CREDIT AGREEMENT, dated as of July 1, 1997 (this
"Agreement"), among The Gap, Inc., a Delaware corporation (the
"Borrower"), the banks and financial institutions (the "Banks")
listed on the signature pages hereof and Citicorp USA Inc. ("CUSA"),
as agent (the "Agent") for the Lenders hereunder:
PRELIMINARY STATEMENT: The Borrower has requested the
Banks to make available to it up to $150,000,000 in revolving credit
loans to be used for general corporate purposes. Subject to the
terms and conditions of this Agreement, the Banks agree to make such
revolving credit loans.
NOW THEREFORE, the Borrower, the Banks, the Lenders from
time to time party hereto and the Agent agree as follows:
ARTICLE IDEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01Certain 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):
"A Advance" means an advance by an A Lender to the
Borrower as part of an A Borrowing and refers to a Base Rate
Advance or a Eurodollar Rate Advance, each of which shall be a
"Type" of A Advance.
"A Borrowing" means a borrowing consisting of
simultaneous A Advances of the same Type made by each of the
A Lenders pursuant to Section 2.01.
"A Commitment" means, as to each A Lender, the amount
set forth opposite such A Lender's name on the signature pages
hereof under the caption 'A Commitment' or, if such A Lender
has entered into one or more Assignment and Acceptances, the
amount set forth for such A Lender with respect thereto in the
Register maintained by the Agent pursuant to Section 9.07
hereof, in each case as such amount may be reduced pursuant to
Section 2.05.
"A Lender" means any Lender having an A Commitment or to
which A Advances are owed.
"Advance" means an A Advance or a B Advance, and
"Advances" means the A Advances and the B Advances.
"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.
"Anniversary Date" means June 30 in each calendar year
occurring during the term of this Agreement.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, and such Lender's Eurodollar Lending Office
in the case of a Eurodollar Rate Advance and, in the case of a
B Advance, the office of such Lender notified by such Lender
to the Agent as its Applicable Lending Office with respect to
such B Advance.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible Assignee,
and accepted by the Agent, in substantially the form of
Exhibit B hereto.
"B Advance" means an advance by an A Lender to the
Borrower as part of a B Borrowing resulting from the auction
bidding procedure described in Section 2.03.
"B Borrowing" means a borrowing consisting of
simultaneous B Advances from each of the A Lenders whose offer
to make one or more B Advances as part of such borrowing has
been accepted by the Borrower under the auction bidding
procedure described in Section 2.03.
"B Reduction" has the meaning specified in Section 2.01.
"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 A Advance which bears
interest as provided in Section 2.07(a).
"Borrowing" means an A Borrowing or a B Borrowing.
"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 if
the applicable Business Day relates to any Eurodollar Rate
Advances, a day on which dealings are carried on in the London
interbank market.
"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.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sec. 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),
directly or indirectly, of securities of the Borrower (or
other securities convertible into such securities)
representing 50% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of
directors; or (ii) during any period of up to 24 consecutive
months, commencing before or after the date of this Agreement,
individuals who at the beginning of such 24-month period were
directors of the Borrower ceasing for any reason to constitute
a majority of the Board of Directors of the Borrower unless
the Persons replacing such individuals were nominated by the
Board of Directors of the Borrower; or (iii) any Person or two
or more Persons acting in concert acquiring by contract or
otherwise, or entering into a contract or arrangement which
upon consummation will result in its or their acquisition of,
control over securities of the Borrower (or other securities
convertible into such securities) representing 50% or more of
the combined voting power of all securities of the Borrower
entitled to vote in the election of directors; provided, that,
the Person or group of Persons referred to in clauses (i) and
(iii) of this definition of Change of Control shall not
include any Person listed on Schedule III hereto or any group
of Persons in which one or more of the Persons listed on
Schedule III are members.
"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 5.01(e).
"Convert", "Conversion" and "Converted" each refers to a
conversion of A Advances of one Type into A Advances of
another Type pursuant to Section 2.09 or 2.10.
"CP Rating" means, as of any date, the higher of the
ratings that have been most recently announced by either S&P
or Moody's, as the case may be, for any class of non-credit
enhanced commercial paper debt issued by the Borrower. For
purposes of the foregoing, (a) if only one of S&P and Moody's
shall have in effect a CP Rating, the Eurodollar Rate Margin
and the Facility Fee Percentage may be determined by reference
to the available rating; (b) 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 (c) if S&P or
Moody's shall change the basis on which ratings are
established, each reference to the CP 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.
"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 of such Person,
(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.
"Debt Rating" means, as of any date, the higher of the
ratings that have been most recently announced by either S&P
or Moody's, as the case may be, for any class of long-term
senior unsecured non-credit enhanced debt issued by the
Borrower. For purposes of the foregoing, (a) if only one of
S&P and Moody's shall have in effect a Debt Rating, the
Eurodollar Rate Margin and the Facility Fee Percentage may be
determined by reference to the available rating; (b) 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 (c) if S&P or Moody's shall change the basis on
which ratings are established, each reference to the 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.
"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 hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"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.
"Eligible Assignee" means (i) a commercial bank
organized under the laws of the United States, or any State
thereof, and having Total Assets in excess of $10,000,000,000;
(ii) a commercial bank organized under the laws of any other
country which is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having Total
Assets in excess of $10,000,000,000; provided, that, such bank
is acting through a branch or agency located in the United
States; (iii) the central bank of any country which is a
member of the OECD; (iv) any Bank or Lender or Affiliate of a
Bank or Lender; (v) a finance company, insurance company or
other financial institution or fund (whether a corporation,
partnership or other entity) which is engaged in making,
purchasing or otherwise investing in commercial loans in the
ordinary course of its business, and having Total Assets in
excess of $10,000,000,000; and (vi) any other Person mutually
acceptable to the Borrower and the Agent.
"Environmental Laws" means any and all laws, statutes,
ordinances, rules, regulations, judgments, orders, decrees,
permits, licenses, or other governmental restrictions or
requirements relating to the environment or any Hazardous
Substance.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) which is a member of a controlled group
of which the Borrower or any Subsidiary of the Borrower is a
member or which is under common control with the Borrower or
any Subsidiary of the Borrower within the meaning of Section
414 of the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the
Agent.
"Eurodollar Rate" means, for any Interest Period for
each Eurodollar Rate Advance comprising part of the same A
Borrowing, an interest rate per annum equal to 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 A Borrowing and for a period
equal to such Interest Period. The Eurodollar Rate for the
Interest Period for each Eurodollar Rate Advance comprising
part of the same A 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 2.09.
"Eurodollar Rate Advance" means an A Advance which bears
interest as provided in Section 2.07(b).
"Eurodollar Rate Margin" means, as of any date, a
percentage per annum determined by reference to the highest of
the Debt Rating or the CP Rating, as the case may be, in
effect on such date as set forth below:
Debt Rating or CP
Rating
S&P/Moody's
Eurodollar Rate
Margin for
Eurodollar Rate
Advances
Level 1
Debt Rating:
A+ or above or A1
or above
.12%
Level 2
Debt Rating:
below A+ but at
least A- or below
A1 but at least
A3
or
CP Rating:
A1 or P1
.145%
Level 3
Debt Rating:
below A- but at
least BBB- or
below A3 but at
least Baa3
or
CP Rating:
below A1 or
below P1
.20%
Level 4
Debt Rating:
none for S&P or
Moody's or
below BBB- or
below Baa3
and
CP Rating:
None from S&P or
Moody's
.30%
"Eurodollar Rate Reserve Percentage" of any Lender for
any Interest Period for any Eurodollar Rate Advance means the
reserve percentage applicable during such Interest Period (or
if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Section
7.01.
"Facility Fee Percentage" means, as of any date, a
percentage per annum determined by reference to the highest of
the Debt Rating or the CP Rating, as the case may be, as set
forth below:
Debt Rating or CP
Rating
S&P/Moody's
Facility Fee
Level 1
Debt Rating:
A+ or above or A1
or above
.07%
Level 2
Debt Rating:
below A+ but at
least A- or below
A1 but at least
A3
or
CP Rating:
A1 or P1
.08%
Level 3
Debt Rating:
below A- but at
least BBB- or
below A3 but at
least Baa3
or
CP Rating:
below A1 or
below P1
.125%
Level 4
Debt Rating:
none for S&P or
Moody's or
below BBB- or
below Baa3
and
CP Rating:
None from S&P or
Moody's
.20%
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fiscal Quarter" means any quarter in any Fiscal Year,
the duration of such quarter being defined in accordance with
generally accepted accounting principles consistent with those
applied in the preparation of the Borrower's financial
statements referred to in Section 5.01(e).
"Fiscal Year" means a fiscal year of the Borrower and
its Subsidiaries.
"Hazardous Substance" means (i) any hazardous substance
or toxic substance as such terms are presently defined or used
in Sec. 101(14) of CERCLA (42 U.S.C. Sec. 9601(14)), in 33 U.S.C.
Sec. 1251 et.seq. (Clean Water Act), or 15 U.S.C. Sec. 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.
"Interest Expense" of any Person for any period means
the aggregate amount of interest or fees (other than agency
fees payable to the Agent, as such) 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, determined in accordance with
generally accepted accounting principles.
