to which it is a party will contravene any
provision of any Applicable Law.
5. No Governmental Approval, which has not been obtained or
taken and is not in full force and effect, is required to authorize, or is
required in connection with, the execution, delivery or performance of any of
the Transaction Agreements by any Loan Party.
6. There is no action, suit or proceeding pending or, to my
knowledge, overtly threatened against any Loan Party in or before any court,
Governmental Authority or arbitrator, which has a reasonable probability (taking
into account the exhaustion of all appeals and the assertion of all defenses) of
having a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of any Loan Document.
4
This opinion is being furnished only to you in connection with
the Transaction Agreements and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person or entity (other than your successors or assigns as Lender
Parties) for any purpose without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and
General Counsel
5
Schedule I
ADDRESSEES
Citicorp USA, Inc.
Bank of America, N.A.
HSBC Bank USA
JPMorgan Chase Bank
GE Capital Corporation
The Bank of Nova Scotia
U.S. Bank National Association
Fleet Bank
ABN Amro Bank N.V.
▇▇▇▇▇ Fargo Bank N.A.
KeyBank National Association
Fifth Third Bank
First National Bank of Omaha
Citibank, N.A.
S-1
Schedule II
DELAWARE SUBSIDIARIES
Banana Republic (California) LLC
Banana Republic, Inc.
Banana Republic (New York) LLC
GPSDC (New York) Inc.
Old Navy Inc.
Old Navy (California) LLC
WCB Twenty-Eight Limited Partnership
S-2
Schedule III
CALIFORNIA SUBSIDIARIES
Banana Republic (Florida) LLC Gap International Sourcing (U.S.A.) Inc.
Banana Republic (Holdings) Inc. Gap International Sourcing, Inc.
Gap (Wisconsin) L.P. Gap International Sourcing (JV) LLC
Gap (Florida) LLC GPS Brand Services, Inc.
Gap (Georgia) L.P. GPS Corporate Facilities, Inc.
Gap (Indiana) L.P. GPS Consumer Direct, Inc.
Gap (Kentucky) L.P. GPS Real Estate, Inc.
Gap (Tennessee) L.P. Old Navy (East) L.P.
Gap Holdings, Inc. Old Navy (Florida) LLC
Gap International Sourcing
(California) Inc. Old Navy (Holdings) Inc.
Gap International Sourcing (Americas)
LLC The ▇▇▇▇▇▇ Gap Stores, Inc.
GPS Employee Services, Inc.
S-3
Exhibit F-2
June [ ], 2003
Citicorp USA, Inc.,
as Collateral Agent
The Lenders and Issuing Banks
(as defined below) listed
on Schedule I hereto
Re: The Gap, Inc./Credit Agreement
Ladies and Gentlemen:
We have acted as special counsel to The Gap, Inc., a Delaware
corporation (the "Company"), and the domestic subsidiaries of the Company listed
on Schedule II hereto (the "Subsidiaries"; together with the Company, the
"Grantors") in connection with the preparation, execution and delivery of the
Security Agreement, dated as of June [ ], 2003 (the "Security Agreement"), from
the Grantors referred to therein to Citicorp USA, Inc. ("CUSA") as Collateral
Agent (the "Collateral Agent"). This opinion is being delivered pursuant to
Section 5.01(b)(ix) of the Credit Agreement, dated as of June [ ], 2003 (the
"Credit Agreement"), among the Company and the LC Subsidiaries, the Subsidiary
Borrowers, the Lenders and the Issuing Banks (as such terms are defined in the
Credit Agreement), Citigroup Global Markets Inc. ("CGMI") and Banc of America
Securities LLC ("BAS") as Joint Book Managers, BAS, HSBC Bank USA and ▇.▇.
▇▇▇▇▇▇ Securities Inc. ("JPM") as Co-Syndication Agents, CGMI, BAS and JPM as
Joint Lead Arrangers, and CUSA as Agent for the Lenders and the Issuing Banks.
In our examination we have assumed the genuineness of all signatures
including endorsements, the legal capacity of natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as facsimile, electronic, certified
or photostatic copies, and the authenticity of the originals of such copies. As
to any facts material to this opinion which we did not independently establish
or verify, we have relied upon
statements and representations of the Grantors and its officers and other
representatives and of public officials, including the facts and conclusions set
forth therein.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
1. the Security Agreement;
2. unfiled copies of financing statements one for each Grantor in Part A
of Schedule II hereto (the "Delaware Grantors") and identifying such
Grantor as debtor and "Citicorp USA, Inc., Collateral Agent" as
secured party, which we understand will be filed in the office of the
Secretary of State of Delaware (such filing office, the "Delaware
Filing Office" and such financing statements, the "Delaware Financing
Statements");
3. unfiled copies of financing statements one for each Grantor in Part B
of Schedule II hereto (the "California Grantors") and identifying such
Grantor as debtor and "Citicorp USA, Inc., Collateral Agent as secured
party, which we understand will be filed in the office of the
Secretary of State of California (such filing office, the "California
Filing Office" and such financing statements, the "California
Financing Statements", together with the Delaware Financing
Statements, the "Financing Statements");
4. certified copies of the certificates of incorporation or certificate
of formation of each Delaware Grantor, as applicable, from the
Secretary of State of the State of Delaware as to each Delaware
Grantor's existence in such state (the "Delaware Secretary of State
Certificates");
5. certified copies of the certificates of incorporation or certificate
of formation of each California Grantor, as applicable, from the
Secretary of State of the State of California as to each California
Grantor's existence in such state (the "California Secretary of State
Certificates"); and
6. such other documents as we have deemed necessary or appropriate as a
basis for the opinions set forth below.
Capitalized terms used herein and not otherwise defined herein shall
have the same meanings herein as set forth in the Security Agreement. As used
herein:
2
1. "New York UCC" means the Uniform Commercial Code as in effect on
the date hereof in the State of New York (without regard to laws
referenced in Section 9-201 thereof).
2. "California UCC" means the Uniform Commercial Code as in effect
on the date hereof in the State of California (without regard to
laws referenced in Section 9201 thereof).
3. "Delaware UCC" means the Uniform Commercial Code as in effect on
the date hereof in the State of Delaware (without regard to laws
referenced in Section 9-201 thereof).
4. "UCC" means (a) the New York UCC, (b) the California UCC, and (c)
the Delaware UCC (in each case as such term is defined below), as
applicable.
5. "Possessory Certificates" means that portion of the Initial
Pledged Equity which constitute "certificated securities" as
defined in Section 8-102 of the UCC, as identified on Schedule
III hereto and delivered on the date hereof.
