EXHIBIT 10.1
U.S. $1,400,000,000
CREDIT AGREEMENT
Dated as of March 7, 2002
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,
----------------
XXXXXXX XXXXX XXXXXX INC.
and
BANC OF AMERICA SECURITIES, LLC.
as Joint Book Managers
----------------------
BANC OF AMERICA SECURITIES, LLC.,
HSBC BANK USA
and
X.X. XXXXXX SECURITIES INC.
as Co-Syndication Agents,
------------------------
ABN AMRO BANK N.V.
as Documentation Agent
----------------------
and
XXXXXXX XXXXX XXXXXX INC.,
BANC OF AMERICA SECURITIES, LLC
and
X.X. XXXXXX 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
SCHEDULES AND EXHIBITS
SCHEDULES
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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 - Subsidiaries For Which Certificates To Be Issued
Schedule XVI - Hedge Subsidiaries
EXHIBITS
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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
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms.........................................................1
SECTION 1.02 Computation of Time Periods..................................................19
SECTION 1.03 Accounting Terms.............................................................19
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 The Advances.................................................................19
SECTION 2.02 Making the Advances..........................................................20
SECTION 2.03 Fees.........................................................................23
SECTION 2.04 Reduction of the Advance Commitments; Reduction and Increase of the
Swing Line Commitments.......................................................23
SECTION 2.05 Repayment of Advances........................................................24
SECTION 2.06 Interest on Advances.........................................................24
SECTION 2.07 Additional Interest on Eurodollar Rate Advances..............................25
SECTION 2.08 Interest Rate Determination..................................................25
SECTION 2.09 Voluntary Conversion of Advances.............................................26
SECTION 2.10 Prepayments of Advances......................................................26
SECTION 2.11 Increased Costs..............................................................27
SECTION 2.12 Illegality...................................................................28
SECTION 2.13 Borrower Guaranty............................................................28
ARTICLE III
AMOUNT AND TERMS OF LETTERS OF
CREDIT AND PARTICIPATIONS THEREIN
SECTION 3.01 Letters of Credit............................................................33
SECTION 3.02 Limitation on the Issuance of Letters of Credit Denominated in
Alternative Currencies.......................................................34
i
SECTION 3.03 Issuing the Letters of Credit................................................35
SECTION 3.04 Reimbursement Obligations....................................................35
SECTION 3.05 Participations Purchased by the Lenders......................................35
SECTION 3.06 Letter of Credit Fees........................................................36
SECTION 3.07 Indemnification; Nature of the Issuing Banks' Duties.........................37
SECTION 3.08 Increased Costs..............................................................38
SECTION 3.09 Uniform Customs and Practice.................................................39
SECTION 3.10 Reductions and Increases in LC Commitments; Additional Issuing Banks.........39
SECTION 3.11 Existing Letters of Credit...................................................42
SECTION 3.12 Currency Provisions..........................................................42
SECTION 3.13 Borrower Guaranty............................................................44
SECTION 3.14 Dollar Payment Obligation....................................................46
SECTION 3.15 Applications; Survival of Provisions; Cash Collateral........................46
SECTION 3.16 LC Subsidiaries..............................................................46
ARTICLE IV
PAYMENTS, TAXES, EXTENSIONS, ETC.
SECTION 4.01 Payments and Computations/Borrowings.........................................47
SECTION 4.02 Taxes/Borrowings.............................................................48
SECTION 4.03 Sharing of Payments, Etc./Borrowings.........................................50
SECTION 4.04 Evidence of Debt/Borrowings..................................................51
SECTION 4.05 Payments and Computations/Letters of Credit..................................51
SECTION 4.06 Taxes/Letters of Credit......................................................52
SECTION 4.07 Sharing of Payments, Etc./Letters of Credit..................................55
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01 Conditions Precedent to Effectiveness of this Agreement......................55
SECTION 5.02 Conditions Precedent to Each Advance/Issuance................................58
ii
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 Representations and Warranties of the Borrower...............................58
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01 Affirmative Covenants........................................................61
SECTION 7.02 Negative Covenants...........................................................66
SECTION 7.03 Financial Covenant...........................................................71
SECTION 7.04 Reporting Requirements.......................................................72
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default............................................................74
ARTICLE IX
THE AGENT
SECTION 9.01 Authorization and Action.....................................................77
SECTION 9.02 Agent's Reliance, Etc........................................................77
SECTION 9.03 CUSA, Citibank and Affiliates................................................78
SECTION 9.04 Lender Credit Decision.......................................................78
SECTION 9.05 Indemnification..............................................................78
SECTION 9.06 Successor Agent..............................................................79
SECTION 9.07 Documentation Agent, Co-Syndication Agents and Joint Lead Arrangers..........79
SECTION 9.08 Release of Collateral........................................................79
SECTION 9.09 Release of Guarantor.........................................................80
SECTION 9.10 Actions in Respect of Intercreditor Agreement................................80
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Amendments, Etc..............................................................80
SECTION 10.02 Notices, Etc.................................................................81
iii
SECTION 10.03 No Waiver; Remedies..........................................................81
SECTION 10.04 Costs and Expenses...........................................................81
SECTION 10.05 Right of Set-off.............................................................82
SECTION 10.06 Binding Effect...............................................................83
SECTION 10.07 Assignments and Participations...............................................83
SECTION 10.08 Severability of Provisions...................................................86
SECTION 10.09 Independence of Provisions...................................................86
SECTION 10.10 Confidentiality..............................................................86
SECTION 10.11 Headings.....................................................................86
SECTION 10.12 Entire Agreement.............................................................86
SECTION 10.13 Execution in Counterparts....................................................87
SECTION 10.14 Consent to Jurisdiction......................................................87
SECTION 10.15 GOVERNING LAW................................................................87
SECTION 10.16 WAIVER OF JURY TRIAL.........................................................87
iv
CREDIT AGREEMENT, dated as of March 7, 2002 (this "Agreement"), among
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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
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hereof, the Issuing Banks (as hereinafter defined), Xxxxxxx Xxxxx Xxxxxx Inc.
("SSB") and Banc of America Securities, LLC. ("BAS") as joint book managers (the
--- ---
"Joint Book Managers"), BAS, HSBC Bank USA ("HSBC") and X.X. Xxxxxx Securities
------------------- ----
Inc. ("JPMorgan") as co-syndication agents (the "Co-Syndication Agents"), ABN
-------- ---------------------
AMRO Bank N.V. ("ABN AMRO") as documentation agent (the "Documentation Agent"),
-------- -------------------
SSB, BAS and JPMorgan, 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 Third Amended and Restated
Credit Agreement dated as of June 26, 2001 (the "Existing 364-Day Agreement").
--------------------------
(2) The Borrower, the financial institutions party thereto and the
Agent have entered into an Amended and Restated Credit Agreement, dated as of
June 27, 2000 (the "Existing Five-Year Agreement").
----------------------------
(3) The Borrower, the LC Subsidiaries, the Subsidiary Borrowers, the
Lenders, the Issuing Banks, the Joint Book Managers, the Co-Syndication Agents,
the Documentation Agent, the Joint Lead Arrangers and the Agent desire to enter
into this Agreement to replace the Existing 364-Day Agreement and Existing
Five-Year 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 Documentation Agent, 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
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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.
"Advance Commitment" means, as to each Lender, the amount set forth
------------------
opposite such Lender's name on Schedule I-A hereto under the caption
Advance 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 pursuant to
Section 2.04.
1
"Advance Commitment Percentage" means, with respect to each Lender,
-----------------------------
the percentage which the then existing Advance Commitment of such Lender is
of the Advance Commitments of all Lenders.
"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:
=============================================================================================================
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI LEVEL VII LEVEL VIII
PERFORMANCE
LEVEL
=============================================================================================================
Applicable Facility .15% .20% .25% .375% .50% .75% .75% .75%
Fee
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"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:
==============================================================================================================
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI LEVEL VII LEVEL VIII
PERFORMANCE
LEVEL
==============================================================================================================
Applicable Letter of .375% .50% .75% 1.00% 1.25% 1.50% 2.00% 2.50%
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:
===========================================================================================================
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI LEVEL VII LEVEL VIII
PERFORMANCE
LEVEL
===========================================================================================================
Base Rate 0.0% 0.0% .50% .75% 1.00% 1.50% 2.00% 2.50%
Applicable Margin
-----------------------------------------------------------------------------------------------------------
Eurodollar Rate .60% .80% 1.25% 1.375% 1.50% 1.75% 2.25% 2.75%
Applicable Margin
-----------------------------------------------------------------------------------------------------------
"Asset Coverage Ratio" means, as of any date, the ratio of the book
--------------------
value of inventory of the Borrower and its Subsidiaries as reflected in
their financial statements as of such date to the sum of the aggregate
amount of Letter of Credit Liability plus the then outstanding amount of
all
2
Advances less cash and cash equivalents of the Borrower and its
Subsidiaries as reflected on such financial statements, in each case as of
such date, provided, that for the purposes of determining the Asset
--------
Coverage Ratio as of the last day of any Fiscal Quarter, the denominator
thereof shall include the xxxx to market liability, if any, of the Borrower
and its Subsidiaries under all Hedge Agreements in effect as of such day in
excess of $25,000,000.
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by Lender and an Eligible Assignee, and accepted by the Agent, 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 3.10(b) and which has an LC 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 3.10(b), agreeing to be bound by all
obligations of a Lender hereunder.
"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).
"Borrowing" means a borrowing, consisting of simultaneous Advances of
---------
the same Type made by each of the Lenders pursuant to Section 2.01(a).
"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
3
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 GAAP, have been or should be reflected as additions to
property, plant or equipment on the balance sheet of such Person.
"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 GAAP, 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
4
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.
"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, 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 an Advance Commitment or a LC Commitment, as the
----------
context may require.
"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.
"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).
"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.
5
"Control Agreement" means "Securities Account Control Agreement" or
-----------------
"Account Control Agreement," as applicable, and in each case as defined in
the Security Agreement.
"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.
"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.
"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
--------------
6
"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, 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
7
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 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 Xxxxx 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 Xxxxx 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 Xxxxx 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.
"Eurodollar Rate Advance" means an Advance which bears interest as
-----------------------
provided in Section 2.06(b).
"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
8
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.
-----------------
"Excluded Subsidiaries" means (a) Gap International Sourcing FZE, (b)
---------------------
Gap International Sourcing Srl., (c) 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, (d) Special Purpose Subsidiaries, (e) Subsidiaries of
Foreign Subsidiaries, (f) 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, and
(g) La Mer S.A., Maravan S.A.R.L. and Gap (RHC) BV. Excluded Subsidiaries
referred to in clause (c) as of the Effective Date are listed in Schedule
XIV hereto.
"Existing 364-Day Agreement" has the meaning specified in Preliminary
--------------------------
Statement (1).
"Existing Credit Agreements" means the Existing 364-Day Agreement and
--------------------------
Existing Five-Year Agreement ."
"Existing Five-Year Agreement " has the meaning specified in
----------------------------
Preliminary Statement (2).
"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 Month" means any month in any Fiscal year, the duration of
------------
such month 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).
"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).
"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.
9
"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 xxxxxxx, xxxxx, xxxxxxxxxx, xxxxxxxxxxx,
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 20% of the notional amount of all such Hedge Agreements
which are currency swap or exchange agreements, (b) the product of 15% of
the notional amount of all such Hedge Agreements which are interest rate
swap or exchange agreements with a tenor of more than 3 years, and (c) the
product of 10% of the notional amount of all such Hedge Agreements which
are interest rate swap or exchange agreements with a tenor of 3 years or
less, in each case existing as of the Effective Date or permitted under
Section 7.02(h), exceeds $150,000,000.
"Hedge Bank" means any Lender or an Affiliate of a Lender, in its
----------
capacity as a party to a Hedge Agreement.
10
"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 as of
----------------------
February 2002 prepared in connection with this Agreement.
"Intercreditor Agreement" means an Intercreditor 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:
-------- -------
(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) 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,
11
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.
"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 N.A., HSBC Bank U.S.A. or Bank of
------------
America, N.A., or any other Lender which agrees to become, and is
designated as an Issuing Bank under Section 3.10(c) 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 3.10(d).
"LC Commitment" means, as to any Lender, the amount set forth opposite
-------------
such Lender's name on Schedule I-A hereto under the caption "LC 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(c) hereof, in each case
as such amount may be reduced or increased from time to time pursuant to
Section 3.10(d).
"LC Commitment Percentage" means, with respect to each Lender, the
------------------------
percentage which the then existing LC Commitment of such Lender is of the
LC Commitments of all Lenders; provided, however, that with respect to
-------- -------
Letters of Credit which expire after the Termination Date has occurred, the
LC Commitment Percentage of each Lender shall be the percentage which
Lender's LC Commitment immediately prior to the Termination Date is of the
LC Commitment of all Lenders immediately prior to the Termination Date.
"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.
"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
12
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.
"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), 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, in
each case as amended, supplemented or otherwise modified hereafter from
time to time in accordance with the terms thereof and Section 8.01.