"Interest Period" means, for each Eurodollar Rate
Advance comprising part of the same A Borrowing, the period
commencing on the date of such Type of A Advance or the date
of the Conversion of any A Advance into such Type of an A
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 or 6 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 Revolver Termination Date;
(ii) Interest Periods commencing on the same date
for A Advances comprising part of the same A 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 A
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, as
requested by the Borrower, if, and only if, the Agent
determines a Eurodollar Rate for the tenor of such
Interest Period and the Majority Lenders do not notify
the Agent pursuant to Section 2.09(b) that the
Eurodollar Rate for such Interest Period will not
adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period; if
both of the preceding conditions are not satisfied with
respect to such requested 9 or 12 month Interest Period,
the duration of the requested Interest Period shall be
the alternative specified in the Notice of A Borrowing,
or, if no alternative Interest Period is selected, 6
months.
"Lenders" means the Banks listed on the signature pages
hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 9.07.
"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.
"Majority Lenders" means, at any time, A Lenders owed at
least 66 2/3% of the then aggregate unpaid principal amount of
the A Advances held by A Lenders, or, if no such principal
amount is then outstanding, A Lenders having at least 66 2/3%
of the A Commitments.
"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 Effect" means a material adverse
effect on the financial condition or results of operations of
the Borrower and its Subsidiaries taken as a whole.
"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.
"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.
"Non-Retail Assets" means property (tangible and
intangible) that is not used, sold or consumed in a Retail
Business.
"Non-Retail Business" means, with respect to any Person,
that such Person is not engaged in the Retail Business.
"Notice of A Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in
Section 2.03(a).
"Obligations" means all obligations of the Borrower now
or hereafter existing under this Agreement, whether for
principal, interest, fees, expenses, indemnification or
otherwise.
"OECD" means the Organization for Economic Cooperation
and Development.
"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 nondelinquent obligations under
worker's compensation or unemployment laws or similar
legislation or to secure the performance of leases or
contracts entered into in the ordinary course of
business or of public or nondelinquent statutory
obligations, bids, or appeal bonds;
(iv) Liens upon or in, and limited to, any
property acquired or held by the Borrower or any of its
Subsidiaries to secure the purchase price of such
property or to secure indebtedness incurred solely for
the purpose of financing or refinancing the acquisition
of any such property to be subject to such Liens, or
Liens existing on any such property at the time of
acquisition;
(v) Liens upon any assets subject to a Capital
Lease and securing payment of the obligations arising
under such Capital Lease;
(vi) 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;
(vii) Liens of the Borrower and its Subsidiaries
not described in the foregoing clauses (i) through (vi),
existing of the date hereof and listed on Schedule II
hereof;
(viii) Liens not described in subclauses (i)
through (vii) above that relate to liabilities not in
excess of $20,000,000 in the aggregate; and
(ix) extensions, renewals or replacements of
Liens described in subclauses (iv), (v), (vii) and
(viii) 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.
"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. Sec. 6901 et seq.), and any
regulations promulgated thereunder.
"Reference Banks" means Citibank, N.A., The Hongkong and
Shanghai Banking Corporation Limited and Bank of America
National Trust & Savings Association.
"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 or chief financial officer
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 9.07(c).
"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.
"Revolver Termination Date" means, subject to Section
2.14 hereof, June 28, 2002 or the earlier date of termination
in whole of the A Commitments pursuant to Section 2.05 or
7.01.
"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) 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) (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.
"364-Day Credit Agreement" means the Credit Agreement
dated as of July 1, 1997 among the Borrower, the LC
Subsidiaries (as defined therein), the financial institutions
party thereto as lenders, Citibank, N.A., as Issuing Bank (as
defined therein), and CUSA, as agent for the Issuing Bank and
such lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"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.
"Type" refers to the distinction among Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
SECTION 1.02Computation 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 1.03Accounting 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 5.01(e).
ARTICLE IIAMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01The A Advances. Each A Lender severally
agrees, on the terms and conditions hereinafter set forth, to make A
Advances to the Borrower from time to time on any Business Day
during the period from the date hereof until the Revolver
Termination Date in an aggregate amount not to exceed at any time
outstanding such A Lender's A Commitment, provided, that, the
aggregate amount of the A Commitments of the A Lenders shall be
deemed used from time to time to the extent of the aggregate amount
of the B Advances then outstanding and such deemed use of the
aggregate amount of the A Commitments shall be applied to the
A Lenders ratably according to their respective A Commitments (such
deemed use of the aggregate amount of the A Commitments being a
"B Reduction"). Each A Borrowing shall be in an aggregate amount
not less than (i) $15,000,000, in the case of an A Borrowing
consisting of Eurodollar Rate Advances and (ii) $1,000,000, in the
case of an 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 A Advances of the same Type made on the same day by
the A Lenders ratably according to their respective A Commitments.
Within the limits of each A Lender's A Commitment, the Borrower may
from time to time borrow, prepay pursuant to Section 2.11(b) and
reborrow under this Section 2.01.
SECTION 2.02Making the A Advances. (a) Each A 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 A Borrowing, if such proposed A Borrowing consists of
Eurodollar Rate Advances and (ii) 10:00 A.M. (New York City time) on
the day of such proposed A Borrowing, if such proposed A Borrowing
consists of Base Rate Advances, by the Borrower to the Agent, which
shall give to each A Lender prompt notice thereof by telecopier,
telex or cable. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be by telecopier, telex, cable or telephone (and
if by telephone, confirmed immediately in writing), in substantially
the form of Exhibit A-1 hereto, specifying therein the requested
(i) date of such A Borrowing, (ii) Type of A Advances comprising
such A Borrowing, (iii) aggregate amount of such A Borrowing and
(iv) in the case of an A Borrowing comprised of Eurodollar Rate
Advances, initial Interest Period for each such A Advance. Each A
Lender shall, before 12:00 noon (New York City time) on the date of
such A Borrowing, make available for the account of its Applicable
Lending Office to the Agent at its address referred to in
Section 9.02, in same day funds, such A Lender's ratable portion of
such A Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article IV,
the Agent will make such funds available to the Borrower at the
Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding, the Borrower may not select Eurodollar Rate
Advances for any A Borrowing if the aggregate amount of such A
Borrowing is less than $1,000,000 multiplied by the number of A
Lenders.
(c) Each Notice of A Borrowing shall be irrevocable
and binding on the Borrower. In the case of any A Borrowing which
the related Notice of A Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each A Lender
against any loss, cost or expense incurred by such A Lender as a
result of any failure to fulfill on or before the date specified in
such Notice of A Borrowing for such A Borrowing the applicable
conditions set forth in Article IV, 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 A Lender to fund the A Advance to be
made by such A Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from
an A Lender prior to the date of any A Borrowing that such A Lender
will not make available to the Agent such A Lender's ratable portion
of such A Borrowing, the Agent may assume that such A Lender has
made such portion available to the Agent on the date of such A
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 on such date a corresponding amount. If and to the
extent that such A Lender shall not have so made such ratable
portion available to the Agent, such A Lender and the 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 until
the date such amount is repaid to the Agent at (i) in the case of
the Borrower, the interest rate applicable at the time to A Advances
comprising such A Borrowing and (ii) in the case of such A Lender,
the Federal Funds Rate. If such A Lender shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute
such A Lender's A Advance as part of such A Borrowing for purposes
of this Agreement.
(e) The failure of any A Lender to make the A Advance
to be made by it as part of any A Borrowing shall not relieve any
other A Lender of its obligation, if any, hereunder to make its A
Advance on the date of such A Borrowing, but no A Lender shall be
responsible for the failure of any other A Lender to make the A
Advance to be made by such other A Lender on the date of any A
Borrowing.
SECTION 2.03The BAdvances. (a) Each A Lender severally
agrees that the Borrower may make B Borrowings under this Section
2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 7 days prior to the
Revolver Termination Date in the manner set forth below; provided,
that, following the making of each B Borrowing, the aggregate amount
of the Advances then outstanding shall not exceed the aggregate
amount of the A Commitments of the A Lenders (computed without
regard to any B Reduction).
(i) The Borrower may request a B Borrowing under this
Section 2.03 by delivering to the Agent (or to each A Lender
if the Borrower is conducting the auction for B Advances
pursuant to subsection (g) of this Section 2.03), by
telecopier, telex or cable, confirmed immediately in writing,
a notice of a B Borrowing (a "Notice of B Borrowing"), in
substantially the form of Exhibit A-2 hereto, specifying the
date and aggregate amount of the proposed B Borrowing, the
maturity date for repayment of each B Advance to be made as
part of such B Borrowing (which maturity date may not be
earlier than the date occurring 7 days after the date of such
B Borrowing or later than the Revolver Termination Date), the
interest payment date or dates relating thereto, and any other
terms to be applicable to such B Borrowing, not later than
3:00 P.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed B Borrowing, if the Borrower
shall specify in the Notice of B Borrowing that the rates of
interest to be offered by the A Lenders shall be fixed rates
per annum and (B) at least four Business Days prior to the
date of the proposed B Borrowing, if the Borrower shall
instead specify in the Notice of B Borrowing the basis to be
used by the A Lenders in determining the rates of interest to
be offered by them. If the Agent is conducting the auction
for B Advances, it shall in turn promptly notify each A Lender
of each request for a B Borrowing received by it from the
Borrower by sending such A Lender a copy of the related Notice
of B Borrowing.