6. "UCC Collateral" means the Inventory and Initial Pledged Equity
(as such terms are defined in the Security Agreement) to the
extent the UCC governs a security interest in such collateral.
We express no opinion with respect to any laws other than (1) the UCC,
(2) for purposes of opinion paragraph 5, the Delaware General Corporation Law,
the Limited Liability Company Act of the State of Delaware and the Delaware
Revised Uniform Limited Partnership Act and (3) for purposes of opinion
paragraph 9, the California General Corporation Law, the California Limited
Liability Company Act and the California Uniform Limited Partnership Act.
We have this date delivered to you our opinion with respect to the
enforceability of the Security Agreement and certain other transaction
agreements. We call to your attention that the opinions set forth herein with
respect to the security interest of the Collateral Agent for the benefit of the
Secured Parties are subject to the qualifications contained in such other
opinion.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
3
(1) Under the New York UCC, the provisions of the Security Agreement are
effective to create a valid security interest in each Grantor's rights in
the UCC Collateral in favor of the Collateral Agent for the benefit of the
Secured Parties to secure the Secured Obligations (as defined in the
Security Agreement).
(2) To the extent the Delaware UCC is applicable to the authorization of the
Delaware Financing Statements, pursuant to the provisions of the Security
Agreement the Delaware Grantors have authorized the filing of the Delaware
Financing Statements for purposes of Section 9-509 of the Delaware UCC.
(3) To the extent the Delaware UCC is applicable, the Delaware Financing
Statements include not only all of the types of information required by
Section 9-502(a) of the Delaware UCC, but also the types of information
without which the Delaware Filing Office may refuse to accept the Delaware
Financing Statements pursuant to Section 9-516 of the Delaware UCC.
(4) To the extent the Delaware UCC is applicable, the security interest of the
Collateral Agent for the benefit of the Secured Parties will be perfected
in each Delaware Grantor's rights in all UCC Collateral upon the later of
the attachment of the security interest and the filing of the Delaware
Financing Statement naming such Delaware Grantor as debtor in the Delaware
Filing Office; provided, however, we express no opinion with respect to (i)
money, (ii) deposit accounts, (iii) letter of credit rights, (iv) goods
covered by a certificate of title statute, (v) as-extracted collateral,
e.g., timber to be cut, or (vi) any property subject to a statute,
regulation or treaty of the United States whose requirements for a security
interest's obtaining priority over the rights of a lien creditor with
respect to the property preempt Section 9-310(a) of the Delaware UCC.
(5) You have asked whether each of the Delaware Grantors is a "registered
organization" as such term is defined in Section 9-102(a)(70) of the
Delaware UCC. Pursuant to Section 9-102(a)(70) of the Delaware UCC, a
"registered organization" must be (i) organized solely under the laws of a
single State (or the United States) and (ii) the State (or the United
States) must maintain a public record showing the organization to have been
organized. Pursuant to Section 103(c)(6) of the Delaware General
Corporation Law, Section 18-201(a) of the Limited Liability Company Act of
the State of Delaware and Section 17-201(a) of the Delaware Revised Uniform
Limited Partnership Act, the Secretary of State of the State of Delaware is
required to maintain a public record showing each of the Delaware Grantors
to have been organized. Based on our review of the Delaware Secretary of
State Certificates and to the extent the Delaware UCC is applicable, each
of the Delaware Grantors is a
4
"registered organization" under Section 9-102(a)(70) of the Delaware UCC
and, where applicable, the Delaware General Corporation Law, the Limited
Liability Company Act of the State of Delaware and the Delaware Revised
Uniform Limited Partnership Act. We have assumed that none of the Delaware
Grantors has filed a certificate of incorporation or any similar document
under the laws of any jurisdiction other than the State of Delaware and
that the internal affairs of the Delaware Grantors are not otherwise
subject to the laws of any other jurisdiction. We call to your attention
that to the extent that the internal affairs of the Delaware Grantors are
subject to regulation under the laws of another state, the State of
Delaware may recognize such authority. See, e.g., ▇▇▇▇▇▇▇▇▇ Inc. ▇. ▇▇▇▇▇,
531 A.2d 206 (Del. 1987). Further, we have assumed that none of the
Delaware Grantors has and will not file (A) any certificates of transfer,
continuance or domestication, or any similar certificates in the State of
Delaware pursuant to Sections 390(a) and 388(b)(1) of the Delaware General
Corporation Law, Section 18-213 of the Limited Liability Company Act of the
State of Delaware, or Section 17-216 of the Delaware Revised Uniform
Limited Partnership Act or (B) any similar certificates in any jurisdiction
other than the State of Delaware.
(6) To the extent the California UCC is applicable to the authorization of the
California Financing Statements, pursuant to the provisions of the Security
Agreement the California Grantors have authorized the filing of the
California Financing Statements for purposes of Section 9509 of the
California UCC.
(7) To the extent the California UCC is applicable, the California Financing
Statements include not only all of the types of information required by
Section 9502(a) of the California UCC, but also the types of information
without which the California Filing Office may refuse to accept the
California Financing Statements pursuant to Section 9516 of the California
UCC.
(8) To the extent the California UCC is applicable, the security interest of
the Collateral Agent for the benefit of the Secured Parties will be
perfected in each California Grantor's rights in all UCC Collateral upon
the later of the attachment of the security interest and the filing of the
California Financing Statement naming such California Grantor as debtor in
the California Filing Office; provided, however, we express no opinion with
respect to (i) money, (ii) deposit accounts, (iii) letter of credit rights,
(iv) goods covered by a certificate of title statute, (v) as-extracted
collateral, e.g., timber to be cut, or (vi) any property subject to a
statute, regulation or treaty of the United States whose requirements for a
security interest's obtaining priority over the rights of a lien creditor
with respect to the property preempt Section 9310(a) of the California UCC.
5
(9) You have asked whether each of the California Grantors is a "registered
organization" as such term is defined in Section 9102(a)(70) of the
California UCC. Pursuant to Section 9102(a)(70) of the California UCC, a
"registered organization" must be (i) organized solely under the laws of a
single State (or the United States) and (ii) the State (or the United
States) must maintain a public record showing the organization to have been
organized. Pursuant to Sections 110(a) and 209 of the California General
Corporation Law, Sections 17050 and 17052 of the California Limited
Liability Company Act, Sections 15621 and 15628 of the California Uniform
Limited Partnership Act and Sections 12160 and 12168 of the California
Government Code, the Secretary of State of the State of California is
required to maintain a public record showing each of the California
Grantors to have been organized. Based on our review of the California
Secretary of State Certificates and to the extent the California UCC is
applicable, each of the California Grantors is a "registered organization"
under Section 9102(a)(70) of the California UCC and, where applicable, the
California General Corporation Law, the California Limited Liability
Company Act and the California Uniform Limited Partnership Act.
