EX-10.1



 





Exhibit 10.1



EXECUTION COPY

As Amended and Restated

as of May 22, 2007




 










CREDIT AGREEMENT




dated as of




November 28, 2006




among




POLO RALPH LAUREN CORPORATION,




as Borrower,




POLO JP ACQUI B.V.,




as Term Borrower,




The Lenders Party Hereto




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent




THE BANK OF NEW YORK, CITIBANK, N.A.,

BANK OF AMERICA, N.A. and SUMITOMI MITSUI BANKING CORPORATION

as Syndication Agents




DEUTSCHE BANK SECURITIES INC., as Co-Agent




J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Sole Lead Arranger




 











 



 


Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I Definitions
	 	 	1	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Classification of Loans and Borrowings
	 	 	20	 
	SECTION 1.03. Terms Generally
	 	 	20	 
	SECTION 1.04. Accounting Terms; GAAP
	 	 	21	 
	SECTION 1.05. Exchange Rates
	 	 	21	 
	 
	 	 	 	 
	ARTICLE II The Credits
	 	 	21	 
	SECTION 2.01. Commitments
	 	 	21	 
	SECTION 2.01(A) The Term Loan
	 	 	23	 
	SECTION 2.02. Revolving Loans and Borrowings
	 	 	23
	 
	SECTION 2.03. Requests for Borrowings
	 	 	23
	 
	SECTION 2.04. Letters of Credit
	 	 	24
	 
	SECTION 2.05. Funding of Borrowings
	 	 	30
	 
	SECTION 2.06. Interest Elections
	 	 	31
	 
	SECTION 2.07. Termination and Reduction of Commitments
	 	 	32
	 
	SECTION 2.08. Repayment of Loans; Evidence of Debt
	 	 	33
	 
	SECTION 2.09. Prepayment of Loans
	 	 	33
	 
	SECTION 2.10. Fees
	 	 	34
	 
	SECTION 2.11. Interest
	 	 	35
	 
	SECTION 2.12. Alternate Rate of Interest
	 	 	36
	 
	SECTION 2.13. Increased Costs
	 	 	36
	 
	SECTION 2.14. Break Funding Payments
	 	 	38	 
	SECTION 2.15. Taxes
	 	 	38
	 
	SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	40	 
	SECTION 2.17. Mitigation Obligations; Replacement of Lenders
	 	 	42	 
	SECTION 2.18. Change in Law
	 	 	42
	 
	 
	 	 	 	 
	ARTICLE III Representations and Warranties
	 	 	43	 
	SECTION 3.01. Organization; Powers
	 	 	43	 
	SECTION 3.02. Authorization; Enforceability
	 	 	43	 
	SECTION 3.03. Governmental Approvals; No Conflicts
	 	 	43

	 
	SECTION 3.04. Financial Condition; No Material Adverse Change
	 	 	43
	 
	SECTION 3.05. Properties
	 	 	44	 
	SECTION 3.06. Litigation and Environmental Matters
	 	 	44	 
	SECTION 3.07. Compliance with Laws and Agreements
	 	 	45	 
	SECTION 3.08. Investment Company Status
	 	 	45	 
	SECTION 3.09. Taxes
	 	 	45	 
	SECTION 3.10. ERISA
	 	 	45	 
	SECTION 3.11. Disclosure
	 	 	45	 
	SECTION 3.12. Subsidiary Guarantors
	 	 	45

	 
	 
	 	 	 	 
	ARTICLE IV Conditions
	 	 	46	 
	SECTION 4.01. Effective Date
	 	 	46	 
	SECTION 4.02. Each Credit Event
	 	 	47	 





i 









 



 


	 	 	 	 	 
	 	 	Page	 
	ARTICLE V Affirmative Covenants
	 	 	47
	 
	SECTION 5.01. Financial Statements; Ratings Change and Other Information
	 	 	47
	 
	SECTION 5.02. Notices of Material Events
	 	 	49	 
	SECTION 5.03. Existence; Conduct of Business
	 	 	49
	 
	SECTION 5.04. Payment of Obligations
	 	 	50	 
	SECTION 5.05. Maintenance of Properties; Insurance
	 	 	50	 
	SECTION 5.06. Books and Records; Inspection Rights
	 	 	50	 
	SECTION 5.07. Compliance with Laws
	 	 	50
	 
	SECTION 5.08. Use of Proceeds and Letters of Credit
	 	 	50
	 
	SECTION 5.09. Guarantee Agreement Supplement
	 	 	51	 
	 
	 	 	 	 
	ARTICLE VI Negative Covenants
	 	 	51	 
	SECTION 6.01. Indebtedness
	 	 	51	 
	SECTION 6.02. Liens
	 	 	52	 
	SECTION 6.03. Sale of Assets
	 	 	53	 
	SECTION 6.04. Fundamental Changes
	 	 	53	 
	SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	54	 
	SECTION 6.06. Transactions with Affiliates
	 	 	55	 
	SECTION 6.07. Consolidated Leverage Ratio
	 	 	55	 
	 
	 	 	 	 
	ARTICLE VII Events of Default
	 	 	55	 
	 
	 	 	 	 
	ARTICLE VIII The Administrative Agent
	 	 	58	 
	 
	 	 	 	 
	ARTICLE IX Miscellaneous
	 	 	60	 
	SECTION 9.01. Notices
	 	 	60	 
	SECTION 9.02. Waivers; Amendments
	 	 	61	 
	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	 	 	62	 
	SECTION 9.04. Successors and Assigns
	 	 	63	 
	SECTION 9.05. Survival
	 	 	67
	 
	SECTION 9.06. Counterparts; Integration; Effectiveness
	 	 	67	 
	SECTION 9.07. Severability
	 	 	67	 
	SECTION 9.08. Right of Setoff
	 	 	67	 
	SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	68

	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	68	 
	SECTION 9.11. Headings
	 	 	69
	 
	SECTION 9.12. Confidentiality
	 	 	69
	 
	SECTION 9.13. Satisfaction in Dollars
	 	 	69	 
	SECTION 9.14. Waivers and Agreements Under Original Credit Agreement
	 	 	70	 




ii 









 




	 
	SCHEDULES:

	Schedule 2.01 — Commitments and Term Loans

	Schedule 2.04 — Existing Letters of Credit

	Schedule 3.12 — Guarantor Subsidiaries

	Schedule 6.01 — Existing Indebtedness

	Schedule 6.02 — Existing Liens

	Schedule 6.05 — Existing Investments







	 
	EXHIBITS:

	Exhibit A — Form of Assignment and Assumption

	Exhibit B-1 — Form of Opinion of Borrower’s Counsel

	Exhibit B-2 — Form of Officer’s Certificate of Borrower’s Chief Financial Officer

	Exhibit C — Form of Guarantee Agreement

	Exhibit D-1 — Form of New Lender Supplement

	Exhibit D-2 — Form of Commitment Increase Supplement





iii 









 



 


     CREDIT AGREEMENT, dated as of November 28, 2006, among POLO RALPH LAUREN CORPORATION, POLO JP
ACQUI B.V., a private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) incorporated under the laws of the Netherlands with its corporate seat in
Amsterdam, the Netherlands, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.



          The parties hereto agree as follows:




ARTICLE I




Definitions




          SECTION 1.01.   Defined Terms.




          As used in this Agreement, the following terms have the meanings specified below:




          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.




          “Adjusted Debt” means, for any date, all Indebtedness of the Borrower and its
Subsidiaries (computed on a consolidated basis) outstanding on such date plus 800% of Consolidated
Lease Expense for the period of four consecutive Fiscal Quarters ended on such date.




          “Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of
1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate.




          “Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders hereunder.




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




          “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.




          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.










 




2




          “Alternative Currency” means any currency that is freely available, freely
transferable and freely convertible into dollars and in which dealings in deposits are carried on
in the London interbank market, provided that such currency is reasonably acceptable to the
Administrative Agent and the applicable Issuing Bank.




          “Alternative Currency LC Exposure” means, at any time, the sum of (a) the Dollar
Equivalent, calculated in accordance with Section 1.05, of the aggregate undrawn and unexpired
amount of all outstanding Alternative Currency Letters of Credit at such time plus (b) the Dollar
Equivalent, calculated in each case using the Exchange Rate at the time the applicable LC
Disbursement is made, of the aggregate principal amount of all LC Disbursements in respect of
Alternative Currency Letters of Credit that have not yet been reimbursed at such time.




          “Alternative Currency Letter of Credit” means a Letter of Credit denominated in an
Alternative Currency.




          “Amendment and Restatement Agreement” shall mean the Amendment and Restatement
Agreement, dated as of May___, 2007, to this Agreement.




          “Applicable Percentage” means, with respect to any Lender, the percentage of the
aggregate of the total Commitments and outstanding Term Loans represented by the aggregate of such
Lender’s Commitment and outstanding Term Loans. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments most recently in effect,
giving effect to any assignments.




          “Applicable Rate” means, for any day, with respect to any Eurocurrency Loan, or with
respect to the commitment fees payable hereunder, or with respect to the Applicable Commercial
Letter of Credit Rate, as the case may be, the applicable rate per annum set forth below (expressed
in basis points) under the caption “Eurocurrency Spread” or “Commitment Fee Rate” or “Applicable
Commercial Letter of Credit Rate”, as the case may be, based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Index Debt:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Applicable
	 	 	 	 	 	 	 	 	 	 	 	 	Commercial
	 	 	 	 	Eurocurrency	 	Commitment	 	Letter of
	 	 	Index Debt Ratings	 	Spread	 	Fee Rate	 	Credit Rate
	Level I

	 	3 A by S&P or

A2 by 
Moody’s
	 	 	20.00	 	 	 	6.00	 	 	 	10.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level II

	 	A- by S&P or 

A3 by

Moody’s
	 	 	25.00	 	 	 	7.00	 	 	 	12.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level III

	 	BBB+ by S&P 

or Baa1
by Moody’s
	 	 	35.00	 	 	 	8.00	 	 	 	17.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level IV

	 	BBB by S&P 

or Baa2
by Moody’s
	 	 	45.00	 	 	 	10.00	 	 	 	22.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Level V

	 	< BBB- by 

S&P or
Baa3 by 


Moody’s
	 	 	60.00	 	 	 	12.50	 	 	 	30.00	 












 



3


          For purposes of the foregoing, (i) if both Moody’s and S&P shall not have in effect a rating
for the Index Debt (other than by reason of the circumstances referred to in the next-to-last
sentence of this definition), then such rating agency shall be deemed to have established a rating
for the Index Debt in Level V; (ii) if the ratings established or deemed to have been established
by Moody’s and S&P for the Index Debt shall fall within different Levels, the Applicable Rate shall
be based on the higher of the two ratings unless one of the two ratings is two or more Levels lower
than the other, in which case the Applicable Rate shall be determined by reference to the Level
next below that of the higher of the two ratings; and (iii) if the ratings established or deemed to
have been established by Moody’s and S&P for the Index Debt shall be changed (other than as a
result of a change in the rating system of Moody’s or S&P), such change shall be effective as of
the date on which it is first announced by the applicable rating agency, irrespective of when
notice of such change shall have been furnished by the Borrower to the Agent and the Lenders
pursuant to Section 5.01 or otherwise. Each change in the Applicable Rate shall apply during the
period commencing on the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of Moody’s or S&P shall change,
or if both such rating agencies shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such rating agencies, and,
pending the effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or cessation. If either (but
not both) of Moody’s and S&P shall cease to have in effect a rating (whether as a result of such
agency ceasing to be in the business of rating corporate debt obligations or otherwise), the
applicable rate shall be determined by reference to the rating of the other rating agency.




          “Approved Fund” has the meaning assigned to such term in Section 9.04.




          “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent.




          “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitments.




          “Available Commitment” means, as to any Lender at any date of determination, an amount
in dollars equal to the excess, if any, of (a) the amount of such Lender’s Commitment in effect on
such date over (b) the Revolving Credit Exposure of such Lender on such date.




          “Board” means the Board of Governors of the Federal Reserve System of the United
States of America.




          “Borrower” means Polo Ralph Lauren Corporation, a Delaware corporation.










 



4




          “Borrowing” means Revolving Loans or Term Loans, as the case may be, of the same Type
made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect.




          “Borrowing Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.03.




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurocurrency Loan, the term “Business
Day” shall also exclude any day on which (i) banks are not open for dealings in dollar or
eurocurrency deposits in the London interbank market and (ii) any day on which banks are not open
for business in Tokyo.




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and, for the purposes
of this Agreement, the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.




          “Change in Law” means (a) the adoption of any law, rule, treaty or regulation after
the Effective Date, (b) any change in any law, rule, treaty or regulation or in the interpretation
or application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.13(b), by any office of
such Lender from or at which Loans and/or Letters of Credit are made or issued, or are booked, as
the case may be, in accordance with the terms of this Agreement) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.




          “Code” means the Internal Revenue Code of 1986, as amended from time to time.




          “Commercial Letter of Credit” means a commercial documentary letter of credit issued
by an Issuing Bank for the account of the Borrower or any of its Subsidiaries for the purchase of
goods in the ordinary course of business.




          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit hereunder, expressed as an
amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.07, (b)
reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04 or (c) increased from time to time pursuant to Section 2.01(b). The initial amount of
each Lender’s Commitment is set forth on Schedule 2.01, in the New Lender Supplement pursuant to
which such Lender shall become a party hereto or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders’ Commitments is $450,000,000.










 



5




          “Commitment Increase Supplement” means a supplement to this Agreement substantially in
the form of Exhibit D-2.




          “Consolidated EBITDAR” means, for any period, Consolidated Net Income for such period
plus, without duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary or non-recurring non-cash expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such Consolidated Net
Income for such period, non-cash losses on sales of assets outside of the ordinary course of
business and including non-cash charges arising from the application of Statement of Financial
Accounting Standards No. 142) and (f) Consolidated Lease Expense and minus, (x) to the
extent included in the statement of such Consolidated Net Income for such period, the sum of (i)
interest income, (ii) any extraordinary or non-recurring non-cash income or gains (including,
whether or not otherwise includable as a separate item in the statement of such Consolidated Net
Income for such period, gains on the sales of assets outside of the ordinary course of business)
and (iii) income tax credits (to the extent not netted from income tax expense) and (y) any cash
payments made during such period in respect of items described in clause (e) above subsequent to
the fiscal quarter in which the relevant non-cash expenses or losses were reflected as a charge in
the statement of Consolidated Net Income, all as determined on a consolidated basis.