(ii) Each A Lender may, if, in its sole
discretion, it elects to do so, irrevocably offer to make one
or more B Advances to the Borrower as part of such proposed
B Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Agent (which
shall give prompt notice thereof to the Borrower) or the
Borrower (if it is conducting the auction for B Advances
pursuant to subsection (g) of this Section 2.03), before
10:30 A.M. (New York City time) (A) on the date of such
proposed B Borrowing, in the case of a Notice of B Borrowing
delivered pursuant to clause (A) of paragraph (i) above and
(B) three Business Days before the date of such proposed
B Borrowing, in the case of a Notice of B Borrowing delivered
pursuant to clause (B) of paragraph (i) above, of the minimum
amount and maximum amount of each B Advance which such
A Lender would be willing to make as part of such proposed
B Borrowing (which amounts may, subject to the proviso to the
first sentence of this Section 2.03(a), exceed such A Lender's
A Commitment), the rate or rates of interest therefor and such
A Lender's Applicable Lending Office with respect to such
B Advance; provided, that, if the Agent in its capacity as an
A Lender shall, in its sole discretion, elect to make any such
offer and the Agent is conducting the auction for B Advances,
it shall notify the Borrower of such offer before 10:00 A.M.
(New York City time) on the date on which notice of such
election is to be given to the Agent by the other A Lenders.
If any A Lender shall elect not to make such an offer, such
A Lender shall so notify the Agent, or the Borrower (if it is
conducting the auction for the B Advances pursuant to
subsection (g) of this Section 2.03), before 10:30 A.M. (New
York City time) on the date on which notice of such election
is to be given to the Agent or the Borrower (if it is
conducting the auction for the B Advances pursuant to
subsection (g) of this Section 2.03) by the other A Lenders,
and such A Lender shall not be obligated to, and shall not,
make any B Advance as part of such B Borrowing; provided,
that, the failure by any A Lender to give such notice shall
not cause such A Lender to be obligated to make any B Advance
as part of such proposed B Borrowing.
(iii) The Borrower shall, in turn, (A) before 12:00 noon
(New York City time) on the date of such proposed B Borrowing,
in the case of a Notice of B Borrowing delivered pursuant to
clause (A) of paragraph (i) above and (B) before 1:00 P.M.
(New York City time) three Business Days before the date of
such proposed B Borrowing, in the case of a Notice of
B Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either:
(x) cancel such B Borrowing by giving the Agent
(or each A Lender if the Borrower is conducting the
auction for the B Advances pursuant to subsection (g) of
this Section 2.03) notice to that effect; or
(y) accept one or more of the offers made by any
A Lender or A Lenders pursuant to paragraph (ii) above,
in its sole discretion, by giving notice to the Agent
(or each such A Lender, if the Borrower is conducting
the auction for B Advances pursuant to subsection (g) of
this Section 2.03) of the amount of each B Advance
(which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum
amount, notified to the Borrower by the Agent on behalf
of such A Lender (or by each A Lender, if the Borrower
is conducting the auction for B Advances pursuant to
subsection (g) of this Section 2.03) for such B Advance
pursuant to paragraph (ii) above) to be made by each
A Lender as part of such B Borrowing, and reject any
remaining offers made by A Lenders pursuant to paragraph
(ii) above by giving the Agent (or each A Lender, if the
Borrower is conducting the auction for B Advances
pursuant to subsection (g) of this Section 2.03) notice
to that effect.
(iv) If the Borrower notifies the Agent that such
B Borrowing is cancelled pursuant to paragraph (iii)(x) above,
the Agent shall give prompt notice thereof to the A Lenders,
and such B Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers
made by any A Lender or A Lenders pursuant to paragraph
(iii)(y) above, the Agent, if it is conducting the auction for
the B Advances, or the Borrower, if it is conducting the
auction for the B Advances pursuant to subsection (g) of this
Section 2.03, shall promptly notify (A) each A Lender that has
made an offer as described in paragraph (ii) above, of the
date and aggregate amount of such B Borrowing, of the lowest
and highest interest rates offered to the Borrower by the A
Lenders in connection with such B Borrowing and whether or not
any offer or offers made by such A Lender pursuant to
paragraph (ii) above have been accepted by the Borrower and
(B) each A Lender that is to make a B Advance as part of such
B Borrowing, of the amount of each B Advance to be made by
such A Lender as part of such B Borrowing. If the Borrower is
conducting the auction for the B Advances pursuant to
subsection (g) of this Section 2.03, it shall concurrently
with the notices given by it to the A Lenders pursuant to the
previous sentence, provide a copy of all such notices to the
Agent. The Agent shall in turn notify each A Lender that is to
make a B Advance as part of such B Borrowing, upon receipt,
that the Agent has received forms of documents appearing to
fulfill the applicable conditions set forth in Article V.
Each A Lender that is to make a B Advance as part of such
B Borrowing shall, before 2:00 P.M. (New York City time) on
the date of such B Borrowing specified in the notice received
from the Agent (or from the Borrower if it is conducting the
auction for B Advances pursuant to subsection (g) of this
Section 2.03) pursuant to clause (A) above or any later time
when such A Lender shall have received notice from the Agent
pursuant to the preceding sentence, make available (i) if the
Agent is conducting the auction for B Advances, to the Agent
for the account of its Applicable Lending Office at its
address referred to in Section 9.02 such A Lender's portion of
such B Borrowing, in same day funds or (ii) if the Borrower is
conducting the auction for B Advances pursuant subsection (g)
of this Section 2.03, to the Borrower at the account
designated by it, such A Lender's portion of such B Borrowing,
in same day funds. Upon fulfillment of the applicable
conditions set forth in Article IV, and after receipt by the
Agent of such funds (if the Agent conducted the auction
relating to such B Borrowing), the Agent will make such funds
available to the Borrower at the Agent's aforesaid address.
Promptly after each B Borrowing the Agent will notify each
A Lender of the amount of the B Borrowing, the consequent
B Reduction and the dates upon which such B Reduction
commenced and will terminate.
(b) Each B Borrowing shall be in an aggregate amount
not less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and, following the making of each B Borrowing, the
Borrower shall be in compliance with the limitation set forth in the
proviso to the first sentence of subsection (a) above. The Borrower
may not accept offers for B Advances in excess of the aggregate
amount specified in its Notice of B Borrowing given with respect to
each proposed B Borrowing.
(c) Within the limits and on the conditions set forth
in this Section 2.03, the Borrower may from time to time borrow
under this Section 2.03, repay or prepay pursuant to subsection (d)
below, and reborrow under this Section 2.03. The Borrower may not
make more than one B Borrowing on any Business Day.
(d) If the Agent conducted the applicable auction
relating to the B Advance to be repaid, the Borrower shall repay to
the Agent for the account of each A Lender which has made a
B Advance on the maturity date of each B Advance (such maturity date
being that specified by the A Lender for repayment of such B Advance
in the related offer delivered pursuant to subsection (a)(ii)
above), the then unpaid principal amount of such B Advance. If the
Borrower conducted the applicable auction relating to the B Advance
to be repaid, the Borrower shall repay directly to each A Lender
that made a B Advance on the maturity date of each B Advance (such
maturity date being that specified by the A Lender for repayment of
such B Advance in the related offer delivered pursuant to subsection
(a)(ii) above), the then unpaid principal amount of such B Advance
at the account designated by such A Lender to the Borrower. The
Borrower shall have no right to prepay any principal amount of any
B Advance unless, and then only on the terms, specified for such
B Advance in the offer delivered pursuant to subsection (a)(ii)
above.
(e) The Borrower shall pay interest on the unpaid
principal amount of each B Advance from the date of such B Advance
to the date the principal amount of such B Advance is repaid in
full, at the rate of interest for such B Advance specified by the
A Lender making such B Advance in its offer with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by the Borrower in its
Notice of B Borrowing with respect thereto delivered pursuant to
subsection (a)(i) above. Such interest shall be paid directly to
the A Lender that made the B Advance at the account designated by it
to the Borrower, if the Borrower conducted the applicable auction
relating to the B Advance on which interest is to be paid, and to
the Agent for the account the Applicable Lending Office of each
A Lender that made a B Advance, if the Agent conducted the auction
relating to the B Advance on which interest is to be paid.
(f) The indebtedness of the Borrower to an A Lender
resulting from each B Advance made to the Borrower as part of a
B Borrowing shall be evidenced by such A Lender's loan account
referred to in Section 3.04; provided, however, that upon the
request of such A Lender, the Borrower shall execute and deliver to
such A Lender a promissory note, in substantially the form of
Exhibit E hereto, in the face amount of the B Advance made by such A
Lender as part of a B Borrowing.
(g) If the Borrower so elects, it may conduct, from
time to time, auctions for B Advances in accordance with the
foregoing provisions.
SECTION 2.04Fees.
(a) Facility Fee. The Borrower agrees to pay to the
Agent for the account of each A Lender a facility fee, accruing at
the rate per annum equal to the Facility Fee Percentage in effect
from and after the date hereof, on the amount of such A Lender's A
Commitment (computed without giving effect to any B Reduction or any
other usage of the A Commitment of such A Lender), payable quarterly
in arrears on the last day of each January, April, July and October
and on the Revolver Termination Date.
(b) Utilization Fee. The Borrower agrees to pay to
the Agent for the account of each A Lender a utilization fee,
accruing, during all periods from and after the date hereof when the
aggregate amount of outstanding A Advances made by such A Lender
exceeds 50% of such A Lender's A Commitment (without regard to any
usage thereof), at the rate of 0.05% per annum on the aggregate
amount of such A Advances 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 Revolver 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 and the Agent.