"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.
13
"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 Xxxxx'x Investors Service, Inc.
-------
"Multiemployer Plan" means a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA to which the Borrower or any 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,
plus, in respect of the Fiscal Year ending February 2, 2002, (iv)
$52,000,000 of fabric writeoffs in such Fiscal Year for cancelled
product orders, (v) $51,000,000 of charges in such Fiscal Year due to
excess corporate facilities space, (vi) $25,000,000 of charges in such
Fiscal Year due to workforce reduction initiatives, and (vii)
$15,000,000 of charges due to distribution center closings in such Fiscal
Year.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
-------------------
"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). 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.
14
"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.
"Other Taxes" has the meaning specified in Section 4.02(b).
-----------
"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,
Performance Level VI, Performance Level VII, or Performance Level VIII as
identified by reference to the Public Debt Rating 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 Standard & Poor's or Baa1 by Moody's
--
-------------------------------------------------------------------------------
Level II Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level I but at least
BBB by Standard & Poor's or Baa2 by Moody's
--
-------------------------------------------------------------------------------
Level III Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level II but at
least BBB- by Standard & Poor's and Baa3 by
---
Moody's
-------------------------------------------------------------------------------
Level IV Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level III but at
least BBB- by Standard & Poor's or Baa3 by
--
Moody's
-------------------------------------------------------------------------------
Level V Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level IV but at
least BB+ by Standard & Poor's and Ba1 by
---
Moody's
-------------------------------------------------------------------------------
Level VI Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level V but at least
BB by Standard & Poor's or Ba2 by Moody's
--
-------------------------------------------------------------------------------
Level VII Long-Term Senior Unsecured Debt of the
Borrower Rated less than Level VI but at
least BB- by Standard & Poor's or Ba3 by
--
Moody's
-------------------------------------------------------------------------------
Level VIII Long-Term Senior Unsecured Debt of the Borrower Rated
less than Level VII
-------------------------------------------------------------------------------
For purposes of this definition, the public debt ratings above shall be
determined by the lowest rating that has been most recently announced by
either S&P or Moody's, as the case may be, for any class of
non-credit-enhanced long-term senior unsecured debt issued by the Borrower.
For purposes of this definition, (a) if only one of S&P and Moody's shall
have in effect a public debt rating, the Performance Level shall be
determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a public debt rating, the applicable
Performance
15
Level will be Performance Level VIII; (c) if the ratings on the Borrower's
long-term senior unsecured debt established by S&P and Moody's shall fall
within different levels and are equal to or higher than BBB- and Baa3,
respectively, the Performance Level in regards to the Applicable Letter of
Credit Fee, Applicable Facility Fee and Applicable Margin will be
determined by the higher of the two ratings, provided, that, if either of
-------- ----
such ratings by S&P and Moody's are less than BBB- or Baa3, respectively,
the Performance Level in regards to the Applicable Letter of Credit Fee,
Applicable Facility Fee and Applicable Margin will be determined by the
lower of the two ratings; provided, further, that, in the event that the
-------- ------- ----
lower of such ratings is more than one level below the higher of such
ratings, the Performance Level in regards to the Applicable Letter of
Credit Fee, Applicable Facility Fee and Applicable Margin will be
determined based upon the level that is one level above the lower of such
ratings; (d) if any rating established by S&P or Moody's shall be changed,
such change shall be effective as of the date on which such change is first
announced publicly by the rating agency making such change; and (e) if S&P
or Moody's shall change the basis on which ratings are established, each
reference to the public debt rating announced by S&P or Moody's, as the
case may be, shall refer to the then equivalent rating by S&P or Moody's,
as the case may be.
"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 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); and
16
(vii) Liens arising out of or pursuant to this Agreement or any
Collateral Document.
"Person" means an individual, partnership, 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.
---------
"Reference Banks" means Citibank, N.A., 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).
--------
"Requirements of Law" means, with respect to any Person, all laws,
-------------------
constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, 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 XxXxxx-Xxxx
---
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).
------------------
17
"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 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.
"Subsidiary Guaranty" has the meaning specified in Section 5.01(b).
-------------------
"Subsidiary Swing Line Obligations" has the meaning specified in
---------------------------------
Section 2.13(b).
"Subsidiary LC Obligations" has the meaning specified in Section
-------------------------
3.13(b).
"Swing Line Advance" means an advance made by a Swing Line Lender
------------------
pursuant to Section 2.01(b).
"Swing Line Lender" means each Lender designated as such on the
-----------------
signature pages hereto.
"Swing Line Commitment" means, with respect to each Swing Line Lender
---------------------
at any time, the amount set forth opposite such Swing Line Lender's name on
Schedule I-A hereto under the caption Swing Line Commitment, as such amount
---------------------
may be reduced or increased from time to time
18
pursuant to Section 2.04(b), provided, that the aggregate of all Swing Line
--------
Commitments 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).
-----
"Termination Date" means, March 6, 2004, or the earlier date of
----------------
termination in whole of the Commitments pursuant to Section 2.04 or 8.01.
"Total Assets" of any Person means all property, whether real,
------------
personal, tangible, intangible or otherwise, which, in accordance with
generally accepted accounting 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.
---
"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).
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 Advance 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, either (i) 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 LC
Commitment in effect from time to time, or (ii) 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 outstanding aggregate amount of all Letter of Credit
Liability in respect of Standby Letters of Credit shall exceed the aggregate
amount of the Advance Commitment in effect from time to time. Each Borrowing
shall be in an aggregate amount not less than (A) $15,000,000, in the case of a
Borrowing
19
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 Advance Commitments. Within the limits of each Lender's Advance
Commitment, the Borrower may from time to time borrow, prepay pursuant to
Section 2.10 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 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 (i) in an amount, when combined with all
Swing Line Advances of all Swing Line Lenders, not to exceed the aggregate
Swing Line Commitment of all Swing Line Lenders at such time and (ii) in an
amount, when combined with all Swing Line Advances by such Swing Line
Lender, not to exceed the Swing Line Commitment of such Swing Line Lender
at such time. No Swing Line Advance shall be used for the purpose of
funding the payment of principal of any other Swing Line Advance. 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),
prepay pursuant to Section 2.10(b) 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, 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)) 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.
20
(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 LC Commitment Percentage) of any outstanding Swing
Line Advance by such Swing Line Lender 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). 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;
(C) the occurrence and continuance of any Default or Event of
Default;
21
(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.
(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
22
original principal amount equal to such Lender's Advance 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, on the amount of such Lender's Advance Commitment (computed
without giving effect to any usage of the Advance Commitment of such Lender),
payable quarterly in arrears on the last day of each January, April, July and
October and on the Termination Date.
(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 Advance 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 of the Advance Commitments; Reduction and
----------------------------------------------------------------
Increase of the Swing Line Commitments. (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 Advance
Commitments of the Lenders, provided, that, after giving effect to such
-------- ----
reduction, the Advance Commitments are not less than the sum of the aggregate
amount of all Letter of Credit Liability in respect of then outstanding Standby
Letters of Credit, 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.
(b) (i) 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 respective Swing
Line Lenders to irrevocably terminate in whole or reduce in part the unused
portion of the Swing Line Commitment of one or more Swing Line Lenders or
increase the amount of any Swing Line Commitment; provided, that, after
-------- ----
giving effect to any such reduction, the Swing Line Commitment of any Swing
Line Lender is not less than the outstanding amount of all Swing Line
Advances by such Swing Line Lender; 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) or as otherwise agreed to by
the respective Swing Line Lender, provided, further, that, the aggregate
-------- ------- ----
amount of all Swing Line Commitments, after giving effect to any increase
thereof proposed herein, shall not exceed $75,000,000 and at the time of
any proposed increase in any 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 a Swing Line Commitment in the Register;
and that the amount of any increase or decrease in the aggregate Swing Line
Commitment will decrease or increase, respectively, the aggregate Issuing
Commitments by such amount, and with
23
such amount to be applied to ratably decrease or increase the Issuing
Commitment of each Issuing Bank on the basis of their then existing Issuing
Commitments, and the Agent shall promptly after each such increase or
decrease notify the Borrower and each Issuing Bank of the Issuing
Commitment then in effect of each Issuing Bank.
(ii) The Borrower may at any time, upon at least 2 Business
Days' prior written notice to the respective Swing Line Lender and the
Agent, increase the Swing Line Commitment of a Swing Line Lender and
at the same time reduce by an equivalent amount the Swing Line
Commitment of one or more of the other Swing Line Lenders; provided,
--------
that such notice is consented to by the Swing Line Lender whose
----
commitment is increased and provided, further, that the Agent shall
-------- -------
record each such increase and decrease of the Swing Line Commitment of
the respective Swing Line Bank in the Register, provided, further,
-------- -------
that after giving effect to such reduction of a Swing Line Lender's
Swing Line Commitment, such Swing Line Commitment is not less than the
outstanding amount of all Swing Line Advances of such Swing Line
Lender.
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) owing
to each Lender, together with accrued interest and fees thereon, on March 1,
2003, and shall not be permitted to request any Advance for ten days thereafter,
provided, that if a certified resolution (in form and substance satisfactory to
--------
the Agent) of the board of directors of the Borrower authorizing it to incur
indebtedness hereunder to the Termination Date (or other evidence reasonably
satisfactory to the Agent with respect to the Borrower's ability to incur such
indebtedness) is delivered to the Agent prior to February 15, 2003, then the
Borrower shall be permitted to request Advances hereunder on and after March 1,
2003 and shall repay in full the principal amount of each such Advance, 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
24
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.
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), 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).
(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, the Agent
---------------
will forthwith so notify the Borrower and the Lenders
25
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 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, 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
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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 York City time)) stating the
26
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
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(x) each partial prepayment shall be in an aggregate principal amount not
less than $15,000,000 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).
(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 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) 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
27
obligated to compensate such Lender pursuant to Sections 2.11(a) or
2.11(b), 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.
(b) Without affecting its rights under Section 2.12(a) 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
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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 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.
--------
28
(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 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
29
Swing Line 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
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 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
30
Obligations or the Subsidiary Operating Indebtedness Obligations is rescinded or
must otherwise be returned by any Swing Line Lender, 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 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;
31
(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.
(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 of this Agreement 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 of this Agreement by treating the
32
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 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.
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 LC 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 LC Commitments in effect from time to
time;
(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;
33
(iii) after giving effect to the Issuance of any Standby Letter of
Credit, the aggregate amount of all Letter of Credit Liability in respect
of outstanding Standby Letters of Credit shall exceed $100,000,000; or
(iv) 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, 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) 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, 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 of Credit not later than the date which occurs one Business Day
after 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
34
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 (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 LC
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) 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 LC 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 participation therein, in lawful money of the
United States, the Dollar equivalent of funds so received, in an amount
equal to such Lender's LC 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) other
than in connection with circumstances involving any willful misconduct or
gross negligence of such Issuing Bank in Issuing a Letter of
35
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) 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) Facility Fee. The Borrower hereby agrees to pay to the Agent for
------------
the account of each Lender (in accordance with its LC Commitment
Percentage) a letter of credit facility fee, accruing 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 a 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 total amount of LC Commitments
in effect from time to time from and after such date (regardless of the
actual or deemed usage thereof) less the total amount of Advance
----
Commitments in effect from time to time from and after such date
(regardless of the actual or deemed usage thereof), 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 and on
the first day after the Termination Date on which no Letters of Credit are
outstanding.
(b) Letter of Credit Fee. The Borrower hereby agrees to pay to the
--------------------
Agent for the account of each Lender (in accordance with its LC 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.
(c) 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.
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
36
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;
(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,
37
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 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 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), 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
38
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 LC Commitments; Additional
-------------------------------------------------------------------
Issuing Banks. (a) The Borrower shall have the right, upon at least three
-------------
Business Days' notice to the Issuing Banks and the Agent, to irrevocably
terminate in whole or reduce in part an Issuing Bank's Commitment (which
reduction shall without further act reduce in whole or ratably in part the
respective LC Commitments of the Lenders), 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 the
LC Commitments below the sum of the then outstanding aggregate amount of
Borrowings, the aggregate Swing Line Commitment then in effect (computed without
giving regard to usage), and the then outstanding aggregate amount of all Letter
of Credit Liability.