(10) Assuming that neither the Collateral Agent nor any Secured Party has notice
of any adverse claims with respect to the Possessory Certificates then,
upon the later of the attachment of the security interest and the delivery
of such Possessory Certificates to the Collateral Agent in the State of
California indorsed, by an effective indorsement, either in blank or to the
Collateral Agent, the Collateral Agent will acquire such Possessory
Certificates (and the shares represented thereby) free of any adverse
claims under Section 8303 of the California UCC. As used herein, "notice of
adverse claim" has the meaning set forth in Section 8105 of the California
UCC and includes, without limitation, any adverse claim that the Collateral
Agent or any Secured Party would discover upon any investigation which such
person has a duty, imposed by statute or regulation, to investigate.
Our opinions are subject to the following qualifications:
(1) We have assumed that each Grantor owns, or with respect to
after-acquired property will own, the UCC Collateral, and we express
no opinion as to the nature or extent of each Grantor's rights in any
of the UCC Collateral and we note that with respect to any
after-acquired property, the security interest will not attach until
each Grantor acquires ownership thereof.
6
(2) Our opinion with respect to proceeds is subject to the limitations set
forth in Section 9-315 of the UCC and, in addition, we call to your
attention that in the case of certain types of proceeds, other parties
such as holders in due course, protected purchasers of securities,
persons who obtain control over securities entitlements and buyers in
the ordinary course of business may acquire a superior interest or may
take their interest free of the security interest of a secured party.
(3) We express no opinion with respect to any goods which are accessions
to, or commingled or processed with, other goods to the extent that
the security interest is limited by Section 9-335 or 9-336 of the UCC.
(4) We express no opinion with respect to the choice of law governing
perfection, the effect of perfection and non-perfection or priority of
the security interest of the Collateral Agent in the UCC Collateral.
(5) We call to your attention that the right of the Collateral Agent to
become a partner or member in UCC Collateral constituting a
partnership or limited liability company may be limited by applicable
law and the terms of the partnership agreement or limited liability
company agreement pursuant to which the partnership or limited
liability company was formed, as amended from time to time, and that
the only remedy may be the right to receive distributions to which the
respective Grantor is otherwise entitled pursuant to the partnership
agreement or limited liability company agreement.
(6) We have assumed that each Grantor has all necessary authorization
under its organizational documents and applicable law (other than the
UCC) for the filing of the Financing Statements.
(7) We call to your attention that in the case of goods subject to a
negotiable document of title, a security interest perfected in the
negotiable document has priority over any security interest perfected
in such goods by another method.
(8) We express no opinion with respect to the security interest of the
Collateral Agent for the benefit of the Secured Parties except to the
extent that the Collateral Agent has been duly appointed as agent for
such persons as of the date hereof.
7
This opinion is being furnished only to you in connection with the
Security Agreement and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person or entity (other than your successors or assigns as Lender
Parties (as defined in the Credit Agreement)) for any purpose without our prior
written consent.
Very truly yours,
8
SCHEDULE I
Addressees
Citicorp USA, Inc.
Bank of America, N.A.
HSBC Bank USA
JPMorgan Chase Bank
GE Capital Corporation
The Bank of Nova Scotia
U.S. Bank National Association
Fleet Bank
ABN Amro Bank N.V.
▇▇▇▇▇ Fargo Bank N.A.
KeyBank National Association
Fifth Third Bank
First National Bank of Omaha
Citibank, N.A.
SCHEDULE II
Part A: California Subsidiaries
Banana Republic (California) LLC
Banana Republic, Inc.
Banana Republic (New York) LLC
GPSDC (New York) Inc.
Old Navy Inc.
Old Navy (California) LLC
WCB Twenty-Eight Limited Partnership
Part B: Delaware Subsidiaries
Banana Republic (Florida) LLC Gap International Sourcing (U.S.A.)
Inc.
Banana Republic (Holdings) Inc. Gap International Sourcing, Inc.
Gap (Wisconsin) L.P. Gap International Sourcing (JV) LLC
Gap (Florida) LLC GPS Brand Services, Inc.
Gap (Georgia) L.P. GPS Corporate Facilities, Inc.
Gap (Indiana) L.P. GPS Consumer Direct, Inc.
Gap (Kentucky) L.P. GPS Real Estate, Inc.
Gap (Tennessee) L.P. Old Navy (East) L.P.
Gap Holdings, Inc. Old Navy (Florida) LLC
Gap International Sourcing (California) Old Navy (Holdings) Inc.
Inc.
Gap International Sourcing (Americas) The ▇▇▇▇▇▇ Gap Stores, Inc.
LLC
GPS Employee Services, Inc.
SCHEDULE III
Possessory Certificates
---------------------------------------------------------------------------------------------------------
NO. OF CERTIFICATE
------ -----------
GRANTOR ISSUER SHARES NO.
------- ------ ------ --
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Banana Republic (Apparel) Inc. 100 1
---------------------------------------------------------------------------------------------------------
Banana Republic, Inc. Banana Republic (Holdings) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Banana Republic (ITM) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Banana Republic, Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS (Maryland), Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS Brand Services, Inc. 1,000 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS Consumer Direct, Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS Corporate Facilities, Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS Employee Services, Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPS Real Estate, Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. GPSDC (New York) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap (Apparel) Inc. 1,000 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap (ITM) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap Holdings, Inc. 700 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap International Sourcing 100 1
(California), Inc.
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap International Sourcing (U.S.A.) 100 1
Inc.
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Gap International Sourcing, Inc. 100 1
---------------------------------------------------------------------------------------------------------
Old Navy Inc. Old Navy (Holdings) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Old Navy (ITM) Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. Old Navy Inc. 100 1
---------------------------------------------------------------------------------------------------------
The Gap, Inc. The ▇▇▇▇▇▇ Gap Stores, Inc. 1,000 1
---------------------------------------------------------------------------------------------------------
Exhibit F-3
June [__], 2003
Citicorp USA, Inc.,
as Agent
The Lenders and Issuing Banks
(as defined below) listed
on Schedule I hereto
Re: The Gap, Inc./Credit Agreement
Ladies and Gentlemen:
We have acted as special counsel to The Gap, Inc., a Delaware
corporation (the "Company"), and the domestic subsidiaries of the Company listed
on Schedule II hereto (the "Subsidiaries"; together with the Company, the "Loan
Parties") in connection with the preparation, execution and delivery of the
Credit Agreement, dated as of June __, 2003 (the "Credit Agreement"), among the
Company and the LC Subsidiaries, the Subsidiary Borrowers, the Lenders and the
Issuing Banks (as such terms are defined in the Credit Agreement), Citigroup
Global Markets Inc. ("CGMI") and Banc of America Securities LLC ("BAS") as Joint
Book Managers, BAS, HSBC Bank USA and ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPM") as
Co-Syndication Agents, CGMI, BAS and JPM as Joint Lead Arrangers, and Citicorp
USA, Inc. as agent for the Lenders and the Issuing Banks (in such capacity, the
"Agent"), and certain other agreements, instruments and documents related to the
Credit Agreement. This opinion is being delivered pursuant to Section
5.01(b)(ix) of the Credit Agreement.