SECTION 2.05Reduction of the A Commitments. 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 A Commitments
of the A Lenders, provided, the aggregate amount of the A
Commitments of the A Lenders shall not be reduced to an amount which
is less than the aggregate principal amount of the B Advances then
outstanding and 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.
SECTION 2.06Repayment of A Advances. The Borrower shall
repay in full the principal amount of each A Advance owing to each A
Lender, together with accrued interest and fees thereon, on the
Revolver Termination Date.
SECTION 2.07Interest on A Advances. The Borrower shall
pay interest on the unpaid principal amount of each A Advance made
by each A Lender from the date of such A Advance until such
principal amount shall be paid in full, at the following rates per
annum:
(a) Base Rate Advances. If such A Advance is a Base
Rate Advance, a rate per annum equal at all times to the Base
Rate 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 Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such A Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times
during the Interest Period for such A Advance to the sum of
the Eurodollar Rate for such Interest Period plus the
Eurodollar Rate Margin, 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
(x) after the expiration of the Interest Period related to
such principal amount, 2% per annum above the Base Rate in
effect from time to time and (y) prior to the expiration of
the Interest Period related to such principal amount, 2% per
annum above the rate per annum required to be paid on such A
Advance immediately prior to the date on which such principal
amount became due.
SECTION 2.08Additional Interest on Eurodollar Rate
Advances. The Borrower shall pay to each A Lender, so long as such
A 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 A Lender,
from the date of such A 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 A 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 A Lender for such
Interest Period, payable on each date on which interest is payable
on such A Advance. Such additional interest shall be determined by
such A Lender and notified to the Borrower through the Agent.
SECTION 2.09Interest 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 any 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 A Lenders of the
applicable interest rate determined by the Agent for purposes of
Section 2.07(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 2.07(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 A 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 A Lenders to
make, or to Convert A Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower
and the A 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 A Lenders and such Advances will
automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid
principal amount of A Advances comprising any A Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than
$1,000,000 multiplied by the number of A Lenders, such A Advances
shall, if they are A Advances of a Type other than Base Rate
Advances, automatically Convert into Base Rate Advances, and on and
after such date the right of the Borrower to Convert such A Advances
into A Advances of a Type other than Base Rate Advances shall
terminate; provided, however, that if and so long as each such A
Advance shall be of the same Type and have the same Interest Period
as A Advances comprising another A Borrowing or other A Borrowings,
and the aggregate unpaid principal amount of all such A Advances
shall equal or exceed $1,000,000 multiplied by the number of A
Lenders, the Borrower shall have the right to continue all such A
Advances as, or to Convert all such A Advances into, A Advances of
such Type having such Interest Period.
(e) 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 A Lenders that the interest rate cannot be
determined for such Eurodollar Rate Advances,
(ii) each such A Advance will automatically, on
the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance (or if such A Advance is then
a Base Rate Advance, will continue as a Base Rate Advance),
and
(iii) the obligation of the A Lenders to make, or
to Convert A Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the A
Lenders that the circumstances causing such suspension no
longer exist.
SECTION 2.10Voluntary Conversion of A 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 2.09 and 2.13, Convert all A Advances of one
Type comprising the same A Borrowing into A Advances of another
Type; provided, however, that any Conversion of any Eurodollar Rate
Advances into A 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 A Advances to be Converted, and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the
Interest Period for each such A Advance.
SECTION 2.11No Prepayments of A Advances. (a) The
Borrower shall have no right to prepay any principal amount of any A
Advances other than as provided in subsection (b) below or Section
2.14.
(b) The Borrower may, upon at least (i) two Business
Day's, in the case of Eurodollar Rate Advances and (ii) same
Business Day's, 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 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 A Advances
comprising part of the same A Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial
prepayment 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 A Lenders in respect
thereof pursuant to Section 9.04(b).
SECTION 2.12Increased 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 to any A 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 A Lender (with a copy
of such demand to the Agent), pay to the Agent for the account of
such A Lender additional amounts sufficient to compensate such A
Lender for such increased cost; provided, that, the Borrower shall
have no obligation to reimburse any A 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 A Lender, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If, at any time after the date of this Agreement,
any A 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 A Lender or any corporation controlling
such A Lender and that the amount of such capital is increased by or
based upon the existence of such A Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand by
such A Lender (with a copy of such demand to the Agent), the
Borrower shall immediately pay to the Agent for the account of such
A Lender, from time to time as specified by such A Lender,
additional amounts sufficient to compensate such A Lender or such
corporation in the light of such circumstances, to the extent that
such A Lender reasonably determines such increase in capital to be
allocable to the existence of such A 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 A Lender undertaken by such A 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 A 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 2.12(a) or 2.12(b) or any other provision of this
Agreement, each A Lender agrees that if there is any increase in any
cost to or reduction in any amount receivable by such A Lender with
respect to which the Borrower would be obligated to compensate such
A Lender pursuant to Sections 2.12(a) or 2.12(b), such A 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 A Lender;
provided, however, that no A Lender shall be obligated to select an
alternative Applicable Lending Office if such A Lender determines
that (i) as a result of such selection such A 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 A 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 2.12 shall survive the
payment in full (after the Revolver Termination Date) of all
Obligations.
SECTION 2.13Illegality. (a) Notwithstanding any other
provision of this Agreement, if any A 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 A 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 A Lenders to make, or to Convert A Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the A 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 A
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 A Lenders then
outstanding into A Advances of another Type in accordance with
Section 2.10.
(b) Without affecting its rights under Section 2.13(a)
or under any other provision of this Agreement, each A Lender agrees
that if it becomes unlawful or impossible for such A Lender to make,
maintain or fund its Eurodollar Rate Advances as contemplated by
this Agreement, such A Lender shall use reasonable efforts to select
an alternative Applicable Lending Office from which such A 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 A Lender shall be obligated to
select an alternative Applicable Lending Office if such A Lender
determines that (i) as a result of such selection such A 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 A Lender.
SECTION 2.14Extension of Revolver Termination Date. At
least 45 but not more than 60 days prior to the next Anniversary
Date, the Borrower, by written notice to the Agent, may request that
the Revolver Termination Date be extended one calendar year from its
then current scheduled expiration. The Agent shall promptly notify
each A Lender of such request, and each A Lender shall in turn,
within 30 days prior to such next Anniversary Date, notify the
Borrower and the Agent in writing regarding whether such A Lender
will consent to such extension. If, and only if, the Majority
Lenders consent in writing to such extension prior to the tenth
Business Day preceding such next Anniversary Date, the Revolver
Termination Date shall be so extended for one calendar year and
references herein to the "Revolver Termination Date" shall refer to
such "Revolver Termination Date" as so extended. If any A Lender
shall fail to deliver such notice to the Borrower and the Agent as
provided above (each such A Lender being a "Declining A Lender"),
such Declining A Lender shall be deemed not to have consented to any
requested extension, such Declining A Lenders' A Commitments shall
terminate on the scheduled Revolver Termination Date then in effect
for such Declining A Lender, and on such scheduled Revolver
Termination Date the Borrower shall repay in full the principal
amount of A Advances owing to such Declining A Lender, together with
accrued interest thereon to the date of payment of such principal
amount, all fees payable to such Declining A Lender and all other
amounts payable to such Declining A Lender under this Agreement
(including, but not limited to any increased costs or other
additional amounts owing under Section 2.12, any indemnification for
Taxes or Other Taxes under Section 3.02, or any amounts which may be
required to be paid by the Borrower pursuant to Section 9.04(b)).
It is understood that no A Lender shall have any obligation
whatsoever to agree to any request made by the Borrower for an
extension of the Revolver Termination Date.
ARTICLE IIIPAYMENTS, TAXES, EXTENSIONS, ETC.
SECTION 3.01Payments and Computations. (a) The Borrower
shall make each payment hereunder with respect to Article II, the A
Advances, the A Lenders, the B Advances 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 (unless otherwise specified in Section 2.03
with respect to B Advances) at its address referred to in
Section 9.02 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 commitment fees ratably (other
than amounts payable pursuant to Section 2.03, 2.08, 2.12, 2.14 or
3.02) to the A Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment
of any other amount payable to such A Lender to be distributed to
the appropriate A Lender or A 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 9.07(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 A Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) The Borrower hereby authorizes the Agent and each
A Lender if and to the extent payment owed to the Agent or such A
Lender is not paid when due hereunder to charge from time to time
against any or all of the Borrower's accounts with the Agent or such
A 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 commitment fees, fixed rates of interest on
B Advances 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 2.08 shall be made by an 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 commitment fees are payable.
Each determination by the Agent (or, in the case of Section 2.08, by
an A Lender) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of
interest or facility or commitment fee, as the case may be;
provided, however, if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the A
Lender or A Lenders hereunder that the 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 A
Lender or A Lenders on such due date an amount equal to the amount
then due such A Lender or A Lenders. If and to the extent that the
Borrower shall not have so made such payment in full to the Agent,
each such A Lender shall repay to the Agent forthwith on demand such
amount distributed to such A Lender together with interest thereon,
for each day from the date such amount is distributed to such A
Lender until the date such A Lender repays such amount to the Agent,
at the Federal Funds Rate.
SECTION 3.02Taxes. (a) Any and all payments by the
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 A Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such A Lender or the
Agent (as the case may be) is organized or any political subdivision
thereof and, in the case of each A Lender, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of
such A Lender'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 shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder
to any A Lender 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 3.02) such A Lender 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 shall make such
deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any
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, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) The Borrower will reimburse each A Lender and the
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.02) paid by
such A Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This reimbursement shall be made
within 30 days from the date such A Lender or the Agent (as the case
may be) makes written demand therefor. The Agent and each A Lender,
as the case may be, shall give prompt (within 10 Business Days)
notice to the Borrower of the payment by the Agent or such A Lender,
as the case may be, of such Taxes or Other Taxes, and of the
assertion by any governmental or taxing authority that such Taxes or
Other Taxes are due and payable, but the failure to give such notice
shall not affect the Borrower's obligations hereunder to reimburse
the Agent and each A Lender for such Taxes or Other Taxes, except
that the Borrower shall not 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. The Borrower shall not 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 A Lender, as the case may be.
(d) Each A Lender 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
Bank and on the date of the Assignment and Acceptance pursuant to
which it becomes an A Lender in the case of each other A Lender, and
from time to time thereafter if requested in writing by the Borrower
(but only so long as such A Lender remains lawfully able to do so),
shall provide the Borrower with Internal Revenue Service form 1001
or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such A Lender 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 or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States. If the form provided by an A Lender
at the time such A Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from
"Taxes" as defined in Section 3.02(a).
(e) For any period with respect to which an A Lender
has failed to provide the Borrower with the appropriate form
described in Section 3.02(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 first sentence of subsection (d) above), such
A Lender shall not be entitled to indemnification under
Section 3.02(a) with respect to Taxes imposed by the United States;
provided, however, that should an A Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the A Lender shall reasonably
request to assist the A Lender to recover such Taxes.
(f) Notwithstanding any contrary provisions of this
Agreement, in the event that an A Lender that originally provided
such form as may be required under Section 3.02(d) thereafter ceases
to qualify for complete exemption from United States withholding
tax, such A Lender may assign its interest under this Agreement to
any assignee and such assignee shall be entitled to the same
benefits under this Section 3.02 as the assignor provided, that, the
rate of United States withholding tax applicable to such assignee
shall not exceed the rate then applicable to the assignor.
(g) Without affecting its rights under this
Section 3.02 or any provision of this Agreement, each A Lender
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 A
Lender or its Applicable Lending Office with respect to which the
Borrower would be obligated pursuant to this Section 3.02 to
increase any amounts payable to such A Lender or to pay any such
Taxes or Other Taxes, such A Lender 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 A Lender shall be obligated to select an
alternative Applicable Lending Office if such A Lender determines
that (i) as a result of such selection such A Lender would be in
violation of an 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 A Lender.
(h) Each A Lender agrees with the Borrower that it
will take all reasonable actions by all usual means (i) to secure
and maintain 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 A Lender'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 in accordance with this Section 3.02
and (ii) otherwise to cooperate with the Borrower to minimize the
amount payable by the Borrower pursuant to this Section 3.02;
provided, however, that no A Lender shall be obliged to disclose to
the Borrower any information regarding its tax affairs or tax
computations nor to reorder its tax affairs or tax planning pursuant
hereto.
(i) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations
of the Borrower contained in this Section 3.02 shall survive the
payment in full of the Obligations.
SECTION 3.03Sharing of Payments, Etc. If any A Lender
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of
the A Advances made by it (other than pursuant to Section 2.08,
2.12, 2.14 or 3.02) in excess of its ratable share of payments on
account of the A Advances obtained by all the A Lenders, such Lender
shall forthwith purchase from the other Lenders such participations
in the A Advances made by them as shall be necessary to cause such
purchasing A Lender to share the excess payment ratably with each of
them, provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing A Lender, such
purchase from each A Lender shall be rescinded and such A Lender
shall repay to the purchasing A Lender the purchase price to the
extent of such recovery together with an amount equal to such A
Lender's ratable share (according to the proportion of (i) the
amount of such A Lender's required repayment to (ii) the total
amount so recovered from the purchasing A Lender) of any interest or
other amount paid or payable by the purchasing A Lender in respect
of the total amount so recovered. The Borrower agrees that any A
Lender so purchasing a participation from another A Lender pursuant
to this Section 3.03 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 A Lender were
the direct creditor of the Borrower in the amount of such
participation.
SECTION 3.04Evidence of Debt. (a) Each A Lender shall
maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such A
Lender resulting from each Advance owing to such A Lender from time
to time, including the amounts of principal and interest payable and
paid to such A Lender from time to time hereunder.
(b) The Register maintained by the Agent pursuant to
Section 9.07(c) shall include a control account, and a subsidiary
account for each A Lender, in which accounts (taken together) shall
be recorded (i) the date and amount of each Borrowing made
hereunder, the Type of Advances comprising such Borrowing and 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 A Lender hereunder, and (iv)
the amount of any sum received by the Agent from the Borrower
hereunder and each A Lender's share thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE IVCONDITIONS OF LENDING
SECTION 4.01Condition Precedent to Initial Advances.
The obligation of each A Lender to make its initial Advance is
subject to the condition precedent that the Agent shall have
received on or before the day of the initial Borrowing the
following, in form and substance satisfactory to the Agent and in
sufficient copies for each Lender:
(a) Certified copies of all documents of the Borrower
evidencing necessary corporate action and governmental
approvals, if any, with respect to this Agreement.
(b) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the other documents to be delivered
hereunder.
(c) A favorable opinion of Borrower's General Counsel
or Associate General Counsel, substantially in the form of
Exhibit C hereto, and as to such other matters as any Lender
through the Agent may reasonably request.
(d) A favorable opinion of Shearman & Sterling,
counsel for the Agent, substantially in the form of Exhibit D
hereto.
(e) Such other approvals, opinions or documents as the
Agent may reasonably request.
SECTION 4.02Conditions Precedent to Each A Borrowing.
The obligation of each A Lender to make an A Advance on the occasion
of each A Borrowing (including the initial A Borrowing) shall be
subject to the further conditions precedent that on the date of such
A Borrowing the following statements shall be true (and each of the
giving of the applicable Notice of A Borrowing and the acceptance by
the Borrower of the proceeds of such A Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
A Borrowing such statements are true):
(a) The representations and warranties contained in
Section 5.01 (other than Section 5.01(e)) are correct on and
as of the date of such A Borrowing, before and after giving
effect to such A Borrowing, and to the application of the
proceeds therefrom, as though made on and as of such date, and
(b) (i) No event has occurred and is continuing, or
would result from such A Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of Default
or Default and (ii) no event has occurred and is continuing
which constitutes an "Event of Default" or a "Default" under
the 364-Day Credit Agreement.
SECTION 4.03Conditions Precedent to Each BBorrowing.
The obligation of each A Lender which is to make a B Advance on the
occasion of a B Borrowing (including the initial B Borrowing) to
make such B Advance as part of such B Borrowing is subject to the
conditions precedent that (i) the Agent shall have received the
written confirmatory Notice of B Borrowing with respect thereto or
the notices from the Borrower contemplated by the second sentence of
Section 2.03(a)(v) and (ii) on the date of such B Borrowing the
following statements shall be true (and each of the giving of the
applicable Notice of B Borrowing and the acceptance by the Borrower
of the proceeds of such B Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
B Borrowing such statements are true):
(a) The representations and warranties contained in
Section 5.01 (other than Section 5.01(e)) are correct on and
as of the date of such B Borrowing, before and after giving
effect to such B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,
(b) (i) No event has occurred and is continuing, or
would result from such B Borrowing or from the application of
the proceeds therefrom, which constitutes an Event of Default
or Default and (ii) no event has occurred and is continuing
which constitutes an "Event of Default" or a "Default" under
the 364-Day Credit Agreement, and
(c) No event has occurred and no circumstance exists
as a result of which the information concerning the Borrower
that has been provided to the Agent and each A Lender by the
Borrower in connection herewith would, taken as a whole,
include an untrue statement of a material fact or omit to
state any material fact or any fact necessary to make the
statements contained therein, in the light of the
circumstances under which they were made, not misleading.
ARTICLE VREPRESENTATIONS AND WARRANTIES
SECTION 5.01Representations 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. The Borrower and each of its Subsidiaries possess
all corporate powers 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 the
Borrower of this Agreement are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower's
charter or by-laws or (ii) law or any contractual restriction
binding on or affecting the Borrower or its properties.
(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 the Borrower of this Agreement.
(d) This Agreement is the legal, valid and binding
obligation of the Borrower enforceable against the Borrower
in accordance with its terms.
(e) The Consolidated balance sheets of the Borrower
and its Subsidiaries as at February 1, 1997, 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, copies of which have been
furnished to each Lender, fairly present the Consolidated
financial condition of the Borrower and its Subsidiaries as at
such date and the 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, and since February 1, 1997, there has
been no material adverse change in the condition (financial or
otherwise), operations, properties or prospects of the
Borrower and its Subsidiaries taken as a whole.
(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 this Agreement.
(g) Following the application of the proceeds of each
Advance, not more than 25 percent of the value of the assets
(either of the Borrower only or of the Borrower and its
Subsidiaries on a Consolidated basis) which are subject to any
restriction on Liens set forth in this Agreement or in any
agreement or instrument between the Borrower and any Lender or
any Affiliate of any Lender relating to Debt and within the
scope of Section 8.01(d) will consist of 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 V 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, to, any Multiemployer Plan.
ARTICLE VICOVENANTS OF THE BORROWER
SECTION 6.01Affirmative 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 Liens), 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 Corporate Existence, Etc.
Preserve and maintain, and cause each of its Subsidiaries to
preserve and maintain, its corporate existence, rights
(charter and statutory), and franchises 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 hereunder or the ability of the Borrower
to perform its obligations hereunder.
(c) Visitation Rights. Permit the Agent and any
Lender or any agents or representatives thereof from time to
time during normal business hours to examine and make copies
of and abstracts from the records and books of account of, and
upon reasonable prior notice to visit the properties of, the
Borrower and its Subsidiaries during reasonable business
hours, without hindrance or delay, 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 insurance) in amounts, from responsible and
reputable insurance companies or associations, with
limitations, of types and on terms as is customary for the
industry; provided, that, the Borrower and each of its
Subsidiaries may self-insure risks and liabilities in
accordance with its practice as of the date hereof and may in
addition self-insure risks and liabilities in amounts as are
customarily self-insured by similarly situated Persons in the
industry.
(g) Employment of Technology, Disposal of Hazardous
Materials, Etc. (i) Employ, and cause each of its Subsidiaries
to employ, appropriate technology and compliance procedures to
maintain compliance with any applicable Environmental Laws
except where the failure to so employ would not have a
Material Adverse Effect, (ii) obtain and maintain, and cause
each of its Subsidiaries to obtain and maintain, any and all
material permits required by applicable Environmental Laws in
connection with its or its Subsidiaries' operations and
(iii) dispose of, and cause each of its Subsidiaries to
dispose of, any and all Hazardous Substances only at
facilities and with carriers reasonably believed to possess
valid permits under RCRA, if applicable, and any applicable
state and local Environmental Laws except where the failure to
so dispose would not have a Material Adverse Effect. The
Borrower shall use its best efforts, and cause each of its
Subsidiaries to use its best efforts, to obtain all
certificates required by law to be obtained by the Borrower
and its Subsidiaries from all contractors employed by the
Borrower or any of its Subsidiaries in connection with the
transport or disposal of any Hazardous Substances except where
failure to transport or dispose in accordance with any
applicable Environmental Laws would not have a Material
Adverse Effect.
(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 $1,000,000;
(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
$1,000,000) 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 $1,000,000 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) Guaranty. Within ten Business Days after the
request of the Majority Lenders made through the Agent, cause
its Subsidiaries designated in such request to enter into and
deliver a guaranty of the Obligations, such guaranty to be in
form and substance satisfactory to the Majority Lenders.
SECTION 6.02Negative 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, other than Permitted Liens and Liens upon or with
respect to Margin Stock.
(b) Debt. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Debt if,
immediately after giving effect to the incurrence of such Debt
and the receipt and application of any proceeds thereof, the
Borrower and its Subsidiaries, on a Consolidated basis, would
be in violation of the financial covenant specified in
Section 6.03 hereof.
(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 that any Subsidiary of the
Borrower may merge or consolidate with or into, or dispose of
assets to, any other Subsidiary of the Borrower and except
that any Subsidiary of the Borrower may merge into or dispose
of assets to the Borrower and, subject to Section
6.02(d)(iii), the Borrower may merge or consolidate with or
into, and any Subsidiary of the Borrower may merge or
consolidate with or into, any other Person, provided in each
case that, immediately after giving effect to such proposed
transaction, no Event of Default or Default shall exist, and
in the case of any merger or consolidation to which the
Borrower is a party, the Person into which the Borrower shall
be merged or formed by any such consolidation shall be a
corporation organized and existing under the laws of the
United States of America or any State thereof and shall assume
the Borrower's obligations hereunder in an agreement or
instrument in form and substance reasonably satisfactory to
the Agent.
(d) Asset Acquisition, Investments, Mergers.
(i) Asset Acquisitions. Purchase, or permit any
of its Subsidiaries to purchase, all or substantially
all the assets of any Person (an "Asset Acquisition")
unless (A) if such Asset Acquisition involves the
purchase of Retail Assets, the purchase price of the
Retail Assets to be purchased in such Asset Acquisition
is less than 50% of the book value of the Borrower's
Consolidated Total Assets immediately prior to such
Asset Acquisition or (B) if such Asset Acquisition
involves the purchase of Non-Retail Assets, the purchase
price of the Non-Retail Assets to be purchased in such
Asset Acquisition is less than 25% of the book value of
the Borrower's Consolidated Total Assets immediately
prior to such Asset Acquisition and (C) immediately
prior to and after giving effect to such Asset
Acquisition no Event of Default or Default shall exist.
(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) if such
Investment is in a Person predominantly engaged in the
Retail Business, the purchase price and dollar amount of
capital contributions made with respect to such
Investment is less than 50% of the Borrower's
Consolidated Total Assets immediately prior to such
Investment or (B) if such Investment is in a Person
engaged predominantly in the Non-Retail Business, the
purchase price and dollar amount of capital
contributions made with respect to such Investment is
less than 25% of the Borrower's Consolidated Total
Assets immediately prior to such Investment and (C) 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 make
investments in the instruments described in Schedule IV
hereto, as such Schedule may be amended from time to
time by the Borrower. The Borrower shall provide the
Agent and each Lender a copy of each change or amendment
made to Schedule IV promptly after each such change or
amendment thereof.
(iii) Mergers. Consummate, or permit the
consummation of, any merger or consolidation (regardless
of whether it is otherwise permitted by Section 6.02(c))
if immediately after giving effect to such merger or
consolidation the book value of Consolidated Non-Retail
Assets of the surviving corporation is greater than 25%
of the book value of Borrower's Consolidated Total
Assets, or the book value of the Consolidated Retail
Assets of the surviving corporation is greater than 50%
of the Borrower's Consolidated Total Assets, in each
case immediately prior to such merger or consolidation
provided, that, Subsidiaries of the Borrower may merge
into or with the Borrower or any other Subsidiary of the
Borrower without regard to the restrictions of this
Section 6.02(d)(iii).
(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.
SECTION 6.03Financial Covenant. The Borrower will not,
without the written consent of the Majority Lenders, permit the
ratio of Debt on the last day of any Fiscal Quarter of the Borrower
to EBITDA for the period of four consecutive Fiscal Quarters of the
Borrower ending on such day to be greater than 3.00 to 1.00.
SECTION 6.04Reporting Requirements. The Borrower will
furnish to the Lenders:
(i) as soon as available and in any event within 60
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 6.03 (which certificate
shall contain the computations used by such chief financial
officer in determining such compliance or non-compliance);
(ii) as soon as available and in any event within 120
days after the end of each Fiscal Year of the Borrower, a copy
of the annual report for such year for the Borrower and its
Subsidiaries, containing Consolidated financial statements of
the Borrower and its Subsidiaries for such Fiscal Year
certified in a manner acceptable to the Majority Lenders by
Deloitte & Touche or other independent public accountants
reasonably acceptable to the Majority Lenders;
(iii) within 120 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 6.03
(which certificate shall contain the computations used by such
chief financial officer in determining such compliance or
non-compliance);
(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 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; and
(viii) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Lender through the
Agent may from time to time reasonably request.
ARTICLE VIIEVENTS OF DEFAULT
SECTION 7.01Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of
any Advance when the same becomes due and payable; or shall
fail to pay any interest on any Advance, fees or any other
amounts hereunder within two days after the same become due
and payable by it; or
(b) Any representation or warranty made by the
Borrower herein (whether made on behalf of itself or
otherwise) or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been
incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe
(i) the covenant contained in Section 6.03; or (ii) any term,
covenant or agreement contained in Section 6.02(c) or (d) for
a period of five days after written notice thereof shall have
been given to the Borrower by the Agent or any Lender; or
(iii) any other term, covenant or agreement contained in this
Agreement 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 the Borrower by 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
$10,000,000 in the aggregate (but excluding Debt hereunder) of
the Borrower or such Subsidiary (as the case may be), when the
same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to
such Debt; or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such
Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt (other than any
such Debt owed to a Lender or an Affiliate of a Lender if such
event or condition shall relate solely to a restriction on the
pledge or other disposition of Margin Stock owned by the
Borrower or any of its Subsidiaries); 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
(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) Any judgment or order for the payment of money in
excess of $10,000,000 shall be rendered against the Borrower
or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of
ten 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;
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 A Lender to make
Advances to be terminated, whereupon the same shall forthwith
terminate, and/or (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; 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 A Lender
to make A 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 shall automatically be terminated.
ARTICLE VIIITHE AGENT
SECTION 8.01Authorization and Action. Each Lender
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 Borrower pursuant to the
terms of this Agreement unless the distribution of such notice is
otherwise provided for herein.
SECTION 8.02Agent'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 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 9.07;
(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, telegram, cable or telex) believed by
it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03CUSA and Affiliates. With respect to CUSA's
A Commitment and the Advances made by it, CUSA 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; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated,
include CUSA in its individual capacity. CUSA and each of its
Affiliates (and, as applicable, any of its 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 and without any duty
to account therefor to the Lenders.
SECTION 8.04Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Agent or any other Lender and based on the financial statements
referred to in Section 5.01 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 or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
this Agreement.
SECTION 8.05Indemnification. The Lenders agree to
indemnify the Agent (to the extent not reimbursed by the Borrower),
ratably, according to their respective principal amounts of A
Advances then outstanding or if no A Advances are outstanding,
ratably according to the respective amounts of their A Commitments),
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever 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 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 8.05 applies whether
any such investigation, litigation or proceeding is brought by the
Agent, any Lender or a third party.