          For the purposes of calculating Consolidated EBITDAR for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated
Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary
shall have made any Material Disposition, the Consolidated EBITDAR for such Reference Period shall
be reduced by an amount equal to the Consolidated EBITDAR (if positive) attributable to the
property that is the subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDAR (if negative) attributable thereto for such Reference
Period, and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a
Material Acquisition, Consolidated EBITDAR for such Reference Period shall be calculated after
giving pro forma effect thereto (taking into account (A) such cost savings as may
be determined by the Borrower in a manner consistent with the evaluation performed by the Borrower
in deciding to make such Material Acquisition, as presented to the Borrower’s Board of Directors,
provided that the Borrower may take into account such cost savings only if it in good faith
determines on the date of calculation that it is reasonable to expect that such cost savings will
be implemented within 90 days following the date of such Material Acquisition (or in the case of
any calculation made subsequent to such 90th day, that such cost savings have, in fact,
been implemented) and (B) all transactions that are directly related to such Material Acquisition
and are entered into in connection and substantially contemporaneously therewith) as if such
Material Acquisition occurred on the first day of such Reference Period. As used in this
definition, “Material Acquisition” means any acquisition of property or series of related
acquisitions of property that (a) constitutes (i) assets comprising all or substantially all of a
business or operating unit of a business, (ii) all or substantially all of the common stock or
other Equity Interests of a Person or (iii) in any case where clauses (i) and (ii)










 



6



above are inapplicable, the rights of any licensee (including by means of the termination of
such licensee’s rights under such license) under a trademark license to such licensee from the
Borrower or any of its Affiliates (the “Acquired Rights”), and (b) involves the payment of
consideration by the Borrower and its Subsidiaries in excess of $50,000,000; “Material
Disposition” means any Disposition of property or series of related Dispositions of property
that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $50,000,000. In
making any calculation pursuant to this paragraph with respect to a Material Acquisition of a
Person, business or rights for which quarterly financial statements are not available, the Borrower
shall base such calculation on the financial statements of such Person, business or rights for the
then most recently completed period of twelve consecutive calendar months for which such financial
statements are available and shall deem the contribution of such Person, business or rights to
Consolidated EBITDAR for the period from the beginning of the applicable Reference Period to the
date of such Material Acquisition to be equal to the product of (x) the number of days in such
period divided by 365 multiplied by (y) the amount of Consolidated EBITDAR of such Person, business
or rights for the twelve-month period referred to above (calculated on the basis set forth in this
definition). In making any calculation pursuant to this paragraph in connection with an
acquisition of Acquired Rights to be followed by the granting of a new license of such Acquired
Rights (or any rights derivative therefrom), effect may be given to such grant of such new license
(as if it had occurred on the date of such acquisition) if, and only if, the Borrower in good faith
determines on the date of such calculation that it is reasonable to expect that such grant will be
completed within 90 days following the date of such acquisition (or in the case of any calculation
made subsequent to such 90th day, that such grant has, in fact, been completed).




          “Consolidated Lease Expense” means, for any period, the aggregate amount of fixed and
contingent rentals payable by the Borrower and its Subsidiaries for such period with respect to
leases of real and personal property, determined on a consolidated basis in accordance with GAAP;
provided that payments in respect of Capital Lease Obligations shall not constitute
Consolidated Lease Expense.




          “Consolidated Leverage Ratio” means on the last day of any Fiscal Quarter, the ratio
of (a) Adjusted Debt on such day to (b) Consolidated EBITDAR for the period of four consecutive
Fiscal Quarters ending on such day.




          “Consolidated Net Income” means for any period, the consolidated net income (or loss)
of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the Borrower or such
Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of
any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the terms of any
Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to
such Subsidiary.










 



7




          “Consolidated Net Worth” means as of any date of determination thereof, the excess of
(a) the aggregate consolidated net book value of the assets of the Borrower and its Subsidiaries
after all appropriate adjustments in accordance with GAAP (including, without limitation, reserves
for doubtful receivables, obsolescence, depreciation and amortization) over (b) all of the
aggregate liabilities of the Borrower and its Subsidiaries, including all items which, in
accordance with GAAP, would be included on the liability side of the balance sheet (other than
Equity Interests, treasury stock, capital surplus and retained earnings), in each case determined
on a consolidated basis (after eliminating all inter-company items) in accordance with GAAP;
provided, however, that in calculating Consolidated Net Worth the effects of the
Statement of Financial Accounting Standards No. 142 shall be disregarded.




          “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.




          “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.




          “Disposition” means with respect to any property, any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed
of” shall have correlative meanings.




          “Dollar Equivalent” means, on any date of determination, (a) with respect to any
amount hereunder denominated in an Alternative Currency for purposes of calculations with respect
to the matters referred to in Section 1.05, the amount of dollars that may be purchased with such
amount of such currency at the applicable rate of exchange determined in accordance with such
Section, (b) with respect to any calculation involving the amount of any drawing under any
Alternative Currency Letter of Credit, the amount in dollars into which the relevant amount in such
Alternative Currency would be converted based upon the relevant Exchange Rate in effect at the time
the applicable Issuing Bank makes payment under such Letter of Credit and (c) with respect to any
calculation involving the amount of any Standby Letter of Credit fee payable pursuant to Section
2.04(f)(ii) with respect to any Alternative Currency Letter of Credit, the amount in dollars into
which the relevant undrawn amount of such Alternative Currency Letter of Credit would be converted
based upon the applicable Exchange Rate in effect on the date payment of such fee is due;
provided, however, that, solely for purposes of calculating the Alternative
Currency L/C Exposure under the first clause (ii) in Section 2.04(b), the foregoing calculations
shall take into account (including with respect to the date applicable to the Exchange Rate
determination), to the extent applicable, any Swap Agreements with respect to any Alternative
Currency applicable to any Alternative Currency Letters of Credit.




          “dollars” or “$” refers to lawful money of the United States of America.




          “Domestic Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction within the United States of America.










 



8




          “Effective Date” means November 28, 2006, the date on which the conditions specified
in Section 4.01 were satisfied (or waived in accordance with Section 9.02).




          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment, preservation or reclamation
of natural resources, or to human health and safety (insofar as such health and safety may be
adversely affected by exposure to dangerous or harmful substances or environmental conditions), as
have been, are, or in the future become, in effect.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.




          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.




          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the










 



9



imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.




          “Eurocurrency”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate or, in the case of the Term Loans, at a rate determined by
reference to the LIBO Rate.




          “Event of Default” has the meaning assigned to such term in Article VII.




          “Exchange Rate” means, on any day, with respect to any Alternative Currency, the rate
determined by the Administrative Agent at which such Alternative Currency may be exchanged into
dollars, as set forth at approximately 11:00 a.m., London time, on such day (or, in the case of any
calculation involving the amount of any LC Disbursement under any Alternative Currency Letter of
Credit, at the time payment thereof is made) on the applicable Reuters World Spot Page. In the
event that any such rate does not appear on any Reuters World Spot Page, the Exchange Rate shall be
determined by reference to such other publicly available service for displaying exchange rates
reasonably selected by the Administrative Agent in consultation with the Borrower for such purpose
or, at the discretion of the Administrative Agent in consultation with the Borrower, such Exchange
Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative
Agent in the market where its foreign currency exchange operations in respect of such Alternative
Currency are then being conducted, at or about 11:00 a.m., local time, on such day (or, in the case
of any calculation involving the amount of any LC Disbursement under any Alternative Currency
Letter of Credit, at the time payment thereof is made) for the purchase of the applicable
Alternative Currency for delivery two Business Days later, provided that, if at the time of
any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent
may use any other reasonable method it deems appropriate to determine such rate, and such
determination shall be presumed correct absent manifest error.




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower or the Term Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income or gross receipts by the United States of America, or by any other Governmental
Authority as a result of a present or former connection between the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by the Borrower under
this Agreement and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any such connection
arising solely from the Administrative Agent, any Lender, any Issuing Bank or any other recipient
of any payment to be made by the Borrower or the Term Borrower under this Agreement having
executed, delivered or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document), (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) in
the case of a Foreign Lender, including any Issuing Bank that is a Foreign Lender (other than an
assignee pursuant to a request by the Borrower or the Term Borrower under Section 2.17(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or










 



10



(i) causes pursuant to Section 2.02(b) a new branch or an Affiliate to make any Loan, or (ii)
designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with
Section 2.15(e), except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to receive additional
amounts from the Borrower or the Term Borrower with respect to such withholding tax pursuant to
Section 2.15(a), and (d) any amounts with respect to any taxes described in clause (a), (b) or (c)
above that are imposed as a result of any event occurring after the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by the Borrower or the
Term Borrower under this Agreement becomes a party to this Agreement, other than a Change in Law.




          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding 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 (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized national standing
selected by it, in its reasonable discretion.




          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.




          “Fiscal Quarter” means with respect to the Borrower and its Subsidiaries, and with
respect to any Fiscal Year, (a) each of the quarterly periods ending 13 calendar weeks, 26 calendar
weeks, 39 calendar weeks and 52 or 53 calendar weeks, as the case may be, after the end of the
prior Fiscal Year or (b) such other quarterly periods as the Borrower shall adopt after giving
prior written notice thereof to the Lenders.




          “Fiscal Year” means with respect to the Borrower and its Subsidiaries, (a) the 52- or
53-week annual period, as the case may be, ending on the Saturday nearest to March 31 of each
calendar year or (b) such other fiscal year as the Borrower shall adopt with the prior written
consent of the Required Lenders (which consent shall not be unreasonably withheld). Any
designation of a particular Fiscal Year by reference to a calendar year shall mean the Fiscal Year
ending during such calendar year.




          “Foreign Lender” means any Lender that is organized under the laws of (or the
applicable lending office of which is located in) a jurisdiction other than that in which the
Borrower is located. For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.




          “Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.




          “GAAP” means generally accepted accounting principles in the United States of America.




          “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any










 



11



agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.




          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business. For purposes of all calculations provided for in this
Agreement, the amount of any Guarantee of any guarantor shall be deemed to be the lower of (x) an
amount equal to the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made and (y) the maximum amount for which such guarantor may be liable pursuant
to the terms of the instrument embodying such Guarantee, unless such primary obligation and the
maximum amount for which such guarantor may be liable are not stated or determinable, in which case
the amount of such Guarantee shall be such guarantor’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.




          “Guarantee Agreement” means the Amended and Restated Guarantee Agreement to be
executed and delivered by each Guarantor, substantially in the form of Exhibit C.




          “Guarantor” means each Domestic Subsidiary that became a party to the Guarantee
Agreement on the Effective Date, each Domestic Subsidiary that, subsequent to the Effective Date,
becomes a Significant Subsidiary (as defined in Regulation S-X part 210.1-02 of the Code of Federal
Regulations) or any Subsidiary which is designated to be a Guarantor by written notice from the
Borrower to the Administrative Agent and, in each case, becomes a party to the Guarantee Agreement
and, with respect to the Term Loans, the Borrower.




          “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any applicable Environmental Law.




          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of
such Person under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the deferred










 



12



purchase price of property or services (excluding accounts payable incurred in the ordinary
course of business), (e) all Indebtedness of others secured by any Lien on property owned or
acquired by such Person (to the extent of such Person’s interest in such property), whether or not
the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of letters of credit and
letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances and (j) all payment and performance obligations of every kind, nature and
description of such Person under or in connection with Swap Agreements. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor. For purposes of all
calculations provided for in this Agreement, there shall be disregarded any Guarantee of any Person
in respect of any Indebtedness of any other Person with which the accounts of such first Person are
then required to be consolidated in accordance with GAAP.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




          “Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the
Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.




          “Interest Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.06.




          “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior
to the last day of such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.




          “Interest Period” means with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three, six, nine or twelve months thereafter, as the Borrower may
elect; provided, that (i) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last Business Day of the
last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and, in the case of a Borrowing,
thereafter shall be the effective date of the most recent conversion or continuation of such
Borrowing.










 



13




          “Investment” means, as applied to any Person, any direct or indirect purchase or other
acquisition by such Person of Equity Interests or other securities of, or any assets constituting a
business unit of, any other Person, or any direct or indirect loan, advance or capital contribution
by such Person to any other Person. In computing the amount involved in any Investment at the time
outstanding, (a) undistributed earnings of, and unpaid interest accrued in respect of Indebtedness
owing by, such other Person shall not be included, (b) there shall not be deducted from the amounts
invested in such other Person any amounts received as earnings (in the form of dividends, interest
or otherwise) on such Investment or as loans from such other Person and (c) unrealized increases or
decreases in value, or write-ups, write-downs or write-offs, of Investments in such other Person
shall be disregarded.




          “Issuing Bank” means, as the context may require, (a) JPMorgan Chase Bank, N.A.,
Wachovia Bank National Association and The Bank of New York, each with respect to Letters or Credit
issued by it or (b) any other Lender that becomes an Issuing Bank pursuant to Section 2.04(l), with
respect to Letters of Credit issued by it, and in each case its successors in such capacity as
provided in Section 2.04(j). Any Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate;
provided, however, that no arrangement of a type described in this sentence shall
be permitted if, immediately after giving effect thereto, amounts would become payable by the
Borrower under Section 2.13 or 2.15 that are in excess of those that would be payable under such
Section if such arrangement were not implemented and, provided, further, that the
fees payable to any such Affiliate shall be subject to the second sentence of Section 2.10(b).




          “Lauren” means Ralph Lauren, an individual.




          “LC Disbursement” means a payment made by the applicable Issuing Bank pursuant to a
Letter of Credit.




          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit (other than Alternative Currency Letters of Credit) at such time, (b)
the aggregate amount of all LC Disbursements under Letters of Credit (other than Alternative
Currency Letters of Credit) that have not yet been reimbursed by or on behalf of the Borrower at
such time and (c) the Alternative Currency LC Exposure at such time. The LC Exposure of any Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such time.




          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to an Assignment and Assumption or a New Lender Supplement,
other than any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.




          “Letter of Credit” means any letter of credit issued pursuant to this Agreement.




          “LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period,
the rate appearing on Reuters Screen “LIBOR01” (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate quotations










 



14



comparable to those currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as the rate for deposits
in the relevant currency with a maturity comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the “LIBO Rate” with respect to
such Eurocurrency Borrowing for such Interest Period shall be the rate at which deposits in the
relevant currency in an amount equal to the foreign currency equivalent of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.




          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.




          “Loan Documents” means this Agreement and the Guarantee Agreement




          “Loan Party” means the Borrower, the Term Borrower and the Guarantors.




          “Loans” means the loans made to the Borrower and the Term Borrower pursuant to this
Agreement.




          “Material Adverse Effect” means a material adverse effect on (a) the business,
operations, property or condition (financial or otherwise) of the Borrower and the Subsidiaries
taken as a whole or (b) the rights and remedies, taken as a whole, of the Administrative Agent and
the Lenders under the Loan Documents.




          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes
of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or
any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.




          “Maturity Date” means (i) with respect to the Revolving Loans, November 28, 2011 and
(ii) with respect to the Term Loans, May___, 2008.




          “Moody’s” means Moody’s Investors Service, Inc.




          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.










 



15




          “Net Income” (“Net Loss”) means with respect to any Person or group of
Persons, as the case may be, for any fiscal period, the difference between (a) gross revenues of
such Person or group of Persons and (b) all costs, expenses and other charges incurred in
connection with the generation of such revenue (including, without limitation, taxes on income),
determined on a consolidated or combined basis, as the case may be, and in accordance with GAAP.




          “New Lender” has the meaning assigned to such term in Section 2.01(c).




          “New Lender Supplement” has the meaning assigned to such term in Section 2.01(c).




          “Original Credit Agreement” means the Credit Agreement, dated as of October 6, 2004
among the Borrower, the several banks and other financial institutions parties thereto and JPMorgan
Chase Bank, N.A., as administrative agent, as heretofore amended, supplemented or otherwise
modified.




          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.




          “Participant” has the meaning set forth in Section 9.04.




          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.




          “Permitted Acquisition” means any acquisition (in one transaction or a series of
related transactions) by the Borrower or any Subsidiary, on or after the Effective Date (whether
effected through a purchase of Equity Interests or assets or through a merger, consolidation or
amalgamation), of (i) another Person (including the equity interest of any Person in which the
Borrower or any Subsidiary owns equity interest), (ii) the assets constituting all or substantially
all of a business or operating business unit of another Person or (iii) in any case where clauses
(i) and (ii) above are inapplicable, the rights of any licensee (including by means of the
termination of such licensee’s rights under such license) under a trademark license to such
licensee from the Borrower or any of its Affiliates, provided that:





     (a) the assets so acquired or, as the case may be, the assets of the Person so acquired
shall be in a Related Line of Business;




     (b) no Default shall have occurred and be continuing at the time thereof or would
result therefrom;




     (c) such acquisition shall be effected in such manner so that the acquired Equity
Interests, assets or rights are owned either by the Borrower or a Subsidiary and, if
effected by merger, consolidation or amalgamation, the continuing, surviving or resulting
entity shall be the Borrower or a Subsidiary, provided that, nothing in this clause
shall be deemed to limit the ability of the Borrower or any Subsidiary to grant to a
different









 



16



licensee any acquired license rights described in clause (iii) above (or any rights
derivative therefrom); and




     (d) the Borrower and its Subsidiaries shall be in compliance, on a pro
forma basis after giving effect to such acquisition, with the covenant contained in
Section 6.07 recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available, as if such acquisition had occurred
on the first day of each relevant period for testing such compliance.



          “Permitted Encumbrances” means:





     (a) Liens imposed by law for taxes and duties, assessments, governmental charges or
levies that are not yet due or are being contested in compliance with Section 5.04;




     (b) landlords, carriers’, warehousemen’s, mechanics’, shippers’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.04;




     (c) pledges and deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security laws or regulations,
and deposits securing liability to insurance carriers under insurance or self-insurance
arrangements;




     (d) deposits to secure the performance of tenders, bids, trade contracts, leases,
public or statutory obligations, warranty requirements, surety and appeal bonds, performance
and bid bonds and other obligations of a like nature, in each case in the ordinary course of
business;




     (e) Liens incurred in the ordinary course of business in connection with the sale,
lease, transfer or other disposition of any credit card receivables of the Borrower or any
of its Subsidiaries;




     (f) judgment, attachment or other similar liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;




     (g) easements, zoning restrictions, restrictive covenants, encroachments, rights-of-way
and similar encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary; and




     (h) possessory Liens in favor of brokers and dealers arising in connection with the
acquisition or disposition of Permitted Investments.


provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.










 



17




          “Permitted Investments” means:





     (a) direct obligations of, or obligations the principal of and interest on which are
directly and fully guaranteed or insured by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit of the United
States of America);




     (b) investments in commercial paper having, at such date of acquisition, a credit
rating of at least A-2 from S&P or P-2 from Moody’s;




     (c) investments in certificates of deposit, Eurocurrency time deposits, banker’s
acceptances and time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued or offered
by, any Lender or any commercial bank which has a combined capital and surplus and undivided
profits of not less than $100,000,000;




     (d) repurchase agreements with a term of not more than 30 days for securities described
in clause (a) above and entered into with a financial institution satisfying the criteria
described in clause (c) above;




     (e) securities with maturities of two years or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the United States or by any
political subdivision or taxing authority of any such state, commonwealth or territory or by
any foreign government, the securities of which state, commonwealth or territory, political
subdivision, taxing authority or foreign government (as the case may be) are rated, at such
date of acquisition, at least A by S&P or A2 by Moody’s;




     (f) securities with maturities of two years or less from the date of acquisition backed
by standby letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (c) of this definition;




     (g) shares of money market funds that (i) comply with the criteria set forth in (a)
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 or (b)
Securities and Exchange Commission Rule 3c-7 under the Investment Company Act of 1940 and
(ii) have portfolio assets of at least (x) in the case of funds that invest exclusively in
assets satisfying the requirements of clause (a) of this definition, $250,000,000 and (y) in
all other cases, $500,000,000;




     (h) in the case of investments by any Foreign Subsidiary, obligations of a credit
quality and maturity comparable to that of the items referred to in clauses (a) through (g)
above that are available in local markets;




     (i) investments in auction rate securities with a rating of AAA from S&P and a maximum
holding period of 45 days, for which the reset date will be used to determine the maturity
date; and









 



18



     (j) investments in short term loan participations of up to 35 days if the short term
debt rating is A-2 from S&P or P-2 from Moody’s or an equivalent long term rating of
investment grade by Moody’s or S&P exists.



          “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.




          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.




          “Priority Indebtedness” means (a) Indebtedness of the Borrower or any Subsidiary
(other than that described in Section 6.01(e)) secured by any Lien on any asset(s) of the Borrower
or any Subsidiary and (b) Indebtedness of any Subsidiary (other than the Indebtedness of the Term
Borrower hereunder) which is not a Guarantor, in each case owing to a Person other than the
Borrower or any Subsidiary.




          “Register” has the meaning set forth in Section 9.04.




          “Related Line of Business” means: (a) any line of business in which the Borrower or
any of its Subsidiaries is engaged as of, or immediately prior to, the Effective Date, (b) any
wholesale, retail or other distribution of products or services under any domestic or foreign
patent, trademark, service mark, trade name, copyright or license or (c) any similar, ancillary or
related business and any business which provides a service and/or supplies products in connection
with any business described in clause (a) or (b) above.




          “Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.




          “Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time; provided, however, that if any Lender defaults
in its obligations to fund Loans hereunder, there shall be excluded from the determination of
Required Lenders at such time such Lender’s pro rata share of the total Revolving Credit Exposures
and unused Commitments.




          “Requirement of Law” means, as to any Person, the Articles or Certificate of
Incorporation and By-Laws or Certificate of Partnership or partnership agreement or other
organizational or governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in each case










 



19



applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.




          “Restatement Effective Date” means May___, 2007, the date on which the conditions
specified in Section 3 of the Amendment and Restatement Agreement are satisfied (or waived in
accordance with Section 3 of the Amendment and Restatement Agreement).




          “Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure at such time.




          “Revolving Loan” means a Loan made to the Borrower pursuant to Section 2.03.




          “S&P” means Standard & Poor’s.




          “Standby Letter of Credit” means an irrevocable letter of credit pursuant to which an
Issuing Bank agrees to make payments in dollars or an Alternative Currency for the account of the
Borrower or any of its Subsidiaries in respect of obligations of the Borrower or any of its
Subsidiaries incurred pursuant to contracts made or performances undertaken or to be undertaken or
like matters relating to contracts to which the Borrower or any of its Subsidiaries is or proposes
to become a party in the ordinary course of the Borrower’s or any of its Subsidiaries’ business,
including for insurance purposes and in connection with lease transactions.




          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. The
Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.




          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




          “Subsidiary” means any subsidiary of the Borrower.




          “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option, cap or collar agreements or similar agreement involving, or
settled by reference to, one or more interest or exchange rates, currencies,










 



20



commodities, equity or debt instruments or securities, or economic, financial or pricing
indices or measures of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former directors,
officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.




          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.




          “Term Borrower” means Polo JP Acqui B.V., a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the
Netherlands.




          “Term Loan” shall have the meaning assigned to such term in Section 2.01(A).




          “Term Loan Borrowing Request” “ means a request by the Term Borrower for a Term Loan
Borrowing in accordance with Section 2.03.




          “Term Loan Percentage” means, for any Lender, the percentage which such Lender’s
outstanding Term Loans constitute of all outstanding Term Loans.




          “Transactions” means the execution, delivery and performance by the Borrower and the
Term Borrower of this Agreement and by the Guarantors of the Guarantee Agreement, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.




          “Type”, when used in reference to an applicable Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the Adjusted LIBO Rate or the Alternate Base Rate.




          “Voting Stock” means stock of any class or classes (however designated), or other
equity ownership interests, of any Person, the holders of which are at the time entitled, as such
holders, to vote for the election of the directors or other governing body of the Person involved,
whether or not the right so to vote exists by reason of the happening of a contingency.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.




          “Yen” and “¥” shall mean the lawful currency of Japan.




          SECTION 1.02.   Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurocurrency Loan”).
Borrowings also may be classified and referred to by Type (e.g., a “Eurocurrency Borrowing”).




          SECTION 1.03.   Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words










 



21



“include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to
have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a)
any definition of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.




          SECTION 1.04.   Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time; provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of
any change occurring after the date hereof in GAAP or in the application thereof on the operation
of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.




          SECTION 1.05.   Exchange Rates. For purposes of calculating the Alternative Currency
LC Exposure at any time during any period and the Dollar Equivalent at the time of issuance of any
Alternative Currency Letter of Credit then requested to be issued pursuant to Section 2.04(b), the
Administrative Agent will at least once during each calendar month and at such other times as it in
its sole discretion decides to do so, determine the respective rate of exchange into dollars of
each Alternative Currency in which an Alternative Currency Letter of Credit is then outstanding
(which rate of exchange shall be based upon the Exchange Rate in effect on date of such
determination). Such rates of exchange so determined on each such determination date shall, for
purposes of the calculations described in the preceding sentence, be deemed to remain unchanged and
in effect until the next such determination date.




ARTICLE II




The Credits




          SECTION 2.01.   Commitments. (a) Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans in dollars to the Borrower from time
to time during the Availability Period in an aggregate principal amount that will not result in
such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment. Within the











 



22



foregoing
limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Loans.




          (b)   The Borrower and any one or more Lenders (including New Lenders) may from time to time
after the Effective Date agree that such Lender or Lenders shall establish a new Commitment or
Commitments or increase the amount of its or their Commitment or Commitments by executing and
delivering to the Administrative Agent, in the case of each New Lender, a New Lender Supplement
meeting the requirements of Section 2.01(c) or, in the case of each Lender which is not a New
Lender, a Commitment Increase Supplement meeting the requirements of Section 2.01(d).
Notwithstanding the foregoing, without the consent of the Required Lenders, (x) the aggregate
amount of incremental Commitments established or increased after the Effective Date pursuant to
this paragraph shall not exceed $150,000,000, (y) unless otherwise agreed to by the Administrative
Agent, each increase in the aggregate Commitments effected pursuant to this paragraph shall be in a
minimum aggregate amount of at least $15,000,000 and (z) unless otherwise agreed by the
Administrative Agent, increases in Commitments may be effected on no more than three occasions
pursuant to this paragraph. No Lender shall have any obligation to participate in any increase
described in this paragraph unless it agrees to do so in its sole discretion.




          (c)   Any additional bank, financial institution or other entity which, with the consent of
the Borrower and the Administrative Agent (which consents shall not be unreasonably withheld),
elects to become a “Lender” under this Agreement in connection with any transaction described in
Section 2.01(b) shall execute a New Lender Supplement (each, a “New Lender Supplement”),
substantially in the form of Exhibit D-1, whereupon such bank, financial institution or other
entity (a “New Lender”) shall become a Lender, with a Commitment in the amount set forth
therein that is effective on the date specified therein, for all purposes and to the same extent as
if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement.




          (d)   Any Lender, which, with the consent of the Borrower and the Administrative Agent, elects
to increase its Commitment under this Agreement shall execute and deliver to the Borrower and the
Administrative Agent a Commitment Increase Supplement specifying (i) the amount of such Commitment
increase, (ii) the amount of such Lender’s total Commitment after giving effect to such Commitment
increase, and (iii) the date upon which such Commitment increase shall become effective.




          (e)   Unless otherwise agreed by the Administrative Agent, on each date upon which the
Commitments shall be increased pursuant to this Section, the Borrower shall prepay all then
outstanding Revolving Loans, which prepayment shall be accompanied by payment of all accrued
interest on the amount prepaid and any amounts payable pursuant to Section 2.14 in connection
therewith, and, to the extent it determines to do so, reborrow Revolving Loans from all the Lenders
(after giving effect to the new and/or increased Commitments becoming effective on such date). Any
prepayment and reborrowing pursuant to the preceding sentence shall be effected, to the maximum
extent practicable, through the netting of amounts payable between the Borrower and the respective
Lenders.










 



23




          SECTION 2.01(A) The Term Loans. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make a Term Loan in Japanese Yen to the Term Borrower on the
Restatement Effective Date in an aggregate principal amount equal to the amount set forth opposite
such Lender’s name on Schedule 2.01 under the caption “Term Loans”.




          SECTION 2.02.   Revolving Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance
with their respective Commitments. Each Term Loan shall be made as part of a Borrowing consisting
of Term Loans made by the Lenders in accordance with the respective amounts set forth under the
caption “Term Loans” on Schedule 2.01. The failure of any Lender to make any Loan required to be
made by it shall not relieve any other Lender of its obligations hereunder; provided that
no Lender shall be responsible for any other Lender’s failure to make Loans as required.




          (b)   Subject to Section 2.12, each Borrowing shall be comprised entirely of ABR Loans or
Eurocurrency Loans as the Borrower may request in accordance herewith. Each Lender at its option
may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower or the Term Borrower, as the case may be, to repay such Loan in
accordance with the terms of this Agreement; and provided, further, that no such
option may be exercised by any Lender if, immediately after giving effect thereto, amounts would
become payable by the Borrower or the Term Borrower, as the case may be, under Section 2.13 or 2.15
that are in excess of those that would be payable under such Section if such option were not
exercised.




          (c)   At the commencement of each Interest Period for any Eurocurrency Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 (or, in the case
of Term Loans, ¥10,000,000) and not less than $5,000,000 (or, in the case of Term Loans,
¥100,000,000). At the time that each ABR Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than $500,000;
provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more than a
total of fifteen (15) Eurocurrency Borrowings outstanding.




          (d)   Notwithstanding any other provision of this Agreement, neither the Borrower nor the Term
Borrower, as the case may be, shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after the applicable
Maturity Date.




          SECTION 2.03.   Requests for Borrowings. To request a Loan, the Borrower or Term
Borrower, as the case may be, shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurocurrency Borrowing that is not a Term Loan, not later than 11:00 a.m., New
York City time,
three Business Days before the date of the proposed Borrowing, (b) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time,











 



24



on the date of the proposed
Borrowing or (c) in the case of the Term Loan, not later than 11:00 a.m., New York City time, four
Business Days prior to the Restatement Effective Date. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower or the Term Borrower, as the case may be. Each such telephonic and
written Borrowing Request shall specify the following information in compliance with Section 2.02:





     (i)    the aggregate amount of the requested Borrowing;




     (ii)    the date of such Borrowing, which shall be a Business Day;




     (iii)    whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing
(provided that Term Loans may only consist of Eurocurrency Borrowings);




     (iv)    in the case of a Eurocurrency Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”




     (v)    if the Borrowing is of Revolving Loans or Term Loans; and




     (vi)    the location and number of the Borrower’s account (or, in the case of the Term
Loans, the Term Borrower’s account) to which funds are to be disbursed, which shall comply
with the requirements of Section 2.05.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency
Borrowing, then the Borrower or Term Borrower, as the case may be, shall be deemed to have selected
an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each applicable Lender of the
details thereof and of the amount of such Lender’s Loan to be made as part of the requested
Borrowing.




          SECTION 2.04.   Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit) in the form of Commercial Letters of Credit or Standby Letters of
Credit for its own account or the account of its Subsidiaries, in a form reasonably acceptable to
the applicable Issuing Bank (provided that each Letter of Credit shall provide for payment against
sight drafts drawn thereunder), at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the applicable Issuing Bank relating to any
Letter of Credit, the terms and conditions of this Agreement shall control. The letters of credit
identified on Schedule 2.04 shall be deemed to be “Letters of Credit” issued on the Effective Date
for all purposes of the Loan Documents.










 



25




          (b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the applicable Issuing
Bank) to the applicable Issuing Bank and, in the case of a Commercial Letter of Credit if the
Administrative Agent shall have so requested and in the case of all Standby Letters of Credit, the
Administrative Agent (in each case, reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension, the currency in which such Letter of Credit is to be
denominated (which shall be dollars or, subject to Section 2.18, an Alternative Currency), the name
and address of the beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit, provided that in no event shall any Issuing
Bank other than JPMorgan Chase Bank or one or more other Issuing Banks designated from time to time
by the Borrower and reasonably acceptable to the Administrative Agent issue any Alternative
Currency Letter of Credit hereunder. If requested by the applicable Issuing Bank, the Borrower
also shall submit a letter of credit application on such Issuing Bank’s standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed (x) $150,000,000, in the case
of Standby Letters of Credit, or (y) $250,000,000, in the case of Commercial Letters of Credit,
(ii) the Alternative Currency LC Exposure with respect to Letters of Credit denominated in an
Alternative Currency shall not exceed $50,000,000, and (iii) the total Revolving Credit Exposures
shall not exceed the total Commitments. Subsequent to the receipt by any Issuing Bank of a
Notification Instruction (as defined below) from the Administrative Agent which shall not have been
withdrawn, such Issuing Bank will contact the Administrative Agent prior to the issuance or
increase in any Letter of Credit to determine whether or not such issuance or increase would result
in any of the limitations set forth in the preceding sentence being exceeded. For purposes of this
Section 2.04(b), a “Notification Instruction” shall mean any instruction from the Administrative
Agent requiring that an Issuing Bank make the contacts described in the preceding sentence, which
instruction the Administrative Agent (i) may deliver at any time when it determines that the
percentage which the aggregate Revolving Credit Exposure constitutes of the aggregate Commitments
then in
effect is greater than 80% and (ii) will withdraw when it determines that such percentage is
less than 80%. For purposes of the third preceding sentence the amount of any Alternative Currency
Letter of Credit shall be the Dollar Equivalent thereof calculated on the basis of the applicable
rate of exchange determined in accordance with Section 1.05.




          (c)   Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.




          (d)   Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender, and










 



26




each
Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to
such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter
of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent in dollars, for the account of such
Issuing Bank, such Lender’s Applicable Percentage of (i) each LC Disbursement made by such Issuing
Bank in dollars and (ii) the Dollar Equivalent, using the Exchange Rate at the time such payment is
made, of each LC Disbursement made by such Issuing Bank in an Alternative Currency and, in each
case, not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section,
or of any reimbursement payment required to be refunded to the Borrower for any reason. Each
Lender acknowledges and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.




          (e)   Reimbursement. If any Issuing Bank shall make any LC Disbursement in respect of
a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to such Issuing
Bank an amount equal to such LC Disbursement in dollars, on the date that such LC Disbursement is
made (or, if such date is not a Business Day, on or before the next Business Day); provided
that, if such LC Disbursement is made under an Alternative Currency Letter of Credit, automatically
and with no further action required, such Borrower’s obligation to reimburse the applicable LC
Disbursement shall be permanently converted into an obligation to reimburse the Dollar Equivalent,
calculated using the Exchange Rate at the time such payment is made, of such LC Disbursement, and
provided, further, that, in the case of any such reimbursement obligation which is
in an amount of not less than $500,000, the Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 that such payment be financed in dollars
with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s
obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing.
If the Borrower fails to make when due any reimbursement payment required pursuant to this
paragraph, the applicable Issuing Bank shall immediately notify the Administrative Agent, which
shall promptly notify each Lender of the applicable LC Disbursement, the Dollar Equivalent thereof
calculated in accordance with the preceding sentence (if such LC Disbursement relates to an
Alternative Currency Letter of
Credit), the reimbursement payment then due from the Borrower in respect thereof and such
Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender
(other than such Issuing Bank) shall pay to the Administrative Agent in dollars its Applicable
Percentage of the reimbursement payment then due from the Borrower, in the same manner as provided
in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to such Issuing Bank in dollars the amounts so received by
it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from
the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to
the applicable Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse an
Issuing Bank for any LC Disbursement (other than the funding of ABR
Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such
LC Disbursement.


 








 




27






          (f)   Letter of Credit Fees.





     (i)    Commercial Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent, for the account of the applicable Issuing Bank and the Lenders, a
Commercial Letter of Credit fee calculated at the rate per annum equal to the Applicable
Rate applicable to Commercial Letters of Credit from time to time in effect on the aggregate
average daily amount available to be drawn (calculated, in the case of any Alternative
Currency Letter of Credit, on the basis of the Dollar Equivalent thereof using the
applicable Exchange Rate in effect on the date payment of such fee is due) under each
Commercial Letter of Credit issued hereunder (and in no event less than $500 with respect to
each such Commercial Letter of Credit). Commercial Letter of Credit Fees accrued through
and including the last day of March, June, September and December of each year shall be
payable in arrears on the fifth Business Day following such last day, commencing on the
first such date to occur after the date hereof. The Administrative Agent will promptly pay
to the Issuing Banks and the Lenders their pro rata shares of any amounts received from the
Borrower in respect of any such fees. Commercial Letter of Credit fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).




     (ii)    Standby Letter of Credit Fees. The Borrower agrees to pay to the
Administrative Agent, for the account of the applicable Issuing Bank and the Lenders, a
Standby Letter of Credit fee calculated at the rate per annum equal to the Applicable Rate
applicable to Eurocurrency Loans from time to time in effect on the aggregate average daily
amount available to be drawn (calculated, in the case of any Alternative Currency Letter of
Credit, on the basis of the Dollar Equivalent thereof using the applicable Exchange Rate in
effect on the date payment of such fee is due) under each Standby Letter of Credit issued
hereunder (and in no event less than $500 with respect to each such Standby Letter of
Credit). Standby Letter of Credit Fees accrued through and including the last day of March,
June, September and December of each year shall be payable in arrears on the fifth Business
Day following such last day, commencing on the first such date to occur after the date
hereof. The Administrative Agent will promptly
pay to the Issuing Banks and the Lenders their pro rata shares of any amounts received
from the Borrower in respect of any such fees. Standby Letter of Credit fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).



          (g)   Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements
as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, any application for the issuance of a Letter of Credit or this Agreement, or any
term or provision therein, (ii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a Letter









 



28



of Credit
against presentation of a draft or other document that does not comply with the terms of such
Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.
Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank; provided that the foregoing shall
not be construed to excuse such Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused
by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence, bad faith or willful misconduct on the part of an
Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the terms of a Letter of
Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any notice or information
to the contrary, or refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.




          (h)   Disbursement Procedures. The applicable Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for payment under a
Letter of Credit. Such Issuing Bank shall promptly notify the Administrative Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing
Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.




          (i)   Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, including by financing such payment obligation with an ABR Loan in accordance with
paragraph (e) of this Section (or, if such date is not a Business Day, on or prior to the next
Business Day), the unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due (including by financing such payment
obligation with an ABR Loan) pursuant to paragraph (e) of this Section, then Section 2.11(c) shall
apply; and provided, further, that, in the case of an LC Disbursement made under an
Alternative Currency Letter of Credit, the amount of interest due with respect










 



29



thereto shall accrue
on the Dollar Equivalent, calculated using the Exchange Rate at the time such LC Disbursement was
made, of such LC Disbursement. Interest accrued pursuant to this paragraph shall be for the
account of the applicable Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank
shall be for the account of such Lender to the extent of such payment.




          (j)   Replacement of any Issuing Bank. Any Issuing Bank may be replaced at any time
by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such
replacement of such Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.04(f) and 2.10(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of such Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to
the term “Issuing Bank” shall be deemed to include a reference to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not
be required to issue additional Letters of Credit.




          (k)   Cash Collateralization. If any Event of Default shall occur and be continuing,
on the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50% of the then total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders,
an amount in dollars and in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that (i) the portions of such amount attributable to
undrawn Alternative Currency Letters of Credit shall be deposited in the applicable Alternative
Currencies in the actual amounts of such undrawn Letters of Credit and (ii) the obligation to
deposit such cash collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in paragraph (h) or (i) of Article
VII. Each deposit pursuant to this paragraph shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower under this Agreement.
The Administrative Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of the Administrative
Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Banks for LC Disbursements
for which they have not been reimbursed (to be applied ratably among them according to the
respective aggregate amounts of the then unreimbursed LC Disbursements) and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity










 



30



of the Loans has been accelerated (but subject to
the consent of Lenders with LC Exposure representing greater than 50% of the then total LC
Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default or, in accordance with Section 2.09(c), the total Revolving
Credit Exposure exceeding 105% of the total Commitments, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default
have been cured or waived or, as the case may be, the total Revolving Credit Exposure not exceeding
the total Commitments.




          (l)   Additional Issuing Banks. The Borrower may, at any time and from time to time
with the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and
such Lender, designate one or more additional Lenders to act as an issuing bank under the terms of
this Agreement, provided that the total number of Issuing Banks at any time shall not
exceed four. Any Lender designated as Issuing Bank pursuant to this paragraph (l) shall be deemed
to be an “Issuing Bank” for the purposes of this Agreement (in addition to being a Lender) with
respect to Letters of Credit issued by such Lender.




          (m)   Reporting. Unless the Administrative Agent otherwise agrees, each Issuing Bank
will report in writing to the Administrative Agent (i) on the first Business Day of each week and
on the second Business Day to occur after the last day of each March, June, September and December,
and on such other dates as the Administrative Agent may reasonably request, the daily activity
during the preceding week, calendar quarter or other period, as the case may be, with respect to
Letters of Credit issued by it, including the aggregate outstanding LC Exposure with respect to
such Letters of Credit on each day during such week, quarter or other period, in such form and
detail as shall be satisfactory to the Administrative Agent, (ii) on any Business Day on which the
Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on
such day, the date of such failure and the amount of such LC Disbursement and (iii) such other
information with respect to Letters of Credit issued by such Issuing Bank as the Administrative
Agent may reasonably request.




          SECTION 2.05.   Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, New York City time to the
account of the Administrative Agent most recently designated by it for such purpose by notice to
the Lenders. The Administrative Agent will make such Loans available to the Borrower or the Term
Borrower, as the case may be, by promptly crediting the amounts so received, in like funds, to an
account of the Borrower or the Term Borrower, as the case may be, maintained with the
Administrative Agent in New York City or, in the case of the Term Loan, London, and designated by
the Borrower or the Term Borrower, as the case may be, in the applicable Borrowing Request;
provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided
in Section 2.04(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank.




          (b)   Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the










 



31



Borrower or the Term Borrower, as the case may
be, a corresponding amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable Lender agrees to
pay to the Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available to the Borrower or
the Term Borrower, as the case may be, to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation. If such
Lender pays such amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing. If such Lender’s share of such Borrowing is not made
available to the Administrative Agent by such Lender within three Business Days after the date such
amount is made available to the Borrower or the Term Borrower, as the case may be, the
Administrative Agent shall promptly notify the Borrower or the Term Borrower, as the case may be,
of such failure and shall also be entitled to recover such amount from the Borrower or the Term
Borrower, as the case may be, on demand, with interest thereon at the rate per annum applicable to
ABR Loans hereunder accruing from the date of such Borrowing. If the Borrower or the Term Borrower,
as the case may be, shall pay to the Administrative Agent such corresponding amount, the Borrower
or the Term Borrower, as the case may be, shall have no further obligations to such Lender with
respect to such amount.




          SECTION 2.06.   Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower or the Term Borrower, as the case may be, may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower or the Term
Borrower, as the case may be, may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
holding the Revolving Loans
comprising such Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.




          (b)   To make an election pursuant to this Section, the Borrower or the Term Borrower, as the
case may be, shall notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower or the Term Borrower were
requesting a Borrowing of the Type resulting from such election to be made on the effective date of
such election. Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery, email (pursuant to procedures approved by the Administrative
Agent) or telecopy to the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the Borrower or the Term Borrower, as the case
may be.




          (c)   Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i)    the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be









 



32



specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);




     (ii)    the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing; and




     (iv)    if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to
be applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an
Interest Period, then the Borrower or the Term Borrower, as the case may be, shall be deemed to
have selected an Interest Period of one month’s duration.




          (d)   Promptly following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.




          (e)   If the Borrower or the Term Borrower, as the case may be, fails to deliver a timely
Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the Borrower or the Term
Borrower, as the case may be, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurocurrency
Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.




          (f)   Notwithstanding anything contained in this Section 2.06, Term Loans shall only be
Eurocurrency Loans.




          SECTION 2.07.   Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.




          (b)   The Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $100,000 and not less than $1,000,000, or, if less than $1,000,000, the
remaining amount of the total Commitments, and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.09, the total Revolving Credit Exposures would exceed the total Commitments.




          (c)   The Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least two (2) Business Days prior to
the effective date of such termination or reduction, specifying such










 



33



election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon another event, such as the
effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their
respective Commitments.




          SECTION 2.08.   Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Revolving Loan on the applicable Maturity Date. The Term Borrower
hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender
the then unpaid principal amount of the Term Loan on the applicable Maturity Date.




          (b)   Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (c)   The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
or Term Borrower, as the case may be, to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender’s share thereof.




          (d)   The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower or the Term Borrower, as the case may be, to repay the Loans in accordance with the
terms of this Agreement.




          (e)   Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower or the Term Borrower, as the case may be, shall prepare, execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender,
to such Lender and its registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).




          SECTION 2.09.   Prepayment of Loans. (a) The Borrower or the Term Borrower, as the
case may be, shall have the right at any time and from time to time to prepay







 



34




voluntarily any
Borrowing in whole or in part without premium or penalty, subject to prior notice in accordance
with paragraph (b) of this Section.




          (b)   The Borrower or the Term Borrower, as the case may be, shall notify the Administrative
Agent by telephone (confirmed by telecopy) of any voluntary prepayment hereunder prior to (i) in
the case of ABR Loans, 11:00 a.m., New York City time, on such date of prepayment, (ii) in the case
of Eurocurrency Loans, 12:00 noon, New York City time, on the Business Day immediately preceding
such date of prepayment or (iii) in the case of Term Loans, 12:00 noon, London time, on the
Business Day three Business Days prior to such date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each Borrowing, Term
Loan or portion thereof to be prepaid and whether the prepayment is of Eurocurrency Loans, ABR
Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each;
provided that, if a notice of voluntary prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section 2.07, then such
notice of prepayment may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial voluntary prepayment of any Borrowing shall be
in an aggregate principal amount of $500,000 or a multiple of $100,000 in excess thereof. Each
partial voluntary prepayment of the Term Loans shall be in an aggregate principal amount of
¥100,000,000 and in whole multiples of ¥10,000,000 in excess thereof. Each voluntary prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.




          (c)   If on any date the total Revolving Credit Exposure exceeds 105% of the total
Commitments, the Borrower shall, without notice or demand, within three Business Days after such
date, prepay Loans in an aggregate amount sufficient to reduce the total Revolving Credit Exposure
to less than the total Commitments, provided that if, after giving effect to such
prepayment, the total Revolving Credit Exposure would still exceed the total Commitments, the
Borrower shall, without notice or demand, deposit cash collateral in an account with the
Administrative Agent established and maintained in accordance with Section 2.04(k) in an aggregate
amount such that, after deducting therefrom the amount so deposited in such account, the total
Revolving Credit Exposure does not exceed the total Commitments.




          (d)   Prepayments shall be accompanied by accrued interest to the extent required by Section
2.11 and any amounts payable pursuant to Section 2.14.




          SECTION 2.10.   Fees. (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee for the period from and including the Effective Date to
the last day of the Availability Period, computed at the Applicable Rate on the average daily
amount of the Available Commitment of such Lender during the period for which payment is made.
Commitment fees accrued through and including the last day of March, June, September and December
of each year shall be payable on the fifth Business Day following such last day, commencing on the
first such date to occur after the date hereof; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. All commitment fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).










 



35




          (b)   The Borrower agrees to pay to each Issuing Bank the fees agreed upon by the Borrower
with such Issuing Bank with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. For the avoidance of doubt, in any case where, in
accordance with the second sentence of the definition of Issuing Bank, an Issuing Bank arranges for
one or more Letters of Credit to be issued by an Affiliate of such Issuing Bank, the fees agreed
upon by such Issuing Bank with the Borrower shall be deemed to have been agreed upon by such
Affiliate unless the Borrower and such Affiliate otherwise agree.




          (c)   The Borrower agrees to pay to the Administrative Agent, for the account of each Lender,
a utilization fee accruing for each day on which the aggregate amount of the Revolving Credit
Exposure of all Lenders exceeds 50% of the aggregate amount of the Commitments then in effect at a
rate per annum equal to 0.10% on the amount of the Revolving Credit Exposure of such Lender
outstanding on such day. Utilization fees accrued through and including the last day of March,
June, September and December of each year shall be payable on the fifth Business Day following such
last day, commencing on the first such date to occur after the date hereof, and on the Maturity
Date; provided that if there shall exist any Revolving Credit Exposure at any time after
the Commitments are terminated or expire, the Commitments, for purposes of calculations pursuant to
this Section, shall be deemed to remain outstanding in the amounts in effect immediately prior to
such termination or expiration and any utilization fees accruing after such termination or
expiration shall be payable on demand. All utilization fees
shall be computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).




          (d)   The Borrower agrees to pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the Borrower and the
Administrative Agent.




          (e)   All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to each Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances (other than in the case, and to the extent, of any
overpayment thereof by the Borrower).




          SECTION 2.11.   Interest. (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate.




          (b)   The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Borrowing or, in the case of the Term Loans,
at a rate determined by reference to the LIBO Rate, plus the Applicable Rate.




          (c)   Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower or the Term Borrower hereunder is not paid when due, whether
at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to
ABR Loans as provided in paragraph (a) of this Section.










 



36




          (d)   Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of all of the Commitments; provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.




          (e)   All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination shall be conclusive
absent manifest error.




          SECTION 2.12.   Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:





     (a)   the Administrative Agent reasonably determines (which determination shall be
conclusive absent manifest error) that by reason of circumstances affecting the relevant
market adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or
the LIBO Rate, as applicable, for such Interest Period; or




     (b)   the Administrative Agent is advised by the Required Lenders that the Adjusted
LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or
its Loan) included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) if any
Borrowing Request requests a Eurocurrency Borrowing, such Borrowing shall be made as an ABR
Borrowing; provided that if the circumstances giving rise to such notice affect only one
Type of Borrowings, then the other Type of Borrowings shall be permitted.




          SECTION 2.13.   Increased Costs. (a) If any Change in Law shall:





     (i)    impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any
Issuing Bank; or









 



37



     (ii)    impose on any Lender or any Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurocurrency Loans made by such Lender or any
Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurocurrency Loan (or of maintaining its obligation to make such Loan) or to
increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
such Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower or the
Term Borrower, as the case may be, will pay to such Lender or such Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.




          (b)   If any Lender or any Issuing Bank reasonably determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return on such Lender’s
or such Issuing Bank’s capital as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit
issued by such Issuing Bank, to a level below that which such Lender could have achieved but for
such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies with
respect to capital adequacy), then from time to time the Borrower will pay to such Lender or such
Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender
or such Issuing Bank for any such reduction suffered.




          (c)   A certificate of a Lender or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or such Issuing Bank, as the case may be, as specified in
paragraph (a) or (b) of this Section, containing a reasonably detailed explanation of the basis on
which such amount or amounts were calculated and explaining the Change in Law by reason of which it
has become entitled to be so compensated, shall be delivered to the Borrower or the Term Borrower,
as the case may be, and shall be conclusive absent manifest error. No Lender or Issuing Bank shall
be entitled to the benefits of this Section 2.13 unless such Lender or Issuing Bank shall have
complied with the requirements of this Section 2.13. The Borrower or the Term Borrower, as the
case may be, shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.




          (d)   Failure or delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Bank’s
right to demand such compensation; provided that the Borrower or the Term Borrower, as the
case may be, shall not be required to compensate a Lender or an Issuing Bank pursuant to this
Section for any increased costs or reductions incurred more than 90 days prior to the date that
such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect thereof.
Notwithstanding any other provision of this Section 2.13, no Lender shall demand compensation for
any increased costs or reduction referred to above in this Section if it shall not then be the










 



38



general policy of such Lender to demand such compensation in similar circumstances from comparable
borrowers under comparable provisions of other credit agreements, if any (it being understood, for
the avoidance of doubt, that a waiver by any Lender in any given case of its right to demand such
compensation from any given borrower shall not, in and of itself, be deemed to constitute a change
in the general policy of such Lender).




          (e)   Notwithstanding any other provision to the contrary, this Section 2.13 shall have no
application with respect to any Indemnified Taxes, Other Taxes or any Excluded Taxes, which
matters, for the avoidance of doubt, shall be dealt with exclusively under Section 2.15.




          SECTION 2.14.   Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan
other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurocurrency
Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.09(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower or the Term Borrower, as the case may be, pursuant
to Section 2.17, then, in any such event, the Borrower or the Term Borrower, as the case may be,
shall compensate each Lender for the loss and reasonable cost and expense attributable to such
event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount reasonably determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such Loan had such event
not occurred, at the Adjusted LIBO Rate (or LIBO Rate, as the case may be) that would have been
applicable to such Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for
the period that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurocurrency market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this
Section, containing a reasonably detailed calculation of such amounts, shall be delivered to the
Borrower or the Term Borrower, as the case may be, and shall be conclusive absent manifest error.
The Borrower or the Term Borrower, as the case may be, shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof. No Lender or Issuing Bank shall
be entitled to the benefits of this Section 2.14 unless such Lender or Issuing Bank shall have
complied with the requirements of this Section 2.14.




          SECTION 2.15.   Taxes. (a) Any and all payments by or on account of any obligation
of the Borrower or the Term Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower or the
Term Borrower, as the case may be, shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums payable under this
Section) the Administrative Agent, Lender or the relevant Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such deductions







 



39




been made, (ii)
the Borrower or the Term Borrower, as the case may be, shall make such deductions and (iii) the
Borrower or the Term Borrower, as the case may be, shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.




          (b)   In addition, the Borrower or the Term Borrower, as the case may be, shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.




          (c)   The Borrower or the Term Borrower, as the case may be, shall indemnify the
Administrative Agent, each Lender and any Issuing Bank, as promptly as possible but in any event
within 30 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower or
the Term Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other
Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability, together with, to the extent available,
a certified copy of a receipt issued by such Governmental Authority evidencing such payment or
other evidence of such payment reasonably satisfactory to the Borrower or the Term Borrower, as the
case may be, delivered to the Borrower or the Term Borrower, as the case may be, as soon as
practicable after any such payment by a Lender or any Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or any Issuing Bank, shall be conclusive absent manifest
error.




          (d)   As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower or the Term Borrower, as the case may be, to a Governmental Authority, the Borrower or the
Term Borrower, as the case may be, shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment reasonably satisfactory to
the Administrative Agent.




          (e)   Each Foreign Lender (including each Issuing Bank that is a Foreign Lender) shall deliver
to the Borrower or the Term Borrower, as the case may be, (with a copy to the Administrative
Agent), at the time it becomes a Lender (or, in the case of any Participant, on or before the date
such Participant purchases the related Participation) and at all times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower or the Term Borrower, as the case may be, as will permit such payments to
be made without withholding. Each Foreign Lender (including each Issuing Bank that is a Foreign
Lender) shall promptly notify the Borrower or the Term Borrower, as the case may be, at any time it
determines that it is no longer in a position to provide any documentation required to be delivered
to the Borrower or the Term Borrower, as the case may be, pursuant to this paragraph. No Person
shall be entitled to become a Lender or Participant unless it shall have complied with the
requirements of the first sentence of this paragraph (if such requirements are applicable to it).




          (f)   If the Administrative Agent, a Lender or an Issuing Bank determines that it has received
a refund which, in the good faith judgment of the Administrative Agent, such










 



40



Lender or such Issuing
Bank, as the case may be, is allocable to any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower or the Term Borrower, as the case may be, or with respect to which
the Borrower or the Term Borrower has paid additional amounts pursuant to this Section 2.15, it
shall promptly pay over such refund to the Borrower or the Term Borrower, as the case may be (but
only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or the
Term Borrower under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all reasonable out-of-pocket expenses of the Administrative Agent or such Lender
and without interest (other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided, that the Borrower or the Term Borrower, as the case may
be, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid
over to the Borrower or the Term Borrower, as the case may be (plus any penalties, interest or
other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require the Administrative Agent or any Lender to
make available its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower, the Term Borrower or any other Person.




          SECTION 2.16.   Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The
Borrower or the Term Borrower, as the case may be, shall make each payment required to be made by
it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of
amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 noon, New York City
time (or, in the case of payments required to be made by the Term Borrower in respect of the Term
Loans, 12:00 noon, London time), on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent or an Issuing Bank, as applicable, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York,
except payments to be made directly to an Issuing Bank as expressly provided herein and except that
payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars except as provided in Section 2.04(k).




          (b)   If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest, fees,
expenses and other amounts then due hereunder, such funds shall be applied (i) first, towards
payment of interest, fees, expenses and other amounts then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest, fees, expenses and other amounts then
due to such parties, and (ii) second, towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.










 



41




          (c)   If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC Disbursements; provided
that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower or the Term Borrower, as the case may be, pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations in LC Disbursements
to any assignee or participant, other than to the Borrower, the Term Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply). Each of the the
Borrower and the Term Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower or Term Borrower, as the case may be,
rights of set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower or the Term Borrower, as the case may be, in the amount of
such participation.




          (d)   Unless the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Administrative Agent for the account of the Lenders or
an Issuing Bank hereunder that the Borrower or the Term Borrower, as the case may be, will not make
such payment, the Administrative Agent may assume that the Borrower or the Term Borrower, as the
case may be, has made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower or the Term Borrower, as the case may be, has not in fact made
such payment, then each of the Lenders or such Issuing Bank, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender
or such Issuing Bank with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative Agent, at the greater
of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.




          (e)   If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.04(d) or (e), 2.05(b) or 2.16(d), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such
Sections until all such unsatisfied obligations are fully paid.










 



42




          SECTION 2.17.   Mitigation Obligations; Replacement of Lenders. (a) If any Lender
(including any Issuing Bank) requests compensation under Section 2.13, or if the Borrower or the
Term Borrower, as the case may be, is required to pay any additional amount to any Lender
(including any Issuing Bank) or any Governmental Authority for the account of any Lender (including
any Issuing Bank) pursuant to Section 2.15, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.




          (b)   If (i) any Lender (including any Issuing Bank) requests compensation under Section 2.13,
(ii) the Borrower or the Term Borrower, as the case may be, is required to pay any additional
amount to any Lender (including any Issuing Bank) or any Governmental Authority for the account of
any Lender (including any Issuing Bank) pursuant to Section 2.15 or (iii) if any Lender (including
any Issuing Bank) defaults in its obligation to fund Loans hereunder, then the Borrower may, at its
sole expense (in the case of clauses (i) and (ii) of this Section 2.17(b) only), upon notice to
such Lender and the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 9.04, provided
that the Borrower shall be required to pay the processing and recordation fee referred to in
Section 9.04(b)(ii)(C)), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower or the Term Borrower, as the case
may be, shall have received the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans and participations in LC Disbursements, 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 Borrower or the Term
Borrower, as the case may be, (in the case of all other amounts) (and, if such Lender is an Issuing
Bank, all Letters of Credit issued by it shall have been cancelled or other arrangements reasonably
satisfactory to such Issuing Bank shall have been made with respect to such Letters of Credit) and
(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13
or payments required to be made pursuant to Section 2.15, such assignment will result in a
reduction in such compensation or payments. A Lender (including any Issuing Bank) shall not be
required to make any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower or the Term Borrower, as the
case may be, to require such assignment and delegation cease to apply. No such assignment shall be
deemed to be a waiver of any rights which the Borrower, the Term Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender.




          SECTION 2.18.   Change in Law. If (a) any Change in Law shall make it unlawful for
any Issuing Bank to issue Letters of Credit denominated in an Alternative Currency or (b) there
shall have occurred any change in national or international financial, political or economic
conditions (including the imposition of or any change in exchange controls) or currency exchange
rates that would make it impracticable for such Issuing Bank to issue Letters







 



43




of Credit denominated
in such Alternative Currency, then by prompt written notice thereof to the Borrower and to the
Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist),
such Issuing Bank may declare that Letters of Credit will not thereafter be issued by it in the
affected Alternative Currency or Alternative Currencies, whereupon the affected Alternative
Currency or Alternative Currencies shall be deemed (for the duration of such declaration) not to
constitute an Alternative Currency for purposes of the issuance of Letters of Credit by such
Issuing Bank.




ARTICLE III




Representations and Warranties




          The Borrower represents and warrants to the Lenders that:




          SECTION 3.01.   Organization; Powers. Each of the Borrower and its Subsidiaries is
duly organized, validly existing and in good standing (or, if applicable in a foreign jurisdiction,
enjoys the equivalent status under the laws of any jurisdiction of organization outside the United
States of America) under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such
qualification is required.




          SECTION 3.02.   Authorization; Enforceability. The Transactions are within each Loan
Party’s corporate powers and have been duly authorized by all necessary corporate and, if required,
stockholder action. Each Loan Document has been duly executed and delivered by each Loan Party
which is a party thereto and constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, liquidation, reconstruction, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.




          SECTION 3.03.   Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect,
(b) will not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any indenture or any
material agreement or other material instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation or imposition of
any Lien on any asset of the Borrower or any of its Subsidiaries.




          SECTION 3.04.   Financial Condition; No Material Adverse Change. (a) The Borrower
has heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended April 1, 2007, reported
on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and







 



44




for the fiscal
quarter and the portion of the fiscal year ended January 1, 2007, certified by its chief financial
officer. Such financial statements present fairly, in all material respects, the financial position
and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of
such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of
the statements referred to in clause (ii) above.




          (b)   Since April 1, 2007, there has been no material adverse change in the business,
operations, property or condition (financial or otherwise) of the Borrower and its Subsidiaries,
taken as a whole.




          SECTION 3.05.   Properties. (a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property material to the
operation of its business, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties for their intended
purposes or such other defects as, in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.




          (b)   Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business as
currently conducted, and the use thereof by the Borrower and its Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.06.   Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) which could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect (except for litigation disclosed prior to April 30, 2007 in reports
publicly filed by the Borrower under the Securities Exchange Act of 1934, as amended) or (ii) that
involve this Agreement or the Transactions.




          (b)   Except with respect to any matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental Liability.










 



45




          SECTION 3.07.   Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.




          SECTION 3.08.   Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is required to be registered as an “investment company” as defined in the Investment
Company Act of 1940.




          SECTION 3.09.   Taxes. Each of the Borrower and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable,
has set aside on its books adequate reserves or (b) to the extent that the failure to do so could
not reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.10.   ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the
most recent financial statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000,000 the fair market value of the
assets of all such underfunded Plans.




          SECTION 3.11.   Disclosure. All of the reports, financial statements and certificates
furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or hereafter delivered hereunder or reports filed pursuant
to the Securities Exchange Act of 1934 (as modified or supplemented by other information so
furnished prior to the date on which this representation and warranty is made or deemed made) do
not contain any material misstatement of fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.




          SECTION 3.12.   Subsidiary Guarantors. Set forth on Schedule 3.12 is a list of each
Subsidiary which, in accordance with Section 4.01(b) of this Agreement, is required to be a
Guarantor under the Guarantee Agreement on the Restatement Effective Date.










 



46




ARTICLE IV




Conditions




          SECTION 4.01.   Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):





     (a)   The Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence reasonably satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.




     (b)   The Administrative Agent shall have received the Guarantee Agreement executed and
delivered by (i) each Domestic Subsidiary which is a guarantor under the Original Credit
Agreement, (ii) each Domestic Subsidiary, if any, which, as of the Effective Date, is a
Significant Subsidiary (as defined in Regulation S-X part 210.1-02 of the Code of Federal
Regulations) and which is not a guarantor under the Original Credit Agreement and (iii) the
Borrower, as a guarantor of the Term Borrower’s obligations under this Agreement.




     (c)   The Administrative Agent shall have received evidence, in form and substance
reasonably satisfactory to it that all obligations of the Borrower under the Original Credit
Agreement (other than the indemnity and other obligations (including obligations in relation
to the letters of credit identified on Schedule 2.04) that expressly survive the termination
thereof) shall have been paid in full, and all commitments of the Lenders to extend credit
thereunder shall have been terminated.




     (d)   The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective Date) of
Friedman Kaplan Seiler & Adelman LLP, counsel for the Loan Parties, substantially in the
form of Exhibit B-1 and an officer’s certificate of the Chief Financial Officer of the
Borrower, substantially in the form of Exhibit B-2. The Borrower hereby requests Friedman
Kaplan Seiler & Adelman LLP to deliver the opinion provided for in clause (i), above.




     (e)   The Administrative Agent shall have received such documents and certificates as
the Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Loan Parties, the authorization of the
Transactions by the Loan Parties and any other legal matters relating to the Loan
Parties, this Agreement or the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.




     (f)   The Administrative Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer of the









 



47



Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section
4.02.




     (g)   The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.


The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m., New York City time, on November 28, 2006 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate at such time).




          SECTION 4.02.   Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, but excluding a conversion of all or a portion of a Borrowing from
one Type to the other or a continuation of all or a portion of a Borrowing of the same Type
pursuant to Section 2.06 and of each Issuing Bank to issue, increase, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:





     (a)   The representations and warranties made by any Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of the date of
such Borrowing or the date of issuance, increase, renewal or extension of such Letter of
Credit, as applicable (other than such representations as are made as of a specific earlier
date, in which case such representations and warranties shall be true and correct in all
material respects as of such earlier date).




     (b)   At the time of and immediately after giving effect to such Borrowing or the
issuance, increase, renewal or extension of such Letter of Credit, as applicable, no Default
shall have occurred and be continuing.


Each Borrowing and each issuance, increase, renewal or extension of a Letter of Credit hereunder
shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a) and (b) of this Section.




ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:




          SECTION 5.01.   Financial Statements; Ratings Change and Other Information. The
Borrower will furnish to each Lender through the Administrative Agent:










 



48





     (a)   within 90 days after the end of each Fiscal Year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Deloitte & Touche or other
independent public accountants of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception as to the scope
of such audit) to the effect that such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied; provided, however, that, so long as the Borrower is required to
file reports under Section 13 of the Securities and Exchange Act of 1934, the requirements
of this paragraph shall be deemed satisfied by the delivery of, the Annual Report of the
Borrower on Form 10-K for such Fiscal Year, signed by the duly authorized officer or
officers of the Borrower;




     (b)   within 60 days after the end of each of the first three Fiscal Quarters of each
fiscal year of the Borrower, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes; provided, however, that, so long as the Borrower
is required to file reports under Section 13 of the Securities and Exchange Act of 1934, the
requirements of this paragraph shall be deemed satisfied by the delivery of the Quarterly
Report of the Borrower on Form 10-Q for the relevant Fiscal Quarter, signed by the duly
authorized officer or officers of the Borrower.




     (c)   concurrently with any delivery of financial statements under clause (a) or (b)
above, a certificate of a Financial Officer of the Borrower (i) stating that he or she has
obtained no knowledge that a Default has occurred (except as set forth in such certificate),
(ii) if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (iii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.03 and 6.07; and (iv) stating
whether any change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 3.04 which has had an effect on such
financial statements and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;




     (d)   concurrently with any delivery of financial statements under clause (a) above, a
certificate of the accounting firm that reported on such financial statements stating
whether they obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent required by
accounting rules or guidelines);









 



49



     (e)   promptly after the same become publicly available, copies of all other periodic
and other reports, proxy statements and other materials filed by the Borrower or any
Subsidiary with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its shareholders generally, as the
case may be;




     (f)   promptly after the Borrower shall have received notice that Moody’s or S&P has
announced a change in the rating established or deemed to have been established for the
Index Debt, written notice of such rating change; and




     (g)   promptly following any request therefor, such other information regarding the
business affairs or financial position of the Borrower or any Subsidiary, or compliance with
the terms of this Agreement, as the Administrative Agent on behalf of any Lender may
reasonably request.



          SECTION 5.02.   Notices of Material Events. The Borrower will furnish to the Lenders
through the Administrative Agent prompt written notice of the following promptly after the Borrower
shall have obtained knowledge thereof:





     (a)   the occurrence of any Default;




     (b)   the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate
thereof that, if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;




     (c)   the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $10,000,000; and




     (d)   any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.


Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.




          SECTION 5.03.   Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business except, in each case (other than the case of the
foregoing requirements insofar as they relate to the legal existence of the Borrower and the
Guarantors), to the extent that failure to do so could not reasonably be expected to result in a
Material Adverse Effect; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.04.










 



50




          SECTION 5.04.   Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could
reasonably be expected to result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make
payment pending such contest could not reasonably be expected to result in a Material Adverse
Effect.




          SECTION 5.05.   Maintenance of Properties; Insurance. Except where the failure to do
so could not reasonably be expected to result in a Material Adverse Effect, the Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear excepted and except for
surplus and obsolete properties, and (b) maintain, with financially sound and reputable insurance
companies, insurance on such of its property and in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses operating in the same
or similar locations.




          SECTION 5.06.   Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in which entries in
conformity in all material respects with all applicable laws, rules and regulations of any
Governmental Authority are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to, on an annual basis at
the request of the Administrative Agent (or at any time after the occurrence and during the
continuance of a Default), permit any representatives designated by the Administrative Agent or any
Lender (at such Lender’s expense), upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records (other than materials protected
by the attorney-client privilege and materials which the Borrower or such Subsidiary, as
applicable, may not disclose without violation of a
confidentiality obligation binding upon it), and to discuss its affairs, finances and
condition with its officers and independent accountants, so long as afforded opportunity to be
present, all during reasonable business hours. It is understood that so long as no Event of Default
has occurred and is continuing, such visits and inspections shall be coordinated through the
Administrative Agent.




          SECTION 5.07.   Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.




          SECTION 5.08.   Use of Proceeds and Letters of Credit. The proceeds of the Revolving
Loans will be used only to finance the working capital needs, capital expenditures, Permitted
Acquisitions, Investments permitted under Section 6.05 and general corporate purposes of the
Borrower and its Subsidiaries (including the refinancing of the Original Credit Agreement). The
proceeds of the Term Loans will be used (i) to finance the public tender offer by PRL Japan
Kabushiki Kaisha, a Japanese subsidiary of the Borrower (the “Japanese Subsidiary”), (ii)
to acquire the remaining approximately 80% of the shares of Impact 21 Co.,










 



51



Ltd. not held by the
Borrower, (iii) to finance the stock purchase by the Borrower of the remaining 50% of the shares of
Polo Ralph Lauren Japan Corporation and (iv) to pay for other transaction related expenses. No
part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including Regulations T, U and X. The
Commercial Letters of Credit shall be used solely to finance purchases of inventory by the Borrower
and its Subsidiaries in the ordinary course of their business, and the Standby Letters of Credit
shall be used solely for the purposes described in the definition of such term in Section 1.01.




          SECTION 5.09.   Guarantee Agreement Supplement. Each Domestic Subsidiary that becomes
a “Significant Subsidiary” (as defined in Regulation S-X, part 210.1-02 of the Code of Federal
Regulations) subsequent to the Effective Date shall promptly (and in any event within 60 days of
becoming such a “Significant Subsidiary”) execute and deliver to the Administrative Agent (with a
counterpart for each Lender) a supplement to the Guarantee Agreement pursuant to which such
Subsidiary shall become a party thereto as a Guarantor, together with such other documents and
legal opinions with respect thereto as the Administrative Agent shall reasonably request (which
documents and opinions shall be in form and substance reasonably satisfactory to the Administrative
Agent).




          SECTION 5.10.   Wholly Owned Subsidiary. The Term Borrower shall remain a
Wholly-Owned Subsidiary of the Borrower.




ARTICLE VI




Negative Covenants




          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:




          SECTION 6.01.   Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:





     (a)   Indebtedness created hereunder;




     (b)   Indebtedness existing on the Restatement Effective Date and set forth in Schedule
6.01 and extensions, renewals and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof or shorten the final maturity or weighted average
life to maturity thereof;




     (c)   Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary;




     (d)   Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary;









 



52



     (e)   Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any real property, fixed or capital assets,
including Capital Lease Obligations, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof; provided
that such Indebtedness is incurred no more than 90 days prior to or within 90 days after
such acquisition or the completion of such construction or improvement;




     (f)   Indebtedness acquired or assumed in Permitted Acquisitions and extensions,
renewals and replacements of any such indebtedness that do not increase the outstanding
principal amount thereof or shorten the final maturity or weighted average life to maturity
thereof or have different obligors;




     (g)   Priority Indebtedness (excluding any Indebtedness permitted by Sections 6.01(e)
and (f)) in an aggregate principal amount at any one time outstanding not to exceed 10% of
the Borrower’s then Consolidated Net Worth;




     (h)   unsecured Indebtedness (excluding any Indebtedness permitted by Section 6.01(f)),
not otherwise permitted by this Section, of the Borrower or any Subsidiary which is a
Guarantor so long as (i) on a pro forma basis after giving effect to the incurrence of such
Indebtedness, the ratio of (x) Adjusted Debt then outstanding to (y) Consolidated EBITDAR
for the then most recently ended period of four consecutive
Fiscal Quarters for which financial statements shall have been delivered to the Lenders
pursuant to Section 5.01 is not greater than 3.75 to 1.00; and




     (i)   Indebtedness under Swap Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative purposes.



          For purposes of this subsection 6.01, any Person becoming a Subsidiary of the Borrower after
the date of this Agreement shall be deemed to have incurred all of its then outstanding
Indebtedness at the time it becomes a Subsidiary, and any Indebtedness assumed by the Borrower or
any of its Subsidiaries shall be deemed to have been incurred on the date of assumption.




          SECTION 6.02.   Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:





     (a)   Permitted Encumbrances;




     (b)   Liens existing on the Restatement Effective Date and set forth on Schedule 6.02;




     (c)   any Lien on any property or asset of the Borrower or any Subsidiary securing
Indebtedness permitted by Section 6.01(e) incurred to acquire, construct or improve such
property or asset;









 



53



     (d)   Liens solely constituting the right of any other Person to a share of any
licensing royalties (pursuant to a licensing agreement or other related agreement entered
into by the Borrower or any of its Subsidiaries with such Person in the ordinary course of
the Borrower’s or such Subsidiary’s business) otherwise payable to the Borrower or any of
its Subsidiaries, provided that such right shall have been conveyed to such Person
for consideration received by the Borrower or such Subsidiary on an arm’s-length basis;




     (e)   Liens arising from precautionary Uniform Commercial Code financing statement
filings with respect to operating leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;




     (f)   Liens securing Indebtedness described in clause (a) of the definition of Priority
Indebtedness;




     (g)   Liens securing Indebtedness permitted under Section 6.01(c);




     (h)   Bankers’ liens and rights of setoff with respect to customary depository
arrangements entered into in the ordinary course of business;




     (i)   Liens attaching solely to cash earnest money or similar deposits in connection
with any letter of intent or purchase agreement in connection with a Permitted Acquisition;
and




     (j)   Liens arising from precautionary UCC financing statements regarding operating
leases or consignments, provided that such Liens extend solely to the assets subject to such
leases or consignments.



          SECTION 6.03.   Sale of Assets. The Borrower will not, nor will it permit any of its
Subsidiaries to, sell, lease, transfer or otherwise dispose of (in one transaction or a series of
transactions) all or substantially all of the assets of the Borrower and its Subsidiaries taken as
a whole.




          SECTION 6.04.   Fundamental Changes. (a) The Borrower will not, and will not permit
any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower
is the surviving corporation, (ii) any Subsidiary (including a Guarantor) may merge into any other
Subsidiary in a transaction in which the surviving entity is a Subsidiary, and (iii) any Subsidiary
may liquidate or dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially disadvantageous to the
Lenders and except that the Borrower or any Subsidiary may effect any acquisition permitted
by Section 6.05 by means of a merger of the Person that is the subject of such acquisition with the
Borrower or any of its Subsidiaries (provided that, in the case of a merger with the
Borrower, the Borrower is the survivor); and




          (b)   The Borrower will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than a Related Line of Business; provided, that the







 



54




Borrower and any Subsidiary may engage in any business or businesses which are not Related Lines of
Business, so long as the Investments made by the Borrower and/or the Subsidiaries in such
businesses do not exceed $500,000,000 in the aggregate, which amount shall be included in the
aggregate amount for Investments permitted under Section 6.05(j).




          SECTION 6.05.   Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to
such merger) any capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business unit or the rights
of any licensee under a trademark license to such licensee from the Borrower or any of its
Affiliates, except:




          (a)   Permitted Investments;




          (b)   investments by the Borrower in the capital stock of its Subsidiaries;




          (c)   loans or advances made by the Borrower to, and Guarantees by the Borrower of obligations
of, any Subsidiary, and loans or advances made by any Subsidiary to, and Guarantees by any
Subsidiary of obligations of, the Borrower or any other Subsidiary;




          (d)   Guarantees constituting Indebtedness permitted by Section 6.01;




          (e)   advances or loans made in the ordinary course of business to employees of the Borrower
and its Subsidiaries;




          (f)   existing Investments not otherwise permitted under this Agreement and described in
Schedule 6.05 hereto;




          (g)   Investments received in connection with the bona fide settlement of any defaulted
Indebtedness or other liability owed to the Borrower or any Subsidiary;




          (h)   Permitted Acquisitions; provided that if, as a result of a Permitted
Acquisition, (i) a new Domestic Subsidiary shall be created and such Domestic Subsidiary is a
Significant Subsidiary (as defined in Regulation S-X part 210.1-02 of the Code of Federal
Regulations) or (ii) any then existing Domestic Subsidiary shall become such a Significant
Subsidiary, such Domestic Subsidiary shall promptly thereafter become party to the Guarantee
Agreement as a Guarantor;




          (i)   Swap Agreements entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;




          (j) Investments, in addition to Investments permitted under clauses (a) through (h) of this
Section 6.05, but including Investments permitted under Section 6.04(b), made after










 



55



the Restatement
Effective Date in an aggregate amount not to exceed $500,000,000 in any Person or Persons; and




          (k) the acquisition of the remaining approximately 80% of the shares of Impact 21 Co., Ltd.
not held by the Borrower and the acquisition by the Borrower of the remaining 50% of the shares of
Polo Ralph Lauren Japan Co., Ltd.




          SECTION 6.06.   Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, (a) any of its Affiliates, (b) a spouse or any relative (by blood, adoption or
marriage) within the third degree of any such Affiliate or (c) any other Person which is an
Affiliate of any such spouse or relative, except (x) in the ordinary course of business at prices
and on terms and conditions, in the aggregate (taking into account all of the Borrower’s or such
Subsidiary’s transactions with, and the benefits to the Borrower and its Subsidiaries derived from
the Borrower’s or such
Subsidiary’s Investment in, such Affiliate), not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, excluding
customary compensation paid to, and indemnity provided on behalf of, directors, officers and
employees of the Borrower and any Subsidiary and (y) transactions between or among the Borrower and
its Subsidiaries not involving any other Affiliate.




          SECTION 6.07.   Consolidated Leverage Ratio. The Borrower will not permit the
Consolidated Leverage Ratio as at the last day of any period of four consecutive Fiscal Quarters
ending after the Effective Date to be greater than 3.75 to 1.00.




ARTICLE VII




Events of Default




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





     (a)   the Borrower or the Term Borrower, as the case may be, shall fail to pay (i) any
principal of any Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise, or (ii) any
reimbursement obligation in respect of any LC Disbursement when and as the same shall become
due and payable and such failure to pay such reimbursement obligation shall continue
unremedied for a period of two Business Days;




     (b)   the Borrower or the Term Borrower, as the case may be, shall fail to pay any
interest on any Loan or unreimbursed LC Disbursement or any fee or any other amount (other
than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for
a period of five days;




     (c)   any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or the Guarantee
Agreement or any amendment or modification hereof or thereof or waiver hereunder or









 



56



thereunder, or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or the Guarantee Agreement or any amendment
or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have
been incorrect in any material respect when made or deemed made;




     (d)   the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.03 (with respect to the Borrower’s existence) or 5.08 or in
Article VI;




     (e)   the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause (a), (b) or (d)
of this Article), and such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which notice will be given at
the request of any Lender);




     (f)   the Borrower or any Subsidiary shall fail to make any payment of principal or
interest, regardless of amount, in respect of any Material Indebtedness, when and as the
same shall become due and payable beyond the period (without giving effect to any
extensions, waivers, amendments or other modifications of or to such period) of grace, if
any, provided in the instrument or agreement under which such Material Indebtedness was
created;




     (g)   any event or condition occurs (after giving effect to any applicable grace
periods and after giving effect to any extensions, waivers, amendments or other
modifications of any applicable provision or agreement) that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or permits the
holder or holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause, with the giving of an acceleration or similar notice if required, any
Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness to the extent such
Indebtedness is paid when due;




     (h)   an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or
any Subsidiary or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be entered;
provided, however, that the occurrence of any of the events specified in
this paragraph (h) with respect to any Person other than the Borrower shall not be deemed to
be an Event of Default unless (x) the net assets of such Person, determined in accordance
with GAAP, shall have exceeded $20,000,000 as of the date of the most recent audited
financial statements delivered to the Lenders pursuant to Section 5.01 or









 



57



on the date of
occurrence of any such event and/or (y) the aggregate net assets of all Loan Parties and
other Subsidiaries in respect of which any of the events specified in this paragraph (h) and
in paragraphs (i) and (j) of this Article VII shall have occurred shall have exceeded
$50,000,000 as of the date of the most recent audited financial statements delivered to the
Lenders pursuant to Section 5.01 or on the date of occurrence of any such event;




     (i)   the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the foregoing;
provided, however, that the occurrence of any of the events specified in
this paragraph (i) with respect to any Person other than the Borrower shall not be deemed to
be an Event of Default unless (x) the net assets of such Person, determined in accordance
with GAAP, shall have exceeded $20,000,000 as of the date of the most recent audited
financial statements delivered to the Lenders pursuant to Section 5.01 or on the date of
occurrence of any such event and/or (y) the aggregate net assets of all Loan Parties and
other Subsidiaries in respect of which any of the events specified in this paragraph (i) and
in paragraphs (h) and (j) of this Article VII shall have occurred shall have exceeded
$50,000,000 as of the date of the most recent audited financial statements delivered to the
Lenders pursuant to Section 5.01 or on the date of occurrence of any such event;




     (j)   the Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due; provided,
however, that the occurrence of any of the events specified in this paragraph (j)
with respect to any Person other than the Borrower shall not be deemed to be an Event of
Default unless (x) the net assets of such Person, determined in accordance with GAAP, shall
have exceeded $20,000,000 as of the date of the most recent audited financial statements
delivered to the Lenders pursuant to Section 5.01 or on the date of occurrence of any such
event and/or (y) the aggregate net assets of all Loan Parties and other Subsidiaries in
respect of which any of the events specified in this paragraph (j) and in paragraphs (h) and
(i) of this Article VII shall have occurred shall have exceeded $50,000,000 as of the date
of the most recent audited financial statements delivered to the Lenders pursuant to Section
5.01 or on the date of occurrence of any such event;




     (k)   one or more judgments for the payment of money in an aggregate amount (not paid
or covered by insurance) in excess of $50,000,000 shall be rendered against the Borrower,
any Subsidiary or any combination thereof and (i) the same shall remain undischarged for a
period of 60 consecutive days from the entry thereof during which execution shall not be
effectively stayed or bonded, or (ii) any action shall be legally









 



58



taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any
such judgment;




     (l)   an ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect;




     (m)   Lauren, his estate or Persons related to him by blood, adoption or marriage
and/or trusts or other entities principally for the benefit of any of the foregoing (the
“Lauren Interests”) shall cease to own in the aggregate, directly or indirectly
either (x) Voting Stock of the Borrower having the voting power to elect a majority of the
Board of Directors of the Borrower or (y) Voting Stock representing more than 25% of the
voting power of the Borrower’s Equity Interests; or




     (n)   the Guarantee Agreement ceases to be in full force and effect;


then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower
described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.




ARTICLE VIII




The Administrative Agent




          Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.




          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.










 



59




          The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in or in connection
with this Agreement, (ii) the contents of any certificate, report or other document delivered
hereunder or in connection herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Administrative Agent.




          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.




          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.










 



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          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right, with the consent
of the Borrower, to appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was acting as
Administrative Agent.




          Each Lender (including each Issuing Bank) acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender (including each Issuing Bank) also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.




          The Syndication Agents shall not have any duties or responsibilities hereunder in their
capacity as such.




ARTICLE IX




Miscellaneous




          SECTION 9.01.   Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein and in the Guarantee Agreement shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:





     (i)    if to the Borrower or the Term Borrower, to Polo Ralph Lauren Corporation, 650
Madison Avenue, New York, New York 10022, Attention of Tracey Travis, Senior Vice President,
Finance and Chief Financial Officer (Telecopy No. (212) 318-7705);









 



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     (ii)    if to the Administrative Agent, to JPMorgan Chase Bank, Loan and Agency
Services Group, 1111 Fannin, 10th Floor, Houston, Texas, 77002, Attention of
Debbie Meche (Telecopy No. (713) 750-2938), with a copy to JPMorgan Chase Bank, 1411
Broadway, 5th Floor, New York 10018, Attention of Paul O’Neill (Telecopy No.
(212) 391-7118);




     (iii)    if to the Administrative Agent regarding the Term Loan, to J.P. Morgan Europe
Limited, 125 London Wall, London EC2Y 5AJ, Attention of Loans Agency (Telecopy No. 44 207
777 2360); and




     (iv)    if to any other Lender or any Issuing Bank, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.



          (b)   Notices and other communications to the Lenders (including any Issuing Bank) hereunder
may be delivered or furnished to the Lenders through the Administrative Agent by electronic
communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless
otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.




          (c)   Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case of any Lender, by
notice to the Administrative Agent and the Borrower). All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement shall be deemed to have
been given on the date of receipt.




          SECTION 9.02.   Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, any Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the Guarantee
Agreement are cumulative and are not exclusive of any rights or remedies that they would otherwise
have. No waiver of any provision of this Agreement or the Guarantee Agreement or consent to any
departure by the Borrower or any Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or
any Issuing Bank may have had notice or knowledge of such Default at the time.




          (b)   Neither this Agreement nor the Guarantee Agreement nor any provision hereof or thereof
may be waived, amended or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, the Term Borrower or the Guarantors, as the










 



62



case may be, and the Required
Lenders or by the Borrower, the Term Borrower or the Guarantors, as the case may be, and the
Administrative Agent with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv) change Section
2.16(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) release any material Guarantors from their
obligations under the Guarantee Agreement (including the Borrower) without the written consent of
each Lender (except that no approval of the Lenders shall be required to release a Guarantor in
connection with the disposition of all the capital stock of such Guarantor not prohibited by the
Loan Documents) or (vi) change any of the
provisions of this Section or the definition of “Required Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the written consent of
each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or an Issuing Bank without the
prior written consent of the Administrative Agent or such Issuing Bank, as the case may be.




          (c)   In the event that, at any time when the Borrower has satisfied all applicable conditions
set forth in Section 4.02, a Lender for any reason fails, refuses or has given notice to the
Administrative Agent and/or the Borrower that it refuses, to fund its portion of a Borrowing (a
“Defaulting Lender”), then, until such time as such Defaulting Lender has funded its
portion of such Borrowing, or the Administrative Agent or all other Lenders, as applicable, have
received payment in full (whether by repayment or prepayment) of the principal and interest due in
respect of such Borrowing, such Defaulting Lender shall not have the right to vote regarding any
issue on which voting is required or advisable under this Agreement or the Guarantee Agreement.




          SECTION 9.03.   Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and J.P. Morgan
Securities, Inc., as sole bookrunner and sole lead arranger, including the reasonable fees, charges
and disbursements of one domestic counsel for the Administrative Agent and J.P. Morgan Securities,
Inc., collectively, in connection with the syndication of the credit facilities provided for
herein, (provided that syndication expenses for each of the Term Loan and the Revolving Loans other
than counsel fees shall not exceed $10,000) the preparation of this Agreement or any amendments,
modifications or waivers of the provisions hereof and (ii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, any Issuing Bank or any Lender, including the reasonable
fees, charges and disbursements of one domestic counsel and one foreign counsel, as necessary, for
the Administrative Agent, any Issuing Bank or any Lender, in connection with the enforcement or
preservation of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations
in respect of such Loans or Letters of Credit .










 



63




          (b)   The Borrower shall indemnify the Administrative Agent, each Issuing Bank and each
Lender, and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any
of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence, bad faith or willful misconduct
of such Indemnitee or such Indemnitee’s employer or any Affiliate of either thereof or any of their
respective officers, directors, employees, advisors or agents.




          (c)   To the extent that the Borrower or Term Borrower fails to pay any amount required to be
paid by it to the Administrative Agent or any Issuing Bank under paragraph (a) or (b) of this
Section, but without affecting the Borrower’s or the Term Borrower’s obligations thereunder, each
Lender severally agrees to pay to the Administrative Agent or such Issuing Bank, as the case may
be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent or such Issuing Bank in its
capacity as such.




          (d)   To the extent permitted by applicable law, neither the Borrower nor the Term Borrower
shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.




          (e)   All amounts due under this Section shall be payable promptly after written demand
therefor.




          SECTION 9.04.   Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of
Credit), except that (i) neither the Borrower nor the Term Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each










 



64



Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null
and void) except pursuant to a transaction permitted by this Agreement and (ii) no Lender
(including any Issuing Bank) may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of
Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative Agent, each
Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.




          (b)   (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld or delayed) of:





          (A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default under clause (a), (b), (h) or (i) of Article VII has occurred and is
continuing, any other assignee; and




          (B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Commitment to an assignee
that is a Lender with a Commitment immediately prior to giving effect to such assignment or
to an Affiliate of such Lender.



          (ii)  Assignments shall be subject to the following additional conditions:





          (A) except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or,
in the case of Term Loans, ¥500,000,000) unless each of the Borrower or the Term Borrower,
as the case may be, and the Administrative Agent otherwise consent, provided that no
such consent of the Borrower or the Term Borrower shall be required if an Event of Default
under clause (a), (b), (h) or (i) of Article VII has occurred and is continuing;




          (B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;




          (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500;









 



65



          (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and.




          (E) no assignment, (including any assignment to a Lender, an Affiliate of a
Lender or an Approved Fund) shall be permitted if, immediately after giving effect thereto,
amounts would become payable by the Borrower under Section 2.13 or 2.15 (including amounts
payable under Section 2.15 in respect of withholding taxes) that are in excess of those that
would be payable under such Section in respect of the amount assigned if such assignment
were not made.



          For the purposes of this Section 9.04(b), the term “Approved Fund” has the following meaning:




          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.




          (iii)  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement (including, in the
case of any Foreign Lender (including each Issuing Bank that is a Foreign Lender), obligations
under Section 2.15(e)), and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03); provided,
however, that no such assignment or transfer shall be deemed to be a waiver of any rights
which the Borrower, the Term Borrower, the Administrative Agent or any other Lender shall have
against such Lender. Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (c) of this Section.




          (iv)  The Administrative Agent, acting for this purpose as an agent of the Borrower and the
Term Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrower, the Term Borrower, the Administrative Agent, the
Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the Borrower, the Term
Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.










 



66




          (v)  Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this paragraph.




          (c)   (i) Any Lender may, without the consent of the Borrower, the Term Borrower, the
Administrative Agent or any Issuing Bank, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the performance of such
obligations, (C) the Borrower, the Term Borrower, the Administrative Agent, the applicable Issuing
Bank 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 (D) if the aggregate
amount of a participation sold is less than €50,000 (or its equivalent thereof in another currency)
and at any time it is a requirement under Dutch law on the date such participation is sold to a
Participant, such particiapnt is a professional market party (professionele marktpartij) within the
meaning of the Dutch Financial Supervision Act (Wet financieel toezicht). Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clauses (i), (ii),(iii),(iv) and (vi) of the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower and the Term Borrower agree that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.16(c) as though it were a Lender.




          (ii)  A Participant shall not be entitled to the benefits of Section 2.13, 2.14 or 2.15 unless
such Participant shall have complied with the requirements of such Section; provided, that in any
case in which a Participant is so entitled, any such Participant shall not be entitled to receive
any greater payment under Section 2.13, 2.14 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.15 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower or the Term Borrower, as
the case may be, to comply with Section 2.15(e) as though it were a Lender.










 



67




          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.




          SECTION 9.05.   Survival. All representations and warranties made by the Borrower and
the Term Borrower herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall survive the execution and delivery of this Agreement and the
making of any Loans and issuance of any Letters of Credit, and shall terminate at such time as no
principal of or accrued interest on any Loan or any fee or any other amount payable under this
Agreement (other than contingent indemnification obligations that are not due and payable) is
outstanding and unpaid, no Letter of Credit is outstanding and the Commitments have expired or been
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.




          SECTION 9.06.   Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.




          SECTION 9.07.   Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.




          SECTION 9.08.   Right of Setoff. If an Event of Default shall have occurred and be
continuing, 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 obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or the
Term Borrower against any of and all the obligations of the Borrower or the Term Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of whether or







 



68




not such
Lender shall have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.




          SECTION
9.09.   Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the
State of New York.




          (b)   Each party to this Agreement hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, 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 such New York State 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 party hereto may otherwise have to bring any action or proceeding relating to this
Agreement against any other party hereto or its properties in the courts of any jurisdiction.




          (c)   Each party to this Agreement hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which 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 in any court referred to in paragraph (b) of this Section. 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.




          (d)   Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.




          SECTION 9.10.   WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.









 



69




          SECTION 9.11.   Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.




          SECTION 9.12.   Confidentiality. Each of the Administrative Agent, each Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors, in each case who
have a need to know such Information in accordance with customary banking practices (it being
understood that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential), (b) to the extent
requested by any regulatory authority, (c) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process, (d) to any other party to this Agreement, (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, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the Administrative Agent, any
Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower which
is not subject to a confidentiality obligation known to the Administrative Agent and the Lenders
with respect to such information. . For the purposes of this Section, “Information” means all
information received from the Borrower or any Subsidiary relating to the Borrower, any Subsidiary
or their respective businesses, other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure
by the Borrower or any Subsidiary; provided that, in the case of information received from
the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.




          SECTION 9.13.   Satisfaction. (a) The obligation of the Borrower hereunder and in
respect of the Letters of Credit to make payments in dollars shall not be discharged or satisfied
by any tender or recovery pursuant to any judgment expressed in or converted into any currency
other than dollars or any other realization in such currency, whether as proceeds of set-off,
security, guarantee, distributions, or otherwise, except to the extent to which such tender,
recovery or realization shall result in the effective receipt by the Administrative Agent and the
Lenders of the full amount of dollars expressed to be payable hereunder and in respect of the
Letters of Credit and the Borrower shall indemnify the Administrative Agent, the Issuing Banks and
each Lender (as an alternative or additional cause of action) for the amount (if any) by which such
effective
receipt shall fall short of the full amount of dollars expressed to be payable hereunder and
in respect of the Letters of Credit and such obligation to indemnify shall not be







 



70




affected by
judgment being obtained for any other sums due under this Agreement and in respect of the Letters
of Credit.




          (b) The obligation of the Term Borrower hereunder to make payments in Yen shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than yen or any other realization in such currency, whether as
proceeds of set-off, security, guarantee, distributions, or otherwise, except to the extent to
which such tender, recovery or realization shall result in the effective receipt by the
Administrative Agent and the Lenders of the full amount of Yen expressed to be payable hereunder
and the Borrower shall indemnify the Administrative Agent and each Lender (as an alternative or
additional cause of action) for the amount (if any) by which such effective receipt shall fall
short of the full amount of Yen expressed to be payable hereunder and such obligation to indemnify
shall not be affected by judgment being obtained for any other sums due under this Agreement.




          SECTION 9.14.    Waivers and Agreements Under Original Credit Agreement. (a) The
Lenders which are parties to the Original Credit Agreement (which Lenders constitute the “Required
Lenders” as defined in the Original Credit Agreement) hereby (i) waive the requirement, set forth
in Section 2.07(c) of the Original Credit Agreement, that the Borrower give not less than two
Business Days’ notice of any termination of the Commitments (as defined therein), (ii) acknowledge
and agree that, for purposes of determining the total “Revolving Credit Exposures” (as defined
therein) that would be outstanding thereunder on the date of such termination, the letters of
credit issued thereunder that are listed on Schedule 2.04 shall (as a result of the operation of
the last sentence of Section 2.04(a), which provides that on the Effective Date such letters of
credit shall be deemed to be “Letters of Credit” issued hereunder) on the Effective Date be deemed
no longer outstanding under the Original Credit Agreement and (iii) pursuant to Section 9.02 of the
Original Credit Agreement, consent to the execution and delivery by JPMorgan Chase Bank, N.A., in
its capacity as Administrative Agent (under and as defined in the Original Credit Agreement) for
and on behalf of the Lenders (under and as defined in the Original Credit Agreement), of this
Agreement to evidence or effectuate (as set forth in Section 9.14(b)) the waivers and agreements
set forth in clauses (i) and (ii) above.




          (b) JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent as defined in the
Original Credit Agreement hereby (i) waives, for and on behalf of the Lenders (as defined therein),
the requirement, set forth in Section 2.07(c) of the Original Credit Agreement, that the Borrower
give not less than two Business Days’ notice of any termination of the Commitments (as defined
therein) and (ii) acknowledges and agrees, for and on behalf of the Lenders (as defined therein),
that for purposes of determining the total “Revolving Credit Exposures” (as defined therein) that
would be outstanding thereunder on the date of such termination, the letters of credit issued
thereunder that are listed on Schedule 2.04 shall on the Effective Date be deemed no longer
outstanding under the Original Credit Agreement.




          SECTION 9.15.   Agreement of Lenders. Notwithstanding Section 9.02 of the Credit
Agreement, each Lender (for itself and each of its respective successors and assigns)
which has a Commitment and signs the Amendment and Restatement Agreement hereby agrees that it
will not vote to approve any matter requiring consent or approval of Required Lenders unless such
matter is consented to or approved by Lenders having Revolving Credit Exposures,







 



71




unused Commitments
and outstanding Term Loans representing more than 50% of the sum of the total Revolving Credit
Exposures, unused Commitments and outstanding Term Loans at such time.










 



72



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




	 	 	 	 	 
	 	POLO RALPH LAUREN CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	JPMORGAN CHASE BANK, N.A., individually and as

Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 









 





	 	 	 	 	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK, individually and as 

Syndication
Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BANK OF AMERICA, N.A., individually and as

Syndication Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CITIBANK, N.A., individually and as Syndication Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SUMITOMO MITSUI BANKING 

CORPORATION,
individually
and as Syndication Agent


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DEUTSCHE BANK SECURITIES INC., as Co-Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 





	 	 	 	 	 



	 	 	 	 	 
	 	DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WACHOVIA BANK NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	COMERICA BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	UNION BANK OF CALIFORNIA, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 





	 	 	 	 	 



	 	 	 	 	 
	 	BARCLAYS BANK PLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LASALLE BANK NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 










 





	 	 	 	 	 




COMMITMENTS




	 	 	 	 	 
	LENDER	 	AMOUNT	 
	JPMorgan Chase Bank, N.A.
	 	$	55,000,000	 
	Bank of America, N.A.
	 	$	42,500,000	 
	The Bank of New York
	 	$	42,500,000	 
	Wachovia Bank National Association
	 	$	42,500,000	 
	Citibank N.A.
	 	$	42,500,000	 
	Sumitomo Mitsui Banking Corporation
	 	$	35,000,000	 
	Deutsche Bank AG New York Branch
	 	$	35,000,000	 
	LaSalle Bank National Association
	 	$	27,500,000	 
	Wells Fargo Bank, N.A.
	 	$	27,500,000	 
	Barclays Bank PLC
	 	$	20,000,000	 
	UBS Loan Finance LLC
	 	$	20,000,000	 
	Union Bank of California, N.A.
	 	$	20,000,000	 
	U.S. Bank National Association
	 	$	20,000,000	 
	Comerica Bank
	 	$	20,000,000	 
	 
	 	 	 
	TOTAL
	 	$	450,000,000.00	 
	 
	 	 	 






TERM LOAN COMMITMENTS




	 	 	 	 	 
	LENDER	 	AMOUNT	 
	JPMorgan Chase Bank, N.A.
	 	¥	3,367,857,143	 
	Bank of America, N.A.
	 	¥	3,367,857,143	 
	The Bank of New York
	 	¥	2,342,857,143	 
	Citibank N.A.
	 	¥	2,342,857,143	 
	Sumitomo Mitsui Banking Corporation
	 	¥	2,342,857,143	 
	Deutsche Bank AG New York Branch
	 	¥	2,342,857,143	 
	LaSalle Bank National Association
	 	¥	1,464,285,714	 
	Wells Fargo Bank, N.A.
	 	¥	1,464,285,714	 
	Union Bank of California, N.A.
	 	¥	1,464,285,714	 
	 
	 	 	 
	TOTAL
	 	¥	20,500,000,000