In our examination we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion which we did not independently
establish or verify, we have relied upon statements and representations of the
Loan Parties and their officers and other representatives and of public
officials, including the facts and conclusions set forth therein.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(a) the Credit Agreement;
(b) the Promissory Notes executed by the Loan Parties;
(c) the Subsidiary Guaranty, dated as of June __, 2003 (the
"Subsidiary Guaranty"), made by the Subsidiaries party thereto in favor of the
Lender Parties;
(d) the Security Agreement, dated as of June __, 2003 (the
"Security Agreement"), from the Loan Parties party thereto (the "Grantors") in
favor of the Agent as Collateral Agent (in such capacity, the "Collateral
Agent");
(e) the certificate of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Senior Vice
President and Treasurer, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Senior Vice President and
General Counsel, respectively, of each of the Loan Parties, dated the date
hereof, a copy of which is attached as Exhibit A hereto; and
(f) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other
than (i) the Applicable Laws of the State of New York and (ii) the Applicable
Laws of the United States of America (including, without limitation, Regulations
U and X of the Federal Reserve Board).
Capitalized terms used herein and not otherwise defined herein
shall have the same meanings herein as ascribed thereto in the Credit Agreement.
The Credit Agreement, the Promissory Notes, the Security Agreement, and the
Subsidiary Guaranty shall hereinafter be referred to collectively as the
"Transaction Agreements." "Applicable Laws" shall mean those laws, rules and
regulations which, in our experience, are normally applicable to transactions of
the type contemplated by the Transaction Agreements, without our having made any
special investigation as to the applicability of any specific law, rule or
regulation, and which are not the subject of a specific opinion herein referring
expressly to a particular law or laws. "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing, recording
or registration with, any governmental authority pursuant to the Applicable Laws
of the State of New York or of the United States of America. The Lenders and the
Issuing Banks are collectively referred to herein as the "Lender Parties".
References to the "UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each of the Transaction Agreements constitutes the valid and
binding obligation of each Loan Party which is a party thereto, enforceable
against each such Loan Party in accordance with its terms, under the Applicable
Laws of the State of New York.
2. Neither the execution, delivery or performance by any Loan
Party of the Transaction Agreements to which it is a party, nor the compliance
by any Loan Parties with the terms and provisions thereof will contravene any
provision of any Applicable Law of the State of New York or any Applicable Law
of the United States of America.
3. No Governmental Approval, which has not been obtained or
taken and is not in full force and effect, is required to authorize, or is
required in connection with, the execution or delivery of any of the Transaction
Agreements by any Loan Party or the enforceability of any of the Transaction
Agreements against any Loan Party.
4. The Loan Parties are not and, solely after giving effect to
the transactions contemplated by the Transaction Agreements to which they are a
party, will not be subject to registration and regulation as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
5. Neither the execution, delivery or performance by any Loan
Party of the Transaction Agreements to which it is a party nor the compliance by
such Loan Party with the terms and provisions thereof will violate any provision
of the Public Utility Holding Company Act of 1935, as amended.
Our opinions are subject to the following assumptions and
qualifications:
(a) enforcement of the Transaction Agreements may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law);
(b) we have assumed that each of the Transaction Agreements
constitutes the valid and binding obligation of each party thereto (other than
the Loan Parties to the extent expressly set forth herein) enforceable against
such other party (other than the Loan Parties to the extent expressly set forth
herein) in accordance with its terms;
(c) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of the Agent or any
party (other than
the Loan Parties to the extent expressly set forth herein) to the Transaction
Agreements with any state, federal or other laws or regulations applicable to
them or (ii) the legal or regulatory status or the nature of the business of the
Agent;
(d) we express no opinion as to the enforceability of any rights
to contribution or indemnification provided for in the Transaction Agreements
which are violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation);
(e) we express no opinion as to the applicability or effect of
any fraudulent transfer or similar law on the Transaction Agreements or any
transactions contemplated thereby;
(f) we express no opinion as to the applicability or effect of
any preference or similar law on the Transaction Agreements or any transaction
contemplated thereby;
(g) we express no opinion on the enforceability of any provision
in a Transaction Agreement purporting to prohibit, restrict or condition the
assignment of rights under such Transaction Agreement to the extent such
restriction on assignability is governed by the Uniform Commercial Code;
(h) we express no opinion as to the enforceability of any
section of any Transaction Agreement to the extent it purports to waive any
objection a person may have that a suit, action or proceeding has been brought
in an inconvenient forum;
(i) our opinion with respect to the enforceability of the choice
of New York law and choice of New York forum provisions of the Transaction
Agreements is rendered in reliance upon the Act of July 19, 1984, ch. 421, 1984
▇▇▇▇▇▇▇▇'▇ Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law Sections
5-1401, 5-1402 (▇▇▇▇▇▇▇▇ 2001) and N.Y. CPLR 327(b) (▇▇▇▇▇▇▇▇ 2001)) and is
subject to the qualifications that such enforceability may be limited by public
policy considerations of any jurisdiction, other than the courts of the State of
New York, in which enforcement of such provisions, or of a judgment upon an
agreement containing such provisions, is sought;
(j) in the case of the Subsidiary Guaranty certain of the
provisions, including waivers, with respect to the Subsidiary Guaranty are or
may be unenforceable in whole or in part, but the inclusion of such provisions
does not affect the validity of the Subsidiary Guaranty, taken as a whole;
(k) certain of the remedial provisions with respect to the
security contained in the Security Agreement may be unenforceable in whole or in
part, but
the inclusion of such provisions does not affect the validity of the Security
Agreement, taken as a whole, and the Security Agreement, taken as a whole,
together with applicable law, contains adequate provisions for the practical
realization of the benefits of the security;
(l) we express no opinion with respect to Section 15 of the
Security Agreement to the extent it establishes a standard of care for
collateral in the possession or control of the Collateral Agent to the extent
such standard of care is unenforceable under Sections 1-102 and 9-207 of the
Uniform Commercial Code;