SECTION 8.06Successor Agent. The Agent may resign at
any time by giving ten days' prior written notice thereof to the
Lenders and the Borrower and may be removed at any time with or
without cause by the Majority Lenders; provided, that, the Agent may
resign without having given such notice if it is required to do so
as a matter of law. Upon any such resignation or removal, the
Majority Lenders, after consulting with the Borrower and giving due
consideration to any successor agent recommended by the Borrower,
shall have the right to appoint a successor Agent with the consent
of the Borrower (which shall not be unreasonably withheld). If no
successor Agent shall have been so appointed by the Majority Lenders
and consented to by the Borrower, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Majority Lenders' removal of the
retiring Agent, then the retiring Agent may, after consulting with
the Borrower and giving due consideration to any successor agent
recommended by the Borrower, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized or
licensed to do business under the laws of the United States of
America or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the
rights, powers, 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 VIII
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
ARTICLE IXMISCELLANEOUS
SECTION 9.01Amendments, Etc.
(a) Majority Lenders. 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 shall, unless in
writing and signed by all the A Lenders, do any of the following:
(i) waive any of the conditions specified in Section 4.01 or 4.02 as
they relate to A Borrowings and A Advances, (ii) increase the A
Commitments of the A Lenders or subject the A Lenders to any
additional obligations, (iii) reduce the principal of, or interest
on, the A Advances or any fees or other amounts payable hereunder to
the A Lenders, (iv) postpone any date fixed for any payment of
principal of, or interest on, the A Advances or any fees or other
amounts payable hereunder to the A Lenders (other than as permitted
under Section 2.14), (v) change the percentage of the A Commitments
or of the aggregate unpaid principal amount of the A Advances, or
the number of A Lenders, which shall be required for the A Lenders
or any of them to take any action hereunder or (vi) amend this
subsection (a) of this Section 9.01.
(b) Agent. No amendment, waiver or consent given or
effected pursuant to this Section 9.01 shall, unless in writing and
signed by the Agent in addition to the A Lenders required above to
take such action, affect the rights, obligations or duties of the
Agent under this Agreement.
(c) Limitation of Scope. All waivers and consents
granted under this Section 9.01 shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 9.02Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable communication) and mailed,
sent by overnight courier, telecopied, telegraphed, telexed, cabled
or delivered, if to the Borrower, at its address at 900 Cherry
Avenue, San Bruno, CA 94066 Attention: Treasurer; if to any Lender,
at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which
it became a Lender; if to the Agent, at its address at 399 Park
Avenue, New York, New York 10043, Attention: Credit Administration;
with a copy, in the case of notices to the Agent, to Citicorp North
America, Inc., One Sansome Street, San Francisco, California,
Attention: Carolyn Wendler, 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, when
telecopied or delivered to the telegraph company, be effective when
received or delivered to the cable company, respectively; and when
delivered by hand, be effective upon delivery except that notices
and communications to the Agent pursuant to Article II or VIII shall
not be effective until received by the Agent.
SECTION 9.03No Waiver; Remedies. No failure on the part
of any Lender 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 9.04Costs and Expenses. (a) The Borrower agrees
to pay on demand all 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 their
respective rights and responsibilities under this Agreement with
respect thereto. The Borrower further agrees to pay on demand all
costs and expenses of the Agent and each Lender (including, without
limitation, reasonable counsel fees and expenses), incurred in
connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement and the other documents
to be delivered hereunder, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of
their respective rights hereunder.
(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 A Advance, as a result of a payment or
Conversion pursuant to Section 2.09(d), 2.11, 2.13 or 2.14 or
acceleration of the maturity of the Advances pursuant to
Section 7.01 or for any other reason, the Borrower shall, upon
demand by any A Lender (with a copy of such demand to the Agent),
pay to the Agent for the account of such A Lender any amounts
required to compensate such A Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such
payment or Conversion, 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 A Lender to fund or maintain such A Advance.
(c) The Borrower agrees to indemnify and hold harmless
each of the Agent, each Lender 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,
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
by the Borrower, except to the extent such claim, damage, liability
or expense is found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. 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 9.04 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 2.08, 2.12(a), 2.13 or
9.04(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 9.05Right of Setoff. 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 7.01 to authorize the Agent to declare the Advances due and
payable pursuant to the provisions of Section 7.01, 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 the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement to
such Lender, 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 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 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 9.06Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Agent and when the Agent shall have been notified by each Bank that
such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Lender and
their respective successors and assigns, except that the 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 9.07Assignments and Participations. (a) Each
Lender may, and if demanded by the Borrower (following a demand by
such Lender pursuant to Section 2.08, 2.12 or 3.02, after such
Lender has declined to vote in favor of extension of the Revolver
Termination Date pursuant to Section 2.14, or after any Lender has
assigned all or any portion of its rights and obligations under this
Agreement to any Affiliate without the consent of the Borrower, upon
at least 20 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 A Commitment and
the A Advances owing to it); provided, however, that (i) each such
respective assignment shall be of a percentage of all rights and
obligations under this Agreement (other than any B Advances) in
respect of the assigning A Lender's A Commitment and A Advances that
is constant and not varying over time, (ii) the respective amounts
of the rights and obligations under the A Commitment and A Advances
of the assigning A Lender, being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than 5% of all such rights and obligations or less than
$5,000,000 (or an integral multiple of $500,000 in excess thereof),
(iii) 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 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 9.07(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 9.07(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, and (vi) 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 $2,000; 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 a 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 or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in
Section 5.01 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, such assigning
Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent 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; 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 a
Lender.
(c) The Agent shall maintain at its address referred
to in Section 9.02 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 A Commitment of, and
principal amount of the Advances owing to, each Lender 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 a Lender hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(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 B 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.
(e) Each Lender may assign or participate to one or
more banks or other entities any B Advance held by it without regard
to any of the restrictions placed on assignments elsewhere in this
Section 9.07 or this Agreement; provided, that, any participation
shall be made in accordance with subsection (f) hereof and provided,
further, that any assignee of a B Advance that is not then a Lender
hereunder shall not be entitled to demand any payments under Section
2.08, 2.12 or 3.02 hereof and shall have no voting rights or other
rights of a Lender hereunder other than the right to demand and
receive interest and principal payments at the times when due with
respect to the B Advance owned by it.
(f) Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the Advances owing to it;
provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its A Commitment to the
Borrower hereunder) 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 Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, provided,
further, that, to the extent of any such participation (unless
otherwise stated therein and subject to the preceding proviso), the
purchaser of such participation shall, to the fullest extent
permitted by law, have the same rights and benefits hereunder as it
would have if it were a 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 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 or other
amounts or such fees, or (iii) extend the Revolver Termination Date.
(g) Upon written request of the Borrower to an A
Lender, such A Lender shall, to the extent consistent with the
policies of such A Lender, inform the Borrower of the Dollar amount
of any Full Term Participation (as hereinafter defined) that such A
Lender has entered into; provided, however, that no A 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 A Lender is subject. For
the purposes of this subsection (g), "Full Term Participation" means
a participation by an A Lender to another Person whereby such other
Person has purchased (pursuant to a participation agreement) all or
a portion of such A Lender's A Commitment from the effective date of
such participation agreement to the Revolver Termination Date.
(h) 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 prompt 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.
SECTION 9.08Severability 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 9.09Independence 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 9.10Confidentiality. Each Lender and the Agent
agrees that it will not disclose to any third party any written
information marked "Confidential" provided to it by the Borrower;
provided, that, the foregoing will not (i) restrict the ability of
the Agent, the Lenders and any loan participants from freely
exchanging such information among themselves (and their respective
employees, attorneys, agents and advisors), (ii) restrict the
ability to disclose such 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 such information to such Eligible Assignee or participant or
(iii) prohibit the disclosure of such information to the extent such
information (a) becomes publicly available, (b) becomes available
through a Person not a Subsidiary, (c) is required to be disclosed
pursuant to court order, subpoena, other legal process, regulatory
request or otherwise by law or (d) is disclosed in litigation with
the Borrower or any of its Subsidiaries.
SECTION 9.11Headings. 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 9.12Entire Agreement. This Agreement sets forth
the entire agreement of the parties with respect to its subject
matter and, except for the letter agreement referred to in
Sections 2.04(c), supersedes all previous understandings, written or
oral, in respect thereof.
SECTION 9.13Execution 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 9.14Consent to Jurisdiction. (a) Each of the
parties hereto hereby irrevocably submits to the 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 9.02 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 9.14 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 9.15GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
SECTION 9.16WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENT AND THE LENDERS 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 OR THE
ADVANCES, OR THE ACTIONS OF THE AGENT OR ANY LENDER IN CONNECTION
WITH THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
THE BORROWER:
THE GAP, INC.
By /s/ Warren R. Hashagen
Name: Warren R. Hashagen
Title: Senior Vice President and
Chief Financial Officer
THE AGENT:
CITICORP USA INC.
By /s/ Marjorie Futornick
Name: Marjorie Futornick
Title: Vice President
THE BANKS:
A Commitment CITICORP USA INC.
$15,789,473.68
By /s/ Marjorie Futornick
Name: Marjorie Futornick
Title: Vice President
A Commitment BANK OF AMERICA NATIONAL
$13,421,052.63 TRUST & SAVINGS ASSOCIATION
By /s/ Maria Vickroy-Peralta
Name: Maria Vickroy-Peralta
Title: Vice President
A Commitment THE HONGKONG AND SHANGHAI
$13,421,052.63 BANKING CORPORATION LIMITED
By /s/ J.C. Holsex
Name: J.C. Holsex
Title: Exec. Vice President
A Commitment NATIONSBANK OF TEXAS, N.A.
$11,052,631.58
By /s/ Chas A. McDonell
Name: Chas A. McDonell
Title: Vice President
A Commitment THE ROYAL BANK OF CANADA
$11,052,631.58
By /s/ Karen T. Hull
Name: Karen T. Hull
Title: Retail Group Manager
A Commitment BANK OF MONTREAL
$11,052,631.58
By /s/ Beverly A. Blucher
Name: Beverly A. Blucher
Title: Senior Vice President
A Commitment SOCIETE GENERALE
$11,052,631.58
By /s/ Maureen E. Kelly
Name: Maureen E. Kelly
Title: Vice President
A Commitment THE FUJI BANK, LIMITED
$11,052,631.58
By /s/ Kazuo Kamio
Name: Kazuo Kamio
Title: General Manager
A Commitment MORGAN GUARANTY TRUST
$11,052,631.58 COMPANY OF NEW YORK
By /s/ Adam J. Silver
Name: Adam J. Silver
Title: Associate
A Commitment THE SUMITOMO BANK LIMITED
$11,052,631.58
By /s/ Kozo Masaki
Name: Kozo Masaki
Title: General Manager
A Commitment DEUTSCHE BANK AG NEW YORK BRANCH
$11,052,631.58 AND/OR CAYMAN ISLANDS BRANCH
By /s/ Joel D. Makowsky
Name: Joel D. Makowsky
Title: Assistant Vice President
By /s/ Susan M. O'Connor
Name: Susan M. O'Connor
Title: Director
A Commitment UNION BANK OF SWITZERLAND, NEW
$11,052,631.58 YORK BRANCH
By /s/ M. Terri Reilly
Name: M. Terri Reilly
Title: Assistant Treasurer
By /s/ Samuel Azizo
Name: Samuel Azizo
Title: Vice President
A Commitment U.S. NATIONAL BANK OF OREGON
$7,894,736.84
By /s/ Janet E. Jordan
Name: Janet E. Jordan
Title: Vice President
_____________
$150,000,000 Total of the A Commitments
Schedule II
EXISTING LIENS
None
Schedule III
CHANGE OF CONTROL
1. Donald G. Fisher
2. Doris Fisher
3. Millard S. Drexler
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 July 1, 1997.
Schedule IV
PERMITTED INVESTMENTS
1. Obligations issued or guaranteed by the United States Government.
2. Commercial paper of issuers having a rating of P-1 by Moodys or A-1 by
S&P or a rating of not less than P-2 by Moodys and A-2 by S&P.
3. Banker's acceptances, certificates of deposit and eurodollar time
deposits (including bank money market funds) from commercial banks
with commercial paper ratings (or equivalent long-term debt ratings)
as specified in 2 above.
4. Tax-exempt securities rated Aaa by Moodys or AAA by S&P or Aa by
Moodys or AA by S&P or A by Moodys or A by S&P.
5. Secured repurchase agreements involving any of the instruments
referred to in 1-4 above and having the ratings specified in 1-4
above, as applicable, with an institution or institutions whose
commercial paper (or long term debt rating) satisfies the criteria
specified in 2 above.
6. Money market preferred stock (not issued by a thrift, saving and loans
institution or analogous institution) rated Aaa by Moodys or AAA by
S&P.
7. Loan participations purchased from major money center banks provided
the borrower associated with such participation has a long-term debt
rating of P-1 by Moodys or A-1 by S&P or P-2 by Moodys and A-2 by S&P.
Moodys = Moody's Investors Service, Inc.
S&P = Standard & Poor's Corporation
Schedule V
PLANS:
Gap VEBA Trust (Self-insured medical and dental claims)
GapShare Plan
Employee Benefit Premium Payment Plan - (Pre-tax employee contributions
under medical, dental plans)
Life Insurance and Accidental Death and Dismemberment Plan
Health Insurance Plan (HMOs and Employee Assistance Plan)
Short Term Disability Plan
Long Term Disability Plan
Tuition Reimbursement Program
Vision Care Plan
EXHIBIT A-1
NOTICE OF A BORROWING
Citicorp USA Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
[Date]
Attention:
Ladies and Gentlemen:
The undersigned, The Gap, Inc., refers to the Credit Agreement,
dated as of July 1, 1997 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain
Lenders parties thereto, and Citicorp USA Inc. as Agent for said Lenders,
and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the
Credit Agreement that the undersigned hereby requests an A Borrowing under
the Credit Agreement, and in that connection sets forth below the
information relating to such A Borrowing (the "Proposed A Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is
, 19 .
(ii) The Type of A Advances comprising the Proposed A
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$ .
(iv) The Interest Period for each A Advance made as part
of the Proposed A Borrowing is [ days] [ 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 A
Borrowing:
(A) the representations and warranties contained in Section
5.01 are correct, before and after giving effect to the Proposed A
Borrowing 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 Proposed A Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or Default.
Very truly yours,
THE GAP, INC.
By
Name:
Title:
EXHIBIT A-2
NOTICE OF B BORROWING
Citicorp USA Inc. , as Agent
for the Lenders parties
to the Credit Agreement
referred to below
[Date]
Attention:
Ladies and Gentlemen:
The undersigned, The Gap, Inc., refers to the Credit Agreement,
dated as of July 1, 1997 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain
Lenders parties thereto, and Citicorp USA Inc. as Agent for said Lenders,
and hereby gives you notice pursuant to Section 2.03 of the Credit
Agreement that the undersigned hereby requests a B Borrowing under the
Credit Agreement, and in that connection sets forth the terms on which such
B Borrowing (the "Proposed B Borrowing") is requested to be made:
(A) Date of B Borrowing
(B) Amount of B Borrowing
(C) Maturity Date
(D) Interest Rate Basis
(E) Interest Payment Date(s)
(F)
(G)
(H)
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Section
5.01 are correct, before and after giving effect to the Proposed B
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date;
(b) no event has occurred and is continuing, or would result
from the Proposed B Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or Default;
(c) no event has occurred and no circumstance exists as a
result of which the information concerning the undersigned that has
been provided to the Agent and each Lender by the undersigned in
connection with the Credit Agreement would, taken as a whole, include
an untrue statement of a material fact or omit to state any material
fact or any fact necessary to make the statements contained therein,
in the light of the circumstances under which they were made, not
misleading; and
(d) the aggregate amount of the Proposed B Borrowing and all
other Borrowings to be made on the same day under the Credit
Agreement is within the aggregate amount of the unused A Commitments
of the A Lenders.
The undersigned hereby confirms that the Proposed B Borrowing
is to be made available to it in accordance with Section 2.03(a)(v) of the
Credit Agreement.
Very truly yours,
THE GAP, INC.
By
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated ,
Reference is made to the Credit Agreement dated as of July 1,
1997 (the "Credit Agreement") among The Gap, Inc., a Delaware corporation
(the "Borrower"), the Lenders (as defined in the Credit Agreement), and
Citicorp USA Inc. as Agent for the Lenders (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 (other than in respect of
B Advances) which represent the respective percentage interests specified
on Schedule 1 of all outstanding rights and obligations under the Credit
Agreement (other than in respect of B Advances) in respect of the
Assignor's A Commitment and the A Advances owing to the Assignor. After
giving effect to such sale and assignment, the Assignee's A Commitment and
the amount of the A Advances owing to the Assignee will be as set forth 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 or the performance or observance by
the Borrower of any of their 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 5.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (ii) agrees that
it will, independently and without reliance upon the Agent, the Assignor or
any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that
it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take
such action 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; (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 a
Lender; [and] (vi) specifies as its Domestic Lending Office (and address
for notices) and Eurodollar Lending Office the offices set forth beneath
its name on the signature pages hereof and [(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 a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the
Credit Agreement in respect of the interests assigned hereby (including,
without limitation, all payments of principal, interest and commitment 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
Schedule 1
to
Assignment and Acceptance
Dated , __
Section 1.
Percentage Interest in A Commitment and A Advances:
Section 2.
Assignee's A Commitment: $
Aggregate outstanding principal amount
of A Advances owing to Assignee: $
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]
Accepted this day
of , ____
CITICORP USA, INC., as Agent
By:
Title:
EXHIBIT E
FORM OF AUCTION BORROWING NOTE
U.S. $ ___________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 (as defined in the Credit Agreement referred to below), on
_________, ___, the principal amount of _______________________ Dollars ($
________).
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in
full, at the interest rate and payable on the interest payment date or dates
provided below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed).
[Insert variable calculation if applicable]
Interest Payment Date or Dates:
____________________________________________
Both principal and interest are payable in lawful money of the
United States of America to ___________________________ for the account of the
Lender at the office of ____________________________, at
___________________________________________, in same day funds, free and clear
of and without any deduction, with respect to the payee named above, subject
to Section 3.02 of the Credit Agreement referred to below, for any and all
present and future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto.
This Promissory Note is one of the promissory notes referred to in
Section 2.03(f) of the Credit Agreement, dated as of July 1, 1997, among the
Borrower, the Lender and certain other banks parties thereto, and Citicorp USA
Inc., as Agent for the Lender and such other banks (such Credit Agreement, as
it may be amended, restated or otherwise modified, being the "Credit
Agreement"). The Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events.
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York, United States, without
reference to principles of conflicts of laws.
THE GAP, INC.
By
Name:
Title: