Exhibit 10.1

EXECUTION COPY

 

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U.S. $1,500,000,000

FIVE-YEAR

CREDIT AGREEMENT

Dated as of May 22, 2006

among

PEPSICO, INC.,

as Borrower,

THE LENDERS NAMED HEREIN,

CITIBANK, N.A.,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent

CITIGROUP GLOBAL MARKETS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners

 

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TABLE OF CONTENTS

 

            Page

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

   1

Section 1.01

    

Certain Defined Terms

   1

Section 1.02

    

Computation of Time Periods

   9

Section 1.03

    

Accounting Terms

   10

Section 1.04

    

Letter of Credit Amounts

   10

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES

   10

Section 2.01

    

The Revolving Credit Advances

   10

Section 2.02

    

Making the Revolving Credit Advances

   10

Section 2.03

    

The Competitive Bid Advances

   12

Section 2.04

    

Fees

   15

Section 2.05

    

Termination, Reduction or Increase of Commitments

   15

Section 2.06

    

Repayment of Revolving Credit Advances: Extension of Termination Date

   17

Section 2.07

    

Interest on Revolving Credit Advances

   18

Section 2.08

    

Interest Rate Determination

   19

Section 2.09

    

Optional Conversion of Revolving Credit Advances

   20

Section 2.10

    

Optional Prepayments of Revolving Credit Advances

   20

Section 2.12

    

Illegality

   21

Section 2.13

    

Payments and Computations

   21

Section 2.14

    

Taxes

   22

Section 2.15

    

Sharing of Payments, Etc.

   25

Section 2.16

    

Use of Proceeds

   25

Section 2.17

    

Borrowings by Borrowing Subsidiaries

   25

Section 2.18

    

Letters of Credit

   27

ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING

   34

Section 3.01

    

Conditions Precedent to Effectiveness of Sections 2.01, 2.03 and 2.18

   34

Section 3.02

    

Conditions Precedent to Each Revolving Credit Borrowing and Each Letter of
Credit Extension

   35

Section 3.03

    

Conditions Precedent to Each Competitive Bid Borrowing

   36

Section 3.04

    

Determinations Under Section 3.01

   36

ARTICLE IV REPRESENTATIONS AND WARRANTIES

   37

Section 4.01

    

Representations and Warranties of the Company

   37

ARTICLE V COVENANTS OF THE COMPANY

   38

Section 5.01

    

Affirmative Covenants

   38

Section 5.02

    

Negative Covenants

   39

ARTICLE VI EVENTS OF DEFAULT

   41

Section 6.01

    

Events of Default

   41

 

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ARTICLE VII THE AGENT

   42

Section 7.01

    

Authorization and Action

   42

Section 7.02

    

Agent’s Reliance, Etc.

   43

Section 7.03

    

Citibank and Affiliates

   43

Section 7.04

    

Lender Credit Decision

   44

Section 7.05

    

Indemnification

   44

Section 7.06

    

Successor Agent

   44

Section 7.07

    

Syndication Agents and Lead Arrangers

   44

ARTICLE VIII MISCELLANEOUS

   45

Section 8.01

    

Amendments, Etc.

   45

Section 8.02

    

Notices, Etc.

   45

Section 8.03

    

No Waiver; Remedies

   46

Section 8.04

    

Costs and Expenses

   46

Section 8.05

    

Right of Set-off

   47

Section 8.06

    

Binding Effect

   47

Section 8.07

    

Assignments and Participations

   48

Section 8.08

    

Confidentiality

   51

Section 8.09

    

Governing Law

   51

Section 8.10

    

Execution in Counterparts

   51

Section 8.11

    

Jurisdiction, Etc.

   51

Section 8.12

    

WAIVER OF JURY TRIAL

   52

Section 8.13

    

USA PATRIOT Act Notice

   52

ARTICLE IX GUARANTEE

   52

Section 9.01

    

Guarantee

   52

Section 9.02

    

Obligations Unconditional

   52

Section 9.03

    

Reinstatement

   53

Section 9.04

    

Subrogation

   53

Section 9.05

    

Remedies

   53

Section 9.06

    

Continuing Guarantee

   53

iii

 

 

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Schedules

 

Schedule I

    

Commitments

Schedule II

    

Agent’s Address

Exhibits

 

Exhibit A-1

    

Form of Revolving Credit Note

Exhibit A-2

    

Form of Competitive Bid Note

Exhibit B-1

    

Form of Notice of Revolving Credit Borrowing

Exhibit B-2

    

Form of Notice of Competitive Bid Borrowing

Exhibit C

    

Form of Assignment and Assumption

Exhibit D

    

Form of Designation Letter

Exhibit E

    

Form of Termination Letter

iv

 

 

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FIVE-YEAR CREDIT AGREEMENT

Dated as of May 22, 2006

PEPSICO, INC., a North Carolina corporation (the “Company”), the banks,
financial institutions and other institutional lenders (the “Initial Lenders”)
listed on the signature pages hereof, and CITIBANK, N.A. (“Citibank”), as
administrative agent (in such capacity, the “Agent”) for the Lenders (as
hereinafter defined), agree, as of May 22, 2006, as follows:

PRELIMINARY STATEMENT

The Company has requested that the Lenders agree to extend credit to it from
time to time in an aggregate principal amount of up to $1,500,000,000 for
general corporate purposes of the Company and its Subsidiaries not otherwise
prohibited under the terms of this Agreement. The Lenders have indicated their
willingness to agree to extend credit to the Company from time to time in such
amount on the terms and conditions of this Agreement.

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent.

“Advance” means a Revolving Credit Advance or a Competitive Bid Advance.

“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 or is a director or officer of such Person. For purposes of this
definition, the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.

“Agent’s Account” means such account as the Agent shall designate from time to
time in a notice to the Company and the Lenders.

“Agent’s Address” means the address or addresses on Schedule II attached hereto.

“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 Competitive Bid Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office with respect to such
Competitive Bid Advance.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender

 

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and an Eligible Assignee, and accepted by the Agent, in substantially the form
of Exhibit C hereto.

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the higher of:

(a) the rate of interest announced publicly by Citibank, from time to time, as
Citibank’s base rate; and

(b)  1/2 of one percent per annum above the Federal Funds Rate.

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

“Borrower” means, at any time, collectively, the Company (both as a Borrower and
as a guarantor under Article IX of Advances made to the Borrowing Subsidiaries)
and each Borrowing Subsidiary.

“Borrowing” means a Revolving Credit Borrowing or a Competitive Bid Borrowing.

“Borrowing Subsidiary” means any Subsidiary of the Company, as to which a
Designation Letter has been delivered to the Agent and as to which a Termination
Letter has not been delivered to the Agent in accordance with Section 2.17.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, the state of the Agent’s Address or in New York, New York and if such
day relates to a Eurodollar Rate Advance, it shall also mean a day on which
dealings are carried on by and between banks in the London interbank eurodollar
market.

“Cash Collateralize” has the meaning specified in Section 2.18(g).

“Commitment” means, with respect to any Lender, such Lender’s obligations to
make Revolving Credit Advances and purchase participations in L/C Obligations.
Such Lender’s Commitment shall be the amount set forth opposite such Lender’s
name on Schedule I hereto or, if such Lender has entered into any Assignment and
Assumption, set forth for such Lender in the Register maintained by the Agent
pursuant to Section 8.07(c), as such amount may be reduced pursuant to
Section 2.05(a) or increased pursuant to Section 2.05(c).

“Competitive Bid Advance” means an advance by a Lender to a Borrower as part of
a Competitive Bid Borrowing resulting from the auction bidding procedure
described in Section 2.03 and refers to a Fixed Rate Advance or a LIBO Rate
Advance.

“Competitive Bid Borrowing” means a borrowing consisting of simultaneous
Competitive Bid Advances from each of the Lenders whose offer to make one or
more Competitive Bid Advances as part of such borrowing has been accepted under
the auction bidding procedure described in Section 2.03.

“Competitive Bid Note” means a promissory note of a Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing
the indebtedness of such Borrower to such Lender resulting from a Competitive
Bid Advance made by such Lender.

“Competitive Bid Reduction” has the meaning specified in Section 2.01.

“Confidential Information” means information that the Company furnishes to the
Agent or any

 

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Lender in a writing designated as confidential, but does not include any such
information that is or becomes generally available to the public or that is or
becomes rightfully available to the Agent or such Lender from a source other
than the Company.

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

“Consolidated Net Tangible Assets” means the total assets of the Company and its
Restricted Subsidiaries (less applicable depreciation, amortization, and other
valuation reserves), less all current liabilities (excluding intercompany
liabilities) and all intangible assets of the Company and its Restricted
Subsidiaries, all as set forth on the most recent consolidated balance sheet of
the Company and its Restricted Subsidiaries, prepared in accordance with GAAP.

“Convert”, “Conversion” and “Converted” each refers to a conversion of Revolving
Credit Advances of one Type into Revolving Credit Advances of the other Type
pursuant to Section 2.08 or 2.09.

“Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services, (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d) all
obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of acceptances,
letters of credit or similar extensions of credit, (g) all obligations of such
Person in respect of Hedge Agreements, (h) all Debt of others referred to in
clauses (a) through (g) above or clause (i) below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (1) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such Debt, (2) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (3) to supply funds
to or in any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is received or
such services are rendered) or (4) otherwise to assure a creditor against loss,
and (i) all Debt referred to in clauses (a) through (h) above secured by (or for
which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on 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.

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

“Default Rate” means (a) with respect to a Base Rate Advance and any other
amount owing hereunder (other than a Eurodollar Rate Advance), the Base Rate
plus two percent (2%) per annum and (b) with respect to all Eurodollar Rate
Advances, the rate otherwise applicable to such Eurodollar Rate Advance plus two
percent (2%) per annum.

“Designation Letter” has the meaning specified in Section 2.17(a).

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” in its Administrative
Questionnaire or in the Assignment and Assumption pursuant to which it became a
Lender, or such other office of such Lender as such Lender

 

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may from time to time specify to the Company and the Agent.

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

“Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; (iii) a
commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $15,000,000,000 and a combined
capital and surplus of at least $1,000,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof, and having total assets in excess of $15,000,000,000 and a
combined capital and surplus of at least $1,000,000,000; (v) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$15,000,000,000 and a combined capital and surplus of at least $1,000,000,000,
so long as such bank is acting through a branch or agency located in the United
States or in the country in which it is organized or another country that is
described in this clause (v); (vi) the central bank of any country that is a
member of the Organization for Economic Cooperation and Development; provided,
however, that each Person described in clauses (ii) through (vi) shall have a
short term public debt rating of not less than A-1 by Standard & Poor’s Ratings
Group or P-1 by Moody’s Investors Service, Inc. and shall be approved by the
Company, such approval not to be unreasonably withheld or delayed; and (vii) any
other Person approved by the Company, such approval not to be unreasonably
withheld or delayed; provided, however, that neither the Company nor an
Affiliate of the Company shall qualify as an Eligible Assignee.

“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to the environment, health, safety
or Hazardous Materials.

“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” in its Administrative
Questionnaire or in the Assignment and Assumption 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 Company and the Agent.

“Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate
Advance constituting part of the same Revolving Credit Borrowing, an interest
rate per annum appearing on display page 3750 of the Telerate Markets (“Page
3750”) (or on any successor or substitute page of such Service, or any successor
to or substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) as of 11:00 A.M. (London
time) on the date two Business Days prior to the first day of such Interest
Period as the rate for Dollar deposits having a term comparable to such Interest
Period, or in the event such offered rate is not available from Page 3750, the
average (rounded to the nearer whole multiple of 1/16 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the Reference Banks in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such

 

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Interest Period in an amount substantially equal to such Reference Bank’s
Eurodollar Rate Advance constituting part of such Revolving Credit Borrowing to
be outstanding during such Interest Period and for a period equal to such
Interest Period. If the Eurodollar Rate does not appear on Page 3750 (or any
successor page), the Eurodollar Rate for any Interest Period for each Eurodollar
Rate Advance constituting part of the same Revolving Credit Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from the Reference Banks two Business Days before the
first day of such Interest Period, subject, however, to the provisions of
Section 2.08.

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

“Events of Default” has the meaning specified in Section 6.01.

“Existing Credit Agreements” means (a) the $750,000,000 Third Amended and
Restated Five-Year Credit Agreement dated as of June 7, 2004 (as amended,
supplemented or otherwise modified from time to time) among the Company, the
banks, financial institutions and other institutional lenders party thereto and
Bank of America, N.A., as administrative agent for the Lenders and such other
lenders, (b) the $750,000,000 Fourth Amended and Restated 364-Day Credit
Agreement dated as of May 26, 2005 (as amended, supplemented or otherwise
modified from time to time) among the Company, the banks, financial institutions
and other institutional lenders party thereto and Bank of America, N.A., as
administrative agent for the Lenders and such other lenders, (c) the
$300,000,000 Revolving Credit Facility dated as of October 7, 2005 between the
Company and Bank of America, N.A. and (d) the Amended and Restated $300,000,000
Bilateral Revolving Credit Facility dated as of October 7, 2005 between the
Company and Citibank, N.A.

“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 that
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.

“Fixed Rate Advances” has the meaning specified in Section 2.03(a)(i).

“GAAP” has the meaning specified in Section 1.03.

“Guaranteed Obligations” has the meaning specified in Section 9.01.

“Hazardous Materials” means petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials, radon
gas and any other chemicals, materials or substances designated, classified or
regulated as being “hazardous” or “toxic”, or words of similar import, under any
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, judgment, decree or judicial or agency interpretation, policy or
guideline.

“Hedge Agreements” means interest rate swap, cap or collar agreements, interest
rate future or option contracts, currency swap agreements, currency future or
option contracts and other similar agreements.

“Honor Date” has the meaning set forth in Section 2.18(c).

 

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“Information Memorandum” means the Confidential Offering Memorandum dated
April 2006 used by the Lead Arrangers in connection with the syndication of the
Commitments.

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

(i) the Company may not select any Interest Period that ends after the
Termination Date;

(ii) Interest Periods commencing on the same date for Eurodollar Rate Advances
constituting part of the same Revolving Credit Borrowing shall be of the same
duration;

(iii) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that,
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and

(iv) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Company (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its L/C Participation
Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or

 

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extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means Citibank, N.A. in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Participation Percentage” means, with respect to a Letter of Credit, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the sum of (a) the aggregate amount of the
Commitments of the Lenders at such time plus (b) the aggregate amount of
Commitments of Lenders that were terminated by the Company pursuant to
Section 2.05(b) or 2.06(b) but were in effect at the time such Letter of Credit
was issued; provided that if the Commitment of each Lender to make Advances and
the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 6.01, then the L/C Participation Percentage of
each Lender shall be determined based on the L/C Participation Percentage of
such Lender immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof.

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

“Lead Arrangers” means each of Citigroup Global Markets Inc. and J.P. Morgan
Securities Inc., in its capacity as joint lead arranger and joint bookrunner,
and any successors thereof.

“Lenders” means the Initial Lenders and each Person that shall become a party
hereto pursuant to Sections 2.05(c), 2.06(b) or 8.07, and, as the context
requires, includes the L/C Issuer.

“Letter of Credit” means any letter of credit issued hereunder. A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is thirty days prior to
the Termination Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.18(i).

“Letter of Credit Sublimit” means an amount equal to the lesser of (a) the
aggregate amount of the Commitments of the Lenders and (b) $250,000,000.

“LIBO Rate Advances” has the meaning specified in Section 2.03(a)(i).

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor.

“Loan Documents” means, collectively, this Agreement, the Notes, each
Designation Letter, each Issuer Document and each Termination Letter.

 

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“Material Adverse Change” means any material adverse change in the financial
condition, operations or properties of the Company or the Company and its
Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the financial
condition, operations or properties of the Company or the Company and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or any
Lender under this Agreement, any Issuer Document or any Note or (c) the ability
of the Company to perform its obligations under this Agreement, any Issuer
Document or any Note.

“Material Subsidiary” means each Subsidiary of the Company to which is
attributed five percent or more of the net sales of the Company and its
Subsidiaries taken as a whole for the most recently ended fiscal year.

“New Lender” means, for purposes of Section 2.05(c), an Eligible Assignee (which
may be a Lender) selected by the Company with (in the case of a New Lender that
is not already a Lender) prior consultation with the Agent.

“Note” means a Revolving Credit Note or a Competitive Bid Note.

“Notice of Competitive Bid Borrowing” has the meaning specified in
Section 2.03(a).

“Notice of Revolving Credit Borrowing” has the meaning specified in
Section 2.02(a).

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

“Principal Property” means any single manufacturing or processing plant, office
building, warehouse or portion thereof owned or leased by the Company or a
Restricted Subsidiary other than a plant, office building, warehouse or portion
thereof which, in the reasonable opinion of the Company’s Board of Directors, is
not of material importance to the business conducted by the Company and its
Restricted Subsidiaries as an entirety.

“Reference Banks” means Citibank, N.A., JPMorgan Chase Bank, N.A. and Bank of
America, N.A. (and any successors thereof).

“Register” has the meaning specified in Section 8.07(d).

“Required Lenders” means at any time (i) Lenders having more than 50% of the
aggregate amount of the Commitments, and (ii) if the Commitments of the Lenders
have been terminated, Lenders owed more than 50% of the then aggregate unpaid
principal amount of the Borrowings and L/C Obligations.

“Restricted Subsidiary” means at any time any Subsidiary of the Company except a
Subsidiary which is at the time an Unrestricted Subsidiary.

“Revolving Credit Advance” means an advance by a Lender to a Borrower as part of
a Revolving Credit Borrowing and refers to a Base Rate Advance or a Eurodollar
Rate Advance (each of which shall be a “Type” of Revolving Credit Advance).

 

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“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by each of the Lenders pursuant
to Section 2.01.

“Revolving Credit Note” means a promissory note of a Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing
the aggregate indebtedness of such Borrower to such Lender resulting from the
Revolving Credit Advances made by such Lender.

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding Voting Stock of such corporation or limited
liability company (irrespective of whether at the time capital stock or
membership interests of any other class or classes of such corporation or
limited liability company shall or might have voting power upon the occurrence
of any contingency), (b) the interest in the capital or profits of such
partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more of
such Person’s other Subsidiaries.

“Syndication Agents” means, collectively, Citibank, N.A. and JPMorgan Chase
Bank, N.A.

“Termination Date” means May 22, 2011 or, if earlier, the date of termination in
whole of the Commitments pursuant to Section 2.05(a) or 6.01 or, in the case of
any Lender whose Commitment is extended pursuant to Section 2.06(b), the date to
which such Commitment is extended; provided in each case that if any such date
is not a Business Day, the relevant Termination Date of such Lender shall be the
immediately preceding Business Day.

“Termination Letter” has the meaning specified in Section 2.17(b).

“Type” has the meaning specified in the definition of “Revolving Credit
Advance”.

“Unreimbursed Amount” has the meaning specified in Section 2.18(c)(i).

“Unrestricted Subsidiary” means any Subsidiary of the Company (not at the time
designated a Restricted Subsidiary) (i) the major part of whose business
consists of finance, banking, credit, leasing, insurance, financial services, or
other similar operations, or any continuation thereof, (ii) substantially all
the assets of which consist of the capital stock of one or more such
Subsidiaries, or (iii) designated as such by the Company’s Board of Directors;
provided that if any securities are outstanding under the Indenture dated as of
December 14, 1994 between the Company and JPMorgan Chase Bank, N.A. as successor
to The Chase Manhattan Bank (National Association), Trustee, such designation
will not constitute a violation of the terms of such indenture. Any Subsidiary
designated as a Restricted Subsidiary may be designated as an Unrestricted
Subsidiary unless such designation will constitute a violation of the terms of
the Indenture dated as of December 14, 1994 between the Company and JPMorgan
Chase Bank, N.A. as successor to The Chase Manhattan Bank (National
Association), Trustee.

“Voting Stock” means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

Section 1.02 Computation of Time Periods.

In this Agreement in the computation of periods of time from a specified date to
a later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding”.

 

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Section 1.03 Accounting Terms.

All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles in the United States
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e) (“GAAP”).

Section 1.04 Letter of Credit Amounts.

Unless otherwise specified, all references herein to the amount of a Letter of
Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit after giving effect to all increases thereof contemplated by
such Letter of Credit or the Issuer Documents related thereto, whether or not
such maximum face amount is in effect at such time.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

Section 2.01 The Revolving Credit Advances.

Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make Revolving Credit Advances to the Company and any Borrowing Subsidiary
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender’s Commitment, provided that the aggregate amount of the
Commitments of the Lenders shall be deemed used from time to time to the extent
of (a) the aggregate amount of the Competitive Bid Advances then outstanding and
such deemed use of the aggregate amount of the Commitments shall be allocated
among the Lenders ratably according to their respective Commitments (such deemed
use of the aggregate amount of the Commitments being a “Competitive Bid
Reduction”) and (b) the aggregate amount of the L/C Obligations then
outstanding. Each Revolving Credit Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if
less, an aggregate amount equal to the amount by which the aggregate amount of a
proposed Competitive Bid Borrowing requested by the Company exceeds the
aggregate amount of Competitive Bid Advances offered to be made by the Lenders
and accepted by the Company in respect of such Competitive Bid Borrowing, if
such Competitive Bid Borrowing is made on the same date as such Revolving Credit
Borrowing) and shall consist of Revolving Credit Advances of the same Type made
on the same day by the Lenders ratably according to their respective
Commitments. Within the limits of each Lender’s Commitment, each Borrower may
borrow under this Section 2.01, prepay pursuant to Section 2.10 and reborrow
under this Section 2.01.

Section 2.02 Making the Revolving Credit Advances.

(a) Each Revolving Credit Borrowing shall be made on notice, given not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances, or the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Base Rate Advances, by the Company (on its own behalf and on
behalf of any Borrowing Subsidiary) to the Agent, which shall give to each
Lender prompt notice thereof by telecopier. Each such notice of a Revolving
Credit Borrowing (a “Notice of Revolving Credit Borrowing”) shall be by
telecopier, confirmed promptly in writing,

 

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in substantially the form of Exhibit B-1 hereto, specifying therein the
requested (i) date of such Revolving Credit Borrowing, (ii) Type of Advances
constituting such Revolving Credit Borrowing, (iii) aggregate amount of such
Revolving Credit Borrowing, (iv) in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Revolving Credit Advance and (v) name of the relevant Borrower (which shall be
the Company or a Borrowing Subsidiary). Each Lender shall, before 12:00 noon
(New York City time) on the date of such Revolving Credit Borrowing, make
available for the account of its Applicable Lending Office to the Agent at the
Agent’s Account, in same day funds, such Lender’s ratable portion of such
Revolving Credit Borrowing. After the Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will make such same day funds available to the relevant Borrower at such
Borrower’s account at the Agent’s address referred to in Section 8.02; provided,
however, that if, on the date of a Revolving Credit Borrowing, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings and second, shall be
made available to the relevant Borrower as provided above.

(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the
Company may not select Eurodollar Rate Advances for any Revolving Credit
Borrowing if the aggregate amount of such Revolving Credit Borrowing is less
than $25,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.08 or 2.12 and (ii) the
Eurodollar Rate Advances may not be outstanding as part of more than twelve
separate Revolving Credit Borrowings.

(c) Each Notice of Revolving Credit Borrowing shall be irrevocable and binding
on the relevant Borrower. In the case of any Revolving Credit Borrowing that the
related Notice of Revolving Credit Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Company shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Revolving Credit
Borrowing for such Revolving Credit Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Revolving Credit Advance to be made by such
Lender as part of such Revolving Credit Borrowing when such Revolving Credit
Advance, as a result of such failure, is not made on such date.

(d) Unless the Agent shall have received notice from a Lender prior to the time
of any Revolving Credit Borrowing that such Lender will not make available to
the Agent such Lender’s ratable portion of such Revolving Credit Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date of such Revolving Credit Borrowing in accordance with subsection
(a) of this Section 2.02 and the Agent may, in reliance upon such assumption,
make available to the relevant Borrower on such date a corresponding amount. If
and to the extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and such 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
such Borrower until the date such amount is repaid to the Agent, at (i) in the
case of a Borrower, the interest rate applicable at the time to Revolving Credit
Advances constituting such Revolving Credit Borrowing and (ii) in the case of
such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such Lender’s
Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes
of this Agreement and shall be made available in same day funds to the relevant
Borrower’s account at the Agent’s address referred to in Section 8.02.

 

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(e) The failure of any Lender to make the Revolving Credit Advance to be made by
it as part of any Revolving Credit Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Revolving Credit Advance on the
date of such Revolving Credit Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Revolving Credit Advance to be made
by such other Lender on the date of any Revolving Credit Borrowing.

Section 2.03 The Competitive Bid Advances.

(a) Each Lender severally agrees that each Borrower may make Competitive Bid
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 30 days prior to the
Termination Date in the manner set forth below; provided that, following the
making of each Competitive Bid Borrowing, the aggregate amount of the Advances
and L/C Obligations then outstanding shall not exceed the aggregate amount of
the Commitments of the Lenders (computed without regard to any Competitive Bid
Reduction) and provided that if any Lender does not make a Competitive Bid
Advance it shall not reduce such Lender’s obligation to make its pro rata share
of a Revolving Credit Advance.

(i) The Company (on its own behalf and on behalf of any Borrowing Subsidiary)
may request a Competitive Bid Borrowing under this Section 2.03 by delivering to
the Agent, by telecopier, confirmed promptly in writing, a notice of a
Competitive Bid Borrowing (a “Notice of Competitive Bid Borrowing”), in
substantially the form of Exhibit B-2 hereto, specifying therein (u) the date of
such proposed Competitive Bid Borrowing, (v) the aggregate amount of such
proposed Competitive Bid Borrowing, (w) the maturity date for repayment of each
Competitive Bid Advance to be made as part of such Competitive Bid Borrowing
(which maturity date may not be earlier than the date occurring 30 days after
the date of such Competitive Bid Borrowing or later than the Termination Date),
(x) the interest payment date or dates relating thereto, (y) the name of the
Borrower, and (z) any other terms to be applicable to such Competitive Bid
Borrowing, not later than 10:00 A.M. (New York City time) (A) at least one
Business Day prior to the date of the proposed Competitive Bid Borrowing, if the
Company shall specify in the Notice of Competitive Bid Borrowing that the rates
of interest to be offered by the Lenders shall be fixed rates per annum (the
Advances constituting any such Competitive Bid Borrowing being referred to
herein as “Fixed Rate Advances”) and (B) at least four Business Days prior to
the date of the proposed Competitive Bid Borrowing, if the Company shall instead
specify in the Notice of Competitive Bid Borrowing the basis to be used by the
Lenders in determining the rates of interest to be offered by them (the Advances
constituting such Competitive Bid Borrowing being referred to herein as “LIBO
Rate Advances”). The Agent shall in turn promptly notify each Lender of each
request for a Competitive Bid Borrowing received by it from the Company by
sending such Lender a copy of the related Notice of Competitive Bid Borrowing.

(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Advances to the relevant
Borrower as part of such proposed Competitive Bid 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 Company), before 10:00 A.M.
(New York City time) on the date of such proposed Competitive Bid Borrowing, in
the case of a Competitive Bid Borrowing

 

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consisting of Fixed Rate Advances and three Business Days before the date of
such proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Advances, of the minimum amount and maximum
amount of each Competitive Bid Advance which such Lender would be willing to
make as part of such proposed Competitive Bid Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section 2.03(a), exceed
such Lender’s Commitment, if any), the rate or rates of interest therefor and
such Lender’s Applicable Lending Office with respect to such Competitive Bid
Advance; provided that if the Agent in its capacity as a Lender shall, in its
sole discretion, elect to make any such offer, it shall notify the Company of
such offer before 9:00 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 Lenders. If any Lender
shall elect not to make such an offer, such Lender shall so notify the Agent,
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 Lenders, and such Lender shall
not be obligated to, and shall not, make any Competitive Bid Advance as part of
such Competitive Bid Borrowing; provided that the failure by any Lender to give
such notice shall not cause such Lender to be obligated to make any Competitive
Bid Advance as part of such proposed Competitive Bid Borrowing.

(iii) The Company shall, in turn, before 11:00 A.M. (New York City time) on the
date of such proposed Competitive Bid Borrowing, in the case of a Competitive
Bid Borrowing consisting of Fixed Rate Advances and before 1:00 P.M. (New York
City time) three Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, either:

(x) cancel such Competitive Bid Borrowing by giving the Agent notice to that
effect, or

(y) accept one or more of the offers made by any Lender or Lenders pursuant to
paragraph (ii) above, by giving notice to the Agent of the amount of each
Competitive Bid 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
Company by the Agent on behalf of such Lender for such Competitive Bid Advance
pursuant to paragraph (ii) above) to be made by each Lender as part of such
Competitive Bid Borrowing, and reject any remaining offers made by Lenders
pursuant to paragraph (ii) above by giving the Agent notice to that effect. If
the Company accepts any offers made by Lenders pursuant to paragraph (ii) above,
such offers shall be accepted in the order of the lowest to highest interest
rates or, if two or more Lenders offer to make Competitive Bid Advances at the
same interest rate, such offers, if any, shall be accepted in proportion to the
amount offered by each such Lender at such interest rate.

(iv) If the Company notifies the Agent that such Competitive Bid Borrowing is
cancelled pursuant to paragraph (iii)(x) above, the Agent shall give prompt
notice thereof to the Lenders and such Competitive Bid Borrowing shall not be
made.

(v) If the Company accepts one or more of the offers made by any Lender or
Lenders pursuant to paragraph (iii)(y) above, the Agent shall in turn promptly
notify (A) each Lender that has made an offer as described in paragraph
(ii) above, of the date and aggregate amount of such Competitive Bid Borrowing
and whether or not any offer or offers made by such Lender pursuant to paragraph
(ii) above have been accepted by the

 

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Company, (B) each Lender that is to make a Competitive Bid Advance as part of
such Competitive Bid Borrowing, of the amount of each Competitive Bid Advance to
be made by such Lender as part of such Competitive Bid Borrowing, and (C) each
Lender that is to make a Competitive Bid Advance as part of such Competitive Bid
Borrowing, upon receipt, that the Agent has received forms of documents
appearing to fulfill the applicable conditions set forth in Article III. Each
Lender that is to make a Competitive Bid Advance as part of such Competitive Bid
Borrowing shall, before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the notice received from the Agent
pursuant to clause (A) of the preceding sentence or any later time when such
Lender shall have received notice from the Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its Applicable Lending
Office to the Agent at the Agent’s Account, in same day funds, such Lender’s
portion of such Competitive Bid Borrowing. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the Agent of such
funds, the Agent will make such same day funds available to the relevant
Borrower at such Borrower’s account at the Agent’s address referred to in
Section 8.02. Promptly after each Competitive Bid Borrowing the Agent will
notify each Lender of the amount of the Competitive Bid Borrowing, the
consequent Competitive Bid Reduction and the dates upon which such Competitive
Bid Reduction commenced and will terminate.