(b) Not more frequently than twice in any period of twelve consecutive
calendar months occurring after the date hereof, the Borrower shall have
the right prior to the Termination Date to increase the amount of the LC
Commitments of one or more Lenders and the Issuing Commitments of the
Issuing Banks and add one or more Assuming Lenders as Lenders or as Issuing
Banks (each such increase being an "LC Commitment Increase"), provided that
----------------------
such Lenders shall have consented to such LC Commitment Increase (which
consent may be granted or withheld by any Lender in its sole and absolute
discretion), on and subject to the following terms:
(i) The aggregate amount of all LC Commitment Increases
shall not exceed $300,000,000 after the date hereof;
(ii) The amount of each LC 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) Each LC Commitment Increase shall increase the
aggregate amount of the LC Commitments and of the Issuing Commitments
by the same amount;
(iv) No proposed LC 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 (an "LC Commitment Increase Notice"),
-----------------------------
dated not earlier than 60 days before the proposed LC Commitment
Increase Effective Date (as defined below) therefor and not later
than 30 days before such proposed LC Commitment Increase
Effective Date, that (1) specifies (w) 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 LC Commitment Increase, (y) the
Lenders whose LC Commitments are to be increased by the proposed
LC Commitment Increase and/or the Assuming
39
Lenders which are to become Lenders and the amount by which each
such Lender's LC Commitment is to be so increased and/or the
amount of each such Assuming Lender's LC Commitment and (z) the
date (the "LC Commitment Increase Effective Date") on which the
-------------------------------------
proposed LC Commitment Increase shall become effective, and (2)
has been signed by each Lender whose LC Commitment is to be
increased, evidencing the consent of such Lender to the proposed
LC 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 LC Commitment Increase Effective
Date of the proposed LC Commitment Increase (1) the following
statements shall be true (and the giving of the applicable LC
Commitment Increase Notice shall constitute a representation and
warranty by the Borrower that on such LC Commitment Increase
Effective Date such statements are true):
(x) The representations and warranties contained in
Section 6.01 are correct on and as of such LC Commitment
Increase Effective Date before and after giving effect to
the proposed LC 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 LC 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;
(v) Promptly following its receipt of an LC 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 LC Commitment Increase on and
as of the proposed LC 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 LC Commitment Increase
Effective Date and from and after such date, (1) the LC Commitments of
the Lenders consenting to such LC Commitment Increase shall be
increased by the respective amounts specified in the LC Commitment
Increase Notice pertaining thereto, (2) references herein to the
amounts of the Lenders' respective LC Commitments shall refer to
respective amounts giving effect to such LC 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 LC
Commitment and, if applicable, with respect to any increased Issuing
Commitment of an Issuing Bank in the Register;
(vi) It is understood that no Lender or Issuing Bank shall
have any obligation whatsoever to agree to any request made by the
Borrower for an LC Commitment Increase;
(vii) As part of such LC Commitment Increase, such Lender or
Assuming Lender shall purchase assignments in the Advances and Advance
40
Commitments of the other Lenders so that after giving effect thereto,
the percentage held by each Lender of the aggregate Advance
Commitments is the same as prior to such LC 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). In connection therewith, on each LC Commitment Increase
Effective Date, (A) each Lender whose LC Commitment has been increased
(each such Lender being an "Increasing Lender") shall, before 2:00
-----------------
p.m. (New York City time) on such LC 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, 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 LC Commitment as a percentage of the aggregate LC Commitments of
the Lenders (including each such Assuming Lender) outstanding after
giving effect to the relevant LC 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 LC 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 in same day
funds, an amount equal to such Assuming Lender's ratable portion of
the Advances then outstanding (calculated based on its LC Commitment
as a percentage of the aggregate LC Commitments of the Lenders
(including each such Assuming Lender) outstanding after giving effect
to the relevant LC Commitment Increase); and
(viii) 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 LC Commitment as a percentage of the aggregate LC
Commitments of the Lenders outstanding after giving effect to the
relevant LC Commitment Increase).
(c) 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
LC Commitment Increase, designate as an Issuing Bank any Lender that has
agreed in writing to act as an Issuing Bank and 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 record all relevant information with
respect to such Lender as such Issuing Bank and its Issuing Commitment in
the Register.
(d) The Borrower may at any time, upon at least 5 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 letters of credit issued pursuant to the Existing 364-Day Agreement
and letters of credit and other credit support instruments issued by one or more
Lenders pursuant to agreements between the Borrower or an LC
41
Subsidiary and such Lender (collectively, 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, and calculating the usage of the respective Issuing Bank's
commitment under Section 3.01) 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 LC 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/LC Commitments. For purposes of
----------------------------------------
determining the unused portion of an Issuing Bank's commitment specified in
Section 3.01 and of each Lender's LC 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 commitment used in connection
with the Issuance of such Letter of Credit and the resulting proportionate
amount of each Lender's LC Commitment used, such reduction to be calculated
in accordance with its LC Commitment Percentage. Further adjustments shall
be made with respect to the unused portion of an Issuing Bank's commitment
to Issue Letters of Credit and each such Lender's LC Commitment based upon
fluctuations thereafter in the value of the Alternative Currency of such
Letter of Credit as provided in subsection (c) below.
(c) Xxxx 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 LC
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 (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
42
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 LC 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.
(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 (i) such
Letter of Credit Liability and (ii) the Dollar amount of any excess of
Letter Credit Liability over total LC Commitments to the Agent, the
Borrower and each Lender, and the Borrower shall promptly upon receipt
thereof make the payments provided for in subsection (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 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;
43
(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 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.
(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;
44
(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
(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
45
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.
ARTICLE IV
PAYMENTS, TAXES, EXTENSIONS, ETC.
SECTION 4.01 Payments and Computations/Borrowings. (a) Except as
-------------------------------------------------
otherwise provided in Section 4.02, 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 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 Section 2.07, 2.11, 3.10(b) or 4.02) 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), 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.
(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 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
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, by 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
46
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 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
47
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 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) (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
48
first two sentences of subsection (d) above), such Lender Party shall not
be entitled to indemnification under Section 4.02(a) 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.
(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
49
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) 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 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)
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, 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 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 in same day funds as provided in
50
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) 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
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), 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) 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.
(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 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
51
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 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
52
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) 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.
(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
53
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 4.02 and (ii) otherwise
to cooperate with the Borrower to minimize the amount payable by the
Borrower or any LC Subsidiary pursuant to this Section 4.02; 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.
(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) in excess of its LC 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 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.
54
(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).
(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), 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;
55
(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, including without limitation, executed Control
Agreements in respect of all "Securities Account" and "Deposit
Accounts" as contemplated by this Agreement and the Security
Agreement.
(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, Xxxxxxx & Xxxx
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 Agreements 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 Agreements (except for the Existing Letters of
Credit issued thereunder) 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 Agreements.
(e) The Borrower shall have issued convertible notes in a principal
amount of not less than $1,000,000,000.
(f) A preliminary valuation review of the domestic trademarks and
inventories of the Loan Parties that is satisfactory to the Agent and the
Joint Lead Arrangers.
(g) A certificate as to the amount of cash and property, respectively,
on the close of business on the Business Day immediately preceding the
Effective Date in the Deposit Accounts and Securities Accounts,
respectively, referred to in Section 5.01(b)(vi) above.
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
56
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 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, 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, and
(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.
(c) The making of such Advance will be in compliance with the
respective criteria set forth in Section 2.01(a)(i) and (ii) and Section
2.01(b)(i) and (ii), 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(i),(ii) and (iii), 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 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.
57
(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 3, 2001, 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. Since February 3, 2001, there has been no Material Adverse Change.
(f) 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, 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.
(g) 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.
(h) 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.
(i) 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 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.
(j) 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.
(k) 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.
58
(l) 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.
(m) 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.
(n) The Borrower is, individually and together with its Subsidiaries,
Solvent.
(o) 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 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.
(p) 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.
(q) 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
59
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 shall not prohibit, or be
violated as a result of, any transactions be 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
60
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.
(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 (c) or (f) 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
61
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 (c) or (f) 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) 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 its Subsidiary in such
non-wholly owned Domestic Subsidiary and (C) within 45 days after the
formation or acquisition of a first-tier Special Purpose Subsidiary
and within 60 days after the formation or acquisition of a first-tier
Foreign Subsidiary, duly execute and deliver, and cause its respective
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 a supplement attached as an exhibit thereto)
with respect to, in the case of each such first-tier Special Purpose
Subsidiary, the Equity Interests held by the Borrower or such Domestic
Subsidiary in such Special Purpose Subsidiary and, in the case of each
such first-tier Foreign Subsidiary, 65% of the voting Equity Interests
and 100% of the non-voting Equity Interests held by the Borrower or
such Domestic Subsidiary in such first-tier Foreign 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 (c) or (f) 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 (c) or (f) 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
62
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
(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 or any Foreign 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 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.
63
(iv) (A) Maintain, and cause each of its Domestic Subsidiaries
(other than Excluded Subsidiaries referred to in clauses (d), (e), (f)
and (g) of the definition thereof) to maintain, no more than an
aggregate amount of $25,000,000 in all deposit accounts and securities
accounts of the Borrower and all such Domestic Subsidiaries (other
than such Excluded Subsidiaries), except for deposit accounts and
securities accounts with the Collateral Agent or with any bank or
financial institution which has entered into an acceptable Control
Agreement with the Collateral Agent and maintain, and cause each of
its Domestic Subsidiaries (other than such Excluded Subsidiaries) to
maintain, in such deposit accounts and securities accounts all amounts
transferred therein except such amounts which are transferred
therefrom from time to time in the ordinary course of business to pay
obligations of the Borrower and its Subsidiaries; provided, however,
-------- -------
that the Borrower and such Domestic Subsidiaries may maintain
retirement plan accounts and other similar accounts maintained in the
ordinary course of business without regard to such restriction;
(B) transfer, and cause each of such Domestic Subsidiaries
to transfer, all cash received in their operations as promptly as
practicable after receipt thereof (and in any event no later than
the Business Day immediately succeeding receipt thereof) by each
bank or other financial institution receiving or holding deposits
for the Borrower or such Domestic Subsidiary to a deposit account
of the Collateral Agent or a deposit account or a securities
account maintained with a financial institution which has entered
into an acceptable Control Agreement with the Collateral Agent,
provided that such cash need not be required to be transferred on
any Business Day from any such account in which the total funds
in such account at the end of such Business Day are less than
$5,000,000; and
(C) agrees not to enter into, and agrees to cause each of
such Domestic Subsidiaries not to enter into, any agreement,
other than the Loan Documents, that would restrict the flow of
cash received in their operations as described in subclause (B)
above.
(v) (A) No later than sixty (60) days after the Effective Date,
deliver to the Agent, a favorable opinion of counsel for GPS
(Maryland), Inc., with respect to the matters set forth in paragraphs
1, 2, 3(i), 4 and 5 of the opinion delivered on the Effective Date
pursuant to Section 5.01(b)(viii) hereof (with appropriate changes to
reflect the law of the State of Maryland) and certified copies of
resolutions of the board of directors (or persons performing similar
functions) of such foreign Loan Party approving this 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 incorporation, 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 Section 7.01(j)(v)(A) above and thereafter until such documents are
64
delivered to the Agent, (i) 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 (ii) 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. The remedies provided herein are the exclusive remedies
for the failure to timely deliver the respective documents herein
referred to.
(B) Not later than sixty (60) days after the Effective Date,
take such actions, and cause each other respective Loan Party to
take such actions, so that the Subsidiaries listed on Schedule XV
issue certificated securities evidencing the ownership interest
therein of the respective Loan Party and pledge, and cause to be
pledged, to the Collateral Agent such certificated securities
pursuant to the Security Agreement.
(vi) No later than the tenth Business Day after the Effective Date,
take all necessary actions, and cause each respective Loan Party to take
all necessary actions, so that each Securities Account (as defined in the
Security Agreement and set forth on Schedule VII thereto on the Effective
Date) is subject to an effective Securities Account Control Agreement in
favor of the Collateral Agent by such tenth Business Day or if any such
Securities Account is not then subject to such Securities Account Control
Agreement, transfer by such tenth Business Day all funds in such Securities
Account to a Deposit Account subject to an Account Control Agreement (each
as defined in the Security Agreement) or a Securities Account then subject
to such Securities Account Control Agreement.
(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
Agreements 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 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,
65
(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 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, and
(v) 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 existing on the Effective Date and described on
Schedule XIII hereto;
(iii) 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;
(iv) Debt incurred after the date of this Agreement and secured
by Liens expressly permitted under Section 7.02(a)(ii) in an aggregate
principal amount not to exceed, when aggregated with the principal
amount of all Debt incurred under clause (v) of this Section 7.02(b),
$50,000,000 any time outstanding;
(v) 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 (iv) of this
Section 7.02(b), do not exceed $50,000,000 at any time outstanding;
(vi) 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;
(vii) Endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(viii) Debt referred to in Section 7.02(a)(iii) in a principal
amount not in excess of the amount referred to therein;
66
(ix) Debt extending the maturity of, or refunding, refinancing or
replacing, in whole or in part, any Debt incurred under clause (ii) 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; and
(x) 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.
(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). 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,
------------
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 during the term of this Agreement is less than 10% 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).
67
(ii) Investments. 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 and the purchase price and dollar amount of capital
contributions made with respect to any such Investment during the term
of this Agreement is less than 10% 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.
The foregoing limitation shall not restrict the Borrower's and its
Subsidiaries' ability to (x) 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 or (y) 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 Aaa
by Xxxxx'x or AAA by S&P) as such Schedule may be amended from time to
time by the Borrower with consent of the Agent. 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:
(i) the Borrower may (A) declare and pay dividends and
distributions 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 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, 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;
68
(ii) any Subsidiary of the Borrower may declare and pay cash
dividends (A) to the Borrower or any other Loan Party and (B) to a
Subsidiary of any Loan Party; and
(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).