(m) we express no opinion with respect to Article 3 of the
Credit Agreement to the extent it excuses the issuer of a letter of credit from
liability to the extent such provision is unenforceable pursuant to Section
5-103 of the Uniform Commercial Code;
(n) we express no opinion with respect to any provision of the
Credit Agreement to the extent it authorizes or permits any purchaser of a
participation interest to set-off or apply any deposit, property or indebtedness
with respect to any participation interest;
(o) we express no opinion with respect to the enforceability of
Section 10.15 of the Credit Agreement to the extent such provision purports to
select a governing law in conflict with mandatory choice of law rules set forth
in Section 5-116 of the Uniform Commercial Code; and
(p) we express no opinion with respect to the validity,
perfection or priority of any security interest.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) each Loan Party is validly existing and in good standing as
a corporation, a limited liability company or a limited partnership, as the case
may be, under the laws of its respective jurisdiction of organization;
(b) each Loan Party has the power and authority to execute,
deliver and perform all of its respective obligations under each of the
Transaction Agreements to which it is a party and the execution and delivery of
each of the Transaction Agreements by each Loan Party which is a party thereto
and the consummation by each Loan Party of the transactions contemplated thereby
have been duly authorized by all requisite action on the part of each Loan
Party. Each of the Transaction Agreements has been duly authorized, executed and
delivered by each Loan Party which is a party thereto;
(c) the execution, delivery and performance of any obligations
of each respective Loan Party under the Transaction Agreements to which it is a
party does not and will not conflict with, contravene, violate or constitute a
default under (i) (x) the Certificate of Incorporation, Articles of
Incorporation, Certificate of Formation, Limited Liability Company Articles of
Organization or Certificate of Limited Partnership or (y) the By-laws, Operating
Agreement or Limited Partnership Agreement, as applicable, or their equivalent
under the laws of the respective jurisdiction of organization, of each Loan
Party, (ii) any lease, indenture, instrument or other agreement to which any
Loan Party or its property is subject, (iii) any rule, law or regulation to
which any Loan Party is subject (other than Applicable Laws of the State of New
York and Applicable Laws of the United States of America as to which we express
our opinion in paragraph 2 herein) or (iv) any judicial or administrative order
or decree of any governmental authority;
(d) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other than
Governmental Approvals as to which we express our opinion in paragraph 3 herein)
is required to authorize or is required in connection with the execution,
delivery or performance by any Loan Party of any of the Transaction Agreements
to which it is a party or the transactions contemplated thereby;
(e) we call to your attention that (i) effective enforcement of
a claim denominated in a foreign currency may be limited by requirements that
the claim (or a judgment in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a specified date and (ii) we
express no opinion as to whether a federal or state court would award a judgment
in a currency other than United States dollars; and
(f) our opinion is subject to possible judicial action giving
effect to governmental actions or foreign laws affecting creditors' rights.
We understand that you are separately receiving opinions with
respect to the foregoing assumptions from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Senior Vice
President and General Counsel of each of the Loan Parties, and from ▇▇▇▇▇
▇▇▇▇▇▇▇ LLP, counsel to GPS (Maryland), Inc., and we are advised that such
opinions contain qualifications. Our opinions herein stated are based on the
assumptions specified above and we express no opinion as to the effect on the
opinions herein stated of the qualifications contained in such other opinions.
This opinion is being furnished only to you in connection with
the Transaction Agreements and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person or entity (other than your successors or assigns as Lender
Parties) for any purpose without our prior written consent.
Very truly yours,
Schedule I
to SASM&F Opinion
ADDRESSEES
Citicorp USA, Inc.
Bank of America, N.A.
HSBC Bank USA
JPMorgan Chase Bank
GE Capital Corporation
The Bank of Nova Scotia
U.S. Bank National Association
Fleet Bank
ABN Amro Bank N.V.
▇▇▇▇▇ Fargo Bank N.A.
KeyBank National Association
Fifth Third Bank
First National Bank of Omaha
Citibank, N.A.
S-1
Schedule II
to SASM&F Opinion
SUBSIDIARIES
Banana Republic (California) LLC Gap International Sourcing (U.S.A.) Inc.
Banana Republic, Inc. Gap International Sourcing, Inc.
Banana Republic (Florida) LLC Gap International Sourcing (JV) LLC
Banana Republic (Holdings) Inc. GPS Brand Services, Inc.
Banana Republic (New York) LLC GPS Corporate Facilities, Inc.
Gap (Wisconsin) L.P. GPS Consumer Direct, Inc.
Gap (Florida) LLC GPS Real Estate, Inc.
Gap (Georgia) L.P. GPSDC (New York) Inc.
Gap (Indiana) L.P. Old Navy (California) LLC
Gap (Kentucky) L.P. Old Navy (East) L.P.
Gap (Tennessee) L.P. Old Navy (Florida) LLC
Gap Holdings, Inc. Old Navy (Holdings) Inc.
Gap International Sourcing (California) Old Navy Inc.
Inc.
Gap International Sourcing (Americas) The ▇▇▇▇▇▇ Gap Stores, Inc.
LLC
GPS (Maryland), Inc. WCB Twenty-Eight Limited Partnership
GPS Employee Services, Inc.
S-2
Exhibit A to Opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Officers' Certificate
The undersigned are, respectively, the duly elected, qualified
and acting Senior Vice President and General Counsel, and the Senior Vice
President and Treasurer, of The Gap, Inc., a Delaware corporation ("The Gap")
and the domestic subsidiaries of The Gap listed on Schedule II (the
"Subsidiaries" together with The Gap, the "Loan Parties") to the attached the
Opinion (as defined below). Each of us understands that pursuant to Section
5.01(b)(ix) of the Credit Agreement, dated as of June 24, 2003 (the "Credit
Agreement"), among The Gap and the Subsidiary Borrowers, the LC Subsidiaries,
the Lenders and the Issuing Banks (as such terms are defined in the Credit
Agreement), Citigroup Global Markets Inc. ("CGMI") and Banc of America
Securities LLC ("BAS") as Joint Book Managers, BAS, HSBC Bank USA and ▇.▇.
▇▇▇▇▇▇ Securities Inc. ("JPM") as Co-Syndication Agents, CGMI, BAS and JPM as
Joint Lead Arrangers, and Citicorp USA, Inc. as agent for the Lenders and the
Issuing Banks (in such capacity, the "Agent"), and certain other agreements,
instruments and documents related to the Credit Agreement, Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP ("SASM&F"), is rendering an opinion (the "Opinion") to the
Agent and the Lenders. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms as set forth in the
Opinion. Each of us further understands that SASM&F is relying on this officer's
certificate and the statements made herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Loan Parties, we
hereby certify (each of us only as to the paragraphs below which are identified
on our respective signature pages) that:
1. Each of us is familiar with the business of the Loan
Parties, and due inquiry has been made of all persons deemed necessary or
appropriate to verify or confirm the statements contained herein.
2. SASM&F may rely on the respective representations and
warranties that each of the Loan Parties has made in the Credit Agreement, each
of the other Loan Documents and each of the certificates delivered pursuant
thereto. I have made a careful review of each of such representations and
warranties and hereby confirm, to the best of my knowledge and belief, that such
representations and warranties are true, correct and complete on and as of the
date of this certificate.
A-3
3. Set forth on Schedule I hereto are all the Governmental
Approvals which, to the best of my knowledge and belief, are specifically
applicable to each of the Loan Parties in connection with the Transaction
Agreements and the transactions contemplated thereunder.
4. Less than twenty-five percent (25%) of the assets of the
Loan Parties on a consolidated basis and on an unconsolidated basis consist of
Margin Stock.
5. Each of the Loan Parties is primarily engaged directly,
or indirectly through Majority-Owned Subsidiaries, in the specialty retailer
business primarily selling causal apparel and personal care products or
businesses related thereto; and the Loan Parties (i) are not and do not hold
themselves out as being engaged primarily, nor do they propose to engage
primarily, in the business of investing, reinvesting or trading in Securities,
(ii) have not and are not engaged in, and do not propose to engage in, the
business of issuing Face-Amount Certificates of the Installment Type and has no
such certificate outstanding and (iii) do not own or propose to acquire
Investment Securities having a Value exceeding forty percent (40%) of the Value
of the total assets of the Loan Parties (exclusive of Government Securities and
cash items) on an unconsolidated basis.
6. The Loan Parties do not own or operate facilities used
for the generation, transmission, or distribution of electric energy for sale
("Electric Utility Facilities").
7. The Loan Parties do not own or operate facilities used
for the distribution of natural or manufactured gas for heat, light, or power
("Gas Utility Facilities").
8. None of the Loan Parties, directly or indirectly, or
through one or more intermediary Companies, own, control, or hold with power to
vote (a) ten percent (10%) or more of the outstanding Voting Securities of any
Company that owns or operates any Electric Utility Facilities or Gas Utility
Facilities, or (b) any other interest, directly or indirectly, or through one or
more intermediary entities, in (i) any Company that owns or operates any
Electric Utility Facilities or Gas Utility Facilities, or (ii) any of the
foregoing types of entities that have received notice of the sort described in
paragraph 9 below.
A-4
9. None of the Loan Parties have received notice that the
Securities and Exchange Commission has determined, or may determine, that any of
the Loan Parties exercises a controlling influence over the management or
direction of the policies of a gas utility company or an electric utility
company as to make it subject to the obligations, duties and liabilities imposed
on holding companies by the Public Utility Holding Company Act of 1935, as
amended ("PUHCA").
10. To the best of my knowledge, no Company that has
registered with the Securities and Exchange Commission as a public utility
holding company under PUHCA owns, directly or indirectly, through one or more
intermediary entities, ten percent (10%) or more of the outstanding Voting
Securities (as defined below) of the Loan Parties.
11. As used in paragraph 4 of this certificate, the
following term shall have the following meaning:
"Margin Stock" means: (i) any equity security registered or
having unlisted trading privileges on a national securities exchange; (ii) any
OTC security designated as qualified for trading in the National Market System
under a designation plan approved by the Securities and Exchange Commission;
(iii) any debt security convertible into a margin stock or carrying a warrant or
right to subscribe to or purchase a margin stock; (iv) any warrant or right to
subscribe to or purchase a margin stock; or (v) any security issued by an
investment company registered under Section 8 of the Investment Company Act of
1940.
12. As used in paragraphs 5 and 12 of this certificate, the
following terms shall have the following meanings:
"Exempt Fund" means a company that is excluded from treatment as
an investment company solely by section 3(c)(1) or 3(c)(7) of the Investment
Company Act of 1940 (applicable to certain privately offered investment funds).
"Face-Amount Certificate of the Installment Type" means any
certificate, investment contract, or other Security that represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at a fixed or determinable date or dates more than 24 months after the date of
issuance, in consideration of the payment of periodic installments of a stated
or determinable amount.
A-5
"Government Securities" means all Securities issued or
guaranteed as to principal or interest by the United States, or by a person
controlled or supervised by and acting as an instrumentality of the government
of the United States pursuant to authority granted by the Congress of the United
States; or any certificate of deposit for any of the foregoing.
"Investment Securities" includes all Securities except (A)
Government Securities, (B) Securities issued by companies the only shareholders
in which are employees and former employees of a company and its subsidiaries,
members of the families of such persons and the company and its subsidiaries and
(C) Securities issued by Majority-Owned Subsidiaries of the Company which are
not engaged and do not propose to be engaged in activities within the scope of
clause (i), (ii) or (iii) of paragraph 5 of this Certificate or which are
exempted or excepted from treatment as an investment company by statute, rule or
governmental order (other than Exempt Funds).
"Majority-Owned Subsidiary" of a person means a company fifty
percent (50%) or more of the outstanding Voting Securities of which are owned by
such person, or by a company which, within the meaning of this paragraph, is a
Majority-Owned Subsidiary of such person.
"Security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest therein
or based on the value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign currency, or,
in general, any interest or instrument commonly known as a "security," or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
"Value" means (i) with respect to Securities owned at the end of
the last preceding fiscal quarter for which market quotations are readily
available, the market value at the end of such quarter; (ii) with respect to
other Securities and assets owned at the end of the last preceding fiscal
quarter, fair value at the end of such quarter, as determined in good faith by
or under the direction of the board of directors; and (iii) with respect to
securities and other assets acquired after the end of the last preceding fiscal
quarter, the cost thereof.
A-6
"Voting Security" means any security presently entitling the
owner or holder thereof to vote for the election of directors of a company (or
its equivalent, e.g., general partner or manager of a limited liability
company).
13. As used in paragraphs 8, 10 and 13 of this certificate,
the following terms shall have the following meanings:
"Company" means a corporation, limited liability company,
partnership, association, joint-stock company, joint venture, trust, or any
receiver, trustee, or other liquidating agent of any of the foregoing in its
capacity as such.
"Security" or "Securities" means any note, draft, stock,
treasury stock, bond, debenture, limited liability company interest, certificate
of interest or participation in any profit-sharing agreement or in any oil, gas,
other mineral royalty or lease, any collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
receiver's or trustee's certificate, or, in general, any instrument commonly
known as a "security"; or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guaranty of, assumption of
liability on, or warrant or right to subscribe to or purchase, any of the
foregoing.
"Voting Security" or "Voting Securities" means any Security
presently entitling the owner or holder thereof to vote in the direction or
management of the affairs of a Company, or any Security issued under or pursuant
to any trust, agreement, or arrangement whereby a trustee or trustees or agent
or agents for the owner or holder of such Security are presently entitled to
vote in the direction or management of the affairs of a Company; and a specified
per centum of the outstanding Voting Securities of a Company means such amount
of the outstanding Voting Securities of such Company as entitles the holder or
holders thereof to cast said specified per centum of the aggregate votes which
the holders of all the outstanding Voting Securities of such Company are
entitled to cast in the direction or management of the affairs of such Company.
[Signature Page Follows]
A-7
IN WITNESS THEREOF, the undersigned have executed this
certificate this ____ day of June, 2003.
THE GAP, INC. GAP INTERNATIONAL SOURCING, INC.
BANANA REPUBLIC (CALIFORNIA) LLC, by Banana Republic, GAP INTERNATIONAL SOURCING (JV) LLC, by Gap
Inc., its managing member International Sourcing, Inc.,
its managing member
BANANA REPUBLIC (FLORIDA) LLC, by Banana Republic, GAP INTERNATIONAL SOURCING
Inc., its managing member (CALIFORNIA) INC.
BANANA REPUBLIC (HOLDINGS) INC. GPS CORPORATE FACILITIES, INC.
BANANA REPUBLIC (NEW YORK) LLC, by Banana Republic, GPS CONSUMER DIRECT, INC.
Inc., its managing member
BANANA REPUBLIC, INC. GPS REAL ESTATE, INC.
GAP (FLORIDA) LLC, GPSDC (NEW YORK) INC.
by The Gap, Inc., its managing member
GAP (GEORGIA) L.P., GPS BRAND SERVICES, INC.
by The Gap, Inc., its general partner
GAP (INDIANA) L.P., OLD NAVY (EAST) L.P.,
by The Gap, Inc., its general partner by Old Navy, Inc., its general partner
GAP (KENTUCKY) L.P., OLD NAVY (FLORIDA) LLC,
by The Gap, Inc., its general partner by Old Navy, Inc., its managing member
GAP (TENNESSEE) L.P., OLD NAVY (HOLDINGS) INC.
by The Gap, Inc., its general partner
GAP (WISCONSIN) L.P., OLD NAVY INC.
by The Gap, Inc., its general partner
GAP HOLDINGS, INC. OLD NAVY (CALIFORNIA) LLC,
by Old Navy, Inc., its member
GAP INTERNATIONAL SOURCING (AMERICAS) LLC, by The Gap, WCB TWENTY-EIGHT LIMITED
Inc., its member PARTNERSHIP, by GPS Corporate Facilities,
Inc., its general partner
A-8
GAP INTERNATIONAL SOURCING (U.S.A.) INC. THE ▇▇▇▇▇▇ GAP STORES, INC.
GPS (MARYLAND), INC.
GPS EMPLOYEE SERVICES, INC.
With respect to only paragraphs 1, 3, 6, 7, 8, 9, 10 and 13 above:
By:
----------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and General Counsel
With respect to only paragraphs 1, 2, 4, 5, 11 and 12 above:
By:
------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and Treasurer
A-9
Schedule I to
Exhibit A
GOVERNMENTAL APPROVALS
None.
A-10
Exhibit G
OPINION OF SPECIAL NEW YORK COUNSEL TO THE AGENT
June 24, 2003
To the Lenders and Issuing
Banks party to the Credit
Agreement referred to below
and to Citicorp USA, Inc.,
as Agent
Ladies and Gentlemen:
We have acted as special New York counsel to Citicorp USA, Inc.,
individually and as Agent, in connection with the preparation, execution and
delivery of the Credit Agreement dated as of June 24, 2003 (the "Credit
Agreement"), among The Gap, Inc., a Delaware corporation (the "Borrower"),
certain subsidiaries of the Borrower, certain other financial institutions and
each of you. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.
In such capacity, we have examined a counterpart of the Credit
Agreement, the notes delivered this date thereunder, the Subsidiary Guaranty and
the Security Agreement.
In our examination of the Credit Agreement and such other
documents, we have assumed, without independent investigation (a) the due
execution and delivery of the Loan Documents by all parties thereto, (b) the
genuineness of all signatures, (c) the authenticity of the originals of the
documents submitted to us and (d) the conformity to originals of any documents
submitted to us as copies.
In addition, we have assumed, without independent investigation,
that (i) each Loan Party, each of the Lenders, and the Agent is a corporation or
other entity duly organized and validly existing under the laws of the
jurisdiction of its organization, (ii) each Loan Party, each of the Lenders and
the Agent has full power and authority (corporate and otherwise) to execute,
deliver and perform the Loan Documents to which it is a party, (iii) the
execution, delivery and performance by each Loan Party, each of the Lenders and
the Agent of the Loan Documents have been duly authorized by all necessary
action (corporate or otherwise) and do not (A) contravene the certificate of
incorporation, bylaws or other constituent documents of the Loan Parties, any of
the Lenders or the Agent, (B) violate any law, rule, regulation or order
applicable to the Loan Parties, any of the Lenders or the Agent or (C) conflict
with or result in the breach of any document or instrument binding on the Loan
Parties, any of the Lenders or the Agent and, (iv) no authorization, approval,
consent 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 or performance by the Loan Parties, any of the Lenders or
the Agent of the Loan Documents or, if any such authorization, approval,
consent, action, notice or filing is required thereof, it has been duly obtained
or made and is in full force and effect.
Exh. G Page 1
Based upon the foregoing examination and assumptions and upon
such other investigation as we have deemed necessary and subject to the
qualifications set forth below, we are of the opinion that the Loan Documents
are the legal, valid and binding obligation of each Loan Party thereto,
enforceable against each such Loan Party in accordance with its respective
terms.
Our opinion above is subject to the following qualifications:
(i) Our opinion above 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.
(ii) Our opinion above is also 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).
(iii) We express no opinion as to the enforceability
of the indemnification provisions set forth in the Loan
Documents to the extent enforcement thereof is contrary to
public policy regarding the exculpation of criminal violations,
intentional harm and acts of gross negligence or recklessness.
We express no opinion as to the creation, perfection or priority
of any security interests.
(iv) Our opinion above is limited to the law of the
State of New York and the federal law of the United States of
America and we do not express any opinion herein concerning any
other law. Without limiting the generality of the foregoing, we
express no opinion as to the effect of the law of a jurisdiction
other than the State of New York wherein any of the Lenders may
be located or wherein enforcement of the Credit Agreement may be
sought that limits the rates of interest legally chargeable or
collectible.
A copy of this opinion letter may be delivered by any of you to
any Person that becomes a Lender in accordance with the provisions of the Credit
Agreement. Any such Lender may rely on the opinion expressed above as if this
opinion letter were addressed and delivered to such Lender on the date hereof.
Exh. G Page 2
This opinion letter speaks only as of the date hereof. We
expressly disclaim any responsibility to advise you or any other Lender who is
permitted to rely on the opinion expressed herein as specified in the preceding
paragraph of any development or circumstance of any kind including any change of
law or fact that may occur after the date of this opinion letter even though
such development, circumstance or change may affect the legal analysis, a legal
conclusion or any other matter set forth in or relating to this opinion letter.
Accordingly, any Lender relying on this opinion letter at any time should seek
advice of its counsel as to the proper application of this opinion letter at
such time.
Very truly yours,
SES/RAP/SPH
Exh. G Page 3
EXHIBIT H
FORM OF ASSUMPTION AGREEMENT
Dated: _____________, 200_
The Gap, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Citicorp USA, Inc.,
as Agent for the Lender Parties
to the Credit Agreement referred to below
[399 ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇]
Attention: Credit Administration
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of June __, 2003 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement," the terms defined therein being used herein as therein
defined), among The Gap, Inc., a Delaware corporation (the "Borrower"), certain
Subsidiaries of the Borrower, certain Lenders party thereto, certain Issuing
Banks, certain Joint Book Managers parties thereto, Co-Syndication Agents
parties thereto, the Documentation Agent, Citigroup Global Markets Inc., Banc of
America Securities LLC and ▇▇ ▇▇▇▇▇▇ Securities, Inc. as Joint Lead Arrangers,
and Citicorp USA, Inc., as agent for such Lenders and the Issuing Banks.
The undersigned (the "Assuming Lender") proposes to become an Assuming
Lender pursuant to Section 2.04(c) of the Credit Agreement and, in that
connection, hereby agrees that it shall become a Lender for purposes of the
Credit Agreement on the applicable Commitment Increase Effective Date and that
its Commitment shall as of such date be $__________.
The undersigned (a) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 6.01(e) thereof, the most recent financial statements referred to in
Section 7.04 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assumption Agreement; (b) agrees that it will, independently and without
reliance upon the 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 the Credit Agreement; (c)
appoints and authorizes the Agent and the Issuing Banks to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Agent and the Issuing Banks by the terms thereof, together
with such powers as
Exh. H Page 1
are reasonably incidental thereto; (d) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as Lender; (e) confirms that it is
an Eligible Assignee; (f) specifies as its Applicable Lending Offices (and
address for notices) the offices set forth beneath its name on the signature
pages hereof; and (g) attaches the forms prescribed by the Internal Revenue
Service of the United States required under Section 4.02 of the Credit
Agreement.
The effective date for this Assumption Agreement shall be the applicable
Commitment Increase Effective Date. Upon delivery of this Assumption Agreement
to the Borrower and the Agent, and satisfaction of all conditions imposed under
Section 2.04(c) as of [date specified above], the undersigned shall be a party
to the Credit Agreement and have the rights and obligations of a Lender
thereunder. As of [date specified above], the Agent shall make all payments
under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees) to the Assuming Lender.
This Assumption Agreement may be executed in 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 by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assumption Agreement.
Exh. H Page 2
This Assumption Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
[NAME OF ASSUMING LENDER]
By:
----------------------------------
Name:
Title:
Domestic Lending Office
(and address for notices):
[Address]
Eurodollar Lending Office
[Address]
Acknowledged and Agreed to:
THE GAP, INC.
By:
-------------------------------------
Name:
Title:
CITICORP USA, INC.
By:
-------------------------------------
Name:
Title:
Exh. H page 3
EXHIBIT I
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected _____________________________ of The Gap,
Inc., a Delaware corporation (the "Company");
(2) I have reviewed the terms of that certain Credit Agreement dated
as of June ___, 2003, as amended, supplemented or otherwise modified to the date
hereof (said Credit Agreement, as so amended, supplemented or otherwise
modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1 annexed hereto
and made a part hereof) being used in this Certificate as therein defined), by
and among the Company, the financial institutions party thereto, and Citicorp
USA, Inc., as Agent, and the terms of the other Loan Documents, and I have made,
or have caused to be made under my supervision, a review in reasonable detail of
the transactions and condition of Company and its Subsidiaries during the
accounting period covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Default during or at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth below.
Set forth [below] [in a separate attachment to this Certificate] are all
exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking or proposes to take with respect to each such
condition or event:
Exh. I Page 1
The foregoing certifications, together with the computations set forth
in Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this _____ day of _______________, 200_ pursuant to Section
7.04[(i)][(iii)] of the Credit Agreement.
THE GAP, INC.
By
------------------------------
Name:
Title:
Exh. I Page 2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ______________, 200_ and pertains to the period from
_____________, 200_ to ____________, 200_. Subsection references herein relate
to subsections of the Credit Agreement.
A. LEVERAGE RATIO
(for the four-Fiscal Quarter period ending ____________, 200_)
1. Consolidated Funded Debt $__________
2. Eight times Lease Expense $__________
3. Consolidated Net Income $__________
4. Consolidated Interest Expense $__________
5. Provisions for Taxes based on Income $__________
6. Total Depreciation Expense $__________
7. Total Amortization Expense $__________
8. Consolidated EBITDA (3+4+5+6+7) $__________
9. Lease Expense $__________
10. Leverage Ratio (1+2) : (8+9) _____ : 1.00
11. Maximum ratio allowed under Subsection 7.03(a) 5.00 : 1.00
B. FIXED CHARGE COVERAGE RATIO
(for the four-Fiscal Quarter period ending _____________, 200_)
1. Consolidated Net Income $__________
2. Consolidated Interest Expense $__________
3. Provisions for Taxes based on Income $__________
4. Total Depreciation Expense $__________
5. Total Amortization Expense $__________
6. Consolidated EBITDA (1+2+3+4+5) $__________
7. Lease Expense $__________
8. Consolidated Interest Expense $__________
Attachment No. 1 to Compliance Certificate - Page 1
9. Fixed Charge Coverage Ratio (6 + 7) : (7+8)) _____ : 1.00
10. Minimum ratio required under Section 7.03(b) _____ : 1.00
C. CAPITAL EXPENDITURES OF THE BORROWER AND ITS SUBSIDIARIES
1. Capital Expenditures for Fiscal Year-to-date $__________
2. Maximum amount of Capital Expenditures for
Borrower and its Subsidiaries permitted
under Section 7.03(c) for Fiscal Year $625,000,000
Attachment No. 1 to Compliance Certificate - Page 2