(b) Each Competitive Bid Borrowing shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Company shall be in
compliance with the limitation set forth in the proviso to the first sentence of
subsection (a) above.

(c) Within the limits and on the conditions set forth in this Section 2.03, each
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, provided
that a Competitive Bid Borrowing shall not be made within three Business Days of
the date of any other Competitive Bid Borrowing.

(d) Each Borrower shall repay to the Agent for the account of each Lender that
has made a Competitive Bid Advance to such Borrower, on the maturity date of
such Competitive Bid Advance (such maturity date being that specified by the
Company for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance. No Borrower
shall have any right to prepay any principal amount of any Competitive Bid
Advance unless, and then only on the terms, specified by the Company for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and set forth in the Competitive
Bid Note evidencing such Competitive Bid Advance.

(e) Each Borrower shall pay interest on the unpaid principal amount of each
Competitive Bid Advance to such Borrower from the date of such Competitive Bid
Advance to the date the principal amount of such Competitive Bid Advance is
repaid in full, at the rate of interest for such Competitive Bid Advance
specified by the Lender making such Competitive Bid Advance in its notice with
respect thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by such Borrower for such Competitive
Bid Advance in the related Notice of Competitive Bid Borrowing delivered
pursuant to subsection (a)(i) above, as provided in the Competitive Bid Note
evidencing such Competitive Bid Advance.

 

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(f) The indebtedness of each Borrower resulting from each Competitive Bid
Advance made to such Borrower as part of a Competitive Bid Borrowing shall be
evidenced by a separate Competitive Bid Note of such Borrower payable to the
order of the Lender making such Competitive Bid Advance.

Section 2.04 Fees.

(a) Facility Fee. The Company agrees to pay to the Agent for the account of each
Lender a facility fee on the aggregate amount of such Lender’s Commitment
irrespective of usage from the Effective Date in the case of each Initial Lender
and from the effective date specified in the Assignment and Assumption pursuant
to which it became a Lender in the case of each other Lender until the
Termination Date (on a daily basis) at a rate per annum equal to 0.04%, payable
in arrears quarterly on the last day of each June, September, December and
March, commencing June 30, 2006, and on the Termination Date.

(b) Agent’s Fees. The Company shall pay to the Agent for its own account such
fees as may from time to time be agreed between the Company and the Agent.

Section 2.05 Termination, Reduction or Increase of Commitments.

(a) The Company shall have the right, upon at least three Business Days’ notice
to the Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders; provided that each
partial reduction shall be in the aggregate amount of $25,000,000 or an integral
multiple of $1,000,000 in excess thereof and provided further that the aggregate
amount of the Commitments of the Lenders shall not be reduced to an amount that
is less than the aggregate principal amount of the Advances and L/C Obligations
then outstanding.

(b) If any Lender shall make a demand under Section 2.11 or 2.14, the Company
shall have the right, upon at least ten Business Days’ notice, to terminate in
full the Commitment of such Lender or to demand that such Lender assign to one
or more Persons all of its rights and obligations under this Agreement in
accordance with Section 8.07. If the Company shall elect to terminate in full
the Commitment of any Lender pursuant to this Section 2.05(b), the Company shall
(i) pay to such Lender, on the effective date of such Commitment termination, an
amount 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 (ii) Cash Collateralize such Lender’s L/C Participation
Percentage, whereupon such Lender shall cease to be a party hereto.

(c) (i) Not more than once in any calendar year, the Company may propose to
increase the aggregate amount of the Commitments by an aggregate amount of
$25,000,000 or an integral multiple of $1,000,000 in excess thereof (a “Proposed
Aggregate Commitment Increase”) in the manner set forth below, provided that:

(1) no Default shall have occurred and be continuing either as of the Increase
Notice Date (as hereinafter defined) or as of the related Increase Date (as
hereinafter defined); and

(2) after giving effect to any such increase, the aggregate amount of the
Commitments shall not exceed $2,000,000,000.

 

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(ii) The Company may request an increase in the aggregate amount of the
Commitments by delivering to the Agent a notice (an “Increase Notice”; the date
of delivery thereof to the Agent being the “Increase Notice Date”) specifying
(1) the Proposed Aggregate Commitment Increase, (2) the proposed date (the
“Increase Date”) on which the Commitments would be so increased (which Increase
Date may not be fewer than 30 nor more than 60 days after the Increase Notice
Date) and (3) the New Lenders, if any, to whom the Company desires to offer the
opportunity to commit to all or a portion of the Proposed Aggregate Commitment
Increase. The Agent shall in turn promptly notify each Lender of the Company’s
request by sending each Lender a copy of such notice.

(iii) Not later than the date five days after the Increase Notice Date, the
Agent shall notify each New Lender, if any, identified in the related Increase
Notice of the opportunity to commit to all or any portion of the Proposed
Aggregate Commitment Increase. Each such New Lender may irrevocably commit to
all or a portion of the Proposed Aggregate Commitment Increase (such New
Lender’s “Proposed New Commitment”) by notifying the Agent (which shall give
prompt notice thereof to the Company) before 11:00 A.M. (New York City time) on
the date that is 10 days after the Increase Notice Date; provided that:

(1) the Proposed New Commitment of each New Lender shall be in an amount not
less than $25,000,000; and

(2) each New Lender that submits a Proposed New Commitment shall enter into an
agreement in form and substance satisfactory to the Company and the Agent
pursuant to which such New Lender shall undertake a Commitment (and, if any such
New Lender is already a Lender, its Commitment shall be in addition to such
Lender’s Commitment hereunder on such date), and shall pay to the Agent a
processing and recordation fee of $5,000.

(iv) If the aggregate Proposed New Commitments of all of the New Lenders shall
be less than the Proposed Aggregate Commitment Increase, then (unless the
Company otherwise requests) the Agent shall, on or prior to the date that is
15 days after the Increase Notice Date, notify each Lender of the opportunity to
so commit to all or any portion of the Proposed Aggregate Commitment Increase
not committed to by New Lenders pursuant to Section 2.05(c) (iii). Each Lender
may, if, in its sole discretion, it elects to do so, irrevocably offer to commit
to all or a portion of such remainder (such Lender’s “Proposed Increased
Commitment”) by notifying the Agent (which shall give prompt notice thereof to
the Company) not later than 11:00 A.M. (New York City time) on the date five
days before the Increase Date.

(v) If the aggregate amount of Proposed New Commitments and Proposed Increased
Commitments (such aggregate amount, the “Total Committed Increase”) equals or
exceeds $25,000,000, then, subject to the conditions set forth in
Section 2.05(c)(i):

(1) effective on and as of the Increase Date, the aggregate amount of the
Commitments shall be increased by the Total Committed Increase (provided that
the aggregate amount of the Commitments shall in no event be increased pursuant
to this Section 2.05(c) to more than $2,000,000,000) and shall be allocated
among the New Lenders and the Lenders as provided in Section 2.05(c)(vi); and

 

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(2) on the Increase Date, if any Revolving Credit Advances are then outstanding,
the Company shall borrow Revolving Credit Advances from all or certain of the
Lenders and/or (subject to compliance by the Company with Section 8.04(c))
prepay Revolving Credit Advances of all or certain of the Lenders such that,
after giving effect thereto, the Revolving Credit Advances (including, without
limitation, the Types and Interest Periods thereof) shall be held by the Lenders
(including for such purposes New Lenders) ratably in accordance with their
respective Commitments.

If the Total Committed Increase is less than $25,000,000, then the aggregate
amount of the Commitments shall not be changed pursuant to this Section 2.05(c).

(vi) The Total Committed Increase shall be allocated among New Lenders having
Proposed New Commitments and Lenders having Proposed Increased Commitments as
follows:

(1) If the Total Committed Increase shall be at least $25,000,000 and less than
or equal to the Proposed Aggregate Commitment Increase, then (x) the initial
Commitment of each New Lender shall be such New Lender’s Proposed New Commitment
and (y) the Commitment of each Lender shall be increased by such Lender’s
Proposed Increased Commitment.

(2) If the Total Committed Increase shall be greater than the Proposed Aggregate
Commitment Increase, then the Total Committed Increase shall be allocated:

(x) first to New Lenders (to the extent of their respective Proposed New
Commitments) in such a manner as the Company shall agree; and

(y) then to Lenders on a pro rata basis based on the ratio of each Lender’s
Proposed Increased Commitment (if any) to the aggregate amount of the Proposed
Increased Commitments of all of the Lenders.

(vii) No increase in the Commitments contemplated hereby shall become effective
until the Agent shall have received (x) Revolving Credit Notes payable to each
New Lender and each other Lender whose Commitment is being increased, and
(y) evidence satisfactory to the Agent (including an update of the opinion of
counsel provided pursuant to Section 3.01(g)(iv)) that such increases in the
Commitments, and borrowings thereunder, have been duly authorized by all
necessary corporate and other action on the part of the Company.

Section 2.06 Repayment of Revolving Credit Advances: Extension of Termination
Date.

(a) The Company shall repay to the Agent for the ratable account of the Lenders
on the Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding, and all accrued but unpaid interest, fees and all
other amounts due hereunder.

(b) The Company may, by written notice to the Agent (which shall promptly notify
the Lenders) not more than 90 nor less than 60 days prior to each anniversary of
the date hereof

 

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(such anniversary date following such notice, the “Extension Date”), request
that the Termination Date then in effect (the “Existing Termination Date”) be
extended for a period of one year. Such request shall be irrevocable and binding
upon the Company. The Agent shall promptly notify each Lender of such request.
If a Lender agrees, acting in its sole discretion, to so extend its Commitment
(an “Extending Lender”), it will notify the Agent, in writing, of its decision
to do so not more than 30 nor less than 20 days before the Extension Date; it
being understood that failure to give such notice shall be deemed a decision not
to extend. If any Lender fails to accept the Company’s request for extension of
the Termination Date (a “Declining Lender”), the Company shall have the right,
prior to the Extension Date, to require any Declining Lender to assign in full
its rights and obligations under this Agreement to an Eligible Assignee
(including any Extending Lender) designated by the Company that agrees to accept
all of such rights and obligations and agrees to such extension (a “Replacement
Lender”), provided that (i) such assignment is otherwise in compliance with
Section 8.07, (ii) such Declining Lender receives payment in full of the
principal amount of all Advances owing to such Declining Lender, together with
accrued interest thereon to the date of such payment of principal and all other
amounts payable to such Declining Lender under this Agreement and (iii) any such
assignment shall be effective on the Extension Date. If (i) there are no
Declining Lenders or all of the Declining Lenders are replaced by Replacement
Lenders as set forth above and (ii) no Default shall have occurred and be
continuing immediately prior to the Extension Date, the Termination Date shall
be extended by one year (except that, if the date on which the Termination Date
is to be extended is not a Business Day, such Termination Date as so extended
shall be the next preceding Business Day), and the Agent shall promptly notify
the Company of such extension. If there are any Declining Lenders that are not
replaced in accordance with the terms above, the Company may (i) withdraw its
request for an extension and the Existing Termination Date will remain in effect
or (ii) provided that no Default shall have occurred and be continuing
immediately prior to the Extension Date, on the Extension Date (x) pay any such
Declining Lenders in full for all principal, interest and other amounts owing to
such Declining Lender under this Agreement, reduce the aggregate Commitments of
the Lenders by the amount of the Commitment of such Declining Lenders and
(y) Cash Collateralize such Lender’s L/C Participation Percentage, whereupon
such Lender shall cease to be a party hereto, and extend the Termination Date
for one year at the reduced aggregate Commitment amount.

Section 2.07 Interest on Revolving Credit Advances.

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

(a) Base Rate Advances. During such periods as such Revolving Credit Advance is
a Base Rate Advance, a rate per annum equal at all times to the Base Rate in
effect from time to time, payable in arrears quarterly on the last day of each
March, June, September and December during such periods and on the date such
Base Rate Advance shall be Converted or paid in full.

(b) Eurodollar Rate Advances. During such periods as such Revolving Credit
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Revolving Credit Advance to the sum of (x) the
Eurodollar Rate for such Interest Period for such Revolving Credit Advance plus
(y) 0.135%, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.

 

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(c) Default Rate. Upon the occurrence and during the continuance of an Event of
Default pursuant to Section 6.01(a), the principal of and, to the extent
permitted by law, interest on the Advances and any other amounts owing hereunder
or under the other Loan Documents (including without limitation fees and
expenses) shall bear interest, payable on demand, at the Default Rate.

Section 2.08 Interest Rate Determination.

(a) If the Eurodollar Rate does not appear on Page 3750 (or any successor page),
each Reference Bank agrees to furnish to the Agent timely information for the
purpose of determining each Eurodollar Rate. If the Eurodollar Rate does not
appear on Page 3750 (or any successor page), and if any one or more of the
Reference Banks shall not furnish such timely information to the Agent for the
purpose of determining any such interest rate, the Agent shall determine such
interest rate on the basis of timely information furnished by the remaining
Reference Banks. The Agent shall give prompt notice to the Company and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.07, and the rate, if any, furnished by each Reference Bank for the
purpose of determining the interest rate under Section 2.07(b).

(b) If, due to a major disruption in the interbank funding market with respect
to any Eurodollar Rate Advances, the Required Lenders notify the Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Required Lenders of making, funding or maintaining
their respective Eurodollar Rate Advances for such Interest Period, the Agent
shall forthwith so notify the Borrower and the Lenders, whereupon (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance, and (ii) the
obligation of the Lenders to make, or to Convert Revolving Credit Advances into,
Eurodollar Rate Advances shall be suspended until the Agent shall notify the
Company and the Lenders that the circumstances causing such suspension no longer
exist.

(c) If the Company 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 Company and the Lenders and the Company will be deemed to have
selected an Interest Period of one month.

(d) On the date on which the aggregate unpaid principal amount of Eurodollar
Rate Advances constituting any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.

(e) Upon the occurrence and during the continuance of any Event of Default,
(i) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.

(f) If the Eurodollar Rate does not appear on Page 3750 (or any successor page)
and 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 Company and the Lenders that the
interest rate cannot be determined for such Eurodollar Rate Advances,

 

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(ii) each such Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance (or if such Advance
is then a Base Rate Advance, will continue as a Base Rate Advance), and

(iii) the obligation of the Lenders to make, or to Convert Revolving Credit
Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Company and the Lenders that the circumstances causing such
suspension no longer exist.

Section 2.09 Optional Conversion of Revolving Credit Advances.