(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) the Borrower may sell, lease, transfer or otherwise
dispose of any of its property or assets to any Guarantor, any
Guarantor may sell, lease, transfer or otherwise dispose of any of its
property or assets to the Borrower or any other Guarantor, and any
Subsidiary of the 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 sell, lease,
transfer or otherwise dispose of any obsolete, damaged or worn-out
equipment or any other equipment that is otherwise no longer useful in
the conduct of their business and may transfer certain distribution
center operational assets in Kentucky to a Special Purpose Subsidiary
or a Subsidiary thereof;
(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 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) so long as the aggregate
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 (iv) in any year does not exceed 15% of the
book value of the property and 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.
69
(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, in excess of ten
years, in each case from the date the Borrower or such Hedge Subsidiary
enters into any such agreement, and with each such agreement to be
denominated in U.S. Dollars, Canadian Dollars, Japanese Yen, Euro or any
other major European currency, 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) 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 than in the ordinary course
of business), to any Special Purpose Subsidiary, except as provided in
Section 7.02(g)(iii); 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, 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
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this Agreement, any Loan Party or any Subsidiary thereof may convey or
otherwise transfer trademarks and service marks to a Special Purpose
Subsidiary.
SECTION 7.03 Financial Covenant. 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 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) Asset Coverage Ratio. Maintain an Asset Coverage Ratio as of the
--------------------
last day of each Fiscal Quarter and as of the last day of the first two
Fiscal Months of the last Fiscal Quarter in each Fiscal Year of not less
than 1.75:1.00; provided, that, to the extent that the amount of cash and
-------- ----
cash equivalents of the Borrower and its Subsidiaries, as reflected on the
balance sheet of the Borrower as of the last day of the respective Fiscal
Quarter or Fiscal Month, less $210,000,000 exceeds the sum of the then
outstanding aggregate amount of all Letter of Credit Liability and the then
outstanding amount of all Advances as of such last day, then the Borrower
shall be deemed to be in compliance with this covenant for the applicable
Fiscal Quarter or Fiscal Month, as the case may be provided, further that
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the Borrower shall deliver to the Agent and each Lender no
70
later than 20 days after the end of each such Fiscal Month a certificate in
the form of Compliance Certificate attached hereto as Exhibit I indicating
the compliance or non-compliance with this conveant.
(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
------------------------------------
First Fiscal Quarter 2002 1.2:1.0
------------------------------------
Second Fiscal Quarter 2002 1.2:1.0
------------------------------------
Third Fiscal Quarter 2002 1.2:1.0
------------------------------------
Fourth Fiscal Quarter 2002 1.2:1.0
------------------------------------
First Fiscal Quarter 2003 1.4:1.0
------------------------------------
Second Fiscal Quarter 2003 1.4:1.0
------------------------------------
Third Fiscal Quarter 2003 1.4:1.0
------------------------------------
Fourth Fiscal Quarter 2003 1.4:1.0
------------------------------------
(c) Maximum Capital Expenditures. Not make Capital Expenditures, and
----------------------------
cause its Subsidiaries not to make Capital Expenditures, (i) in any Fiscal
Year in an aggregate amount for the Borrower and its Subsidiaries in excess
of $425,000,000 or (ii) in the first Fiscal Quarter of Fiscal Year 2004 in
the aggregate amount for the Borrower and its Subsidiaries in excess of
$100,000,000.
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 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 (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
71
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 (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;
(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 2002, projections for
Fiscal Year 2003 in substantially the same format and containing
substantially the same information as the projections for Fiscal Year 2002
which were set forth in the Information Memorandum; 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 "xxx.xxxxxx.xxx" or when such reports
containing such financial statements or other
72
materials are posted on the SEC's website on the internet at "xxx.xxx.xxx";
provided, however, that the Borrower shall deliver paper copies of such
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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
(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 7.01(j)(vi), 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); (ii) any covenant contained in Section 7.01(j)(iv) hereof on its
part to be performed or observed if the failure to perform or observe such
covenant shall remain unremedied for three Business Days after any Loan
Party becomes aware thereof or after written notice thereof shall have been
given to such Loan Party by an Issuing Bank, the Agent or any Lender; or
(iii) 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) The Borrower or any of its Subsidiaries 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 the Borrower or such Subsidiary 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,
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
73
arrangements) that the Borrower or its respective Subsidiary would be
required to pay if such Hedge Agreement were terminated at such time);
(e) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it 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
limitation, the entry of an order for relief against, or the appointment of
a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of
its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) One or more judgments or orders for the payment of money in excess
of $50,000,000 in the aggregate shall be rendered against the Borrower or
any of its Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(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) 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) 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
74
ERISA, and, as a result of such reorganization, insolvency or
termination, the aggregate annual contributions of the Loan Parties
and the 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;
(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), 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 the Borrower
or any of its Subsidiaries 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 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
75
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
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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; (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
------------------------------------------
Advance Commitment, its LC 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 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
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
76
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 LC 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, 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
77
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 Documentation Agent, Co-Syndication Agents and Joint Lead
----------------------------------------------------------------------
Arrangers. The financial institutions identified as Co-Syndication Agents, the
---------
Documentation Agent, 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, Documentation 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,
Documentation Agent, Joint Book Manager or Joint Lead Arranger in deciding to
enter into this Agreement or in taking or not taking action hereunder.
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. Without limitation of the
---------------------------------
provisions of the Collateral Documents with respect thereto, upon the sale of
outstanding shares of capital stock and other equity, ownership and profit
interests in any Guarantor in a transaction which is permitted under Section
7.02(g), then upon request by the Borrower, the Agent, on behalf of each Lender
Party, shall confirm in writing that the liability of such Guarantor under the
Subsidiary Guaranty in respect of the Obligations hereunder 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 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.
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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, (ii) increase the Commitments of the
Lenders (other than as provided for in Section 2.04(b) and 3.10(b)), (iii)
reduce the principal of, or interest on, the Advances made pursuant to
Section 2.01(a) or any 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) 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 Advance
Commitments, LC Commitments or of the aggregate unpaid principal amount of
the Advances made pursuant to Section 2.01(a) 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, (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) and mailed,
sent by overnight courier, telecopied or delivered, if to the Borrower or any
other Loan Party, at its address at 000 Xxxxxx Xxxxxx, Xxx Xxxxx, XX 00000
Attention: Treasurer, Telecopier: 000-000-0000; with a copy to 0 Xxxxxx Xxxxxx,
Xxx Xxxxxxxxx, XX 00000, Attention: General Counsel, Telecopier: 000-000-0000;
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 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Credit Administration, Telecopier: 000-000-0000; 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: Xxxxxxx
Xxxxxxx, Telecopier: 000-000-0000, 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, be effective when received, respectively; and when delivered by
hand, be effective upon delivery except that
79
notices and communications to the Agent pursuant 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 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 fees and out-of-pocket expenses of counsel for the Agent
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, acceleration of the maturity of the Advances pursuant
to Section 8.01 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 as a result of a demand by the Borrower pursuant to
Section 10.07(a), 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 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 Book Manager, each Joint
Lead Arranger and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party")
-----------------
from and against any and all claims, 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
80
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) of this Agreement 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 to authorize the Agent to
declare the Advances due and payable pursuant to the provisions of Section 8.01
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), whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. 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, 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 Advance Commitment, the
Advances owing to it, its LC 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 Advance Commitment,
Advances, LC Commitment and participations in Letter of Credit Liability and
Swing Line Advances, that is constant
81
and not varying over time, (ii) the respective amounts of the rights and
obligations under the Advance 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 (which shall not
unreasonably withhold its consent); 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 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 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
82
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.
(c) The Agent shall maintain at its address referred to in Section
10.02 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 LC Commitment of and Advance Commitment of, and principal
amount of the Advances owing to, each Lender from time to time and the
names and addresses and the Issuing Commitment 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 Advance
Commitment and LC Commitment and the Advances owing to it; provided,
--------
however, that (i) such Lender's obligations under this Agreement
-------
(including, without limitation, its Advance Commitment to the Borrower
hereunder and LC 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
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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.
(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,
--------
83
however, that no Lender shall be obligated to disclose such information if
-------
the disclosure thereof would constitute a violation of law or regulation or
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 Advance Commitment and LC 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
2.11, 4.02 or 4.06, then, subject to Section 10.07(a) 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) 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 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
84
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).
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(c), 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
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 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
85
CONNECTION WITH THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
[The remainder of this page intentionally left blank.]
86
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/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
87
THE LC SUBSIDIARIES:
--------------------
BANANA REPUBLIC DIRECT, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
BANANA REPUBLIC, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
OLD NAVY INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
OLD NAVY (CANADA) INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
88
OLD NAVY DIRECT, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (CANADA) INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (DEUTSCHLAND) GMBH
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (IRELAND) LIMITED
By: /s/ XXXXX XXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
89
GAP INTERNATIONAL SOURCING
LIMITED
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING FZE
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(MEXICO) S.A. DE C.V.
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING PTE. LTD.
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
90
GAP (JAPAN) K.K.
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING
(HOLDINGS) LIMITED
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (NETHERLANDS) B.V.
By: /s/ XXXX RACER
--------------------------------------
Name: Xxxx Racer
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL B.V.
By: /s/ XXXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
91
GPS CONSUMER DIRECT, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP DIRECT, INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (FRANCE) SAS
By: /s/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: President
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GOLDHAWK BV
By: /s/ XXXXX XXXX
--------------------------------------
Name: Xxxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
92
GPS (GREAT BRITAIN) LIMITED
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
93
THE SUBSIDIARY BORROWERS:
------------------------
GAP INTERNATIONAL SOURCING LIMITED
By: /s/ XXXX XXXX
-----------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING PTE. LTD.
By: /s/ XXXX XXXX
-----------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL SOURCING (HOLDINGS) LIMITED
By: /s/ XXXX XXXX
-----------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (JAPAN) K.K.
By: /s/ XXXX XXXX
-----------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
94
GAP (NETHERLANDS) B.V.
By: /s/ XXXX RACER
--------------------------------------
Name: Xxxx Racer
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP INTERNATIONAL B.V.
By: /s/ XXXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
OLD NAVY (CANADA) INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (CANADA) INC.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
95
GPS (GREAT BRITAIN) LIMITED
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (ESO) LIMITED
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (UK DISTRIBUTION) LIMITED
By: /s/ XXXXX XXXX
--------------------------------------
Name: Xxxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
GAP (DEUTSCHLAND) GMBH
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
Title: Director
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
96
GAP (FRANCE) S.A.S.
By: /s/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: President
Address for Notices:
-------------------
0 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
97
THE AGENT:
---------
CITICORP USA, INC.
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
THE JOINT BOOK MANAGERS:
----------------------
XXXXXXX XXXXX XXXXXX INC.
By: /s/ XXXXXXX XXXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-In-Fact
BANC OF AMERICA SECURITIES, LLC
By: /s/ XXXXXXXX X. DEL GRANDE
--------------------------------------
Name: Xxxxxxxx X. Del Grande
Title: Managing Director
98
THE CO-SYNDICATION AGENTS:
-------------------------
BANC OF AMERICA SECURITIES LLC
By: /s/ XXXXXXXX X. DEL GRANDE
--------------------------------------
Name: Xxxxxxxx X. Del Grande
Title: Managing Director
HSBC BANK USA
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: First Vice President
X.X. XXXXXX SECURITIES INC.
By: /s/ XXXX XXXXX
--------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
99
THE DOCUMENTATION AGENT:
-----------------------
ABN AMRO BANK N.V.
By: /s/ XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Group Vice President
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
THE JOINT LEAD ARRANGERS:
------------------------
XXXXXXX XXXXX XXXXXX INC.
By: /s/ XXXXXXX XXXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Attorney-In-Fact
BANC OF AMERICA SECURITIES LLC
By: /s/ XXXXXXXX X. DEL GRANDE
--------------------------------------
Name: Xxxxxxxx X. Del Grande
Title: Managing Director
X.X. XXXXXX SECURITIES INC.
By: /s/ XXXX XXXXX
--------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
100
THE LENDERS:
-----------
CITICORP USA, INC.
By: /s/ XXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
000
XXXX XX XXXXXXX, N.A.
By: /s/ XXX XXXXXXXXXX
--------------------------------------
Name: Xxx Xxxxxxxxxx
Title: Vice President
102
HSBC BANK USA
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: First Vice President
103
JPMORGAN CHASE BANK
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
104
ABN AMRO BANK N.V.
By: /s/ XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Group Vice President
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
105
U.S. BANK NATIONAL ASSOCIATION
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
000
XXXXX XXXXXXXX XXXX XX XXXXX
Xx: /s/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
000
XXX XXXX XX XXXX XXXXXX
By: /s/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
108
XXXXX FARGO BANK NA
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK NA
By: /s/ XXXXX X. XXXXXXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Senior Vice President
109
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ XXXXXX XXXXX
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
110
THE ISSUING BANKS:
-----------------
CITIBANK, N.A.
By: /s/ XXXXXX XXXXXX
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
HSBC BANK U.S.A.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: First Vice President
BANK OF AMERICA, N.A.
By: /s/ XXX XXXXXXXXXX
--------------------------------------
Name: Xxx Xxxxxxxxxx
Title: Vice President
111
THE SWING LINE LENDERS:
----------------------
CITIBANK, N.A.
By: /s/ XXXXXX XXXXXX
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
HSBC BANK U.S.A.
By: /s/ XXXXXXX XXXXXXX
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: First Vice President
BANK OF AMERICA, N.A.
By: /s/ XXX XXXXXXXXXX
--------------------------------------
Name: Xxx Xxxxxxxxxx
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: Group Vice President
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
JPMORGAN CHASE BANK
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
000
XXX XXXX XX XXXX XXXXXX
By: /s/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Director
113
HSBC BANK plc.
By: /s/ XXXXXXX XXXXX
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Relationship Manager
114
Schedule I-A
COMMITMENT AMOUNTS
--------------------------------------------------------------------------------------------------
Lender / Swing Lender / Advance LC Commitment Swing Line Issuing
----------------------- ------- ------------- ---------- -------
Issuing Bank Commitment ($)* ($) Commitment Commitment
------------ --------------- --- ---------- ----------
--------------------------------------------------------------------------------------------------
Citicorp USA Inc., as Lender $59,107,142.86 $224,375,000 N/A N/A
--------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, as $59,107,142.86 $224,375,000 N/A N/A
Lender
--------------------------------------------------------------------------------------------------
HSBC Bank USA, as Lender $28,392,857.14 $186,875,000 N/A N/A
--------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V., as $24,857,142.86 $150,000,000 N/A N/A
Lender
--------------------------------------------------------------------------------------------------
Bank of America N.A., as $59,107,142.86 $224,375,000 N/A N/A
Lender, as Lender
--------------------------------------------------------------------------------------------------
U.S. Bank National $21,428,571.43 $ 75,000,000 N/A N/A
Association, as Lender
--------------------------------------------------------------------------------------------------
Bank of Nova Scotia, as $18,714,285.71 $125,000,000 N/A N/A
Lender
--------------------------------------------------------------------------------------------------
First National Bank of Omaha, $ 4,285,714.29 $ 15,000,000 N/A N/A
as Lender
--------------------------------------------------------------------------------------------------
Xxxxx Fargo Bank NA, as $14,285,714.29 $ 50,000,000 N/A N/A
Lender
--------------------------------------------------------------------------------------------------
The CIT Group/Business $35,714,285.71 $125,000,000 N/A N/A
Credit, Inc., as Lender
--------------------------------------------------------------------------------------------------
Citibank, N.A., as Issuing N/A N/A N/A $467,647,058.80
Bank
--------------------------------------------------------------------------------------------------
Bank of America N.A., as N/A N/A N/A $467,647,058.80
Issuing Bank
--------------------------------------------------------------------------------------------------
HSBC Bank USA., as Issuing N/A N/A N/A $389,705,882.40
Bank
--------------------------------------------------------------------------------------------------
Citibank, N.A., as Swing Line N/A N/A $ 5,000,000 N/A
Lender
--------------------------------------------------------------------------------------------------
Bank of America N.A., as Swing N/A N/A $ 5,000,000 N/A
Line Lender
--------------------------------------------------------------------------------------------------
ABN AMRO N.V., as Swing Line N/A N/A $18,000,000 N/A
Lender
--------------------------------------------------------------------------------------------------
-----------------------------
* The Advance Commitment is in effect a subset of the LC Commitment and does
not create additional credit availability.
Sch.-I-A Page 1
--------------------------------------------------------------------------------------------------
JPMorgan Chase Bank, as N/A N/A $ 5,000,000 N/A
Swing Line Lender
--------------------------------------------------------------------------------------------------
HSBC Bank USA and HSBC N/A N/A $25,000,000 N/A
Bank plc., as Swing
Line Lenders
--------------------------------------------------------------------------------------------------
Bank of Nova Scotia, as Swing N/A N/A $17,000,000 N/A
Line Lender
--------------------------------------------------------------------------------------------------
TOTAL $ 325,000,000 $1,400,000,000 $75,000,000 $ 1,325,000,000
--------------------------------------------------------------------------------------------------
Sch.-I-A Page 2
Schedule I-B
LIST OF APPLICABLE LENDING OFFICES
--------------------------------------------------------------------------------------------------------------------
Lender Domestic Lending Office Eurodollar Lending Office
--------------------------------------------------------------------------------------------------------------------
Citicorp USA Inc./ 0 Xxxxx Xxx 0 Xxxxx Xxx
Xxxxxxxx, X.X. Xxx Xxxxxx, XX 00000 Xxx Xxxxxx, XX 00000
Attn: Xxx Xxxxx Attn: Xxx Xxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank JPMorgan Chase Bank JPMorgan Chase Bank
000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx Xxxxx Xxxxxxx, VP
Tel: 000-000-0000 000-000-0000
Fax: 000-000-0000 000-000-0000
--------------------------------------------------------------------------------------------------------------------
HSBC Bank USA One HSBC Center, 26th Floor Xxx XXXX Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxx Xxx Attn: Xxxxx Xxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000 000-0000 Fax: 000 000-0000
--------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V. 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000 Xxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxx Attn: Xxxxxx Xxxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
Bank of America N.A. 0000 Xxxxxxx Xxxx 0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx Xxxx Xxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
U.S. Bank National Association 000 X.X. Xxx Xxxxxx, Xxxxx 000 000 X.X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000 Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxx Xxxxxx Attn: Xxxxx Xxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
First National Bank of Omaha 0000 Xxxxx Xxxxxx 0000 Xxxxx Xxxxxx
Xxxxx, XX 00000 Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx Attn: Xxxxxx Xxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia 000 Xxxxxxxxxx Xxxxxx, xxxxx 2100 000 Xxxxxxxxxx Xxxxxx, xxxxx 0000
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Attn: Xxxx Xxxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx Xxxx XX 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
XXX X0000-000 MAC X0000-000
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx Attn: Xxxxxxx Xxxxxxx
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
--------------------------------------------------------------------------------------------------------------------
Sch.-I-B Page 1
------------------------------------------------------------------------------------------------------------------
The CIT Group/Business 000 X. Xxxxx Xxx., 0xx Xxxxx 300 S. Grand Ave., 3rd Floor
Credit, Inc., Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx or Xxxxxxxx Attn: Xxxxxx X. Xxxxx or Xxxxxxxx
Xxx Mak
Tel: 000 000-0000 or 000 000-0000 Tel: 000 000-0000 or 213 613-2583
Fax: 000 000-0000 Fax: 000 000-0000
------------------------------------------------------------------------------------------------------------------
Sch.-I-B Page 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 Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxx #0, Xxxx xx Xxxxx Xxxx, Xxxx, 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 0000 Xxxxxxxxx
Xxxx., Xxxxxx, Xxxxxxxx, 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 0000 Xxxxxxxxx Xxxx., Xxxxxx,
Xxxxxxxx, dated June 15, 2000 (the Old Navy Outlet Distribution Center)
Sch.-III Page 1
Schedule III
CHANGE OF CONTROL
1. Xxxxxx X. Xxxxxx
2. Xxxxx X. Xxxxxx
3. Xxxxxxx X. Xxxxxxx
4. 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.
5. The executive officers of The Gap, Inc. as of March 7, 2002.
Sch.-III Page 1
Schedule IV
OUTSTANDING BALANCE OF EXISTING LETTERS OF CREDIT
Sch.-IV Page 1
Schedule V
LC SUBSIDIARIES
(As of date of this Agreement)
1. Banana Republic Direct, Inc.
2. Banana Republic, Inc.
3. Gap (Canada) Inc.
4. Gap (Deutschland) GmbH
5. Gap Direct, Inc.
6. Gap (France) SAS
7. Gap International BV
8. Gap International Sourcing FZE
9. Gap International Sourcing (Holdings) Limited
10. Gap International Sourcing Limited
11. Gap International Sourcing (Mexico) S.A. de C.V.
12. Gap International Sourcing Pte. Ltd.
13. Gap (Ireland) Limited
14. Gap (Japan) KK
15. Gap (Netherlands) BV
16. Goldhawk BV
17. GPS Consumer Direct, Inc.
18. GPS (Great Britain) Limited
19. Old Navy (Canada) Inc.
20. Old Navy Direct, Inc.
21. Old Navy Inc.
Sch.-V Page 1
Schedule VI
SUBSIDIARY BORROWERS
Gap (Canada) Inc.
Gap (Deutschland) GmbH
Gap (ESO) Limited
Gap (France) SAS
Gap International BV
Gap International Sourcing (Holdings) Limited
Gap International Sourcing Limited
Gap (Japan) KK
Gap (Netherlands) BV
Gap (UK Distribution) Limited
GPS (Great Britain) Limited
Old Navy (Canada) Inc.
Gap International Sourcing Pte. Ltd.
Sch.-VI Page 1
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 = Xxxxx'x Investors Service, Inc.
S&P = Standard & Poor's Ratings Services, a division of the XxXxxx-Xxxx
Companies, Inc.
Sch.-VII Page 1
Schedule VIII
PLANS
GapShare 401(k) Plan
Gap Inc. Employee Benefits Premium Payment Plan
Gap Inc. Life and Accidental Death and Dismemberment Plan (includes the Business
Travel Accident Plan)
Gap Inc. Health Insurance Plan
Gap Inc. Short-Term Disability Plan
Gap Inc. Long-Term Disability Plan
Gap Inc. Tuition Reimbursement Program
Gap Inc. Vision Plan
Gap Inc. Dependent Care Flexible Spending Account Plan
Gap Inc. Health Care Flexible Spending Account Plan
The Gap, Inc. 2001 Workforce Review Transition Benefits Plan for Employees in
Grades 23 and Below
The Gap, Inc. 2001 Workforce Review Transition Benefits Plan for Employees in
Grades 24 and Above
Banana Republic, Inc. 2001 Field Reorganization Benefits Plan
The Gap, Inc. 2002 Distribution Division Transition Benefits Plan for Employees
in Grades 19 and Below
The Gap, Inc. 2002 Distribution Division Transition Benefits Plan for Employees
in Grades 20 and Above
The Gap Inc. 2002 Transition Benefits Plan for Employees in Grades 19 and Below
The Gap Inc. 2002 Transition Benefits Plan for Employees in Grades 20 and Above
Sch.- VIII page 1
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
Sch.- IX Page 1
Schedule X
ERISA MATTERS
None.
Sch.-X Page 1
Schedule XI
SUBSIDIARIES OF THE BORROWER
-----------------------------------------------------------------------------------------------------------------------------------
Number of
Shares/Units
Percentage Covered By
Subsidiaries of Number of Owned Options, Warrants,
the Borrower Jurisdiction Number of Equity by Borrower Rights of
(except Excluded of Shares/ Units Interests or Any Conversion or Material Assets (if a
Subsidiaries) Organization Authorized Outstanding Subsidiary Purchase Special Purpose Subsidiary)
-----------------------------------------------------------------------------------------------------------------------------------
100 100% None. Holds all U.S. trademarks
Banana Republic CA 1,000 for the Banana Republic
(Apparel) Inc. brand.
-----------------------------------------------------------------------------------------------------------------------------------
n/a 100% None.
Banana Republic DE n/a n/a
(California) LLC
-----------------------------------------------------------------------------------------------------------------------------------
n/a 100% None.
Banana Republic CA n/a n/a
(Florida) LLC
-----------------------------------------------------------------------------------------------------------------------------------
100 100% None.
Banana Republic CA 1,000 n/a
(Holdings) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100 100% Holds all international
Banana Republic CA 1,000 None. trademarks for the Banana
(ITM) Inc. Republic brand.
-----------------------------------------------------------------------------------------------------------------------------------
n/a 100%
Xxxxxx Xxxxxxxx XX x/x Xxxx. x/x
(Xxx Xxxx) LLC
-----------------------------------------------------------------------------------------------------------------------------------
100 100%
Banana Republic CA 1,000 None. n/a
Direct, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100 100%
Banana Republic, DE 1,000 None. n/a
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
1,000 100% Holds all U.S. trademarks
Gap (Apparel) Inc. CA 1,000 None. for the Gap brand.
-----------------------------------------------------------------------------------------------------------------------------------
11,000 100%
Gap (Canada) Inc. Canada Unlimited ordinary; 1 None. n/a
preferred
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Florida) LLC CA n/a n/a None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Georgia) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Indiana) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100,000 100%
Gap (Ireland) Ireland 1,000,000 None. n/a
Limited
-----------------------------------------------------------------------------------------------------------------------------------
Sch.-XI Page 1
-----------------------------------------------------------------------------------------------------------------------------------
Number of
Shares/Units
Percentage Covered By
Subsidiaries of Number of Owned Options, Warrants,
the Borrower Jurisdiction Number of Equity by Borrower Rights of
(except Excluded of Shares/ Units Interests or Any Conversion or Material Assets (if a
Subsidiaries) Organization Authorized Outstanding Subsidiary Purchase Special Purpose Subsidiary)
-----------------------------------------------------------------------------------------------------------------------------------
100 100% Will hold all international
Gap (ITM) Inc. CA 100,000 None. trademarks for the Gap
brand.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Kentucky) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Puerto Rico), Puerto Rico 1,000 1,000 None. n/a
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Tennessee) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap (Wisconsin) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100 100%
Gap Direct, Inc. CA 1,000 None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap Holdings, Inc. CA 1,000 700 None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing CA n/a n/a None. n/a
(Americas) LLC
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing CA 1,000 100 None. n/a
(California) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing Hong Kong 100 100 None. n/a
(Holdings) Limited
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing (JV) LLC CA n/a n/a None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing Thailand 1,000,000 1,000,000 None. n/a
(Thailand) Limited
-----------------------------------------------------------------------------------------------------------------------------------
Gap International 100%
Sourcing (U.S.A.) CA 100 None. n/a
Inc. 100
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap International CA 1,000 100 None. n/a
Sourcing, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Gap International Singapore 100,000 100,000 None.
Sourcing Pte. Ltd.
-----------------------------------------------------------------------------------------------------------------------------------
Sch.-XI Page 2
-----------------------------------------------------------------------------------------------------------------------------------
Number of
Shares/Units
Percentage Covered By
Subsidiaries of Number of Owned Options, Warrants,
the Borrower Jurisdiction Number of Equity by Borrower Rights of
(except Excluded of Shares/ Units Interests or Any Conversion or Material Assets (if a
Subsidiaries) Organization Authorized Outstanding Subsidiary Purchase Special Purpose Subsidiary)
-----------------------------------------------------------------------------------------------------------------------------------
GPS (Bermuda) 100%
Insurance Services 120,000 120,000 None. n/a
Limited Bermuda
-----------------------------------------------------------------------------------------------------------------------------------
100 100%
GPS (Maryland), Inc. MD 10,000 None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
GPS Brand CA 10,000 1,000 None. n/a
Services, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
GPS Consumer CA 1,000 100 None. n/a
Direct, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
GPS Corporate CA 1,000 100 None. n/a
Facilities, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100% Holds distribution center
GPSDC (CADC) LLC CA n/a n/a None. assets.
-----------------------------------------------------------------------------------------------------------------------------------
100% Holds distribution center
GPSDC (Fresno) LLC CA n/a n/a None. assets.
-----------------------------------------------------------------------------------------------------------------------------------
100%
GPSDC (New York) DE 1,000 100 None. n/a
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100% Holds distribution center
GPSDC (WDC) LLC CA n/a n/a None. assets.
-----------------------------------------------------------------------------------------------------------------------------------
100%
GPS Real Estate, CA 1,000 100 None. n/a
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100% Holds all U.S. trademarks
Old Navy CA 1,000 100 None. for the Old Navy brand.
(Apparel) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy DE n/a n/a None. n/a
(California) LLC
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy Canada Unlimited 100 None. n/a
(Canada) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy (East) L.P. CA n/a 99 LP; 1 GP None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy (Florida) CA n/a n/a None. n/a
LLC
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy CA 1,000 100 None. n/a
(Holdings) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Sch.-XI Page 3
-----------------------------------------------------------------------------------------------------------------------------------
Number of
Shares/Units
Percentage Covered By
Subsidiaries of Number of Owned Options, Warrants,
the Borrower Jurisdiction Number of Equity by Borrower Rights of
(except Excluded of Shares/ Units Interests or Any Conversion or Material Assets (if a
Subsidiaries) Organization Authorized Outstanding Subsidiary Purchase Special Purpose Subsidiary)
-----------------------------------------------------------------------------------------------------------------------------------
100% Holds all international
Old Navy (ITM) Inc. CA 1,000 100 None. trademarks for the Old Navy
brand.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy (Puerto Puerto Rico 10,000 1,000 None. n/a
Rico) Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy Direct, CA 1,000 100 None. n/a
Inc.
-----------------------------------------------------------------------------------------------------------------------------------
100%
Old Navy Inc. DE 1,000 100 None. n/a
-----------------------------------------------------------------------------------------------------------------------------------
100%
The Xxxxxx Gap 7,500 1,000 None. n/a
Stores, Inc. CA
-----------------------------------------------------------------------------------------------------------------------------------
100%
XXX Xxxxxx-Xxxxx XX x/x 00 XX; 0 XX Xxxx. n/a
Limited Partnership
-----------------------------------------------------------------------------------------------------------------------------------
Sch.-XI Page 4
Schedule XII
ENVIRONMENTAL MATTERS
None.
Sch.-XII Page 1
Schedule XIII
EXISTING DEBT
-------------------------------------------------------------------------------------------------------------
Amount Type of Debt Date Issued Date Expires
-------------------------------------------------------------------------------------------------------------
Euro 250,000,000 5.0% 5-Year Notes September 1999 September 2004
by Gap International BV
-------------------------------------------------------------------------------------------------------------
US $50,000,000 6.25% 10-Year Notes May 1999 May 2009
by Gap (Japan) KK
-------------------------------------------------------------------------------------------------------------
Euro 1,998,452 Bank Guarantee for lease June 24, 1994 Evergreen
payments in France
Societe Generale
-------------------------------------------------------------------------------------------------------------
Euro 3,536,078 Bank Guarantee for lease April 4, 1997 Evergreen
payments in Germany
Deutsche Bank
-------------------------------------------------------------------------------------------------------------
Sch.-XV Page 1
Schedule XIV
EXCLUDED SUBSIDIARIES
1. Banana Republic (Canada) Inc.
2. Banana Republic (Hong Kong) Limited
3. Banana Republic Limited
4. Banana Republic (Puerto Rico) Inc.
5. Banana Republic Stores Pty Ltd.
6. Gap International, Inc
7. Gap International Sourcing (Honduras) S.A. de C.V.
8. Gap International Sourcing (Mexico) S.A. de C.V.
9. Gap (New Jersey) L.P.
10. GPS Distribution Facilities, LLC
11. GPS Employee Services, Inc.
12. GPS (Japan) Limited
13. GPS Limited
14. GPS Management Services, Inc.
15. GPS Park Restaurant, Inc.
16. GPS (Puerto Rico) Limited
17. GPS Realty Company Inc.
18. GPS (UK) Limited
19. The Pottery Barn West
20. Real Estate Ventures (Glastonbury), Inc.
21. Real Estate Ventures (Xxxx Eagle), Inc.
22. Real Estate Ventures (Wheaton), Inc.
Sch.-XV Page 1
Schedule XV
SUBSIDIARIES FOR WHICH CERTIFICATES TO BE ISSUED
Domestic Subsidiaries:
---------------------
1. Banana Republic (Holdings) Inc.
2. Banana Republic Direct, Inc.
3. Banana Republic, Inc.
4. The Xxxxxx Gap Stores, Inc.
5. Gap Direct, Inc.
6. Gap Holdings, Inc.
7. Gap International Sourcing (California) Inc.
8. Gap International Sourcing (U.S.A.) Inc.
9. GPS Consumer Direct, Inc.
10. GPS Corporate Facilities, Inc.
11. GPS (Maryland), Inc.
12. GPS Real Estate, Inc.
13. GPSDC (New York) Inc.
14. Old Navy Direct, Inc.
15. Old Navy (Holdings) Inc.
16. Old Navy Inc.
Foreign Subsidiaries:
--------------------
1. Gap (Canada) Inc.
2. Gap (Puerto Rico) Inc.
3. Old Navy (Canada) Inc.
4. Old Navy (Puerto Rico) Inc.
5. GPS (Bermuda) Insurance Services Limited
6 Gap International Sourcing Pte. Ltd.
7. Gap (Ireland) Limited
Sch.-XV Page 1
Schedule XVI
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.
Sch.-XVI Page 1
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 March 7, 2002 (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, the Documentation Agent, Xxxxxxx Xxxxx
Barney Inc., Banc of America Securities, LLC and X.X. Xxxxxx 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______, ______.
(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 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 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)(i) and (ii) of the Credit
Agreement.
Very truly yours,
THE GAP, INC
By
----------------------------------------------
Name:
Title:
Exh. A Page 2
EXHIBIT B
FORM OF PROMISSORY NOTE
$_______________ Dated: _________ __, ____
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 March 7, 2002 (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, the
Documentation Agent, Xxxxxxx Xxxxx Barney Inc., Banc of America Securities, LLC
and X.X. Xxxxxx 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 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000] (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.
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.
Exh. B Page 1
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States, without reference to
principles of conflicts of laws other than New York General Obligations Law
(S) 5-1401.
THE GAP, INC.
By
------------------------------
Title:
Exh. B Page 2
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ,
---------
Reference is made to the Credit Agreement, dated as of March __, 2002 (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, the Documentation Agent,
Xxxxxxx Xxxxx Xxxxxx Inc., Banc of America Securities, LLC and X.X. Xxxxxx
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 (i) the Assignor's Advance Commitment and the Advances owing to
the Assignor and (ii) the LC Commitment and participations in Letter of Credit
Liability of the Assignor. After giving effect to such sale and assignment, (x)
the Assignee's Advance Commitment and the amount of the Advances owing to the
Assignee and (y) such Assignee's LC Commitment and participations in Letter of
Credit Liability will be as set forth, respectively, in Section 2 of Schedule 1.
2. The Assignor (i) 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; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto and (iii) 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 (i) 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; (ii) 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 Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
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; (v) 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] (vi)
specifies as its Domestic Lending Office (and address for
Exh. C Page 1
notices) and Eurodollar Lending Office the offices set forth beneath its name on
the signature pages hereof [and (vii) 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, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make (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 ,
-----
Section 1.
Percentage Interest in Advance Commitment and Advances: _____
Percentage Interest in LC Commitment and participations in Letter of
Credit Liability: _____
Section 2.
Assignee's Advance Commitment: $____
Assignee's LC 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 Date*: __________________, ____
[NAME OF ASSIGNOR]
By:
------------------------------
Title:
[NAME OF ASSIGNEE]
By:
------------------------------
Title:
Domestic Lending Office (and
address for notices)
[Address]
Eurodollar Lending Office:
[Address]
____________________
* This date should be no earlier than the date of acceptance by the Agent.
Schedule 1 to Assignment and Acceptance - Page 1
Accepted this ____ day
of
CITICORP USA, INC., as Agent
By:_____________________________________
Title:
Schedule 1 to Assignment and Acceptance - Page 2
EXHIBIT D
FORM OF SUBSIDIARY GUARANTY
Exh. D Page 1
EXHIBIT E
FORM OF SECURITY AGREEMENT
Exh. E Page 1
EXHIBIT F-1
FORM OF OPINION OF COUNSEL TO THE LOAN PARTIES
[Letterhead of The Gap, Inc.]
March ___, 2002
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 Vice President and Associate General Counsel to The Gap,
Inc., a Delaware corporation (the "Company") and the domestic subsidiaries of
-------
the Gap listed on Schedule II hereto (the "Subsidiaries"; and together with the
------------
Company, the "Loan Parties"), in connection with the preparation, execution and
------------
delivery of the Credit Agreement, dated as of March __, 2002 (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), Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB") and Banc of America
---
Securities, LLC ("BAS") as Joint Book Managers, BAS, HSBC Bank USA and XX Xxxxxx
---
Securities Inc. ("JPM") as Co-Syndication Agents, ABN AMRO Bank N.V. as
---
Documentation Agent, SSB, 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 March ___, 2002 (the
"Subsidiary Guaranty"), made by the Subsidiaries party thereto in favor of
-------------------
the Lender Parties;
(d) the Security Agreement, dated as of March ___, 2002 (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 Securities Account Control Agreements each dated as of
March ___, 2002 (each a "Securities Account Control Agreement") among the
---------- -----------------
respective Grantor, the Collateral Agent and the respective financial
institution party thereto as securities intermediary and which is the financial
institution with which one of the Securities Accounts (as defined in the
Security Agreement) is maintained;
(f) the Deposit Account Control Agreements each dated as of
March _____, 2002 (each a "Deposit Account Control Agreement") among the
---------------------------------
respective Grantor, the Collateral Agent and the respective financial
institution party thereto as the bank with which one of the Deposit Accounts
(as defined in the Security Agreement) is maintained;
(g) unfiled copies of the Uniform Commercial Code financing
statements identifying each of the Grantors as a debtor;
(h) certified copies of the respective Constitutive Documents (as
defined in the Credit Agreement) of each Loan Party;
(i) 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 February 27, 2002, in the case of the Company, and on
March 6, 2002, in the case of each of the Subsidiaries;
(j) 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
(k) such other documents, instruments and certificates as I have
deemed necessary for the purpose of rendering this opinion.
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, the
Subsidiary Guaranty, the Securities Account Control Agreements and the Deposit
Account Control Agreements shall hereinafter be referred to collectively as the
"Transaction Agreements." The term "Governmental Approval" means any consent,
---------------------- ---------------------
approval, license, authorization or validation of, or filing, recording or
registration with, any governmental authority pursuant to Applicable Law. The
term "Applicable Contracts" means (i) the Indenture dated as of March 5, 2002
--------------------
between the Company and The Bank of New York, as Trustee and (ii) 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 3, 2001, and Forms 10-Q for the
quarterly periods ending May 5, 2001, August 4, 2001 and November 3, 2001, 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".
--------------
4
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 Loan Parties that is organized under the laws of
the State of California is authorized to exercise all its powers, rights and
privileges and is in good legal standing in the State of California, and each of
the Loan Parties that is organized under the laws of the State of Delaware is
validly existing and in good standing under the laws of the State of Delaware.
2. 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.
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 Constituent 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 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 or 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
knowl-
5
edge, 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.
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,
Xxxxxx X. Xxxx
Vice President and Associate
General Counsel
6
Schedule I
ADDRESSEES
----------
Schedule II
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.
Banana Republic Direct, Inc. GPS Consumer Direct, Inc.
Gap (Wisconsin) L.P. GPS Real Estate, Inc.
Gap (Florida) LLC GPSDC (New York) Inc.
Gap (Georgia) L.P. Old Navy (California) LLC
Gap (Indiana) L.P. Old Navy (East) L.P.
Gap (Kentucky) L.P. Old Navy (Florida) LLC
Gap (Tennessee) L.P. Old Navy (Holdings) Inc.
Gap Direct, Inc. Old Navy Direct, Inc.
Gap Holdings, Inc. Old Navy Inc.
Gap International Sourcing (California) Inc. The Xxxxxx Gap Stores, Inc.
Gap International Sourcing (Americas) LLC WCB Twenty-Eight Limited Partnership
Exh. F-1 Page 1
EXHIBIT F-2
FORM OF UCC OPINION OF SPECIAL NEW YORK COUNSEL TO THE LOAN
PARTIES
March [___], 2002
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 certain domestic subsidiaries of the Company listed on
-------
Schedule II hereto (the "Subsidiaries", and together with the Gap, the
----------- ------------
"Grantors"), in connection with the preparation, execution and delivery of the
--------
Security Agreement, dated as of March ___,2002 (the "Security Agreement"), from
------------------
the Grantors referred to therein in favor of Citicorp USA, Inc., 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 March __, 2002 (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), Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB") and Banc of America
---
Securities, LLC ("BAS") as Joint Book Managers, BAS, HSBC Bank USA and XX Xxxxxx
---
Securities Inc. ("JPM") as Co-Syndication Agents, ABN AMRO Bank N.V. as
---
Documentation Agent, SSB, BAS and JPM as Joint Lead Arrangers, and Citicorp USA,
Inc. 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 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 Security Agreement;
(b) [the Securities Account Control Agreements identified in Schedule III
and each dated as of March ___, 2002 (each a "Securities Account Control
Agreement") among the respective Grantor, the Collateral Agent and the
respective financial institution party thereto as securities intermediary and
which is the financial institution with which one of the Securities Accounts (as
defined in the Security Agreement) is maintained (each a "Securities
Intermediary");] [NOTE: Securities Account Control Agreement references are
likely to be deleted: perfection to be obtained by filing]
(c) the Deposit Account Control Agreements identified in Schedule III and
------------
each dated as of March ___, 2002 (each a "Deposit Account Control Agreement")
among the respective Grantor, the Collateral Agent and the respective financial
institution party thereto as the bank with which one of the Deposit Accounts (as
defined in the Security Agreement) is maintained (each a "Depository");
----------
(d) unfiled copies of the financing statements identifying certain of the
Grantors which are organized under the laws of the State of Delaware as debtor
(the "Delaware Grantors"), and "Citicorp USA, Inc., as Collateral Agent" as
-----------------
secured party, which we understand will be filed within ten (10) days of the
transfer of the security interest 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");
-----------------------------
(e) unfiled copies of the financing statements identifying certain of the
Grantors which are organized under the laws of the State of California as debtor
(the "California Grantors"), and "Citicorp USA, Inc., as Collateral Agent" as
-------------------
secured party, which we understand will be filed within ten (10) days of the
transfer of the security interest 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");
-------------------------------
3
(f) certificates from the Secretary of State of the State of Delaware as to
the existence and good standing in the State of Delaware (the "Delaware Good
-------------
Standing Certificates") of each of the Delaware Grantors;
---------------------
(g) certificates from the Secretary of State of the State of California as
to the existence and good standing in the State of California (the "California
----------
Good Standing Certificates") of each of the California Grantors;
--------------------------
(h) certified copies of the constitutive documents of each of the Delaware
Debtors (together with the Delaware Good Standing Certificates, the "Delaware
--------
Organizational Documents");
------------------------
(i) certified copies of the constitutive documents of each of the
California Debtors (together with the California Good Standing Certificates, the
"California Organizational Documents"); and
-----------------------------------
(j) 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:
1. "UCC" means (a) the New York UCC, (b) the California UCC, and (c) the
---
Delaware UCC (as each term is defined below) as applicable.
2. "Possessory Certificates" means that portion of the Collateral (as
-----------------------
defined in the Security Agreement) constituting "Certificated Securities" as
defined in Article 8 of the UCC and identified on Schedule IV hereto and
-----------
delivered on the date hereof.
3. "Securities Accounts" means those accounts identified on Schedule VII to
-------------------
the Security Agreement.
4. "Deposit Accounts" means those accounts identified on Schedule VIII to
----------------
the Security Agreement (together with the Securities Accounts, the "Pledged
-------
Accounts").
--------
5. "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).
4
6. "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 9-201 thereof).
7. "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).
8. "UCC Collateral" means that portion of the Collateral (as such term is
--------------
defined in the Security Agreement) which constitutes "inventory," "investment
property," "deposit accounts" and "general intangibles" (as defined in Article 9
of the UCC and subject thereto).
9. "Financial Institutions" means together those financial institutions
----------------------
individually defined and listed on Schedule V.
----------
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, and
(3) for purposes of opinion paragraph 9, the California General Corporation Law.
We have this date delivered to you our opinion with respect to the
enforceability of the Security Agreement and certain other Loan Documents. We
call to your attention that the opinions set forth herein with respect to the
security interest of the Secured Party 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:
(a) 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 Lenders
and the Issuing Banks (the "Secured Party") to secure the Secured Obligations
-------------
(as defined in the Security Agreement).
(b) Pursuant to the provisions of the Security Agreement, each of the
Delaware Grantors has authorized the filing of the Delaware Financing Statements
identifying the UCC Collateral for purposes of Section 9-509 of the Delaware
UCC.
5
(c) Each Delaware Financing Statement includes 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
such Delaware Financing Statement pursuant to Section 9-516 of the Delaware UCC.
(d) Under the Delaware UCC, the security interest of the Secured Party will
be perfected in each of the 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 Statements in the Delaware Filing Office. We express no
opinion with respect to (i) goods covered by a certificate of title statute,
(ii) as-extracted collateral and timber to be cut, (iii) 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, (iv) any
goods subject to a negotiable document of title, (v) money and (vi) deposit
accounts (other than in paragraph 11 below).
(e) You have asked whether each of the Delaware Grantors is a "registered
organization" as defined in the Delaware UCC. Pursuant to ss. 103(c)(6) of the
Delaware General Corporation Law, 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
Organizational Documents, we are of the opinion that under the Delaware UCC and
the Delaware General Corporation Law, the Limited Liability Company Act of the
State of Delaware and the Delaware Revised Uniform Limited Partnership Act, each
of the Delaware Grantors is a "registered organization."
(f) Pursuant to the provisions of the Security Agreement, each of the
California Grantors has authorized the filing of the California Financing
Statements identifying the UCC Collateral for purposes of Section 9509 of the
California UCC.
(g) Each California Financing Statement includes 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 such California Financing Statement pursuant to Section 9516 of the
California UCC.
(h) Under the California UCC, the security interest of the Secured Party
will be perfected in each of the California Grantor's rights in all UCC
Collateral upon the later of the attachment of the security interest and the
filing of the
6
California Financing Statements in the California Filing Office. We express no
opinion with respect to (i) goods covered by a certificate of title statute,
(ii) as-extracted collateral and timber to be cut, (iii) 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, (iv) any
goods subject to a negotiable document of title, (v) money and (vi) deposit
accounts (other than in paragraph 11 below).
(i) You have asked whether each of the California Grantors is a
"registered organization" as defined in the California UCC. Pursuant to xx.xx.
110(a) and 200 of the California General Corporation Law 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 Organizational Documents, we are of the opinion that under the
California UCC, the California General Corporation Law and the California
Government Code, each of the California Grantors is a "registered organization."
(j) Assuming that the Secured Party has no 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 Secured Party indorsed, by an effective indorsement, either
in blank or to the Secured Party in the State of California, the Secured Party
will acquire such UCC Collateral (and the shares represented thereby) free of
any adverse claims under 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 Secured Party would
discover upon any investigation which such person has a duty, imposed by statute
or regulation, to investigate.
(k) Under the [New York] UCC, the provisions of the Deposit Account
Control Agreements [and the Securities Account Control Agreements] [NOTE: likely
to be deleted] are effective to perfect the security interest of the Secured
Party in the Grantor's rights in the Deposit Accounts [and the Securities
Accounts.]
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 collateral, and we express no opinion with
respect to
7
the nature or extent of each Grantor's rights in any of the collateral and we
note that with respect to any after-acquired property, the security interest
will not attach until each Grantor acquires ownership thereof.
2. We express no opinion with respect to proceeds of the UCC
Collateral.
3. We have assumed that each [Deposit Account] [Securities Account] is
[either (i)] a "deposit account" and the Financial Institution is an
organization that is engaged in the business of banking [or (ii) is a
"securities account" and the Financial Institution in the ordinary course of its
business maintains securities accounts for customers and is acting in that
capacity] ([each] as defined in the UCC).
4. We express no opinion with respect to the nature or extent of any
of the securities intermediary's rights in, or title to, the securities or other
financial assets underlying any "security entitlement" now or hereafter credited
to a securities account. We note that to the extent any Securities intermediary
maintains any financial asset in a "clearing corporation" (as defined in Section
8-102(5) of the UCC), pursuant to Section 8-111 of the UCC, the rules of such
clearing corporation may affect the rights of the securities intermediary.
Furthermore, we express no opinion with respect to any property or assets now or
hereafter credited to a securities account that is not a "financial asset" and
we express no opinion whether or to what extent any particular item of property
credited to any securities account is a "financial asset".
5. We have assumed that the Control Agreement is the valid, binding
and enforceable obligation of each of the parties thereto.
6. We call to your attention that pursuant to Section 9-340 of the
UCC, a bank with which a deposit account is maintained may continue to exercise
any right of recoupment or set-off against a secured party that holds a security
interest in the deposit account.
7. 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 Secured Party in the UCC Collateral.
8
8. 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.
9. For purposes of our opinion paragraph 5, we have assumed that each
such Delaware Grantor has not 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 Grantor are not otherwise subject
to the laws of any jurisdiction other than Delaware. We call to your attention
that to the extent that the internal affairs of the Grantor are subject to
regulation under the laws of another state, the State of Delaware may recognize
such authority. See, e.g., XxXxxxxxx Inc. x. Xxxxx, 531 A.2d 206 (Del. 1987).
--- ---- -----------------------
Further, we have assumed that the Grantor has not and will not file (A) any
certificates of transfer, continuance or domestication, or any similar
certificates in other jurisdictions pursuant to Sections 390(a) and 388(b)(1) of
the Delaware General Corporation Law and Section 18-213 of the Delaware Limited
Liability Company Act [DRULPA] or (B) any similar certificates in any
jurisdiction other than the State of Delaware.
10. For purposes of our opinion paragraph 9, we have assumed that each
such California Grantor is and will remain "organized solely" (within the
meaning of Section 9102(a)(70) of the California UCC) under the laws of the
State of California.
11. Pursuant to Section 9-311(a) of the UCC, we express no opinion
with respect to 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 UCC.
12. We call to your attention that each of the issuers of the
Possessory Certificates is organized under the laws of the country identified
opposite such issuer's name in Schedule IV, and we express no opinion as to the
effect of the laws of such foreign countries on the opinions herein stated. Our
opinion with respect to the Possessory Certificates is limited to the UCC and
the laws of the jurisdiction of the issuer of the securities may affect, among
other things, whether the security is characterized as a "certificated security"
under the UCC, the exercise of remedies with respect to such security and the
exercise of voting or other rights with respect to such security.
9
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,
10
SCHEDULE I
----------
Lenders and Issuing Banks
-------------------------
11
SCHEDULE II
-----------
Subsidiaries
------------
12
SCHEDULE III
------------
Securities Account Control Agreements:
-------------------------------------
Deposit Account Control Agreements:
----------------------------------
13
SCHEDULE IV
-----------
Possessory Certificates
-----------------------
--------------------------------------------------------------------------------
POSSESSORY CERTIFICATE
---------- -----------
GRANTOR CERTIFICATES NO. OF SHARES NO.
------- ------------ ------------- ---
--------------------------------------------------------------------------------
Gap International GPS (Bermuda) 78,000 2
Sourcing (California) Insurance Services
Inc. Ltd.
--------------------------------------------------------------------------------
The Gap, Inc. Gap (Canada) Inc. 7,150 C-5
1 preferred P-2
--------------------------------------------------------------------------------
Old Navy Inc. Old Navy (Canada) 65 C-1
Inc.
--------------------------------------------------------------------------------
The Gap, Inc. Gap (Ireland) Ltd. 78,000 4
--------------------------------------------------------------------------------
The Gap, Inc. Gap International 65,000 6
Sourcing Pte. Ltd.
--------------------------------------------------------------------------------
Exh. F-2 Page 1
SCHEDULE V
----------
Financial Institutions
----------------------
Exh. F-2 Page 2
EXHIBIT F-3
FORM OF CORPORATE OPINION OF SPECIAL NEW YORK COUNSEL TO THE LOAN PARTIES
[SASM&F Letterhead]
March __, 2002
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 March __, 2002 (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), Xxxxxxx Xxxxx Xxxxxx Inc.
("SSB") and Banc of America Securities, LLC ("BAS") as Joint Book Managers, BAS,
--- ---
HSBC Bank USA and XX Xxxxxx Securities Inc. ("JPM") as Co-Syndication Agents,
---
ABN AMRO Bank N.V. as Documentation Agent, SSB, 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 March ___, 2002 (the "Subsidiary
----------
Guaranty"), made by the Subsidiaries party thereto in favor of the Lender
--------
Parties;
(d) the Security Agreement, dated as of March ___, 2002 (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 Securities Account Control Agreements each dated as of March ___,
2002 (each a "Securities Account Control Agreement") among the respective
------------------------------------
Grantor, the Collateral Agent and the respective financial institution party
thereto as securities intermediary and which is the financial institution with
which one of the Securities Accounts (as defined in the Security Agreement) is
maintained;
(f) the Deposit Account Control Agreements each dated as of March ___, 2002
(each a "Deposit Account Control Agreement") among the respective Grantor, the
---------------------------------
Collateral Agent and the respective financial institution party thereto as the
bank with which one of the Deposit Accounts (as defined in the Security
Agreement) is maintained;
(g) the certificate of Xxxxxxx Xxxxxxx, the Treasurer, and Xxxxxx X. Xxxx,
the Vice President and Associate General Counsel, respectively, of each of the
Loan Parties, dated the date hereof, a copy of which is attached as Exhibit A
hereto; and
(h) 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 the
Applicable Laws of the State of New York and 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, the Subsidiary
Guaranty, the Securities Account Control Agreements and the Deposit Account
Control Agreements 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. 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 laws of the State of New
York.
5
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. None of the Loan Parties is 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)
enforceable against such other party (other than the Loan Parties) 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;
6
(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 such Transaction Agreement to the extent such restriction on
assignability is governed by sections 9-406 through 9-409 of the Uniform
Commercial Code;
(h) certain of the remedial provisions, including waivers, with respect to
the Subsidiary Guaranty and the Security Agreement, may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect the
validity of the Subsidiary Guaranty and the Security Agreement, each taken as a
whole;
(i) enforcement of the Security Agreement may be subject to the terms of
instruments, leases, contracts or other agreements between any of the Loan
Parties and the other parties to such agreements, the rights of such other
parties and any claims or defenses of such other parties against such Loan Party
arising under or outside such instruments, leases, contracts or other
agreements;
(j) 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;
(k) we express no opinion with respect to Section 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;
(l) 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
7
interest to set-off or apply any deposit, property or indebtedness with respect
to any participation interest; and
(m) 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 under the laws
of its jurisdiction of organization;
(b) each Loan Party has the power and authority to execute, deliver and
perform all of their 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 of its obligations 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
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;
8
(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;
(f) we call to your attention that federal and state courts located in New
York could decline to hear a case on grounds of forum non-conveniens or any
----- --- ----------
other doctrine limiting the availability of the courts of New York as a forum
for the resolution of disputes not having a sufficient nexus to New York, and we
do not express any opinion as to any waiver of rights to assert the
applicability of forum non-conveniens doctrine or any such other doctrine;
----- --- ----------
(g) 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 XxXxxxxx'x
Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law (S)(S)5-1401, 5-1402
(XxXxxxxx 1989) and N.Y. CPLR 327(b) (XxXxxxxx 1990)) (the "Act") 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; and
(h) 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 an opinion, with respect to
the foregoing assumptions from Xxxxxx X. Xxxx, the Vice President and Associate
General Counsel of each of the Loan Parties, and we are advised that such
opinion contains 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 opinion.
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.
9
Very truly yours,
10
Schedule I
to SASM&F Opinion
ADDRESSEES
----------
A-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.
Banana Republic Direct, Inc. GPS Consumer Direct, Inc.
Gap (Wisconsin) L.P. GPS Real Estate, Inc.
Gap (Florida) LLC GPSDC (New York) Inc.
Gap (Georgia) L.P. Old Navy (California) LLC
Gap (Indiana) L.P. Old Navy (East) L.P.
Gap (Kentucky) L.P. Old Navy (Florida) LLC
Gap (Tennessee) L.P. Old Navy (Holdings) Inc.
Gap Direct, Inc. Old Navy Direct, Inc.
Gap Holdings, Inc. Old Navy Inc.
Gap International Sourcing (California) Inc. The Xxxxxx Gap Stores, Inc.
Gap International Sourcing (Americas) LLC WCB Twenty-Eight Limited Partnership
A-2
Exhibit A to Opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
----------------------------------------
Officers' Certificate
The undersigned are, repectively, the duly elected, qualified and
acting Vice President and Associate General Counsel, and Treasurer, of The Gap,
Inc., a Delaware corporation ("The Gap") and the domestic subsidiaries listed on
-------
Schedule II (together with 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 March ___, 2002 (the "Credit Agreement"),
----------------
among The Gap and the LC Subsidiaries, the Subsidiary Borrowers, the Lenders and
the Issuing Banks (as such terms are defined in the Credit Agreement), Xxxxxxx
Xxxxx Xxxxxx Inc. ("SSB") and Banc of America Securities, LLC ("BAS") as Joint
--- ---
Book Managers, BAS, HSBC Bank USA and XX Xxxxxx Securities Inc. ("JPM") as
---
Co-Syndication Agents, ABN AMRO Bank N.V. as Documentation Agent, SSB, 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,
Xxxxxxx & Xxxx 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 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
A-4
Facilities, or (ii) any of the foregoing types of entities that have
received notice of the sort described in paragraph 9 below.
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:
"Control" means the power to exercise a controlling influence over the
-------
management or policies of a company, unless such power is solely the result of
an official position with such company.
"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).
A-5
"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.
"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]
IN WITNESS THEREOF, the undersigned have executed this certificate this ___ day
of March, 2002.
THE GAP, INC. GAP INTERNATIONAL SOURCING, INC.
BANANA REPUBLIC (CALIFORNIA) LLC, GAP INTERNATIONAL SOURCING (JV) LLC,
by Banana Republic, Inc., its member by Gap International Sourcing, Inc.,
its managing member
BANANA REPUBLIC (FLORIDA) LLC, by GAP INTERNATIONAL SOURCING
Banana Republic, Inc., its managing member (CALIFORNIA) INC.
BANANA REPUBLIC (HOLDINGS) INC. GPS CORPORATE FACILITIES, INC.
BANANA REPUBLIC (NEW YORK) LLC, by GPS CONSUMER DIRECT, INC.
Banana Republic, Inc., its member
BANANA REPUBLIC DIRECT, INC. GPS REAL ESTATE, INC.
BANANA REPUBLIC, INC. GPSDC (NEW YORK) INC.
GAP (FLORIDA) LLC, GPS BRAND SERVICES, INC.
by The Gap, Inc., its managing member
GAP (GEORGIA) L.P., OLD NAVY (EAST) L.P.,
by The Gap, Inc., its general partner by Old Navy, Inc., its general partner
GAP (INDIANA) L.P., OLD NAVY (FLORIDA) LLC,
by The Gap, Inc., its general partner by Old Navy, Inc., its managing member
GAP (KENTUCKY) L.P., OLD NAVY (HOLDINGS) INC.
by The Gap, Inc., its general partner
GAP (TENNESSEE) L.P., OLD NAVY DIRECT, INC.
by The Gap, Inc., its general partner
GAP (WISCONSIN) L.P., OLD NAVY INC.
by The Gap, Inc., its general partner
GAP DIRECT, INC. OLD NAVY (CALIFORNIA) LLC,
by Old Navy, Inc., its member
GAP HOLDINGS, INC. WCB TWENTY-EIGHT LIMITED
PARTNERSHIP, by GPS Corporate Facilities,
Inc., its general partner
GAP INTERNATIONAL SOURCING THE XXXXXX GAP STORES, INC.
(AMERICAS) LLC, by The Gap, Inc., its
member
A-8
GAP INTERNATIONAL SOURCING
(U.S.A.) INC.
With respect to only paragraphs 1, 3, 6, 7, 8, 9, 10 and 13 above:
By:
------------------------------------------------------------
Xxxxxx X. Xxxx
Vice President and Associate General Counsel
With respect to only paragraphs 1, 2, 4, 5, 11 and 12 above:
By:
------------------------------------------------------------
Xxxxxxx Xxxxxxx
Vice President and Treasurer
A-9
Schedule I to
Exhibit A
---------
GOVERNMENTAL APPROVALS
----------------------
None.
A-1
EXHIBIT G
FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE AGENT
March 7, 2002
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 March 7, 2002 (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 that connection, we have examined a counterpart of the
Credit Agreement, the note 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 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.
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 such Loan Party in accordance with its respective terms.
Our opinion above is subject to the following qualifications:
Exh. G Page 1
(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.
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 next
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;na
Exh. G Page 2
EXHIBIT H
FORM OF ASSUMPTION AGREEMENT
Dated: _____________, ______
The Gap, Inc.
000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Citicorp USA, Inc.,
as Agent for the Lender Parties
to the Credit Agreement referred to below
[399 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000]
Attention: Credit Administration
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of March 7, 2002
(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, Xxxxxxx Xxxxx Xxxxxx Inc., Banc of
America Securities, LLC and XX Xxxxxx 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 3.10(b) 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 LC Commitment Increase Effective Date and
that its LC Commitment shall as of such date be $__________.
The undersigned (i) 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; (ii) 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;
(iii) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) 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; (v) confirms that it is an Eligible
Assignee; (vi) specifies as its Applicable Lending Offices (and address for
notices) the offices set forth beneath its name on the signature pages hereof;
and (vii) attaches the forms prescribed by the Internal Revenue Service of the
United States required under Section 4.02 of the Credit Agreement.
Exh. H. Page 1
The effective date for this Assumption Agreement shall be applicable
LC Commitment Increase Effective Date. Upon delivery of this Assumption
Agreement to the Borrower and the Agent, and satisfaction of all conditions
imposed under Section 3.10(b) 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 March ___, 2002, 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:
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Exh. I Page 4
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 _______________, _____ pursuant to Section
7.04[(i)][(iii)] of the Credit Agreement
THE GAP, INC.
By_____________________________
Name:
Title:
Exh. I Page 5
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of _________________, _____ and pertains to the
period from ________________, ____ to ________________, ____. Subsection
references herein relate to subsections of the Credit Agreement.
A. Asset Coverage Ratio
(for the [Fiscal Quarter][Fiscal Month] ending _______________, _____)
1. Book Value of Inventory $__________
2. Letter of Credit Liability $__________
3. Outstanding Advances $__________
4. Total Liabilities (2 + 3) $__________
5. Asset Coverage Ratio (1) : (4) _____:1.00
6. Minimum ratio required under Subsection 7.03(a) 1.75 :1.00
7. Cash of Borrower and its Subsidiaries $__________
8. Cash equivalents of Borrower and its Subsidiaries $__________
9. Cash in Deposit Accounts (as defined in Security
Agreement) $__________
10. Property in Securities Accounts (as defined in
Security Agreement) $__________
B. Fixed Charge Coverage Ratio
(for the four-Fiscal Quarter period ending ________________, _____)
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 Expenses for the Borrower and its
Subsidiaries $__________
8. Consolidated Interest Expense $__________
9. Fixed Charge Coverage Ratio ((6) + (7))/((7)+(8)) _____:1.00
Attach. to Exh. I Page 1
10. Minimum ratio required under Subsection 7.03(b) _____:1.00
C. Consolidated Maintenance Capital Expenditures
1. Consolidated Maintenance Capital Expenditures
for Fiscal Year-to-Date $__________
2. Maximum amount of Consolidated Maintenance
Capital Expenditures permitted under Subsection
7.03(c) for Fiscal Year $425,000,000
Attach. to Exh. I Page 2