The Company may on any Business Day, upon notice given to the Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Sections 2.08 and
2.12, Convert all Revolving Credit Advances of one Type constituting the same
Borrowing into Revolving Credit Advances of the other Type; provided, however,
that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
made only on the last day of an Interest Period for such Eurodollar Rate
Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be in an amount not less than the minimum amount specified in
Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result
in more separate Revolving Credit Borrowings than permitted under
Section 2.02(b). Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Revolving
Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for each such
Advance. Each notice of Conversion shall be irrevocable and binding on the
Company.

Section 2.10 Optional Prepayments of Revolving Credit Advances.

The Company may, upon at least one Business Day’s notice, in the case of Base
Rate Advances, and three Business Days’ notice, in the case of Eurodollar Rate
Advances, to the Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given the Company shall, prepay the
outstanding principal amount of the Revolving Credit Advances constituting part
of the same Revolving Credit Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an
aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000
in excess thereof and (y) in the event of any such prepayment of a Eurodollar
Rate Advance, the Company shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 8.04(c).

Section 2.11 Increased Costs.

(a) If, due to either (i) the introduction of or any change in any law or
regulation or in the interpretation or administration of any law or regulation
by any governmental authority charged with the interpretation or administration
thereof or (ii) the compliance with any guideline or request from any central
bank or other governmental authority that would be complied with generally by
similarly situated banks acting reasonably (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances or LIBO Rate Advances
or (as the case may be) issuing or participating in Letters of Credit, in either
case by an amount deemed by such Lender to be material, then the Company shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of

 

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such increased cost, submitted to the Company and the Agent by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this paragraph with respect to any Competitive Bid Advance if
the change giving rise to such request was applicable to such Lender at the time
of submission of such Lender’s offer to make such Competitive Bid Advance.

(b) If, due to either (i) the introduction of or any change in or interpretation
of any law or regulation or (ii) compliance with any guideline or request from
any central bank or other governmental or regulatory authority which becomes
effective after the date hereof, there shall be any increase in the amount of
capital required or expected to be maintained by any Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender’s Advances or commitment to lend or (as
the case may be) issue or participate in Letters of Credit hereunder and other
commitments of this type by an amount deemed by such Lender to be material,
then, upon demand by such Lender (with a copy of such demand to the Agent), the
Company shall pay to the Agent for the account of such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender’s Advances or commitment to lend or (as the case
may be) issue or participate in Letters of Credit hereunder. A certificate as to
such amounts submitted to the Company and the Agent by such Lender shall be
conclusive and binding for all purposes as to the calculations therein, absent
manifest error. Such certificate shall be in reasonable detail and shall certify
that the claim for additional amounts referred to therein is generally
consistent with such Lender’s treatment of similarly situated customers of such
Lender whose transactions with such Lender are similarly affected by the change
in circumstances giving rise to such payment, but such Lender shall not be
required to disclose any confidential or proprietary information therein.

Section 2.12 Illegality.

Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Agent (and provide to the Company an opinion of counsel to the
effect) that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or LIBO Rate Advances or to fund or maintain Eurodollar
Rate Advances or LIBO Rate Advances hereunder, (i) each Eurodollar Rate Advance
or LIBO Rate Advance made by such Lender, as the case may be, will
automatically, upon such demand, Convert into a Base Rate Advance or an Advance
that bears interest at the rate set forth in Section 2.07(a), as the case may
be, and (ii) the obligation of such Lender to make, or to Convert Revolving
Credit Advances into, Eurodollar Rate Advances shall be suspended until such
Lender shall notify the Company and the Agent that the circumstances causing
such suspension no longer exist.

Section 2.13 Payments and Computations.

(a) Each Borrower shall make each payment hereunder and under the Notes not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Agent at the Agent’s Account in same day funds without deduction, off-set
or counterclaim. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal, interest, facility fees or letter of
credit fees ratably (other than amounts payable pursuant to Section 2.02(c),
2.03, 2.05(b), 2.06(b), 2.11, 2.14, 2.18(j) or 8.04(c)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in

 

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each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Assumption and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date specified in such Assignment and Assumption, the Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Assumption shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

(b) 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 based on the Eurodollar Rate or
the Federal Funds Rate shall be made by the Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
fees are payable. Each determination by the Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.

(c) Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances or LIBO Rate Advances to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.

(d) Unless the Agent shall have received notice from the Company prior to the
date on which any payment is due to the Lenders hereunder that a Borrower will
not make such payment in full, the Agent may assume that such 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 each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent such
Borrower shall not have so made such payment in full to the Agent, each Lender
shall repay to the Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Federal Funds Rate.

Section 2.14 Taxes.

(a) Each Lender is exempt from any withholding imposed under the laws of the
United States in respect of any fees, interest or other payments to which it is
entitled pursuant to this Agreement or the Notes (the “Income”) because (i) the
Lender is organized under the laws of the United States; (ii) the Income is
effectively connected with the conduct of a trade or business within the United
States within the meaning of Section 871 of the Internal Revenue Code; or
(iii) the Income is eligible for an exemption by reason of a tax treaty. The
Agent is exempt from any withholding tax imposed under the laws of the United
States in respect of the Income because the Agent is organized under the laws of
the United States.

(b) Each Lender organized under the laws of a jurisdiction outside the United
States (each, a “Foreign Lender”) shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender, and
on the date of the Assignment and Assumption pursuant to which it became a
Lender in the case of each other Foreign Lender and from time to time thereafter
if requested in writing by the Company or the Agent, provide the Agent and the
relevant Borrower with Internal Revenue Service Form W-8BEN or W-8ECI, as
appropriate, or

 

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any successor or other form prescribed by the Internal Revenue Service,
certifying that such Foreign Lender is exempt or entitled to a reduced rate of
United States withholding tax on any Income that is the subject of such forms.
If the form provided by a Foreign Lender at the time such Foreign Lender first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero, or in excess of the rate applicable to the Foreign
Lender assignor on the date of the Assignment and Assumption pursuant to which
it became a Foreign Lender, in the case of each other Foreign Lender,
withholding tax at such rate shall be considered excluded from Taxes as defined
in Section 2.14(c).

(c) Based on Section 2.14(a) and (b), any and all payments by any Borrower
hereunder or under the Notes shall be made free and clear of and without
deduction for any present United States federal income withholding taxes imposed
on a Foreign Lender under the Internal Revenue Code (such withholding taxes
being hereinafter referred to as “Taxes”).

(d) If, as a result of the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any United States law or any tax treaty
(or in the application or official interpretation of any law or any tax treaty)
that occurs on or after the date a Foreign Lender first becomes a party to this
Agreement (a “Change in Law”), a Foreign Lender cannot comply with
Section 2.14(b) or, if despite such compliance, any Borrower shall be required
to deduct any Taxes from or in respect of any Income, then: (i) the sum payable
to such Foreign Lender shall be increased as may be necessary so that after
making all required deductions for such Taxes (including deductions applicable
to additional sums payable under this Section 2.14) such Foreign Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. Notwithstanding the foregoing, each
Borrower shall be entitled to pay any Taxes in any lawful manner so as to reduce
any deductions and such Foreign Lender shall to the extent it is reasonably able
provide any documentation or file any forms as may be required by the Internal
Revenue Service or any other foreign governmental agency. In addition, if any
Foreign Lender or the Agent (in lieu of such Foreign Lender), as the case may
be, is required to pay directly any Taxes as a result of a Change in Law because
a Borrower cannot or does not legally or timely do so, the Company shall
indemnify such Foreign Lender or Agent for payment of such Taxes, without
duplication of, or increase in, the amount of Taxes otherwise due to the Foreign
Lender.

(e) In addition, the Company agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (excluding any income or franchise taxes, business taxes or capital taxes
of any nature) that arise from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the Notes (hereinafter referred to
as “Other Taxes”). If a Lender is required to pay directly Other Taxes because a
Borrower cannot or does not legally or timely do so, the Company shall indemnify
such Lender for such payment of Other Taxes. Notwithstanding anything to the
contrary in this paragraph (e), each Lender shall upon the written request of
and at the expense of the Company use reasonable efforts to change the
jurisdiction of its Applicable Lending Office if the making of such change would
avoid the need for, or reduce the amount of, any such Other Taxes that may
thereafter accrue and would not, in the reasonable judgment of such Lender,
cause imposition on such Lender of any material legal or regulatory burdens.

(f) Within 30 days after the date of any payment of Taxes or foreign withholding
taxes, the Company shall furnish to the Agent, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing payment
thereof. Prior to making any payment

 

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hereunder or under the Notes by or on behalf of any Borrower through an account
or branch outside the United States or on behalf of any Borrower by a payor that
is not a United States person (a “Foreign Payment”), such Borrower shall
determine that no foreign withholding taxes are payable in respect thereof, and
at its expense, shall furnish, or shall cause such payor to furnish, to the
Agent, at such address, a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Agent, in either case stating that such
Foreign Payment is exempt from or not subject to foreign withholding taxes. Each
Lender shall cooperate with each Borrower’s efforts described in this subsection
by providing to the extent reasonably within its means any forms requested by
such Borrower substantiating an exemption from foreign withholding taxes
required by any governmental agency. For purposes of this subsection (f), the
terms “United States” and “United States person” shall have the meaning
specified in Section 7701 of the Internal Revenue Code. If, as a result of the
enactment, promulgation, execution or ratification of, or any change in or
amendment to, any applicable foreign law or any tax treaty (or in the
application or official interpretation of any law or any tax treaty) that occurs
on or after the date a tax opinion is rendered pursuant to the terms of this
subsection, and which renders such tax opinion incorrect as to the absence of
any foreign withholding tax (the “Foreign Change in Law”), any Borrower shall be
required to deduct any foreign withholding taxes from or in respect of any
Income, then: (i) the sum payable to the applicable Lender shall be increased as
may be necessary so that after making all required deductions for foreign
withholding taxes (including deductions applicable to additional sums payable
under this Section 2.14) such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. Notwithstanding the foregoing, each Borrower shall be entitled
to pay any foreign withholding taxes in any lawful manner so as to reduce any
deductions and such Lender shall to the extent it is reasonably able provide any
documentation or file any forms as may be required by the Internal Revenue
Service or any other foreign governmental agency. In addition, if any Lender is
required to pay directly any foreign withholding tax in respect of any Foreign
Payments made pursuant to the Note held by such Lender or this Agreement because
a Borrower cannot or does not legally or timely do so, the Company shall
indemnify such Lender for payment of such tax.

(g) For any period with respect to which a Lender has failed to comply with the
requirements of subsection (b) or (f) relating to certain forms intended to
reduce withholding taxes (other than if such failure is due to a Change in Law
or a Foreign Change in Law), such Lender shall not be entitled to
indemnification under subsection (d) or (f).

(h) Upon a Change in Law or the imposition of any foreign withholding tax in
respect of Foreign Payments, a Lender shall, upon the written request of and at
the expense of the Company, use reasonable efforts to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such taxes that may thereafter accrue and
would not, in the reasonable judgment of such Lender, cause the imposition on
such Lender of any material legal or regulatory burdens.

(i) Without prejudice to the survival of any other agreement of any Borrower
hereunder, the agreements and obligations of the Company contained in this
Section 2.14 shall survive the payment in full of principal and interest
hereunder and under the Notes until the applicable statute of limitations
relating to the payment of any Taxes under Section 2.14(d) has expired.

(j) Any request by any Lender for payment of any amount under this Section 2.14
shall be accompanied by a certification that such Lender’s claim for said amount
is generally

 

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consistent with such Lender’s treatment of similarly situated customers of such
Lender whose transactions with such Lender are similarly affected by the change
in circumstances giving rise to such payment, but such Lender shall not be
required to disclose any confidential or proprietary information therein.

Section 2.15 Sharing of Payments, Etc.

If any Lender shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of the Revolving
Credit Advances owing to it (other than pursuant to Section 2.05(b), 2.06(b),
2.11, 2.14 or 8.04(c)) or the participations in L/C Obligations held by it in
excess of its ratable share thereof, such Lender shall forthwith purchase from
the other Lenders such participations in the Revolving Credit Advances owing to
them and/or such subparticipations in the participations in L/C Obligations held
by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender’s ratable
share (according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that any Lender so
purchasing a participation or subparticipation from another Lender pursuant to
this Section 2.15 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation or subparticipation. This
Section 2.15 shall continue to apply after any conversion of the Revolving
Credit Advances pursuant to Section 2.06(b).

Section 2.16 Use of Proceeds.

The proceeds of the Advances and the Letters of Credit shall be available (and
the Company agrees that such proceeds shall be used) to repay outstanding
commercial paper issued by the Company and its subsidiaries and for general
corporate purposes of the Company and its Subsidiaries, including working
capital, capital investments and acquisitions.

Section 2.17 Borrowings by Borrowing Subsidiaries.

(a) The Company may, at any time or from time to time upon not less than 10
Business Days’ notice in the case of any Subsidiary so designated after the
Effective Date, designate one or more Subsidiaries as Borrowers hereunder by
furnishing to the Agent a letter (a “Designation Letter”) in duplicate, in
substantially the form of Exhibit D, duly completed and executed by the Company
and such Subsidiary. The Agent shall promptly notify each Lender of the
Company’s notice of such pending designation by the Company and the identity of
the respective Subsidiary. Following the giving of any notice pursuant to this
Section 2.17(a), if the designation of such Designated Subsidiary obligates the
Agent or any Lender to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information is
not already available to it, the Company shall, promptly upon the request of the
Agent or any Lender, supply such documentation and other evidence as is
reasonably requested by the Agent or any Lender in order for the Agent or such
Lender to carry out and be satisfied it has complied with the results of all
necessary “know your customer” or other similar checks under all applicable laws
and regulations. Upon any such designation of a Subsidiary, such Subsidiary
shall be a Borrowing Subsidiary and a Borrower entitled to borrow Revolving
Credit Advances and Competitive Bid Advances on and subject to the terms and
conditions of this

 

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Agreement.

If the Company shall designate as a Designated Subsidiary hereunder any
Subsidiary not organized under the laws of the United States or any State
thereof, any Lender may, with notice to the Agent and the Company, fulfill its
Commitment by causing an Affiliate of such Lender to act as the Lender in
respect of such Designated Subsidiary (and such Lender shall, to the extent of
Advances made to and participations in Letters of Credit issued for the account
of such Designated Subsidiary, be deemed for all purposes hereof to have pro
tanto assigned such Advances and participations to such Affiliate in compliance
with the provisions of Section 8.07.

As soon as practicable after receiving notice from the Company or the Agent of
the Company’s intent to designate a Subsidiary as a Designated Borrower, and in
any event no later than five Business Days after the delivery of such notice,
for a Designated Subsidiary that is organized under the laws of a jurisdiction
other than of the United States or a political subdivision thereof, any Lender
that may not legally lend to, establish credit for the account of and/or do any
business whatsoever with such Designated Subsidiary directly or through an
Affiliate of such Lender as provided in the immediately preceding paragraph (a
“Protesting Lender”) shall so notify the Company and the Agent in writing. With
respect to each Protesting Lender, the Company shall, effective on or before the
date that such Designated Subsidiary shall have the right to borrow hereunder,
either (A) notify the Agent and such Protesting Lender that the Commitments of
such Protesting Lender shall be terminated; provided that such Protesting Lender
shall have received payment of an amount equal to the outstanding principal of
its Advances and/or Letter of Credit reimbursement obligations, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company or the relevant Designated Subsidiary (in the case of all
other amounts), or (B) cancel its request to designate such Subsidiary as a
“Designated Subsidiary” hereunder.

(b) If all principal of and interest on all Advances made to any Borrowing
Subsidiary have been paid in full, the Company may terminate the status of such
Borrowing Subsidiary as a Borrower hereunder by furnishing to the Agent a letter
(a “Termination Letter”) in substantially the form of Exhibit E, duly completed
and executed by the Company. Any Termination Letter furnished hereunder shall be
effective upon receipt by the Agent, which shall promptly notify the Lenders,
whereupon the Lenders shall, upon payment in full of all amounts owing by such
Borrower hereunder, promptly deliver to the Company (through the Agent) the
Notes, if any, of such former Borrower. Notwithstanding the foregoing, the
delivery of a Termination Letter with respect to any Borrower shall not
terminate (i) any obligation of such Borrower that remains unpaid at the time of
such delivery (including without limitation any obligation arising thereafter in
respect of such Borrower under Section 2.11 or 2.14) or (ii) the obligations of
the Company under Article IX with respect to any such unpaid obligations;
provided that if the status of such Borrowing Subsidiary has been terminated as
aforesaid because the Company has sold or transferred its interest in such
Subsidiary, and the Company so certifies to the Agent at the time of the
delivery of such Termination Letter, and subject to payment of said principal
and interest, (i) such Subsidiary shall automatically, upon the effectiveness of
the delivery, of such Termination Letter and certification, cease to have any
obligation under this Agreement or the Notes and (ii) the Company shall
automatically be deemed to have unconditionally assumed, as primary obligor, and
hereby agrees to pay and perform, all of such obligations.

 

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Section 2.18 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.18, (1) from time to time on any Business Day during the period from
the Effective Date to the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Company or any of its Subsidiaries, and to amend
or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Company or its Subsidiaries and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (x) the sum of (1) the aggregate principal amount of the
Advances outstanding plus (2) all outstanding L/C Obligations shall not exceed
the aggregate amount of the Commitments of the Lenders, (y) the aggregate
principal amount of the Revolving Credit Advances of any Lender, plus such
Lender’s L/C Participation Percentage of the outstanding L/C Obligations shall
not exceed such Lender’s Commitment or (z) the outstanding L/C Obligations shall
not exceed the Letter of Credit Sublimit. Each request by the Company for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Company that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Company’s ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Company may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.

(ii) The L/C Issuer shall not issue any Letter of Credit if:

(A) subject to Section 2.18(b)(iii), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date; or

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date.

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

(A) any order, judgment or decree of any governmental authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any laws, rules regulations and orders applicable to
the L/C Issuer or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall impose upon
the L/C Issuer with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the date of this Agreement, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not applicable on
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this Agreement and which the L/C Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate any laws, rules
regulations and orders or one or more policies of the L/C Issuer;

(C) except as otherwise agreed by the Agent and the L/C Issuer, such Letter of
Credit is in an initial face amount less than $100,000, in the case of a
commercial Letter of Credit, or $100,000, in the case of a standby Letter of
Credit;

(D) such Letter of Credit is to be denominated in a currency other than U.S.
dollars;

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder; or

(F) a default of any Lender’s obligations to fund under Section 2.18(c) exists
or any Lender has otherwise failed to comply with any of its funding obligations
hereunder, unless the L/C Issuer has entered into satisfactory arrangements with
the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to
such Lender.

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(b) Procedures for Issuance and Amendment of Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Company delivered to the L/C Issuer (with a copy to the
Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by the Company. Such Letter of Credit Application must be received by
the L/C Issuer and the Agent not later than 11:00 a.m. at least five
(5) Business Days (or such later date and time as the Agent and the L/C Issuer
may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer:
(A) the proposed issuance date of the requested Letter of Credit (which shall be
a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be presented
by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and

 

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(D) such other matters as the L/C Issuer may require. Additionally, the Company
shall furnish to the L/C Issuer and the Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as the L/C Issuer or the Agent may require.

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Agent (by telephone or in writing) that the Agent has
received a copy of such Letter of Credit Application from the Company and, if
not, the L/C Issuer will provide the Agent with a copy thereof. Unless the L/C
Issuer has received written notice from any Lender, the Agent or the Company, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article III shall not be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Company or the applicable Subsidiary or enter
into the applicable amendment, as the case may be, in each case in accordance
with the L/C Issuer’s usual and customary business practices. Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a
risk participation in such Letter of Credit in an amount equal to the product of
such Lender’s L/C Participation Percentage times the amount of such Letter of
Credit. Each Lender acknowledges and agrees that its participation in each
Letter of Credit will be automatically adjusted to reflect such Lender’s L/C
Participation Percentage at each time such Lender’s Revolving Credit Commitment
is amended pursuant to a Commitment Increase in accordance with Section 2.05(c),
an assignment in accordance with Section 8.07 or otherwise pursuant to this
Agreement.

(iii) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Company and the Agent a true
and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of
drawing under such Letter of Credit, the L/C Issuer shall notify the Company and
the Agent thereof. Not later than 2:00 p.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (each such date, an “Honor Date”) (provided
that the L/C Issuer notifies the Company of the related drawing prior to 12:00
noon on such Honor Date), the Company shall reimburse the L/C Issuer through the
Agent in an amount equal to the amount of such drawing; if such notice is
received by the Company after 12:00 noon on the Honor Date, the Company shall
make such reimbursement to the L/C Issuer on or before 11:00 a.m. on the next
succeeding Business Day after the Honor Date together with interest on such
amount accrued from the Honor Date at the Base Rate. If the Company fails to so
reimburse the L/C Issuer by such time, the Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s L/C Participation
Percentage thereof. In such event, the Company shall be deemed to have requested
a Revolving Credit Borrowing of Base Rate Advances to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in Section 2.01 for the principal amount of
Revolving Credit Borrowings, but subject to the amount of the unutilized portion
of the aggregate amount

 

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of the Commitments of all the Lenders and the conditions set forth in
Section 3.02 (other than the delivery of a Notice of Revolving Credit
Borrowing). Any notice given by the L/C Issuer or the Agent pursuant to this
Section 2.18(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

(ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any
notice pursuant to Section 2.18(c)(i) make funds available to the Agent for the
account of the L/C Issuer at the Agent’s Account in an amount equal to its L/C
Participation Percentage of the Unreimbursed Amount not later than 1:00 p.m. on
the Business Day specified in such notice by the Agent, whereupon, subject to
the provisions of Section 2.18(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Advance to the Company in
such amount. The Agent shall remit the funds so received to the L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Credit Borrowing of Base Rate Advances because the conditions set
forth in Section 3.02 cannot be satisfied or for any other reason, the Borrower
shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Base Rate. In such event, each Lender’s payment to the Agent for
the account of the L/C Issuer pursuant to Section 2.18(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.18.

(iv) Until each Lender funds its Revolving Credit Advance or L/C Advance
pursuant to this Section 2.18(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender’s L/C
Participation Percentage of such amount shall be solely for the account of the
L/C Issuer.

(v) Each Lender’s obligation to make Revolving Credit Advances or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.18(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Company or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Credit
Advances pursuant to this Section 2.18(c) is subject to the conditions set forth
in Section 3.02 (other than delivery by the Company of a Notice of Revolving
Credit Borrowing). No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Company to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

(vi) If any Lender fails to make available to the Agent for the account of the
L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.18(c) by the time specified in
Section 2.18(c)(ii), the L/C Issuer shall be entitled to recover from such
Lender (acting through the Agent), on demand, such amount with interest thereon
for the period from the date such payment is

 

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required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the Federal Funds Rate from time to time in
effect. A certificate of the L/C Issuer submitted to any Lender (through the
Agent) with respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.18(c), if the Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Company or otherwise,
including proceeds of cash collateral applied thereto by the Agent), the Agent
will distribute to such Lender its L/C Participation Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s L/C Advance was outstanding) in the same
funds as those received by the Agent.

(ii) If any payment received by the Agent for the account of the L/C Issuer
pursuant to Section 2.18(c)(i) is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or otherwise (including pursuant to any settlement entered
into by the L/C Issuer in its discretion), each Lender shall pay to the Agent
for the account of the L/C Issuer its L/C Participation Percentage thereof on
demand of the Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.

(e) Obligations Absolute. The obligation of the Company to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement or any other Loan Documents;

(ii) the existence of any claim, counterclaim, set-off, defense or other right
that the Company or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented by the
beneficiary under such Letter of Credit proving to be forged, fraudulent or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under such Letter of Credit;

(iv) any payment by the L/C Issuer under such Letter of Credit against

 

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presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Company or any
Subsidiary.

The Company shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Company’s instructions or other irregularity, the Company
will immediately notify the L/C Issuer. The Company shall be conclusively deemed
to have waived any such claim against the L/C Issuer and its correspondents
unless such notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and the Company agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by such Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Agent or any of the respective correspondents, participants or assignees of
the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted
in connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Company hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Company’s pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. None of the L/C Issuer, the Agent or any of
the respective correspondents, participants or assignees of the L/C Issuer,
shall be liable or responsible for any of the matters described in clauses
(i) through (v) of Section 2.18(e); provided, however, that anything in such
clauses to the contrary notwithstanding, the Company may have a claim against
the L/C Issuer, and the L/C Issuer may be liable to the Company, to the extent,
but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Company which the Company proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit unless the L/C Issuer is prevented or
prohibited from so paying as a result of any order or directive of any court or
other governmental authority. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

(g) Cash Collateral. Upon the request of the Agent, (i) if the L/C Issuer has
honored

 

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any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
Expiration Date, any Letter of Credit for any reason remains outstanding and
partially or wholly undrawn, the Company shall immediately Cash Collateralize
the then outstanding amount of all L/C Obligations (determined as of the date of
such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be).
Sections 2.05, 2.06(b) and 6.01 set forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.18,
Section 2.05, Section 2.06(b) and Section 6.01, “Cash Collateralize” means to
pledge and deposit with or deliver to the Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to
the Agent and the L/C Issuer (which documents are hereby consented to by the
Lenders). Derivatives of such term have corresponding meanings. The Company
hereby grants to the Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts with the Agent.

(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the L/C
Issuer and the Company when a Letter of Credit is issued, (i) the rules of the
ISP shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce at the time of issuance shall apply to
each commercial Letter of Credit.

(i) Letter of Credit Fees. The Company shall pay to the Agent for the account of
each Lender in accordance with its L/C Participation Percentage a Letter of
Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to
0.135% times the daily maximum amount available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such Letter
of Credit). Letter of Credit Fees shall be (i) computed on a quarterly basis in
arrears and (ii) due and payable on the first Business Day after the end of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Company shall pay directly to the L/C Issuer, for its own account, (i) a
one-time fronting fee with respect to each commercial Letter of Credit in an
amount equal to 0.115% per annum times the amount of such commercial Letter of
Credit, due and payable at the time of issuance and (ii) a fronting fee with
respect to each standby Letter of Credit in an amount equal to 0.115% per annum
on the daily maximum amount available to be drawn thereunder (whether or not
such maximum amount is then in effect under such Letter of Credit), due and
payable quarterly in arrears on the first Business Day after the end of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such standby Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. In addition, the Company shall
pay directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

 

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(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Company shall be obligated to reimburse
the L/C Issuer hereunder for any and all drawings under such Letter of Credit.
The Company hereby acknowledges that the issuance of Letters of Credit for the
account of Subsidiaries inures to the benefit of the Company, and that the
Company’s business derives substantial benefits from the businesses of such
Subsidiaries.

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND LENDING

Section 3.01 Conditions Precedent to Effectiveness of Sections 2.01, 2.03 and
2.18.

Sections 2.01, 2.03 and 2.18 of this Agreement shall become effective on and as
of the first date (the “Effective Date”) on which the following conditions
precedent have been satisfied:

(a) As of the Effective Date, there shall have occurred no Material Adverse
Change since December 31, 2005 that has not been publicly disclosed.

(b) As of the Effective Date, there shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any of its Subsidiaries
pending or, to the knowledge of the Company’s executive officers, threatened
before any court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) could reasonably be likely to
affect the legality, validity or enforceability of this Agreement or any Note or
the consummation of the transactions contemplated hereby.

(c) As of the Effective Date, nothing shall have come to the attention of the
Lenders during the course of their due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading, incorrect
or incomplete in any material respect.

(d) As of the Effective Date, all governmental and third party consents and
approvals necessary in connection with the transactions contemplated hereby
shall have been obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect.

(e) As of the Effective Date, the Company shall have paid all accrued fees and
expenses of the Agent, the Syndication Agents, the Lead Arrangers and the
Lenders (including the accrued fees and expenses of counsel to the Agent).

(f) On the Effective Date, the following statements shall be true and the Agent
shall have received for the account of each Lender a certificate signed by a
duly authorized officer of the Company, dated the Effective Date, stating that:

(i) The representations and warranties contained in Section 4.01 are correct on
and as of the Effective Date, and

(ii) No event has occurred and is continuing that constitutes a Default.

(g) The Agent shall have received on or before the Effective Date the following,

 

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each dated such date, in form and substance satisfactory to the Agent and
(except for the Revolving Credit Notes) in sufficient copies for each Lender:

(i) The Revolving Credit Notes payable to the order of each Lender.

(ii) Certified copies of the resolutions of the Board of Directors of the
Company approving this Agreement and the Notes, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes, including, without limitation, copies
of the articles of incorporation and bylaws of the Company.

(iii) A certificate of the Secretary or an Assistant Secretary of the Company
certifying the names and true signatures of the officers of the Company
authorized to sign this Agreement and the Notes and the other documents to be
delivered hereunder.

(iv) A favorable opinion of Thomas H. Tamoney, Jr., Vice President and Associate
General Counsel of the Company, in form and substance reasonably satisfactory to
the Agent and the Lenders.

(v) A copy of the Indenture dated as of December 14, 1994 between the Company
and JPMorgan Chase Bank, N.A. as successor to The Chase Manhattan Bank (National
Association), Trustee (and all amendments thereto).

(h) The Agent shall have received evidence of (i) the termination of the
commitments to make extensions of credit to the Company and the Borrowing
Subsidiaries by the lenders party to each of the Existing Credit Agreements and
(ii) payment in full of all amounts owing under each of the Existing Credit
Agreements.

Section 3.02 Conditions Precedent to Each Revolving Credit Borrowing and Each
Letter of Credit Extension.

The obligation of each Lender to make a Revolving Credit Advance on the occasion
of each Revolving Credit Borrowing and the obligations of the L/C Issuer to make
any Letter of Credit Extension shall be subject to the conditions precedent that
the Effective Date shall have occurred and on the date of such Revolving Credit
Borrowing or such Letter of Credit Extension:

(a) the following statements shall be true (and each of the giving of the
applicable Notice of Revolving Credit Borrowing and the acceptance by any
Borrower of the proceeds of such Revolving Credit Borrowing and each submission
of a Letter of Credit Application shall constitute a representation and warranty
by the Company and such Borrower that on the date of such Borrowing or Letter of
Credit Extension, as the case may be, such statements are true):

(i) The representations and warranties contained in Section 4.01 (except the
representations set forth in the last sentence of subsection (e) thereof and in
subsection (f) thereof (other than clause (ii) thereof)) are correct on and as
of the date of such Revolving Credit Borrowing or Letter of Credit Extension, as
the case may be, before and after giving effect to such Revolving Credit
Borrowing or Letter of Credit Extension, as the case may be, and to the
application of the proceeds therefrom, as though made on and as of such date,
and

(ii) No event has occurred and is continuing, or would result from such

 

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Revolving Credit Borrowing or Letter of Credit Extension, as the case may be, or
from the application of the proceeds therefrom, that constitutes a Default; and

(b) the Agent shall have received the Notice of Revolving Credit Borrowing
and/or the L/C Issuer shall have received the Letter of Credit Application, as
the case may be, and such other approvals, opinions or documents as any Lender
through the Agent may reasonably request, and, in the case of the first
Borrowing by a Borrowing Subsidiary, the Agent shall have received such
Revolving Credit Notes, corporate documents, resolutions and legal opinions
relating to such Borrowing Subsidiary as the Agent may reasonably require.

Section 3.03 Conditions Precedent to Each Competitive Bid Borrowing.

The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i) the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii) on or before the date of
such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing, the
Agent shall have received a Competitive Bid Note payable to the order of such
Lender for each of the one or more Competitive Bid Advances to be made by such
Lender as part of such Competitive Bid Borrowing, in a principal amount equal to
the principal amount of the Competitive Bid Advance to be evidenced thereby and
otherwise on such terms as were agreed to for such Competitive Bid Advance in
accordance with Section 2.03, and (iii) on the date of such Competitive Bid
Borrowing the following statements shall be true (and each of the giving of the
applicable Notice of Competitive Bid Borrowing and the acceptance by any
Borrower of the proceeds of such Competitive Bid Borrowing shall constitute a
representation and warranty by the Company and such Borrower that on the date of
such Competitive Bid Borrowing such statements are true):

(a) The representations and warranties contained in Section 4.01 (except the
representations set forth in the last sentence of subsection (e) thereof and in
subsection (f) thereof (other than clause (ii) thereof)) are correct on and as
of the date of such Competitive Bid Borrowing, before and after giving effect to
such Competitive Bid Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date,

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

(c) No event has occurred and no circumstance exists as a result of which the
information concerning the Company that has been provided to the Agent and each
Lender by the Company in connection herewith would 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.

Section 3.04 Determinations Under Section 3.01.

For purposes of determining compliance with the conditions specified in
Section 3.01, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of the Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender prior
to the proposed Effective Date, as notified by the Company to the Lenders,
specifying its objection thereto. The Agent shall promptly notify the Lenders of
the occurrence of the Effective Date.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01 Representations and Warranties of the Company.

The Company represents and warrants as follows:

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Carolina.

(b) The execution, delivery and performance by the Company of this Agreement and
the Notes, and the consummation of the transactions contemplated hereby, are
within the Company’s corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) the Company’s charter or
by-laws or (ii) any law or any contractual restriction binding on or materially
affecting the Company.

(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by the Company of this
Agreement or the Notes.

(d) This Agreement has been, and each of the Notes when delivered hereunder will
have been, duly executed and delivered by the Company. This Agreement is, and
each of the Notes when delivered hereunder will be, the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with
their respective terms.

(e) The Consolidated balance sheet of the Company and its Subsidiaries as at
December 31, 2005, and the related Consolidated statements of income and cash
flows and common shareholders’ equity of the Company and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of KPMG LLP, independent
registered public accounting firm, present fairly, in all material respects, the
Consolidated financial condition of the Company and its Subsidiaries as at such
date and the Consolidated results of the operations of the Company and its
Subsidiaries for the year ended on such date, all in accordance with United
States generally accepted accounting principles consistently applied. Since
December 31, 2005, there has been no Material Adverse Change.

(f) There is no pending or threatened action, suit, investigation, litigation or
proceeding affecting the Company before any court, governmental agency or
arbitrator that (i) would be reasonably likely to have a Material Adverse Effect
or (ii) would reasonably be likely to affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the
transactions contemplated hereby.

(g) No proceeds of any Advance or Letter of Credit will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, other than equity securities issued by the
Company.

(h) The Company is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds of any Advance or Letter of Credit

 

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will be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock.

(i) Following application of the proceeds of each Advance and each Letter of
Credit, not more than 25 percent of the value of the assets (either of any
Borrower only or of the Company and its Subsidiaries on a consolidated basis)
subject to the provisions of Section 5.02(a) or (b) or subject to any
restriction contained in any agreement or instrument between the Company and any
Lender or any Affiliate of any Lender relating to Debt and within the scope of
Section 6.01(d) will be margin stock.

(j) Neither the Company nor any of its Subsidiaries is an “investment company”,
a company “controlled by”, or “promoter” or “principal underwriter” for, an
“investment company”, as such terms are defined in the Investment Company Act of
1940, as amended. Neither the making of any Advances nor the application of the
proceeds or repayment thereof by any Borrower will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange Commission
thereunder.

ARTICLE V

COVENANTS OF THE COMPANY

Section 5.01 Affirmative Covenants.

So long as any Advance shall remain unpaid, any Letter of Credit shall remain
outstanding or any Lender shall have any Commitment hereunder, the Company will:

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, compliance with
ERISA and Environmental Laws, except where failure so to comply would not, and
would not be reasonably likely to, have a Material Adverse Effect.

(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries
to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law become a Lien
upon its property; provided, however, that neither the Company nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors and such Lien would be reasonably likely to have a
Material Adverse Effect.

(c) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Material Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company and its Material Subsidiaries may consummate any merger or
consolidation permitted under Section 5.02(b) and provided further that neither
the Company nor any of its Material Subsidiaries shall be required to preserve
any right or franchise if the Board of Directors of the Company or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or such Subsidiary, as the case
may be, and that the loss thereof is not disadvantageous in any

 

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material respect to the Company, such Subsidiary or the Lenders.

(d) Reporting Requirements. Furnish to the Agent:

(i) as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of the Company, the Consolidated
balance sheet of the Company and its Subsidiaries as of the end of such quarter
and Consolidated statements of income and cash flows of the Company and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Company as having been
prepared in accordance with GAAP, it being agreed that delivery of the Company’s
Quarterly Report on Form 10-Q will satisfy this requirement;

(ii) as soon as available and in any event within 90 days after the end of each
fiscal year of the Company, a copy of the annual audit report for such year for
the Company and its Subsidiaries, containing the Consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, in each case accompanied by an opinion
acceptable to the Required Lenders by KPMG LLP or other independent public
accountants acceptable to the Required Lenders, it being agreed that delivery,
of the Company’s Annual Report on Form 10-K will satisfy this requirement;

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

(iv) promptly after the sending or filing thereof copies of all annual reports
and proxy solicitations that the Company sends to any of its security holders,
and copies of all reports on Form 8-K that the Company or any Subsidiary files
with the Securities and Exchange Commission.

Reports and financial statements required to be delivered by the Company
pursuant to clauses (i), (ii) and (iv) of this subsection (d) shall be deemed to
have been delivered on the date on which the Company posts such reports, or
reports containing such financial statements, on its website on the Internet at
www.pepsico.com, at www.sec.gov or at such other website identified by the
Company in a notice to the Agent and that is accessible by the Lenders without
charge; provided that the Company shall deliver paper copies of such information
to any Lender promptly upon request of such Lender through the Agent.

Section 5.02 Negative Covenants.

So long as any Advance shall remain unpaid, any Letter of Credit shall remain
outstanding or any Lender shall have any Commitment hereunder, the Company will
not:

(a) Secured Debt. Create or suffer to exist, or permit any of its Restricted
Subsidiaries to create or suffer to exist, any Debt secured by a Lien on (i) any
Principal Property, (ii) any shares of stock of a Restricted Subsidiary or
(iii) any Debt of any Restricted Subsidiary

 

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unless the Company or such Restricted Subsidiary secures or causes such
Restricted Subsidiary to secure the Advances and all other amounts payable under
this Agreement and the Notes equally and ratably with such secured Debt, so long
as such secured Debt shall be so secured, unless after giving effect thereto the
aggregate amount of all such Debt so secured does not exceed 10% of Consolidated
Net Tangible Assets at such time, provided that the foregoing restriction does
not apply to Debt secured by:

(i) Liens existing prior to the date hereof;

(ii) Liens on property of, or on shares of stock of or Debt of, any corporation
existing at the time such corporation becomes a Restricted Subsidiary;

(iii) Liens in favor of the Company or any Restricted Subsidiary;

(iv) Liens in favor of any governmental bodies to secure progress or advance
payments;

(v) Liens on property, shares of stock or Debt existing at the time of
acquisition thereof (including acquisition through merger or consolidation) or
to secure the payment of all or any part of the purchase price thereof or
construction thereon or to secure any Debt incurred prior to, at the time of, or
within 120 days after the later of the acquisition, the completion of
construction, or the commencement of full operation of such property or within
120 days after the acquisition of such shares or Debt for the purpose of
financing all or any part of the purchase price thereof or construction thereon;
and

(vi) any extension, renewal or refunding referred to in the foregoing clauses
(i) to (v), inclusive.

(b) Mergers, Etc. (i) Merge or consolidate with or into, or permit any of its
Subsidiaries to merge or consolidate with or into, any corporation, (ii) sell,
lease, transfer or otherwise dispose of all or any substantial part of its
assets (except in the ordinary course of business), whether now owned or
hereafter acquired, (iii) acquire all or substantially all the assets and assume
all or substantially all the liabilities of any Person, or permit any of its
Subsidiaries to do so, or (iv) acquire any shares of the stock of any Person
other than a Subsidiary of the Company, or permit any of its Subsidiaries to do
so, unless the Company or one of its Subsidiaries would be the acquiring or
surviving party in such transaction and no Default shall have occurred and be
continuing at the time of such proposed transaction or would result therefrom.
Notwithstanding the foregoing, the Company may at any time sell or otherwise
dispose of all the stock of any of its Subsidiaries (or substantially all the
assets of any of its Subsidiaries) if the board of directors of the Company
shall have determined that the retention of such stock or assets is no longer in
the best interests of the Company and that such sale or disposition will not
materially adversely affect the Consolidated financial condition of the Company
and its Subsidiaries taken as a whole.

 

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ARTICLE VI

EVENTS OF DEFAULT

Section 6.01 Events of Default.

If any of the following events (“Events of Default”) shall occur and be
continuing:

(a) Any Borrower shall fail to pay any principal of, or interest on, any Advance
or any L/C Obligation or to make any other payment under this Agreement or any
Note, in each case within five days after the same becomes due and payable; or

(b) Any representation or warranty made by the Company herein or by any Borrower
(or any of its officers) in connection with this Agreement (including without
limitation by any Borrowing Subsidiary pursuant to any Designation Letter) shall
prove to have been incorrect in any material respect when made; or

(c) (i) The Company shall fail to perform or observe any term, covenant or
agreement contained in Sections 5.01(d) or 5.02, or (ii) the Company shall fail
to perform or observe any other term, covenant or agreement contained in this
Agreement on its part to be performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to the
Company by the Agent or any Lender; or

(d) The Company or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on any Debt that is outstanding in a principal or notional
amount of at least $100,000,000 in the aggregate (but excluding Debt outstanding
hereunder) of the Company 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 the
maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or

(e) The Company 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 Company 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
30 days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Company or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or

 

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(f) Any judgment or order for the payment of money in excess of $100,000,000
shall be rendered against the Company or any of its Material Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however, that
any such judgment or order shall not be an Event of Default under this
Section 6.01(f) if and for so long as (i) the amount of such judgment or order
is covered by a valid and binding policy of insurance between the defendant and
the insurer covering payment thereof and (ii) such insurer, which shall be rated
at least “A” by A.M. Best Company, has been notified of, and has not disputed
the claim made for payment of, the amount of such judgment or order; or

(g) Any event, action or condition with respect to an employee benefit plan of
the Company subject to Title IV of ERISA results in any penalty or action
pursuant to ERISA that has a material adverse effect on the business or
financial condition of the Company and its Subsidiaries, taken as a whole;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Company, declare the
obligation of each Lender to make Advances and any obligation of the L/C Issuer
to make L/C Credit Extensions to be terminated, whereupon the same shall
forthwith terminate, (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Company declare the Notes, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Notes, 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
Company and (iii) shall at the request, or may with the consent, of the Required
Lenders, require that the Company Cash Collateralize the L/C Obligations;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Company or any Borrowing Subsidiary under the
Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances and
any obligation of the L/C Issuer to make L/C Credit Extensions shall
automatically be terminated, (B) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
protest or any notice of any kind, all of which are hereby expressly waived by
the Company and (C) the obligation of the Company to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective without further
act of the Agent or any Lender.

ARTICLE VII

THE AGENT

Section 7.01 Authorization and Action.

(a) Each Lender hereby appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of the Notes), 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 Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Agent shall not be required to take any action

 

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that exposes the Agent to personal liability or that 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 Company pursuant to the terms of this
Agreement.

(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (i) provided to the
Agent in this Article VII with respect to any acts taken or omissions suffered
by the L/C Issuer in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term “Agent” as used in
this Article VII included the L/C Issuer with respect to such acts or omissions,
and (ii) as additionally provided herein with respect to the L/C Issuer.

Section 7.02 Agent’s Reliance, Etc.

Neither the Agent nor any of its directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Agent: (i) may treat the payee of any Note as the holder thereof until the Agent
receives and accepts an Assignment and Assumption entered into by the Lender
that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in Section 8.07; (ii) may consult with legal counsel
(including counsel for the Company or any Subsidiary 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 any Borrower or to inspect the
property (including the books and records) of any Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier) believed by it to be genuine
and signed or sent by the proper party or parties.

Section 7.03 Citibank and Affiliates.

With respect to its Commitment, the Advances made by it, the Letters of Credit
issued by it and the Note issued to it, Citibank shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent; and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Company, any of its
Subsidiaries and any Person who may do business with or own securities of the
Company or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders. The Agent shall have no
duty to disclose information obtained or received by it or any of its Affiliates
relating to the Company or its Subsidiaries to the extent such information was
obtained or received in any capacity other than as Agent.

 

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Section 7.04 Lender 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 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon 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 7.05 Indemnification.

The Lenders agree to indemnify the Agent (to the extent not reimbursed by the
Company), ratably according to the respective principal amounts of the Revolving
Credit Notes then held by each of them (or if no Revolving Credit Notes are at
the time outstanding or if any Revolving Credit Notes are held by Persons that
are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against 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 Company.

Section 7.06 Successor Agent.

The Agent may resign at any time by giving written notice thereof to the Lenders
and the Company and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent approved by the Company, which
approval shall not be unreasonably withheld or delayed. If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent’s giving of notice of
resignation or the Required Lenders’ removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement, but shall not be discharged from any duties or
obligations under this Agreement prior to its retirement as Agent. After any
retiring Agent’s resignation or removal hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.

Section 7.07 Syndication Agents and Lead Arrangers.

Without prejudice to the obligations of the Agent hereunder, the Syndication
Agents and Lead Arrangers, in their capacities as such, have no duties,
obligations or responsibilities under this Agreement.

 

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ARTICLE VIII

MISCELLANEOUS

Section 8.01 Amendments, Etc.

No amendment or waiver of any provision of this Agreement or the Revolving
Credit Notes, nor consent to any departure by any Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Company and the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders affected thereby, do any of the following:
(a) waive any of the conditions specified in Section 3.01, (b) increase the
Commitment of a Lender or subject a Lender to any additional obligations,
(c) reduce the principal of, or interest on, the Revolving Credit Notes or any
fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Revolving Credit Notes or any fees
or other amounts payable hereunder, (e) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Revolving Credit Notes, or
the number of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder, (f) release the guarantee as set forth in
Section 9.01, or (g) amend this Section 8.01; and provided further that (i) no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Note and (ii) no amendment,
waiver or consent shall, unless in writing and signed by the L/C Issuer in
addition to the Lenders required above to take such action, affect the rights or
duties of the L/C Issuer under this Agreement or any Letter of Credit
Application relating to any Letter of Credit issued or to be issued by it.

Section 8.02 Notices, Etc.

All notices and other communications provided for hereunder shall be either
(x) in writing (including telecopier communication) and mailed, telecopied, or
delivered or (y) as and to the extent set forth in Section 9.02(b) and in the
proviso to this Section 8.02(a), if to any Borrower, to the Company at its
address at 700 Anderson Hill Road, Purchase, New York 10577, Attention:
Assistant Treasurer, Telecopier No. (914) 253-3303, with a copy to Secretary,
Telecopier No. (914) 253-3123; if to any Initial Lender, at its Domestic Lending
Office set forth in its Administrative Questionnaire; if to any other Lender, at
its Domestic Lending Office specified in the Assignment and Assumption pursuant
to which it became a Lender; and if to the Agent, at the Agent Address; or, as
to the Company or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party,
at such other address as shall be designated by such party in a written notice
to the Company and the Agent, provided that materials required to be delivered
pursuant to Section 5.01(d)(i), (ii) or (iv) shall be delivered to the Agent as
specified in Section 8.02(b) or as otherwise specified to the Company by the
Agent. All such notices and communications shall, when mailed, telecopied be
effective when deposited in the mails or telecopied, respectively, except that
notices and communications to the Agent pursuant to Article II, III or VII shall
not be effective until received by the Agent. The Company and the Agent may
agree to accept notice and other communications by electronic means pursuant to
procedures approved by both parties.

(b) So long as Citibank or any of its Affiliates is the Agent, materials
required to be delivered pursuant to Section 5.01(d)(i), (ii) and (iv) shall be
delivered to the Agent in an electronic medium in a format acceptable to the
Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com. The Company
agrees that the Agent may make such materials, as well as any other written
information,

 

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documents, instruments and other material relating to the Company, any of its
Subsidiaries or any other materials or matters relating to this Agreement, the
Notes or any of the transactions contemplated hereby (collectively, the
“Communications”) available to the Lenders by posting such notices on Intralinks
or a substantially similar electronic system (the “Platform”). The Company
acknowledges that (i) the distribution of material through an electronic medium
is not necessarily secure and that there are confidentiality and other risks
associated with such distribution, (ii) the Platform is provided “as is” and “as
available” and (iii) neither the Agent nor any of its Affiliates warrants the
accuracy, adequacy or completeness of the Communications or the Platform and
each expressly disclaims liability for errors or omissions in the Communications
or the Platform. No warranty of any kind, express, implied or statutory,
including, without limitation, any warranty of merchantability, fitness for a
particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by the Agent or any of its Affiliates in
connection with the Platform.

(c) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform
shall constitute effective delivery of such information, documents or other
materials to such Lender for purposes of this Agreement; provided that if
requested by any Lender the Agent shall deliver a copy of the Communications to
such Lender by email or telecopier. Each Lender agrees (i) to notify the Agent
in writing of such Lender’s e-mail address to which a Notice may be sent by
electronic transmission (including by electronic communication) on or before the
date such Lender becomes a party to this Agreement (and from time to time
thereafter to ensure that the Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail address.

Section 8.03 No Waiver; Remedies.

No failure on the part of any Lender or the Agent to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document 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 8.04 Costs and Expenses.

(a) The Company agrees to pay on demand all reasonable costs and expenses of the
Agent and the Lenders, if any (including, without limitation, reasonable counsel
fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a).

(b) The Company agrees to indemnify and hold harmless the Agent and each Lender
and each of their Affiliates and their officers, directors, employees, agents
and advisors (each, an “Indemnified Party”) from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related
to or in connection with the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances, whether or not such investigation, litigation or proceeding is brought
by any Borrower, its directors, shareholders or creditors or an Indemnified
Party or any other Person or any Indemnified Party is otherwise a party thereto
and whether or not the transactions

 

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contemplated hereby are consummated, except to the extent such claim, damage,
loss, 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. No Indemnified Party shall be liable for
any damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in
connection with this Agreement. No party hereto shall have any liability to any
other party hereto for any indirect, punitive or consequential damages relating
to this Agreement or any other Loan Document or arising out of its activities in
connection herewith or therewith.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance or LIBO Rate Advance is made by any Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or
2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason, the Company shall, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

(d) Without prejudice to the survival of any other agreement of any Borrower
hereunder, the agreements and obligations of the Company contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.

Section 8.05 Right of Set-off.

Upon (i) the occurrence and during the continuance of any Event of Default and
(ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, 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 any Borrower against any and all of the obligations
of such Borrower now or hereafter existing under this Agreement and the Note
held by such Lender, whether or not such Lender shall have made any demand under
this Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Company after any such set-off and
application, 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) that such Lender and
its Affiliates may have.

Section 8.06 Binding Effect.

This Agreement shall become effective (other than Sections 2.01, 2.03 and 2.18,
which shall only become effective upon satisfaction of the conditions precedent
set forth in Section 3.01) when it shall have been executed by the Company and
the Agent and when the Agent shall have been notified by each Initial Lender
that such Initial Lender has executed it and thereafter shall be binding upon
and inure to the benefit of the Company, each Subsidiary Borrower (if any), the
Agent and each Lender and their respective successors and assigns, except that
no Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.

 

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Section 8.07 Assignments and Participations.

(a) Each Lender may, upon ten days’ notice to the Agent and with the consent of
the Company and, if demanded by the Company (following a demand by such Lender
pursuant to Section 2.11 or Section 2.14 or pursuant to Section 2.06(b)) upon at
least 20 Business Days’ notice to such Lender and the Agent, will assign to one
or more Persons all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Revolving Credit Advances and L/C Obligations owing to it and the Revolving
Credit Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all rights
and obligations under this Agreement (other than any right to make Competitive
Bid Advances, Competitive Bid Advances owing to it or Competitive Bid Notes),
(ii) except in the case of an assignment to a Person that, immediately prior to
such assignment, was a Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Assumption with respect to such assignment) shall in
no event be less than $10,000,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Company pursuant to this Section 8.07(a) shall be arranged by the Company 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 that 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 Company pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Company 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, including with
respect to L/C Obligations and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined in clause (d) below), an Assignment and Assumption,
together with any Revolving Credit Note subject to such assignment and a
processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Assumption, (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 Assumption, 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 Assumption, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption 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); provided that an assigning Lender’s rights to indemnification and
reimbursement pursuant to Section 8.04 shall survive assignment hereunder.

Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose vehicle (an “SPV”) of such
Granting Lender, identified as such in writing from time to time by the Granting
Lender to the Agent and the Company, the option to provide to the Borrowers all
or any part of any Advance that such Granting Lender would otherwise be
obligated to make to the Borrowers pursuant to Section 2.01, provided that
(i) nothing herein shall constitute a commitment by any SPV to make any Advance,
(ii) if an SPV elects not to exercise such option or otherwise fails to provide
all or any part of such Advance, the Granting Lender shall be obligated to make
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(iii) the Borrowers may bring any proceeding against either the Granting Lender
or the SPV in order to enforce any rights of the Borrowers hereunder. The making
of an Advance by an SPV hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Advance were made by the Granting
Lender. Each party hereto hereby agrees that no SPV shall be liable for any
payment under this Agreement for which a Lender would otherwise be liable, for
so long as, and to the extent, the related Granting Lender makes such payment.
In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States or any State thereof
arising out of any claim against such SPV under this Agreement. In addition,
notwithstanding anything to the contrary contained in this Section, any SPV may
with notice to, but without the prior written consent of, the Company or the
Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Advances to its Granting Lender or to any financial
institutions (consented to by the Company and the Agent) providing liquidity
and/or credit support (if any) with respect to commercial paper issued by such
SPV to fund such Advances and such SPV may disclose, on a confidential basis,
confidential information with respect to the Company and its Subsidiaries to any
rating agency, commercial paper dealer or provider of a surety, guarantee or
credit liquidity enhancement to such SPV. This paragraph may not be amended
without the consent of any SPV at the time holding Advances under this
Agreement.

(b) By executing and delivering an Assignment and Assumption, 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 Assumption, 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, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, 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 any Borrower or the performance or
observance by any 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 4.01 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 Assumption; (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 and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all of the obligations that by the terms of this Agreement are required to be
performed by it as a Lender.

(c) Upon its receipt of an Assignment and Assumption executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with any Revolving Credit Note or Notes subject to such assignment, the Agent
shall, if such Assignment and

 

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Assumption has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Assumption, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Company. Within five Business Days after receipt by the Company of such notice,
the relevant Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Revolving Credit Note a new Revolving
Credit Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Assumption and, if the
assigning Lender has retained a Commitment hereunder, a new Revolving Credit
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Revolving Credit Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Revolving Credit Note or Notes, shall be dated the effective date of
such Assignment and Assumption and shall otherwise be in substantially the form
of Exhibit A-1 hereto.

(d) The Agent shall maintain at its address referred to in Section 8.02 a copy
of each Assignment and Assumption delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and, with respect
to Lenders, the 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
each 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 Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

(e) Each Lender may, upon notice to the Agent and the Company, 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, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) such Lender’s obligations
under this Agreement (including, without limitation, its Commitment 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 holder of any such Note for all purposes of this Agreement,
(iv) the Borrowers, 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 and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by any
Borrower therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation or release the Borrower from
its obligations hereunder, including, without limitation, its obligations under
Article IX.

(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant any information
relating to any Borrower furnished to such Lender by or on behalf of any
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information relating to the Borrowers
received by it from such Lender.

(g) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement

 

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(including, without limitation, the Advances owing to it and the Note or Notes
held by it) in favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.

Section 8.08 Confidentiality.

Neither the Agent nor any Lender shall disclose any Confidential Information to
any Person without the consent of the Company, other than (a) to the Agent’s or
such Lender’s Affiliates and their officers, directors, employees, agents and
advisors and to actual or prospective assignees and participants, and then only
on a confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) to any rating agency when required by it, provided that,
prior to any such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Borrowers
received by it from such Lender, (d) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder and
(f) to the extent such Confidential Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Agent or any Lender on a nonconfidential basis from a source other than the
Company.

In addition, the Agent may disclose to any agency or organization that assigns
standard identification numbers to loan facilities such basic information
describing the facilities provided hereunder as is necessary to assign unique
identifiers (and, if requested, supply a copy of this Agreement), it being
understood that the Person to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to make available to
the public only such information as such person normally makes available in the
course of its business of assigning identification numbers.

Section 8.09 Governing Law.

This Agreement and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York.

Section 8.10 Execution in Counterparts.

This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 8.11 Jurisdiction, Etc.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the Notes, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any

 

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party may otherwise have to bring any action or proceeding relating to this
Agreement or the Notes in the courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the Notes in any New York State
or federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

Section 8.12 WAIVER OF JURY TRIAL.

EACH BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
NOTES OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

Section 8.13 USA PATRIOT Act Notice.

Each Lender and the Agent (for itself and not on behalf of any Lender) hereby
notifies the Company that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it
is required to obtain, verify and record information that identifies the
Company, which information includes the name and address of the Company and
other information that will allow such Lender or the Agent, as applicable, to
identify the Company in accordance with the Act.

ARTICLE IX

GUARANTEE

Section 9.01 Guarantee.

The Company hereby unconditionally guarantees to each Lender and the Agent and
their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration, by optional prepayment or
otherwise) of the principal of and interest on the Advances to and the Notes of
(to the extent of the principal of and interest on Advances made to) each
Borrowing Subsidiary and all other amounts whatsoever from time to time now or
hereafter owing to the Lenders or the Agent or any of them by any Borrowing
Subsidiary under this Agreement pursuant to its Designation Letter, in each case
strictly in accordance with the terms thereof (such obligations being herein
collectively called the “Guaranteed Obligations”). The Company hereby further
agrees that if any Borrowing Subsidiary shall fail to pay in full when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise) any of the Guaranteed Obligations, the Company will promptly pay the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.

Section 9.02 Obligations Unconditional.

(a) The obligations of the Company under this Article IX, and the obligations
(if

 

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any) of the Company assumed pursuant to Section 2.17(b), are unconditional
irrespective of (i) the value, genuineness, legality, validity, regularity or
enforceability of any of the Guaranteed Obligations, (ii) any modification,
amendment or variation in or addition to the terms of any of the Guaranteed
Obligations or any covenants in respect thereof or any security therefor,
(iii) any extension of time for performance or waiver of performance of any
covenant of any Borrowing Subsidiary or any failure or omission to enforce any
right with regard to any of the Guaranteed Obligations, (iv) any exchange,
surrender, release of any other guaranty of or security for any of the
Guaranteed Obligations, or (v) any other circumstance whatsoever which may or
might constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent hereof that the obligations of the Company under
this Article IX shall be absolute and unconditional under any and all
circumstances.

(b) The Company hereby expressly waives diligence, presentment, demand, protest
and all notices whatsoever with regard to any of the Guaranteed Obligations and
said obligations assumed under Section 2.17(b) and any requirement that the
Agent or any Lender exhaust any right, power or remedy or proceed against any
Borrowing Subsidiary or any other Person hereunder or under the Designation
Letter of such Borrowing Subsidiary or under any Note of such Borrowing
Subsidiary or any other guarantor of or any security for any of the Guaranteed
Obligations. The obligations of the Company under this Article IX constitute a
guarantee of payment and not of collection.

Section 9.03 Reinstatement.

The guarantee in this Article IX shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of any Borrowing
Subsidiary in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder(s) of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise.

Section 9.04 Subrogation.

Until the termination of the Commitments and the payment in full of the
principal of and interest on the Advances and all other amounts payable to the
Agent or any Lender hereunder, the Company hereby irrevocably waives all rights
of subrogation or contribution, whether arising by operation of law (including,
without limitation, any such right arising under the Federal Bankruptcy Code) or
otherwise, by reason of any payment by it pursuant to the provisions of this
Article IX.

Section 9.05 Remedies.

The Company agrees that, as between the Company on the one hand and the Lenders
and the Agent on the other hand, the obligations of any Borrowing Subsidiary
guaranteed under this Agreement may be declared to be forthwith due and payable,
or may be deemed automatically to have been accelerated, as provided in
Article VI, for purposes of Section 9.01 hereof notwithstanding any stay,
injunction or other prohibition (whether in a bankruptcy proceeding affecting
such Borrowing Subsidiary or otherwise) preventing such declaration as against
such Borrowing Subsidiary and that, in the event of such declaration or
automatic acceleration such obligations (whether or not due and payable by such
Borrowing Subsidiary) shall forthwith become due and payable by the Company for
purposes of said Section 9.01.

Section 9.06 Continuing Guarantee.

The guarantee in this Article IX is a continuing guarantee and shall apply to
all Guaranteed

 

53

 

 

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Obligations whenever arising.

[Remainder of Page Intentionally Left Blank]

 

54

 

 

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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.

 

PEPSICO, INC.

By:   /s/  Lionel L. Nowell III                        

Name:

 

        Lionel L. Nowell III

Title:

 

        Senior Vice President and
        Treasurer

                                                                     

By:  /s/  J. Darrell Thomas                            

Name:

 

    J. Darrell Thomas

Title:

 

    Vice President and Assistant
    Treasurer

 

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

CITIBANK, N.A.

as Agent, L/C Issuer and as an Initial Lender

By:   /s/  Carolyn A. Kee                    

Name:    Carolyn A. Kee

Title:       Vice President

 

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

JPMORGAN CHASE BANK, N.A.

By:  /s/  Thomas T. Hou                    

Name:   Thomas T. Hou

Title:      Vice President

 

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

HSBC BANK USA, NATIONAL

ASSOCIATION

By:  /s/  Thomas A. Foley                    

Name:   Thomas A. Foley

Title:      Senior Vice President

 

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

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

MERRILL LYNCH BANK USA

By:  /s/ Frank Stepan                                

Name:

 

Frank Stepan

Title:

 

Vice President

 

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

MORGAN STANLEY BANK

By:  /s/ Daniel Twenge                            

Name:

 

Daniel Twenge

Title:

 

Vice President

 

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

UBS LOAN FINANCE LLC

By: /s/ Richard L. Tavrow                        

Name:

 

    Richard L. Tavrow

Title:

 

    Director

By:  /s/ Irja R. Otsa                                

Name:

 

    Irja R. Otsa

Title:

 

    Associate Director

 

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

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

BANCO BILBAO VIZCAYA

ARGENTARIA S.A.

By:  /s/ Jay Levit                                    

Name:

 

    Jay Levit

Title:

 

    Vice President

By:   /s/ Erich Michel                            

Name:

 

    Erich Michel

Title:

 

    Vice President

 

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

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

BANK OF AMERICA, N.A.

By:  /s/ David L. Catherall                    

Name:

 

    David L. Catherall

Title:

 

    Vice President

 

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

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

THE BANK OF NEW YORK

By:  /s/ Joanna S. Bellocq                    

Name:

 

    Joanna S. Bellocq

Title:

 

    Vice President

 

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

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

Schedule I

Commitments

 

                Lender

   Commitment

Citibank, N.A.

   $ 300,000,000

JPMorgan Chase Bank

   $ 300,000,000

HSBC Bank USA, National Association

   $ 150,000,000

Merrill Lynch Bank USA

   $ 150,000,000

Morgan Stanley Bank

   $ 150,000,000

UBS Loan Finance LLC

   $ 150,000,000

Banco Bilbao Vizcaya Argentaria S.A.

   $ 100,000,000

Bank of America, N.A.

   $ 100,000,000

The Bank of New York

   $ 100,000,000

Total:

   $ 1,500,000,000

 

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

Schedule II

Agent’s Address

 

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

Exhibit A-1 to

Credit Agreement

 

FORM OF REVOLVING CREDIT PROMISSORY NOTE

 

Dated: May     , 2006

FOR VALUE RECEIVED, the undersigned, PEPSICO, INC., a North Carolina corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of
                                          (the “Lender”) for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal amount of the Revolving Credit
Advances made by the Lender to the Borrower pursuant to the Five-Year Credit
Agreement dated as of May 22, 2006 among the Borrower, the Lender and certain
other lenders parties thereto, and Citibank, N.A., as Agent for the Lender and
such other lenders (as amended or modified from time to time, the “Credit
Agreement”; the terms defined therein being used herein as therein defined)
outstanding on the Termination Date.

The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Advance from the date of such Revolving Credit Advance until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.

Both principal and interest are payable in lawful money of the United States of
America to Citibank, N.A., as Agent, at the Agent’s Account, in same day funds
for the account of the Lender. Each Revolving Credit Advance owing to the Lender
by the Borrower pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note. Each such endorsement shall constitute prima facie evidence of
the accuracy of the information so endorsed.

This Promissory Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of Revolving Credit Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Credit Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.

The Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.

 

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

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

This Promissory Note shall be governed by, and construed in accordance with the
laws of the State of New York.

 

PEPSICO, INC.

By:

 

                                                                               
  

Name:

 

                                                                               
  

Title:

 

                                                                               
  

2

 

 

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

ADVANCES AND PAYMENTS OF PRINCIPAL

 

    Date    

  

Amount of

Advance

  

Amount of

Principal Paid

Or Prepaid

  

Unpaid Principal

Balance

   Notation
    Made By    

 

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

Exhibit A-2 to

Credit Agreement

FORM OF COMPETITIVE BID PROMISSORY NOTE

 

U.S.$                                          

  Dated: May      , 2006

FOR VALUE RECEIVED, the undersigned, PEPSICO, INC., a North Carolina 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 Five-Year Credit Agreement
dated as of May 22, 2006 among the Borrower, the Lender and certain other
lenders parties thereto, and Citibank, N.A., as Agent for the Lender and such
other lenders (as amended or modified from time to time, the “Credit Agreement”;
the terms defined therein being used herein as therein defined)), on ,
                     the principal amount of U.S.$                     .

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).

Both principal and interest are payable in lawful money of the United States of
America to Citibank, N.A., for the account of the Lender at the office of
Citibank, N.A., at the Agent’s Account in same day funds.

This Promissory Note is one of the Competitive Bid Notes referred to in, and is
entitled to the benefits of, 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.

 

PEPSICO, INC.

By:

 

                                                                               
  

Name:

 

                                                                               
  

Title:

 

                                                                               
  

 

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

Exhibit B-1 to

Credit Agreement

FORM OF NOTICE OF REVOLVING CREDIT BORROWING

Citibank, N.A., as Agent

for the Lenders parties

to the Credit Agreement

referred to below

    

 

   

    

 

    [Date]

Attention:                                         

Ladies and Gentlemen:

The undersigned, PepsiCo, Inc. (the “Company”), refers to the Five-Year Credit
Agreement, dated as of May 22, 2006 (as amended or modified from time to time,
the “Credit Agreement”; the terms defined therein being used herein as therein
defined), among the undersigned, certain Lenders parties thereto and Citibank,
N.A., 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 a Revolving Credit Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Revolving Credit
Borrowing (the “Proposed Revolving Credit Borrowing”) as required by
Section 2.02(a) of the Credit Agreement:

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

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

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

(iv) The identity of the Borrower for the Proposed Revolving Credit Borrowing is
                                         , a
                                         corporation.

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

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

(a) the representations and warranties contained in Section 4.01 of the Credit
Agreement (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f) thereof (other than clause
(ii) thereof)) are correct, before and after giving effect

 

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

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

to the Proposed Revolving Credit Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date;

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

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

 

Very truly yours,

PEPSICO, INC.

By:

 

                                                                               
  

Name:

 

                                                                               
  

Title:

 

                                                                               
  

 

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

Exhibit B-2 to

Credit Agreement

FORM OF NOTICE OF COMPETITIVE BID BORROWING

Citibank, N.A., as Agent

for the Lenders parties

to the Credit Agreement

referred to below

 

 

 

 

 

 

 

May       , 2006

 

Attention:                                 

Ladies and Gentlemen:

The undersigned, PepsiCo, Inc. (the “Company”), refers to the Five-Year Credit
Agreement, dated as of May 22, 2006 (as amended or modified from time to time,
the “Credit Agreement”; the terms defined therein being used herein as therein
defined), among the undersigned, certain Lenders parties thereto and Citibank,
N.A., as Agent for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.03 of the Credit Agreement that the undersigned hereby
requests a Competitive Bid Borrowing under the Credit Agreement, and in that
connection sets forth the terms on which such Competitive Bid Borrowing (the
“Proposed Competitive Bid Borrowing”) is requested to be made:

 

 

  (A)     

Date of Competitive

         

Bid Borrowing

  

_____________________________

  (B)     

Amount of Competitive

         

Bid Borrowing

  

_____________________________

  (C)     

Maturity Date

  

_____________________________

  (D)     

Interest Rate Basis

  

_____________________________

  (E)     

Interest Payment Date(s)

  

_____________________________

  (F)     

Identity of Borrower

  

_____________________________

  (G)     

_____________________________

  

_____________________________

  (H)     

_____________________________

  

_____________________________

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

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

 

1

 

 

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

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

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

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

Very truly yours,

PEPSICO, INC.

By:

 

                                                                               
  

Name:

 

                                                                               
  

Title:

 

                                                                               
  

 

2

 

 

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Exhibit C to

Credit Agreement

FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below (i) all of the Assignor’s rights and obligations as
a Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including,
without limitation, Letters of Credit and guarantees included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.

  

Assignor:                                          

2.

  

Assignee:                                           [and is an
Affiliate/Approved Fund of [identify Lender]

3.

  

Company:         PepsiCo, Inc.

4.

  

Agent: Citibank, N.A., as the administrative agent under the Credit Agreement.

 

5.

  

Credit
Agreement:

  

Five-Year Credit Agreement, dated as of May 22, 2006, among PepsiCo, Inc. (the
“Company”), the Lenders party thereto and Citibank, N.A., as Agent.

 

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6.

  

Assigned Interest:

 

            Facility Assigned

  

Aggregate
Amount of
Commitment/
Advances

for all Lenders*

   Amount of
Commitment/
Advances
Assigned*    Percentage
Assigned of
Commitment/
Advances1

        Revolving Credit

   $                         $                                              %

[7.        Trade Date:                                      ]2

Effective Date:                                          , 20        [TO BE
INSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

By:

 

                                                             

 

Title:

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

By:

 

                                                             

 

Title:

 

 

*

Amount to be adjusted to take into account any payments or prepayments made
between the Trade Date and the Effective Date.

 

1

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

2

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

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

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

Consented to and Accepted:

CITIBANK, N.A., as Administrative Agent

By:

 

                                                                     

 

Title:

[Consented to:]

[PEPSICO, INC.]

By:

 

                                                                     

 

Title:

[BANK OF AMERICA, N.A., as L/C Issuer]

By:

 

                                                                     

 

Title:

 

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Company, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement),
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01(d) thereof, as
applicable, 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 Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Lender, and (v) if it is a Lender that is not a
“United States person” within the meaning of Section 7701(a)(30) of the Internal
Revenue Code (a “Foreign Lender’), attached hereto is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on 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 Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to or on or after the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in

 

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payments by the Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

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Exhibit D to

Credit Agreement

 

FORM OF DESIGNATION LETTER

 

May     , 2006

To Citibank, N.A.,

    as Agent

Attention:

Ladies and Gentlemen:

We make reference to the Five-Year Credit Agreement (as amended or modified from
time to time, the “Credit Agreement”; the terms defined therein being used
herein as therein defined) dated as of May 22, 2006 among PepsiCo, Inc., (the
“Company”), Citibank, N.A., as Agent (the “Agent”), and the banks party thereto
(the “Initial Lenders”).

The Company hereby designates [                                         ] (the
“Borrowing Subsidiary”), a Subsidiary of the Company and a corporation duly
incorporated under the laws of [                                         ], as a
Borrower in accordance with Section 2.17 of the Credit Agreement until such
designation is terminated in accordance with said Section 2.17.

The Borrowing Subsidiary hereby accepts the above designation and hereby
expressly and unconditionally accepts the obligations of a Borrower under the
Credit Agreement, adheres to the Credit Agreement and agrees and confirms that,
upon your execution and return to the Company of the enclosed copy of this
letter, such Borrowing Subsidiary shall be a Borrower for purposes of the Credit
Agreement and agrees to be bound by and perform and comply with the terms and
provisions of the Credit Agreement applicable to it as if it had originally
executed the Credit Agreement as a Borrower. The Borrowing Subsidiary hereby
authorizes and empowers the Company to act as its representative and
attorney-in-fact for the purposes of signing documents and giving and receiving
notices (including notices of Borrowing under the Credit Agreement) and other
communications in connection with the Credit Agreement and the transactions
contemplated thereby and for the purposes of modifying or amending any provision
of the Credit Agreement and further agrees that the Agent and each Lender may
conclusively rely on the foregoing authorization.

The Company hereby represents and warrants to the Agent and each Lender that,
before and after giving effect to this Designation Letter, (i) the
representations and warranties set forth in Section 4.01 of the Credit Agreement
(except the representations set forth in the last sentence of subsection
(e) thereof and in subsection (f) thereof (other than clause (ii) thereof)) are
true and correct on the Effective Date as if made on and as of the date hereof
and (ii) no Default has occurred and is continuing. The Borrowing Subsidiary
represents and warrants that each of the representations and warranties set
forth in Section 4.01(a) (as if the reference therein to North

 

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Carolina were a reference to its jurisdiction of organization), (b), (c) and
(d) of the Credit Agreement are true as if each reference therein to the Company
were a reference to the Borrowing Subsidiary and as if each reference therein to
the Loan Documents were a reference to this Designation Letter and the Note
executed by the Borrowing Subsidiary in connection herewith.

The Borrowing Subsidiary hereby aware that this Designation Letter, the Credit
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York. The Borrowing Subsidiary hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Designation Letter, the Credit Agreement or the transactions
contemplated thereby. The Borrowing Subsidiary irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. The Borrowing Subsidiary further agrees that service
of process in any such action or proceeding brought in New York may be made upon
it by service upon the Borrower at the “Address for Notices” specified below its
name on the signature pages to the Credit Agreement.

Without limiting the foregoing, the Borrowing Subsidiary joins in the
submission, agreements, waivers and consents in Section 8.11 and 8.12 of the
Credit Agreement.

 

PEPSICO, INC.

By

 

                                                                     

Title:

 

[NAME OF BORROWING SUBSIDIARY]

By

 

                                                                     

 

Title:

 

ACCEPTED

CITIBANK, N.A.,
    as Agent

By

 

                                                                     

 

Title:

 

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Exhibit E to

Credit Agreement

 

FORM OF TERMINATION LETTER

To Citibank, N.A.,

as Agent

Attention:

Ladies and Gentlemen:

We make reference to the Five-Year Credit Agreement (as amended or modified from
time to time, the “Credit Agreement”; the terms defined therein being used
herein as therein defined) dated as of May 22, 2006 by and among PepsiCo, Inc.
(the “Company”), Citibank, N.A., as Agent, and the banks party thereto.

The Company hereby terminates the status as a Borrowing Subsidiary of
[                                         ], a corporation incorporated under
the laws of [                                         ], in accordance with
Section 2.17 of the Credit Agreement, effective as of the date of receipt of
this notice by the Agent. The undersigned hereby represents and warrants that
all principal of and interest on any Advance of the above-referenced Borrowing
Subsidiary and all other amounts payable by such Borrowing Subsidiary pursuant
to the Credit Agreement have been paid in full on or prior to the date hereof.
Notwithstanding the foregoing, this Termination Letter shall not affect any
obligation which by the terms of the Credit Agreement survives termination
thereof.

 

PEPSICO, INC.

By:

 

                                                                               
  

Name:

 

                                                                               
  

Title: