exv4wxoy



 






Exhibit 4(o)




 

 






CREDIT AGREEMENT




dated as of




April 7, 2005




among




J. C. PENNEY COMPANY, INC.,

J. C. PENNEY CORPORATION, INC.,

J. C. PENNEY PURCHASING CORPORATION,




The Lenders Party Hereto,




and




JPMORGAN CHASE BANK, N.A.

as Administrative Agent,




and




WACHOVIA BANK, NATIONAL ASSOCIATION,

as LC Agent














J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger




and




BANK OF AMERICA, N.A., CREDIT SUISSE FIRST BOSTON, and WACHOVIA

BANK NATIONAL ASSOCIATION,

as Co-Syndication Agents




 

 






[CS&M Reference No. 6701-489]




 i




 









 








Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I
	 
	 	 	 	 	 	 
	Definitions
	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Defined Terms
	 	 	1	 
	SECTION 1.02.

	 	Classification of Loans and Borrowings
	 	 	19	 
	SECTION 1.03.

	 	Terms Generally
	 	 	19	 
	SECTION 1.04.

	 	Accounting Terms; GAAP
	 	 	20	 
	 
	ARTICLE II
	 
	 	 	 	 	 	 
	The Credits
	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Commitments
	 	 	20	 
	SECTION 2.02.

	 	Loans and Borrowings
	 	 	20	 
	SECTION 2.03.

	 	Requests for Revolving Borrowings
	 	 	21	 
	SECTION 2.04.

	 	Swingline Loans
	 	 	22	 
	SECTION 2.05.

	 	Letters of Credit
	 	 	23	 
	SECTION 2.06.

	 	Funding of Borrowings
	 	 	29	 
	SECTION 2.07.

	 	Interest Elections
	 	 	29	 
	SECTION 2.08.

	 	Termination and Reduction of Commitments; Increase in Commitments
	 	 	31	 
	SECTION 2.09.

	 	Repayment of Loans; Evidence of Debt
	 	 	33	 
	SECTION 2.10.

	 	Prepayment of Loans
	 	 	34	 
	SECTION 2.11.

	 	Fees
	 	 	34	 
	SECTION 2.12.

	 	Interest
	 	 	35	 
	SECTION 2.13.

	 	Alternate Rate of Interest
	 	 	36	 
	SECTION 2.14.

	 	Increased Costs
	 	 	36	 
	SECTION 2.15.

	 	Break Funding Payments
	 	 	37	 
	SECTION 2.16.

	 	Taxes
	 	 	38	 
	SECTION 2.17.

	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	40	 
	SECTION 2.18.

	 	Mitigation Obligations; Replacement of Lenders
	 	 	42	 
	SECTION 2.19.

	 	Borrowing Subsidiaries
	 	 	45	 
	 
	ARTICLE III
	 
	 	 	 	 	 	 
	Representations and Warranties
	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Organization; Powers
	 	 	45	 
	SECTION 3.02.

	 	Authorization; Enforceability
	 	 	45	 
	SECTION 3.03.

	 	Governmental Approvals; No Conflicts
	 	 	45	 
	SECTION 3.04.

	 	Financial Condition; No Material Adverse Change
	 	 	46	 






ii




 









 








	 	 	 	 	 	 	 
	SECTION 3.05.

	 	Properties
	 	 	46	 
	SECTION 3.06.

	 	Litigation and Environmental Matters
	 	 	46	 
	SECTION 3.07.

	 	Compliance with Laws and Agreements
	 	 	47	 
	SECTION 3.08.

	 	Investment and Holding Company Status
	 	 	47	 
	SECTION 3.09.

	 	Taxes
	 	 	47	 
	SECTION 3.10.

	 	ERISA
	 	 	47	 
	SECTION 3.11.

	 	Disclosure
	 	 	47	 
	SECTION 3.12.

	 	Material Subsidiaries
	 	 	48	 
	 
	ARTICLE IV
	 
	 	 	 	 	 	 
	Conditions
	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Effective Date
	 	 	48	 
	SECTION 4.02.

	 	Each Credit Event
	 	 	49	 
	SECTION 4.03.

	 	Borrowing Subsidiaries
	 	 	49	 
	 
	ARTICLE V
	 
	 	 	 	 	 	 
	Affirmative Covenants
	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Financial Statements; Ratings Change and Other Information
	 	 	50	 
	SECTION 5.02.

	 	Notices of Material Events
	 	 	51	 
	SECTION 5.03.

	 	Existence; Conduct of Business
	 	 	52	 
	SECTION 5.04.

	 	Payment of Obligations
	 	 	52	 
	SECTION 5.05.

	 	Maintenance of Properties
	 	 	52	 
	SECTION 5.06.

	 	Insurance
	 	 	52	 
	SECTION 5.07.

	 	Books and Records; Inspection Rights; Inventory Audits
	 	 	52	 
	SECTION 5.08.

	 	Compliance with Laws
	 	 	52	 
	SECTION 5.09.

	 	Use of Proceeds and Letters of Credit
	 	 	53	 
	 
	ARTICLE VI
	 
	 	 	 	 	 	 
	Negative Covenants
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Subsidiary Indebtedness
	 	 	53	 
	SECTION 6.02.

	 	Liens
	 	 	53	 
	SECTION 6.03.

	 	Fundamental Changes
	 	 	55	 
	SECTION 6.04.

	 	Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	55	 
	SECTION 6.05.

	 	Sale and Leaseback Transactions
	 	 	56	 
	SECTION 6.06.

	 	Restrictive Agreements
	 	 	56	 
	SECTION 6.07.

	 	Leverage Ratio
	 	 	57	 
	SECTION 6.08.

	 	Fixed Charge Coverage Ratio
	 	 	57	 






iii




 









 








	 	 	 	 	 	 	 
	ARTICLE VII
	 
	 	 	 	 	 	 
	Events of Default
	 
	 	 	 	 	 	 
	SECTION 7.01.

	 	Events of Default
	 	 	57	 
	SECTION 7.02.

	 	Exclusion of Immaterial Subsidiaries
	 	 	59	 
	 
	ARTICLE VIII
	 
	 	 	 	 	 	 
	The Administrative Agent
	 
	 	 	 	 	 	 
	ARTICLE IX
	 
	 	 	 	 	 	 
	Miscellaneous
	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	Notices
	 	 	62	 
	SECTION 9.02.

	 	Waivers; Amendments
	 	 	62	 
	SECTION 9.03.

	 	Expenses; Indemnity; Damage Waiver
	 	 	63	 
	SECTION 9.04.

	 	Successors and Assigns
	 	 	65	 
	SECTION 9.05.

	 	Survival
	 	 	68	 
	SECTION 9.06.

	 	Counterparts; Integration; Effectiveness
	 	 	68	 
	SECTION 9.07.

	 	Severability
	 	 	68	 
	SECTION 9.08.

	 	Right of Setoff
	 	 	68	 
	SECTION 9.09.

	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	69	 
	SECTION 9.10.

	 	WAIVER OF JURY TRIAL
	 	 	69	 
	SECTION 9.11.

	 	Headings
	 	 	70	 
	SECTION 9.12.

	 	Confidentiality
	 	 	70	 
	SECTION 9.13.

	 	Interest Rate Limitation
	 	 	70	 
	SECTION 9.14.

	 	USA Patriot Act
	 	 	71	 
	SECTION 9.15.

	 	Waiver Under Existing Credit Agreement
	 	 	71	 






iv




 









 








SCHEDULES:




Schedule 1.01 — Existing Letters of Credit

Schedule 2.01 — Commitments

Schedule 2.05 — Initial Issuing Banks

Schedule 3.06 — Disclosed Matters

Schedule 3.12 — Material Subsidiaries

Schedule 6.02 — Existing Liens

Schedule 6.06 — Existing Restrictions





EXHIBITS:




Exhibit A — Form of Assignment and Assumption

Exhibit B — Form of Opinion of Counsel of Loan Parties

Exhibit C — Form of Guarantee Agreement





 iv





 










 







     CREDIT AGREEMENT dated as of April 7, 2005, among J. C. PENNEY
COMPANY, INC., J. C. PENNEY CORPORATION, INC., J. C. PENNEY PURCHASING
CORPORATION, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent, and WACHOVIA BANK, NATIONAL ASSOCIATION, as LC
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.




          “Account Parties” means the Parent Borrower and Purchasing.




          “Additional Costs” has the meaning assigned to such term in Section
2.14(c).




          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 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 greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and
(c) 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, the Base CD Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.




          “Applicable Lending Office” means, for each Issuing Bank or Lender, the office or
branch of such Issuing Bank or Lender (or an affiliate of such Issuing Bank or Lender) designated
in an Administrative Questionnaire delivered by such Issuing Bank or Lender to the




 









 








  2



Administrative Agent or such other office or branch of such Issuing Bank or Lender as such Issuing
Bank or Lender may, from time to time, in accordance with the terms of this Agreement, specify to
the Administrative Agent, the Borrowers and the Account Parties as the office or branch by which
its Letters of Credit, Loans or Commitments, as applicable, are to be made and maintained.




          “Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment. 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 ABR Loan or Eurodollar
Revolving Loan, or with respect to the participation fees in respect of Stand-by Letters of Credit
or the commitment fees payable hereunder, as the case may be, the applicable rate per annum set
forth below under the caption “ABR Spread”, “Eurodollar Spread”, “Stand-by Letter of Credit Fee
Rate” or “Commitment Fee Rate”, as the case may be, based upon the ratings (in each case, a
“Rating”) assigned by Moody’s and S&P, respectively, applicable on such date to the Index Debt:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Stand by Letter	 	 	 	 
	     Ratings	 	 	 	 	 	Eurodollar	 	 	of Credit Fee	 	 	Commitment Fee	 
	Moody’s/S&P	 	ABR Spread	 	 	Spread	 	 	Rate	 	 	Rate	 
	Category 1
	 	 	0.000	%	 	 	0.625	%	 	 	0.625	%	 	 	0.125	%
	3Baa1/BBB+
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 2
	 	 	0.000	%	 	 	0.750	%	 	 	0.750	%	 	 	0.150	%
	Baa2/BBB
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 3
	 	 	0.000	%	 	 	0.875	%	 	 	0.875	%	 	 	0.175	%
	Baa3/BBB-
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 4
	 	 	0.000	%	 	 	1.000	%	 	 	1.000	%	 	 	0.200	%
	Ba1/BB+
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Category 5
	 	 	0.250	%	 	 	1.250	%	 	 	1.250	%	 	 	0.250	%
	£Ba2/BB
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






          For purposes of the foregoing, (a) if either Moody’s or S&P shall not have in effect a
Rating for the Parent Borrower (other than by reason of the circumstances referred to in the last
sentence of this definition), then such rating agency shall be deemed to have established a Rating
in Category 5 (unless otherwise agreed to by the Required Lenders); (b) if the Ratings established
or deemed to have been established by Moody’s and S&P for the Parent Borrower shall fall within
different Categories, the Applicable Rate shall be based on the higher of the two Ratings unless
one of the two Ratings is two or more Categories lower than the other, in which case the Applicable
Rate shall be determined by reference to the Category next below that of the higher of the two
Ratings; and (c) if the Ratings established or deemed to have been established by Moody’s and S&P
for the Parent Borrower 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




 









 








  3



which it is first announced by the applicable rating agency, irrespective of when notice of such
change shall have been furnished by Holdings or the Parent Borrower to the Administrative 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 either such rating agency shall cease to be in the business of rating
corporate debt obligations, the Parent 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 agency 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.




          “Assessment Rate” means, for any day, the annual assessment rate in effect on such day
that is payable by a member of the Bank Insurance Fund classified as “well-capitalized” and within
supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the offices of such member in the
United States; provided that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be representative of the
cost of such insurance to the Lenders.




          “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.




          “Augmenting Lender” has the meaning assigned to such term in Section
2.08(d).




          “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.




          “Base CD Rate” means the sum of (a) the Three-Month Secondary CD Rate multiplied by
the Statutory Reserve Rate plus (b) the Assessment Rate.




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




          “Borrowers” means the Parent Borrower and, if eligible to be a Borrower at the time in
accordance with Section 2.19, each Borrowing Subsidiary.




          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in
effect or (b) a Swingline Loan.




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




 









 








  4




          “Borrowing Subsidiary” means any Subsidiary with respect to which a Subsidiary
Borrower Election shall have been executed and delivered as provided in Section 2.19 and with
respect to which a Subsidiary Borrower Termination has not been executed as provided in Section
2.19.




          “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 Eurodollar Loan, the term
“Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the London interbank market.




          “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 the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person other than Holdings or a wholly owned Subsidiary of
Holdings of any Equity Interest in the Parent Borrower; (b) the
acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than any retirement or
savings plan for employees of Holdings and its Subsidiaries, of Equity Interests representing more
than 40% of either the aggregate ordinary voting power or the aggregate equity value represented by
the issued and outstanding Equity Interests in Holdings, other than pursuant to a Permitted Holding
Company Reorganization; or (c) occupation of a majority of the seats (other than vacant seats) on
the board of directors of Holdings by Persons who were neither (i) nominated by the board of
directors of Holdings nor (ii) appointed by directors so nominated.




          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule 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 2.14(b), by any lending
office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) 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.




          “Change in Location” has the meaning assigned to such term in Section 2.16.




          “Charges” has the meaning assigned to such term in Section 9.13.




          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.




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




 









 








  5




          “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans 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 or increased from time to time pursuant
to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth
on Schedule 2.01, 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
$1,200,000,000.




          “Commitment Increase” has the meaning assigned to such term in Section 2.08(e).




          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus (a) without duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of (i) consolidated interest expense for such
period plus (ii) consolidated
financing costs associated with securitization programs for such
period plus (iii) consolidated
income tax expense for such period plus (iv) all amounts attributable to depreciation and
amortization for such period plus (v) any extraordinary or other non-recurring non-cash charges (it
being understood that the write-down or write-off of any inventory or accounts receivable shall not
be construed to be a non-recurring non-cash charge) for such period,
provided that in the event
Holdings or any Subsidiary makes any cash payment in respect of any such non-cash charge, such cash
payment shall be deducted from Consolidated EBITDA in the period in which such payment is made, and
minus (b) without duplication and to the extent included in determining such Consolidated Net
Income, any extraordinary or other non-recurring gains for such period, all determined on a
consolidated basis in accordance with GAAP.




          “Consolidated Interest Expense” means, for any period, the excess of (a) the interest
expense (including imputed interest expense in respect of Capital Lease Obligations) of Holdings
and the Subsidiaries for such period, including any interest that is capitalized rather than
expensed for such period minus (b) interest income of Holdings and the Subsidiaries for such
period, all determined on a consolidated basis in accordance with GAAP.




          “Consolidated Net Income” means, for any period, the net income or loss of Holdings
and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than Holdings) in which
any other Person (other than Holdings or any Subsidiary or any director holding qualifying shares
in compliance with applicable law) owns an Equity Interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings or any of the Subsidiaries during such
period, and (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary
or is merged into or consolidated with Holdings or any Subsidiary or the date that such Person’s
assets are acquired by Holdings or any Subsidiary.




          “Consolidated Rent Expense” means, for any period, the rental expense in respect of
stores and other real property (other than Capital Lease Obligations) deducted in determining
Consolidated Net Income for such period.




 









 








  6




          “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.




          “Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.




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




          “Effective Date” means the date on which the conditions specified in Section 4.01 are
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, the management, release or threatened release of any Hazardous Material or to
health and safety matters.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of
Holdings 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, and the final rules and regulations promulgated thereunder, as from time to time in
effect.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with Holdings, 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




 









 








  7



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 Holdings 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 Holdings or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan
or Plans (other than a termination initiated by Holdings or an ERISA Affiliate) or to appoint a
trustee to administer any Plan; (f) the incurrence by Holdings 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 Holdings or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Holdings or any ERISA Affiliate of any notice, concerning the 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.




          “Eurodollar”, 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.




          “Event of Default” has the meaning assigned to such term in Section 7.01.




          “Excluded Subsidiary” means, at any date, any Realty Company that is not a Material
Subsidiary as of such date. For purposes of determining whether a Realty Company is a Material
Subsidiary, the computations required by the definition of the term “Material Subsidiary” shall be
made including the accounts of all Excluded Subsidiaries.




          “Existing Credit Agreement” means the Credit Agreement dated as of May 31, 2002, as
amended, among Holdings, the Account Parties, the financial institutions named therein as lenders,
the Administrative Agent, and Wachovia Bank, National Association, as LC Agent.




          “Existing Indentures” means (a) the Indenture dated as of October 1, 1982, as amended,
between the Parent Borrower and U.S. Bank National Association (successor to Bank of America
National Trust and Savings Association), as trustee, and (b) the Indenture dated as of April 1,
1994, as amended, between the Parent Borrower and U.S. Bank National Association (successor to Bank
of America National Trust and Savings Association), as trustee.




          “Existing Letter of Credit” means any letter of credit that is outstanding under the
Existing Credit Agreement on the Effective Date.




          “Extended Letter of Credit” has the meaning assigned to such term in Section
2.05(k).




          “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




 









 








  8



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 standing selected by it.




          “Financial Officer” means the chief financial officer, principal accounting officer,
vice president-chief accountant, treasurer, assistant treasurer or controller of Holdings or the
Parent Borrower.




          “Fitch” means Fitch Ratings.




          “Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) Consolidated
EBITDA plus Consolidated Rent Expense to (b) Consolidated Interest Expense plus Consolidated Rent
Expense, in each case for such period.




          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Parent 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 that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the District of
Columbia.




          “Funded Indebtedness” of any Person means, at any date for the determination thereof,
without duplication, the sum of (a) the outstanding aggregate principal amount of all Indebtedness
of such Person for borrowed money or of a type described in clause (c) or (d) of the definition of
the term “Indebtedness”, (b) the outstanding aggregate principal amount of all Indebtedness of
others of the type described in the preceding clause (a) for the payment of which such Person is
responsible or liable as guarantor or otherwise and (c) the Securitization Amount as of such date;
provided that Funded Indebtedness shall not include (i) any obligations under leases or any
guarantees of obligations of others under leases, (ii) any obligations of such Person in respect of
letters of credit, (iii) except as provided in clause (b) above, any contingent obligations of such
Person and (iv) any Indebtedness of Holdings to any Subsidiary or of any Subsidiary to Holdings or
any other Subsidiary. It is understood that for the purposes of this definition the term
“principal” when used at any date with respect to any Indebtedness issued at a discount shall mean
the amount of principal of such Indebtedness that could be declared due and payable on that date
upon the occurrence of one or more events permitting the acceleration of such Indebtedness pursuant
to the terms of such Indebtedness.




          “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 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.




 









 








  9




          “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.




          “Guarantee Agreement” means the Guarantee Agreement among the Guarantee Parties and
the Administrative Agent, substantially in the form of Exhibit C.




          “Guarantee Parties” means Holdings, the Parent Borrower and any other Subsidiary
that becomes a party to the Guarantee Agreement as a guarantor thereunder.




          “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 Environmental Law.




          “Holdings” means J. C. Penney Company, Inc., a Delaware corporation.




          “Increase Effective Date” has the meaning assigned to such term in Section
2.08(e).




          “Increasing Lender” has the meaning assigned to such term in Section
2.08(d).




          “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 purchase
price of property or services (excluding current accounts payable incurred in the ordinary course
of business), (e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, 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 and (i) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of




 









 








  10



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.




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




          “Information Memorandum” means the Confidential Information Memorandum dated March,
2005, relating to the Parent Borrower and the Transactions.




          “Initial Loans” has the meaning assigned to such term in Section 2.08(e).




          “Interest Election Request” means a request by a Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.07.




          “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the last day of each March, June, September and December, (b) with respect to any Eurodollar
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 Eurodollar 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 and (c) with respect to any Swingline
Loan, the day that such Loan is required to be repaid.




          “Interest Period” means, with respect to any Eurodollar 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 or six months (or, with the
consent of each Lender, nine or twelve months) thereafter, as the applicable Borrower may elect;
provided that (a) 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, in the case of a
Eurodollar Borrowing only, 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 (b) any
Interest Period pertaining to a Eurodollar Borrowing 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 Revolving Borrowing, thereafter shall be
the effective date of the most recent conversion or continuation of such Borrowing.




          “Issuing Bank” means any Lender or Affiliate of a Lender that agrees (as provided in
Section 2.05(i)) to issue Letters of Credit, in its capacity as an issuer of Letters of Credit, and
its respective successors and assigns in such capacity as provided in Section 2.05(i). The initial
Issuing Banks are identified in Schedule 2.05. Subject to the consent of the Parent Borrower, which
consent shall not be unreasonably withheld, any Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by one or more of its Affiliates,





 









 



11


in which case the term
“Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.




     “LC Agent” means Wachovia Bank, National Association.



     “LC Disbursement” means a payment made by an 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 at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Account Parties 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, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption, or as otherwise provided in
Section 2.08(d). Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lenders.



     “Letter of Credit” means any letter of credit issued pursuant to this Agreement. Each Existing
Letter of Credit shall be deemed to constitute a Letter of Credit as of the Effective Date. Each
Letter of Credit shall be either a Trade Letter of Credit or a Stand-by Letter of Credit.



     “Leverage Ratio” means, on any date, the ratio of (a) Funded Indebtedness of Holdings and its
Subsidiaries (on a consolidated basis) as of such date to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters of Holdings ended on such date. For the sole purpose of
determining compliance with Section 6.07, the Parent Borrower may elect (by notice to the
Administrative Agent) to deduct from Funded Indebtedness, on no more than one date of determination
of the Leverage Ratio during the term of this Agreement, an amount equal to the aggregate amount of
cash that, on such date, has been deposited by the Parent Borrower in a collateral account
controlled by the Administrative Agent subject to a perfected Lien to secure the Obligations
pursuant to a security agreement entered into by the Parent Borrower with the Administrative Agent
that is reasonably satisfactory in form and substance to the Administrative Agent; provided that
(i) such deducted amount shall not exceed $500,000,000 and (ii) the cash deposited by the Parent
Borrower in such collateral account shall remain in such collateral account until the next date of
determination of the Leverage Ratio; provided further that if, at such date of determination, a
Default shall have occurred and is continuing, such cash shall remain in such collateral account
(subject to application to the Obligations in accordance with such security agreement) until such
Default is cured or waived.



     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate
appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such
page of such Service, as determined by the Administrative Agent from time to time for purposes
of providing quotations












 





12

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 dollar deposits 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
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits 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 and (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.



     “Loan” means a loan made by a Lender to a Borrower pursuant to this Agreement.



     “Loan Documents” means this Agreement and the Guarantee Agreement.



     “Loan Parties” means Holdings, the Parent Borrower, the Borrowing Subsidiaries, the Account
Parties and any other Person that is a Guarantee Party.



     “Material Adverse Effect” means (a) a materially adverse effect on the business, assets,
operations or condition of Holdings and its Subsidiaries, taken as a whole, (b) a material
impairment of the ability of the Loan Parties to perform their obligations under this Agreement or
(c) a material impairment of the rights of or benefits available to the Lenders under the Loan
Documents (other than any such impairment of rights or benefits that is primarily attributable to
(i) action taken by one or more Lenders (excluding any action against one or more Lenders taken by
Holdings, the Parent Borrower, any Borrowing Subsidiary, any Account Party, their subsidiaries or
their affiliates) or (ii) circumstances that are unrelated to Holdings, the Parent Borrower, any
Borrowing Subsidiary, any Account Party, their Subsidiaries or their Affiliates).



     “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 Holdings 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 Holdings 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 Holdings or such Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.



     “Material Subsidiary” means, at any date of determination, any Subsidiary of Holdings then
having Net Tangible Assets representing more than 3% of the total Net Tangible Assets of Holdings
and its Subsidiaries.



     “Maturity Date” means April 7, 2010.












 




13


     “Maximum Rate” has the meaning assigned to such term in Section 9.13.



     “Merger” has the meaning assigned to such term in the definition of the term “Permitted
Holding Company Reorganization”.



     “Merger Subsidiary” has the meaning assigned to such term in the definition of the term
“Permitted Holding Company Reorganization”.



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



     “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any of Holdings, the Parent Borrower, Purchasing or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make contributions, or has within
any of the preceding plan years made or accrued an obligation to make contributions.



     “Net Tangible Assets” means the aggregate amount at which the assets of Holdings and its
Subsidiaries are reflected, in accordance with GAAP as in effect on the date hereof, on the asset
side of the consolidated balance sheet, as at the close of a monthly accounting period (selected by
the Parent Borrower) ending within the 65 days next preceding the date of determination, of
Holdings and its Subsidiaries (after deducting all valuation and qualifying reserves relating to
such assets), except any of the following described items that may be included among such assets:




	 	(a)  	trademarks, patents,
goodwill and similar intangibles;
	 
	 	(b)  	investments in and
advances to Subsidiaries; and
	 
	 	(c)  	capital lease property rights,




after deducting from such amount current liabilities (other than deferred tax effects) as
reflected, in accordance with GAAP as in effect on the date hereof, on such balance sheet.




     “New Holdco” has the meaning assigned to such term in the definition of the term “Permitted
Holding Company Reorganization”.



     “Non-Increasing Lender” has the meaning assigned to such term in
Section 2.08(d).



     “Non-Material Subsidiary” means, at any date of determination, any
Subsidiary of Holdings that is not a Material Subsidiary.



     “Obligations” has the meaning assigned to such term in the Guarantee Agreement.



     “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 under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.












 




14

     “Parent Borrower” means J. C. Penney Corporation, Inc., a Delaware corporation.



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



     “Participation Amount” has the meaning assigned to such term in Section 2.05(e).



     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed
into law October 26, 2001)).



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



     “Permitted Encumbrances” means:




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




   (b) carriers’, warehousemen’s, mechanics’, landlords’, 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 compliance with
workers’ compensation, unemployment insurance and other social security laws or
regulations;




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




   (e) judgment liens in respect of judgments that do not constitute an Event of Default
under clause (k) of Section 7.01;




   (f) easements, zoning restrictions, 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 Holdings or any
Subsidiary; and




   (g) the special property interest of a consignor in respect of goods subject to
consignment;


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




     “Permitted Holding Company Reorganization” means a transaction pursuant to which (a) a new
subsidiary (“New Holdco”) is organized as a direct or indirect wholly owned












 





15

Subsidiary of Holdings, (b) New Holdco organizes a new subsidiary (the “Merger Subsidiary”), which
subsidiary is a wholly owned Subsidiary of New Holdco and (c) the Merger Subsidiary merges with and
into Holdings (the “Merger”), pursuant to which (i) each outstanding share of capital stock of any
class in Holdings is converted into one share of capital stock of the same class of New Holdco so
that each Person that beneficially owned, directly or indirectly, capital stock of Holdings
immediately prior to the consummation of the Merger continues to beneficially own, directly or
indirectly, the same percentage of capital stock of the same class in New Holdco following the
consummation of the Merger, (ii) each share of capital stock of New Holdco owned by the Parent
Borrower immediately prior to the consummation of the Merger is cancelled and ceases to exist
immediately following the consummation of the Merger, (iii) Holdings becomes a direct wholly owned
subsidiary of New Holdco and (iv) no other Person receives any consideration; provided that no such
transaction shall constitute a “Permitted Holding Company Reorganization” unless, at or prior to
the consummation of the Merger, (A) New Holdco shall become a Guarantee Party and (B) New Holdco,
Holdings, the Parent Borrower and the Administrative Agent shall enter into an amendment to this
Agreement, in form and substance reasonably satisfactory to the Administrative Agent, providing for
(1) the addition of New Holdco as a party to this Agreement as a Loan Party subject to the same
obligations and provisions as are applicable to Holdings hereunder, (2) the substitution of New
Holdco for Holdings in the definition of the term “Change in Control” and in all contexts
applicable to consolidated financial calculations and reporting requirements (including in the
definition of the term “Leverage Ratio”) and (3) the addition of a new paragraph in Section 6.03 to
the effect that New Holdco shall not engage in any business or activity other than the ownership of
all the outstanding shares of capital stock of Holdings and activities incidental thereto and that
New Holdco will not acquire any assets (other than shares of capital stock of Holdings, cash and
Permitted Investments) or incur any liabilities (other than liabilities under the Loan Documents
and other Indebtedness permitted by this Agreement, liabilities imposed by law, including tax
liabilities, and other liabilities incidental to its existence and permitted business and
activities).




     “Permitted Investments” means:




   (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency or
instrumentality thereof);




   (b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, a credit rating of at least
A1 from S&P, P1 from Moody’s or F1 from Fitch;




   (c) investments in certificates of deposit, banker’s acceptances and time deposits
issued or guaranteed by or placed with, and money market deposit accounts issued or offered
by, (i) any domestic or offshore office of any commercial bank organized under the laws of
the United States of America or any State thereof, (ii) any office located within the
United States of America or in a foreign jurisdiction that has a tax treaty with the United
States of America of a commercial bank organized under the laws of another country or (iii)
any office located in London of any commercial bank organized under the laws of the












 




16


United States of America, any Asian country or any European country, in each case which has
a combined capital and surplus and undivided profits of not less than $500,000,000;
provided, however, that investments with any bank that has a combined capital and surplus
and undivided profits of less than $500,000,000 are permitted if the Parent Borrower
maintains a banking relationship with such bank;




   (d) fully collateralized 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; and




   (e) money market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 and (ii) have
portfolio assets of at least $3,000,000,000; provided, that investments in any money
market fund with portfolio assets of less than $3,000,000,000 are permitted if such fund
has received a rating of AAA from S&P or Aaa from Moody’s.



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



     “Plan” means any employee benefit pension plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code that is maintained for employees of
Holdings or any ERISA Affiliate.



     “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.



     “Proposed Effective Date” has the meaning assigned to such term in Section 2.08(d).



     “Purchasing” means J. C. Penney Purchasing Corporation, a New York corporation.



     “Rating” has the meaning assigned to such term in the definition of the term “Applicable
Rate”.



     “Realty Company” means each of JCP Realty Inc. and its Subsidiaries that is principally
engaged in the business of managing and owning real estate and real estate-related interests.



     “Register” has the meaning assigned to such term in clause (iv) of Section 9.04(b).












 





17


     “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.



     “Relevant Date” has the meaning assigned to such term in Section 2.16.



     “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.



     “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 and Swingline
Exposure at such time.



     “Revolving Loan” means a Loan made pursuant to Section 2.01.



     “Securitization Amount” means, at any date of determination thereof and in respect of any
securitization of accounts receivable of Holdings or any of its Subsidiaries, (a) in the case of a
securitization of such accounts receivable structured as a borrowing of loans secured by such
accounts receivable, the outstanding principal amount of Indebtedness issued in respect of such
securitization that is secured by such accounts receivable and (b) in the case of a securitization
of such accounts receivable structured as a sale of such accounts receivable (other than a sale of
such accounts receivable to a Subsidiary), the aggregate amount of cash consideration received by
Holdings or any of its Subsidiaries from such sale, but only in respect of accounts receivable that
remain uncollected as of such date.



     “S&P” means Standard & Poor’s.



     “Stand-by Letter of Credit” means any Letter of Credit that is not a Trade Letter of Credit.



     “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 (a) with respect to the Base CD Rate, for new negotiable nonpersonal time deposits
in dollars of over $100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, 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. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.



     “Subsequent Borrowing” has the meaning assigned to such term in Section 2.08(e).












 





18


     “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 Holdings, including the Parent Borrower but excluding any
Excluded Subsidiary.



     “Subsidiary Borrower Election” means an agreement executed by the Parent Borrower and a
Subsidiary, and delivered to and acknowledged by the Administrative Agent, pursuant to which the
Parent Borrower designates such Subsidiary to be, and such Subsidiary agrees to be, a Borrower
hereunder, in accordance with Section 2.19. Each Subsidiary Borrower Election shall be in a form
reasonably satisfactory to the Administrative Agent.



     “Subsidiary Borrower Termination” means a notice executed by the Parent Borrower and delivered
to the Administrative Agent terminating a Subsidiary’s status as a Borrower hereunder in accordance
with Section 2.19.



     “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference to, one or more
rates, currencies, 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
Holdings or the Subsidiaries shall be a Swap Agreement.



     “Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans
outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable
Percentage of the total Swingline Exposure at such time.



     “Swingline Lender” means JPMorgan Chase Bank, N.A., and each other Lender that agrees to be a
Swingline Lender hereunder as provided in Section 2.04, in each case in its capacity as a lender of
Swingline Loans hereunder.



     “Swingline Loan” means a Loan made pursuant to Section 2.04.



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



     “Three-Month Secondary CD Rate” means, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day












 





19


is not a Business Day, the next preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day is not a Business Day, on the next preceding Business Day)
by the Administrative Agent from three negotiable certificate of deposit dealers of recognized
standing selected by it.




     “Trade Letter of Credit” means any Letter of Credit issued for the purpose of providing the
primary payment mechanism in connection with the purchase of any materials, goods or services by an
Account Party in the ordinary course of business of such Account Party.



     “Transactions” means the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is or is to be a party, the borrowing of Loans and the issuance of Letters of
Credit hereunder.



     “Type”, when used in reference to any 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.



     “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.



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












 





20

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 Holdings or the Parent Borrower notifies the Administrative Agent
that Holdings or the Parent 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 Holdings or the Parent
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. It is understood that all
financial computations hereunder with respect to Holdings and the Subsidiaries (including
computations of Consolidated EBITDA and Net Tangible Assets and compliance with Section 6.07) shall
be made excluding the accounts of all Excluded Subsidiaries.



ARTICLE II




The Credits




     SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender
agrees to make Revolving Loans to the Borrowers from time to time during the Availability Period in
an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure
exceeding such Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures exceeding
the total Commitments. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.



     SECTION 2.02. 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. 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 the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.



     (b) Subject to Section 2.13, each Revolving Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans as the applicable Borrower may request in accordance herewith. Each Swingline
Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar 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 relevant Borrower to repay such Loan
in accordance with the terms of this Agreement.














 






 21




     (c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000 and not
less than $10,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall
be in an aggregate amount that is an integral multiple of $5,000,000 and not less than $10,000,000;
provided that an ABR Revolving 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 2.05(e). Each Swingline Loan shall be in an amount that is
an integral multiple of $1,000,000 and not less than $5,000,000. Borrowings of more than one Type
and Class may be outstanding at the same time; provided that there shall not at any time be more
than a total of 12 Eurodollar Revolving Borrowings outstanding.



     (d) Notwithstanding any other provision of this Agreement, no Borrower 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 Maturity Date.



     SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing, a Borrower
shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, on the day of the proposed Borrowing;
provided that any such notice given by the Parent Borrower of an ABR Revolving Borrowing to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later
than 10:00 a.m., New York City time, on the date of the proposed Borrowing. 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 relevant Borrower. 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 Eurodollar
Borrowing;




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




          (v) the location and number of the relevant Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.06.



If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the relevant Borrower shall be deemed to have



 









 








 22




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 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. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the
Swingline Lenders agree to make Swingline Loans to the Borrowers from time to time during the
Availability Period, in an aggregate principal amount at any time outstanding that will not result
in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $75,000,000 or (ii)
the sum of the total Revolving Credit Exposures exceeding the total Commitments; provided that no
Swingline Lender shall be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Swingline Loans.



     (b) To request a Swingline Loan, a Borrower shall notify the Administrative Agent and the
applicable Swingline Lender of such request by telephone (confirmed by telecopy), not later than
12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each such notice shall be
irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the
requested Swingline Loan. The applicable Swingline Lender shall make each Swingline Loan available
to the relevant Borrower by means of a credit to the general deposit account of such Borrower with
such Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an
LC Disbursement as provided in Section 2.05(e), by remittance to the applicable Issuing Bank) by
3:00 p.m., New York City time, on the requested date of such Swingline Loan.



     (c) A Swingline Lender may by written notice given to the Administrative Agent not later than
10:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations
on such Business Day in all or a portion of such Swingline Lender’s Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in such notice such
Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the applicable Swingline Lender, such Lender’s Applicable Percentage of
such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including 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. Each Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available funds, in the same
manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06
shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the applicable Swingline Lender the amounts so received by it from the
Lenders. The
Administrative Agent shall notify the relevant Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline



 









 





 23




Loan shall be made to the Administrative Agent and not to the applicable Swingline Lender. Any
amounts received by a Swingline Lender from a Borrower (or other party on behalf of such Borrower)
in respect of a Swingline Loan of such Borrower after receipt by such Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph
and to such Swingline Lender, as their interests may appear; provided that any such payment so
remitted shall be repaid to such Swingline Lender or to the Administrative Agent, as applicable, if
and to the extent such payment is required to be refunded to such Borrower for any reason. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the
relevant Borrower of any default in the payment thereof.



     (d) The Parent Borrower may designate any Lender to be a Swingline Lender hereunder subject to
the prior written consent of the Administrative Agent (which consent shall not be unreasonably
withheld) and such Lender. Any such designation shall not be effective until confirmed in a written
agreement signed by the Parent Borrower, the Administrative Agent and the applicable Lender.



     SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and conditions set forth
herein, (i) any Account Party may request the issuance of Letters of Credit for its own account, in
a form reasonably acceptable to the applicable Issuing Bank, at any time and from time to time
during the Availability Period, and (ii) the Issuing Banks agree to issue Letters of Credit. 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 an Account
Party to, or entered into by an Account Party with, any Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.



     (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), an Account Party 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 (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 (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount
of such Letter of Credit, 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. If
requested by the applicable Issuing Bank, such Account Party 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 applicable Account Party
shall be deemed to represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, the sum of the total Revolving Credit Exposures shall not exceed the total
Commitments.



 









 





 24




     Each Issuing Bank shall provide to the LC Agent and the Administrative Agent not later than
3:00 p.m. (or promptly thereafter, if unable to do so by 3:00 p.m.), New York City time, on the
first Business Day of each calendar week a report of such Issuing Bank setting forth (i) the
aggregate amount of all Letters of Credit issued by such Issuing Bank that are outstanding as of
3:00 p.m. on the last Business Day of the preceding calendar week, (ii) the average daily undrawn
amount of all Letters of Credit issued by such Issuing Bank for each calendar day during the period
since the last calendar day covered by the preceding weekly report (or, in the case of the first
weekly report, during the period from and including the Effective Date) and (iii) the aggregate
amount of LC Disbursements made by such Issuing Bank and not reimbursed as of the time of such
report. In addition to providing such weekly reports, each Issuing Bank shall, from time to time
upon request of the LC Agent or the Administrative Agent, provide the LC Agent and the
Administrative Agent with information of the type referred to in the immediately preceding sentence
on a more frequent basis.



     The LC Agent shall provide to each Lender not later than 3:00 p.m. (or promptly thereafter, if
unable to do so by 3:00 p.m.), New York City time, on the first Business Day of each calendar month
a report setting forth the aggregate amount of all Letters of Credit that are outstanding as of the
date of the most recent weekly reports delivered by the Issuing Banks to the Administrative Agent
pursuant to clause (i) of the immediately preceding paragraph.



     Neither the LC Agent nor the Administrative Agent nor any Issuing Bank shall have any duty or
obligation at any time to monitor the LC Exposure relative to the total Commitments and neither the
LC Agent nor the Administrative Agent nor any Issuing Bank shall have any liability in respect of
the issuance, amendment, renewal or extension of a Letter of Credit to the extent that such
issuance, amendment, renewal or extension results in the total Revolving Credit Exposures exceeding
the total Commitments. It shall be the responsibility of the Borrowers and the Account Parties to
ensure that, after giving effect to the issuance, amendment, renewal or extension of each Letter of
Credit, the sum of the total Revolving Credit Exposures does not exceed the total Commitments.



     (c) Expiration Date. Except for Extended Letters of Credit issued in accordance with Section
2.05(k), each Letter of Credit shall expire at or prior to the close of business on 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, the Issuing Bank in respect of such Letter of Credit hereby grants to
each Lender, and 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, for the
account of the applicable Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement
made by such Issuing Bank and not reimbursed by the applicable Account Party on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded
to an Account Party 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



 









 





 25




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 an Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, (i) the applicable Account Party shall reimburse such LC Disbursement by paying to such
Issuing Bank an amount equal to such LC Disbursement not later than 12:00 noon, New York City time,
on the date that such LC Disbursement is made, if such Account Party shall have received notice of
such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has
not been received by such Account Party prior to such time on such date, then not later than 12:00
noon, New York City time, on (A) the Business Day that such Account Party receives such notice, if
such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (B) the
Business Day immediately following the day that such Account Party receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that, if such LC
Disbursement is not less than $10,000,000, the Parent Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be
financed with an ABR Revolving Borrowing by the Parent Borrower or a Swingline Loan to the Parent
Borrower in an equivalent amount and, to the extent so financed, such Account Party’s obligation to
make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or
Swingline Loan; or (ii) such Issuing Bank may, if arrangements to do so have been agreed upon in
writing by the Parent Borrower, a Borrowing Subsidiary or an Account Party and such Issuing Bank,
obtain reimbursement of such LC Disbursement by debiting directly from an account of the Parent
Borrower, such Borrowing Subsidiary or such Account Party maintained with such Issuing Bank (or one
of its Affiliates) an amount equal to such LC Disbursement; provided that the foregoing shall not
be construed to prevent the applicable Account Party from reimbursing LC Disbursements of an
Issuing Bank in accordance with alternate procedures agreed upon with such Issuing Bank, so long as
such reimbursements are made no later than required under clause (i) above. If such Account Party
fails to make such payment when due or the applicable Issuing Bank is unable to debit the
designated account of the Parent Borrower, the relevant Borrowing Subsidiary or the relevant
Account Party for the full amount of the LC Disbursement, in each case as provided in the preceding
sentence, the applicable Issuing Bank shall notify the LC Agent (and upon receipt of such notice
the LC Agent shall notify each Lender and the Administrative Agent) of the applicable LC
Disbursement, the payment then due from such Account Party in respect thereof and (in the case of
such notice from the LC Agent to each Lender) such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from such Account Party (the “Participation Amount”), in the
same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06
shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent of any payment from such Account
Party 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



 









 





 26




to reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans
or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve such
Account Party of its obligation to reimburse such LC Disbursement.



     (f) Obligations Absolute. An Account Party’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 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 an
Issuing Bank under a Letter 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,
such Account Party’s obligations hereunder. Neither the LC Agent, the Administrative Agent, the
Lenders nor any Issuing Bank, nor any of their respective 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 any
Issuing Bank; provided that the foregoing shall not be construed to excuse the applicable Issuing
Bank from liability to the applicable Account Party to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by such Account Party to the
extent permitted by applicable law) suffered by such Account Party that are caused by the
applicable 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 or wilful misconduct on the part of the
applicable Issuing Bank (as finally determined by a court of competent jurisdiction) or such other
standard of care as shall be separately agreed to in writing by such Issuing Bank and the
applicable Account Party, 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, the applicable 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.



     (g) 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 LC Agent, the Administrative Agent and the
applicable Account Party by telephone (confirmed by telecopy), or by such other means of
communication (if any) as have been agreed upon by such Account Party and such Issuing Bank, of
such demand for payment and whether such Issuing Bank has made or



 









 





 27




will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve such Account Party of its obligation to reimburse such Issuing Bank and
the Lenders with respect to any such LC Disbursement.



     (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then, unless the
applicable Account Party shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, 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 such Account Party
reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if such Account Party fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply. 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
an Issuing Bank shall be for the account of such Lender to the extent of such payment.



     (i) Designation and Replacement of Issuing Banks. An Account Party may designate any Lender to
be an Issuing Bank hereunder, subject to such Lender’s agreement, in its sole discretion, to become
an Issuing Bank. Such Account Party shall notify the Administrative Agent of any such designation.
An Issuing Bank may be replaced at any time by written agreement among the applicable Account
Party, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank (which
must be a Lender). The Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the applicable Account Party
shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.11(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of an 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 refer 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.



     (j) Cash Collateralization. If the Administrative Agent has declared the Loans outstanding
hereunder due and payable pursuant to Section 7.01 then, on the Business Day that an Account Party
receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, such Account Party 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 cash equal to the LC Exposure as of such date attributable to Letters of Credit issued
for the account of such Account Party plus any accrued and unpaid interest thereon; provided that
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 Holdings, any Borrower or any Account Party
described in clause (h) or (i) of Section 7.01. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of such Account Party under
this Agreement. The Administrative



 









 





 28




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 such Account
Party’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 any Issuing Bank for LC Disbursements in respect of Letters of
Credit issued for the account of such Account Party for which such Issuing Bank has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of such Account Party for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated, be applied to satisfy the other Obligations.



     (k) Extended Letters of Credit. An Account Party may request that an Issuing Bank allow, and
an Issuing Bank may (in its sole discretion) agree to allow, one or more Letters of Credit issued
by it to expire later than the date that is five Business Days prior to the Maturity Date. Any such
Letter of Credit is referred to herein as an “Extended Letter of Credit”. The following provisions
shall apply to any Extended Letter of Credit, notwithstanding any contrary provision set forth
herein.




          (i) The participations of each Lender in each Extended Letter of Credit shall
terminate at the close of business on the date that is five Business Days prior to
the Maturity Date, with the effect that Lenders shall not have any obligations to
acquire participations in any LC Disbursement made thereafter or otherwise with
respect to such Extended Letter of Credit, except with respect to demands for
drawings submitted on or prior to such date.




          (ii) On or prior to the date that is fifteen days prior to the Maturity Date
(or on the date of any earlier termination of the Commitments), each Account Party
shall deposit with each Issuing Bank an amount in cash equal to the LC Exposure as
of such date attributable to the Extended Letters of Credit issued by such Issuing
Bank for the account of such Account Party. Each such deposit shall be held by the
applicable Issuing Bank in an account maintained by it as collateral for the
obligations of such Account Party in respect of such Extended Letters of Credit.
Each applicable Issuing Bank 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 relevant Issuing Bank and at such Account Party’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 relevant Issuing Bank to reimburse LC Disbursements in
respect of such Extended Letters of Credit issued for the account of such Account
Party for which such Issuing Bank has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of any reimbursement obligations of
such Account Party for such Issuing Bank’s LC Exposure at such time.




          (iii) After the close of business on the date that is five Business Days prior
to the Maturity Date, the fees that would have accrued pursuant to clause (i) of



 









 





 29





Section 2.11(b) (if the participations of the Lenders in the Extended Letters of
Credit had not terminated) shall continue to accrue on the LC Exposure in respect
of each Extended Letter of Credit and shall be payable to each applicable Issuing
Bank for its own account.



     SECTION 2.06. 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 1:00
p.m., New York City time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.04. The Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to an account of such Borrower
maintained with the Administrative Agent in New York City and designated by such Borrower in the
applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement
of an LC Disbursement as provided in Section 2.05(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 (or, in respect of the reimbursement of an LC Disbursement
under Section 2.05(e), such Lender’s Participation Amount), the Administrative Agent may assume
that such Lender has made such share (or such Lender’s Participation Amount, as applicable)
available on such date in accordance with paragraph (a) of this Section and may, in reliance upon
such assumption, make available to the applicable Borrower (or the applicable Issuing Bank, as
applicable) a corresponding amount. In such event, if a Lender has not in fact made its share of
the applicable Borrowing (or such Lender’s Participation Amount, as applicable) available to the
Administrative Agent, then the applicable Lender and the applicable Borrower (or the applicable
Issuing Bank, as applicable) severally agree 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 such Borrower (or such Issuing Bank, as applicable) to but excluding
the date of payment to the Administrative Agent, at (i) in the case of such Lender or such Issuing
Bank, 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 or (ii) in the case of
such Borrower, the interest rate applicable to ABR Loans. If (x) with respect to such
Borrowing, such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing or (y) with respect to such reimbursement
of such LC Disbursement, the applicable Account Party shall reimburse the applicable LC
Disbursement before the applicable Lender or Issuing Bank reimburses the Administrative Agent as
provided in this paragraph, then the Administrative Agent shall be entitled to receive or retain
the amount due to it as provided above together with interest payable by such Account Party with
respect to the period commencing on the date that the Administrative Agent funded its payment to
the applicable Issuing Bank.



     SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert such Borrowing to a different



 









 





 30




Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. Such Borrower 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 Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate Borrowing. This Section
shall not apply to Swingline Borrowings, which may not be converted or continued.



     (b) To make an election pursuant to this Section, the relevant Borrower 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 such Borrower were requesting a Revolving 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 or telecopy to the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by such Borrower.



     (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 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
Eurodollar Borrowing; and




          (iv) if the resulting Borrowing is a Eurodollar 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 Eurodollar Borrowing but does not specify an
Interest Period, then the relevant Borrower 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 relevant Borrower fails to deliver a timely Interest Election Request with respect
to a Eurodollar Revolving 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



 









 





 31




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 Parent Borrower,
then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Revolving Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.



     SECTION 2.08. Termination and Reduction of Commitments; Increase in Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.



     (b) The Parent 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 $1,000,000 and not less than $5,000,000 and (ii) the Parent Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.10, the sum of the Revolving Credit Exposures would exceed the
total Commitments.



     (c) The Parent Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to
the effective date of such termination or reduction, specifying such 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 Parent Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Parent Borrower may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Parent 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.



     (d) The Parent Borrower may, at any time and from time to time prior to the Maturity Date, by
written notice to the Administrative Agent and the Lenders, request that the Commitments be
increased by an aggregate principal amount not to exceed $800,000,000. Each such notice shall set
forth the amount of the requested increase in the Commitments and the date (the “Proposed Effective
Date”) on which such increase is requested to become effective (which date shall not be less than
60 days after the date of such notice) and shall offer each Lender the opportunity to increase its
Commitment by its Applicable Percentage of the proposed increase in the amount of the total
Commitments. Each Lender shall, by notice to the Parent Borrower and the Administrative Agent given
not less than 30 days prior to the Proposed Effective Date, either agree to increase its Commitment
by all or a portion of the offered amount (each Lender so agreeing to increase its Commitment being
referred to herein as an “Increasing Lender”) or decline to increase its Commitment (and any Lender
that does not deliver such a notice within such period shall be deemed to have declined to increase
its Commitment) (each Lender so declining or deemed to have declined being referred to herein as a
“Non-Increasing Lender”)). In the event that, on the 30th day prior to the Proposed Effective Date,
the Lenders have agreed pursuant to the preceding sentence to increase their Commitments by an
aggregate amount less



 









 





 32




than the increase in the total Commitments requested by the Parent Borrower, the Parent Borrower
may arrange for one or more banks or other financial institutions (any such bank or other financial
institution being referred to herein as an “Augmenting Lender”), which may (but need not) include
any Lender, to extend Commitments in an aggregate amount equal to the unsubscribed amount of such
Commitments; provided that (i) each Augmenting Lender, if not already a Lender hereunder, shall be
subject to the approval of the Administrative Agent (which approval shall not be unreasonably
withheld) and (ii) each Borrower, each Account Party and each applicable Increasing Lender and
Augmenting Lender shall execute all such documentation as the Administrative Agent shall reasonably
request to evidence its Commitment and its status as a Lender. Increases and new Commitments
created pursuant to this paragraph shall become effective on the Proposed Effective Date and the
Administrative Agent shall notify each affected Lender thereof. Notwithstanding the foregoing, no
increase in the total Commitments shall become effective under this paragraph unless (i) on the
Proposed Effective Date, the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall
be satisfied (with all references in such paragraphs to a Borrowing being deemed to be references
to such increase) and the Administrative Agent shall have received a certificate to that effect
dated such date and executed by a Financial Officer of Holdings or the Parent Borrower and (ii) the
Administrative Agent shall have received documents reasonably satisfactory to it consistent with
those delivered on the Effective Date under clauses (b) and (c) of Section 4.01 as to the corporate
power and authority of the Borrowers and the Account Parties to borrow hereunder after giving
effect to such increase.



     (e) On the effective date (a “Increase Effective Date”) of any increase in the total
Commitments pursuant to paragraph (d) above (each a “Commitment Increase”), (i) the aggregate
principal amount of the Loans outstanding (the “Initial Loans”) immediately prior to giving effect
to such Commitment Increase on the related Increase Effective Date shall be deemed to be paid, (ii)
each Increasing Lender and each Augmenting Lender that shall have been a Lender prior to such
Commitment Increase shall pay to the Administrative Agent in same day funds an amount equal to the
difference between (A) the product of (I) such Lender’s Applicable Percentage (calculated
after giving effect to such Commitment Increase and the deemed payment of the Initial Loans,
but prior to the making of the related Subsequent Borrowings) multiplied by (II) the amount of the
related Subsequent Borrowings and (B) the product of (I) such Lender’s Applicable Percentage
(calculated without giving effect to such Commitment Increase, the deemed payment of the Initial
Loans and the making of the related Subsequent Borrowings) multiplied by (II) the amount of such
Initial Loans, (iii) each Augmenting Lender that shall not have been a Lender prior to such
Commitment Increase shall pay to Administrative Agent in same day funds an amount equal to the
product of (A) such Augmenting Lender’s Applicable Percentage (calculated after giving effect to
such Commitment Increase and the deemed payment of the Initial Loans, but prior to the making of
the related Subsequent Borrowings) multiplied by (B) the amount of the related Subsequent
Borrowings, and (iv) after the Administrative Agent receives the funds specified in clauses (ii)
and (iii) above, the Administrative Agent shall pay to each Non-Increasing Lender the portion of
such funds that is equal to the difference between (A) the product of (I) such Non-Increasing
Lender’s Applicable Percentage (calculated without giving effect to such Commitment Increase, the
deemed payment of the Initial Loans and the making of the related Subsequent Borrowings) multiplied
by (II) the amount of such Initial Loans, and (B) the product of (I) such Non-Increasing Lender’s
Applicable Percentage (calculated after giving effect to such Commitment Increase and the deemed
payment of the



 









 





 33




Initial Loans, but prior to the making of the related Subsequent Borrowings) multiplied by (II) the
amount of the related Subsequent Borrowings, (v) after the effectiveness of such Commitment
Increase, each Borrower shall be deemed to have made new Borrowings (the “Subsequent Borrowings”)
pursuant to Section 2.02 in an aggregate principal amount equal to the aggregate principal amount
of such Initial Loans owed by such Borrower and of the Types and for the Interest Periods specified
in a Borrowing Request delivered to the Administrative Agent in accordance with Section 2.03, (vi)
each Non-Increasing Lender, each Increasing Lender and each Augmenting Lender shall be deemed to
hold its Applicable Percentage of each related Subsequent Borrowing (calculated after giving effect
to such Commitment Increase and the deemed payment of the Initial Loans, but prior to the deemed
making of the related Subsequent Borrowings) and (vii) the relevant Borrower shall pay each
Increasing Lender and each Non-Increasing Lender any and all accrued but unpaid interest on such
Initial Loans. The deemed payments made pursuant to clause (i) above in respect of each
Eurocurrency Loan shall be subject to indemnification by the Borrowers pursuant to the provisions
of Section 2.15 if the relevant Increase Effective Date occurs other than on the last day of the
Interest Period relating thereto.



     SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) Each Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan owed by such Borrower to such Lender on the Maturity Date
and (ii) to each Swingline Lender the then unpaid principal amount of each Swingline Loan owed to
such Swingline Lender by such Borrower on the earlier of the Maturity Date and the first date after
such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two
Business Days after such Swingline Loan is made; provided that on each date that a Revolving
Borrowing is made, such Borrower shall repay all Swingline Loans of such Borrower then outstanding.



     (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each 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 Class and 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 each
Borrower 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 each Borrower to
repay its 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 applicable Borrower shall prepare, execute and deliver to such Lender a



 









 





 34




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 2.10. Prepayment of Loans. (a) Each Borrower shall have the right at any time and from
time to time to prepay any of its Borrowings in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.



     (b) The applicable Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the applicable Swingline Lender) by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving
Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that
would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided
in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.



     SECTION 2.11. Fees. (a) The Parent Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the daily unused amount of the Commitment of such Lender during the period from
and including Effective Date to but excluding the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last day of March, June, September and December
of each year and on the date on which the Commitments terminate, commencing on the first such date
to occur after the date hereof. 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). For purposes of computing commitment fees, the Commitment of a Lender
shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposures of
such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purposes).



     (b) The Parent Borrower agrees to pay (i) to the Administrative Agent for the account of each
Lender a participation fee with respect to its participations in (A) Stand-by Letters of Credit,
which shall accrue at the Applicable Rate, and (B) Trade Letters of Credit,



 









 





 35




which shall accrue at a rate equal to 50% of the Applicable Rate used to determine the interest
rate applicable to Eurodollar Revolving Loans on the determination date, in each case on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Commitment terminates and the date on which
such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which
shall accrue at the rate of 0.125% per annum, on the average daily aggregate face amount of the LC
Exposure in respect of Stand-by Letters of Credit issued by such Issuing Bank (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date of termination of the Commitments and the
date on which there ceases to be any LC Exposure, as well as such Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and including the last
day of March, June, September and December of each year shall be payable in arrears on the third
Business Day following such last day, commencing on the first such date to occur after the
Effective Date; 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. Any other fees payable to any Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting 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).



     (c) The Parent 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 Parent Borrower and the
Administrative Agent.



     (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the applicable 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.



     SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline
Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.



     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing 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 any Borrower or any Account Party 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, in the case of Revolving Loans, upon termination 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
Revolving 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 Eurodollar Revolving 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 or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be conclusive absent manifest
error.



     SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of any Interest Period
for a Eurodollar Borrowing:




          (a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate for such Interest Period; or




          (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate 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 Parent Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Parent 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 Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such
Borrowing shall be made as an ABR Borrowing.



     SECTION 2.14. Increased Costs. (a) Subject to Section 2.18, 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 Eurodollar 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 Eurodollar Loan (or of maintaining its obligation to make any 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 relevant
Borrower will pay to such Lender and the relevant Account Party will pay to 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 in accordance
with Section 2.18.



     (b) Subject to Section 2.18, if any Lender or any Issuing Bank 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 or on the capital of such Lender’s or such Issuing
Bank’s holding company, if any, 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 or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or
such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the
relevant Borrower will pay to such Lender and the relevant Account Party will pay to such Issuing
Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such
Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction
suffered in accordance with Section 2.18.



     (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 or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the Parent Borrower and
shall be conclusive absent manifest error. The relevant Borrower shall pay such Lender and the
relevant Account Party shall pay such Issuing Bank, as the case may be, the amount shown as due on
any such certificate (such amount hereinafter referred to as the “Additional Costs”) within 30 days
after receipt thereof.



     (d) Subject to Section 2.18, 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.



     SECTION 2.15. Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar 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 Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the



 









 





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last day of the Interest Period applicable thereto as a result of a request by the Parent Borrower
pursuant to Section 2.18, then, in any such event, the relevant Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount 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 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 eurodollar market. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Parent Borrower and shall be conclusive absent manifest error.
The relevant Borrower shall pay such Lender the amount shown as due on any such certificate within
30 days after receipt thereof.



     SECTION 2.16. Taxes. (a) If any Borrower or any Account Party shall be required by reason of
any change occurring after the date of this Agreement in applicable law or regulation or tax treaty
or in the interpretation or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of law) to deduct any
Taxes from or in respect of any sum payable by such Borrower or such Account Party (as the case may
be) hereunder or under any other Loan Document to any Issuing Bank, any Lender or to the
Administrative Agent, then except as otherwise provided in this Section 2.16 and subject to Section
2.18, (i) the sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section
2.16) such Issuing Bank, Lender or the Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower
or such Account Party (as the case may be) shall make such deductions and (iii) such Borrower or
such Account Party (as
the case may be) shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.



     (b) In addition, the Borrowers and the Account Parties agree to pay any present or future
Other Taxes which arise from any payment made hereunder or under any other Loan Document or from
the execution, delivery or registration of, or otherwise with respect to, this Agreement or any
such Loan Document other than any Other Taxes imposed upon any assignment or participation of a
Lender’s rights, interests and obligations hereunder or thereunder; provided that the amount such
Borrower or such Account Party (as the case may be) shall be required to pay to a particular Lender
in respect of Other Taxes shall not exceed 1% of the aggregate amount of the Commitment of such
Lender on which such Other Taxes are imposed; provided further that if a Lender is actually aware
of the application of any Other Tax to any such payment, execution, delivery or registration, such
Lender shall promptly notify the Parent Borrower of such Other Tax and the relevant Borrower or the
relevant Account Party (as the case may be) shall thereafter have the benefit of the provisions of
Section 2.18(b).



 









 





 39




     (c) Within 30 days after the date of any payment of Taxes withheld by the relevant Borrower or
the relevant Account Party (as the case may be) in respect of any payment to any Issuing Bank,
Lender or the Administrative Agent, such Borrower or such Account Party (as the case may be) will
furnish to the Administrative Agent, at its address referred to in Section 9.01, the original or a
certified copy of a receipt evidencing payment thereof or, if such a receipt is not available, a
certificate of the treasurer or any assistant treasurer of such Borrower or such Account Party (as
the case may be) setting forth the amount of such payment and the date on which such payment was
made.



     (d) Without prejudice to the survival of any other agreement contained herein, the agreements
and obligations contained in this Section 2.16 shall survive the payment in full of the principal
of and interest on all Loans made hereunder and reimbursement obligations in respect of all Letters
of Credit issued hereunder.



     (e) On the date hereof (or, in the case of an entity that becomes an Issuing Bank or a Lender
after the date hereof, on the date such entity becomes an Issuing Bank or a Lender) and thereafter
as required by applicable law, each Issuing Bank and Lender that is organized under the laws of a
jurisdiction outside the United States shall deliver to the Parent Borrower and the Administrative
Agent such certificates, documents or other evidence, and any amendments or supplements to such
certificates, documents, or other evidence, as required by the Code or Treasury Regulations issued
pursuant thereto, properly completed and duly executed by such Issuing Bank or Lender (or the
Administrative Agent) establishing that payments made under this Agreement or under any other Loan
Document to such Issuing Bank or Lender (or the Administrative Agent) are (i) not subject to
withholding under the Code because such payments are effectively connected with the conduct by such
Issuing Bank or Lender (or the Administrative Agent) of a trade or business in the United States or
(ii) totally exempt from United States tax under a provision of an applicable tax treaty. Unless
the Parent Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payments hereunder are not subject to Taxes or are subject to
Taxes at a rate reduced by an applicable tax treaty, the Borrowers and the Account Parties shall
withhold Taxes from such payments at the applicable statutory rate in the case of payments to or
for any Issuing Bank or Lender (or to the Administrative Agent) organized under the laws of a
jurisdiction outside the United States.



     (f) Neither the Borrowers nor the Account Parties shall be required to pay any additional
amounts to any Issuing Bank or Lender (or to the Administrative Agent) pursuant to paragraph (a)
above if the obligations to pay such additional amounts would not have arisen but for a failure by
such Issuing Bank or Lender (or the Administrative Agent) to comply with the provisions of
paragraph (e) unless such failure results from a change occurring after the date of this Agreement
in applicable law or regulations or tax treaty or in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or administration thereof (whether or
not having the force of law).



     (g) Neither the Borrowers nor the Account Parties shall be liable under this Section 2.16 to
any Issuing Bank, Lender or to the Administrative Agent, as applicable, that has changed the
location of its principal office or any of its Applicable Lending Offices after the date (the
“Relevant Date”) on which it first becomes a party to this Agreement (a “Change in



 









 





 40




Location”) for any Taxes that would have not been imposed but for a Change in Law enacted,
promulgated, or effective before the Relevant Date, but only to the extent such Taxes exceed the
amount the relevant Borrower or the relevant Account Party (as the case may be) was required to pay
such Lender or the Administrative Agent pursuant to this Section 2.16 immediately prior to such
Change in Location.



     (h) If any Issuing Bank, Lender or the Administrative Agent shall become aware that it is
entitled to receive a refund in respect of Taxes indemnified and paid by a Borrower or an Account
Party, such Issuing Bank, Lender or the Administrative Agent shall promptly notify the Parent
Borrower of the availability of such refund and shall, within 30 days after receipt of a request by
the Parent Borrower, apply for such refund at the Parent Borrower’s expense. If any Issuing Bank,
Lender or the Administrative Agent receives a refund in respect of any Taxes for which such Issuing
Bank, Lender or the Administrative Agent has received payment from a Borrower or an Account Party
hereunder, it shall within 30 days after the receipt thereof repay the lesser of such refund and
the amount paid by such Borrower or such Account Party (as the case may be) with respect to such
Taxes to the applicable Borrower or the applicable Account Party, as applicable, in each case net
of all reasonable out-of-pocket expenses of such Issuing Bank, Lender or the Administrative Agent
and with interest received by such Issuing Bank, Lender or the Administrative Agent from the
relevant taxing authority attributable to such refund; provided that such Borrower or such Account
Party (as the case may be), upon the request of such Issuing Bank, Lender or the Administrative
Agent, as applicable, agree to return any such refund (plus interest, penalties and other charges)
to such Issuing Bank, Lender or the Administrative Agent, as applicable, in the event such Issuing
Bank, Lender or the Administrative Agent is required to pay such refund to any Governmental
Authority.



     (i) Each Issuing Bank, Lender, and the Administrative Agent severally (but not jointly)
represents and warrants that, as of the date such person becomes a party to this Agreement,
payments made by the Borrowers and the Account Parties to such Issuing Bank, Lender or the
Administrative Agent in connection with this Agreement are effectively connected with the conduct
by such Issuing Bank, Lender or the Administrative Agent of a trade or business in the United
States.



     SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) Each Borrower
and each Account Party 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
2.14, 2.15 or 2.16, or otherwise) prior to the time expressly required hereunder for such payment
(or, if no such time is expressly required, prior to 12:00 noon, New York City 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, 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 or a Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 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 under any Loan Document shall be due on a day
that is not a Business



 









 





 41




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 under each Loan Document shall be made in dollars.



     (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 and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees 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.



     (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 Revolving Loans or
participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans and participations in LC
Disbursements and Swingline Loans 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 Revolving Loans and participations in LC Disbursements and Swingline
Loans 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 Revolving Loans and participations in LC Disbursements and Swingline
Loans; 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 any Borrower or any Account Party
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 Holdings or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each of
the Borrowers and each of the Account Parties 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 such Borrower or such
Account Party (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 such Borrower or such Account
Party (as the case may be) in the amount of such participation.



     (d) Unless the Administrative Agent shall have received notice from a Borrower or an Account
Party prior to the date on which any payment is due to the Administrative Agent from such Borrower
or such Account Party (as the case may be) for the account of the Lenders or an Issuing Bank
hereunder that such Borrower or such Account Party (as the case may be) will not make such payment,
the Administrative Agent may assume that such Borrower or such Account Party (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 the applicable Issuing Bank, as the case may be, the
amount due. In such event, if the relevant Borrower or the relevant



 









 





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Account Party (as the case may be) has not in fact made such payment, then each of the Lenders or
the applicable 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(c), 2.05(d) or (e), 2.06(b) or 2.17(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.



     SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If, with respect to any
Lender or the Administrative Agent, an event or circumstance occurs that would entitle such Lender
or the Administrative Agent to exercise any of the rights or benefits afforded by Section 2.14 or
2.16(a), such Lender or the Administrative Agent, promptly upon becoming aware of the same, shall
take all steps as may be reasonably available (including designating a different Applicable Lending
Office for funding or booking its Loans hereunder or participating in Letters of Credit or
assigning its rights and obligations hereunder to another of its offices, or furnishing the proper
certificates under any applicable tax laws, tax treaties, conventions and governmental regulations
to the extent that such certificates are legally available to such Lender or to the Administrative
Agent) to eliminate or mitigate the effects of any event resulting in the ability of such Lender or
the Administrative Agent to exercise rights under any of such
Sections; provided that neither any
Lender nor the Administrative Agent shall be under any obligation to take any step that, in its
reasonable judgment, would (i) result in its incurring Additional Costs or Taxes in performing its
obligations hereunder unless the Borrowers and the Account Parties have expressly agreed to
reimburse it therefor or (ii) be materially disadvantageous to such Lender or to the Administrative
Agent. Within 60 days after the occurrence of any event giving rise to any rights or benefits
provided by Sections 2.14 and 2.16(a) in favor of any Lender or the Administrative Agent, such
Lender or the Administrative Agent (i) will notify the Parent Borrower of such event or
circumstance and (ii) provide the Parent Borrower with a certificate setting forth in reasonable
detail (x) the event or circumstance giving rise to any benefit under Sections 2.14 and 2.16(a),
(y) the effective date of, and the time period during which, compensation for any Additional Costs
or Taxes are being claimed and (z) the determination of amount or amounts claimed thereby and
detailed calculations with respect thereto; provided that, if such Lender or the Administrative
Agent does not give the Parent Borrower such notice and certificate within the 60-day period set
forth in this sentence, the relevant Borrower or the relevant Account Party (as the case may be)
shall be required to indemnify such Lender or the Administrative Agent only for such Additional
Costs and Taxes as are attributable to the period from and after the first date as of which such
notice and certificate have been received by the Parent Borrower. Such Lender or the Administrative
Agent shall notify the Parent Borrower of any change in circumstances with respect to the event
specified in the above-described notice and certificate as promptly as practicable after such
Lender or the Administrative Agent obtains knowledge thereof. Such certificate shall be conclusive
absent manifest error. Notwithstanding the foregoing, neither any Lender nor the Administrative
Agent shall deliver the notice and



 









 





 43




certificate described in this paragraph (a) to the Parent Borrower in respect of any Additional
Costs or Taxes unless it is then the general policy of such Lender or the Administrative Agent to
pursue similar rights and remedies in similar circumstances under comparable provisions of other
credit agreements.



     (b) With respect to Sections 2.14 and 2.16, the Parent Borrower shall have the right, should
any Lender request any compensation or indemnity thereunder, to (i) unless an Event of Default
shall have occurred and be continuing, (A) promptly terminate such Lender’s Commitment by
irrevocable written notice of such termination to such Lender and the Administrative Agent without
the necessity of complying with Sections 2.08(b) and (c) hereof, (B) reduce the total Commitments
by the amount of such Lender’s Commitment and (C) pay or prepay in immediately available funds all
Loans owing to such Lender, accrued and unpaid interest thereon, accrued fees and all other amounts
payable to it hereunder, or (ii) require such Lender to assign all its interests, rights and
obligations under this Agreement, without recourse to or representation or warranty by such Lender,
to an assignee in accordance with Section 9.04; provided that (x) such assignment shall not
conflict with any statute, law, rule, regulation, order or decree of any Governmental Authority and
(y) the assigning Lender shall have received from the relevant Borrower and the relevant Account
Party and/or such assignee full payment in immediately available funds of the principal of and
interest accrued on the Loans to the date of such assignment made by it hereunder and all other
amounts owed to it hereunder that are subject to such assignment. The Parent Borrower shall have
the right, should the Administrative Agent request any compensation or indemnity under such
Sections, to require the Administrative Agent to assign its rights and obligations hereunder to a
successor Administrative Agent with the consent of the Required Lenders, which consent shall not be
unreasonably withheld.



     (c) With respect to Section 2.14 or 2.16, (i) other than with respect to Section 2.16(b),
neither any Lender nor the Administrative Agent shall be entitled to exercise any right or benefit
afforded thereby and neither the Borrowers nor the Account Parties shall be obligated to reimburse
any Lender or the Administrative Agent pursuant to such Sections unless (x) such Lender or the
Administrative Agent has delivered to the Parent Borrower in accordance with Section 9.01 the
notice and the certificate described in Section 2.18(a) hereof and (y) the Parent Borrower has had
a 30-Business Day period following the receipt of such notice and certificate (if the Parent
Borrower in good faith disagrees with the assertion that any payment under such Sections is due or
with the amount shown as due on such certificate and so notifies the Lender or the Administrative
Agent of such disagreement within 10 Business Days following receipt of the notice and certificate)
to negotiate with the requesting Lender or the Administrative Agent, which negotiations shall be
conducted by the respective parties in good faith, and to agree upon another amount that will
adequately compensate such Lender or the Administrative Agent, it being expressly understood that
if the Parent Borrower does not provide the required notice of its disagreement as provided above,
the relevant Borrower or the relevant Account Party (as the case may be) shall pay the amount shown
as due on the certificate on the tenth Business Day following receipt thereof and further, if the
Parent Borrower does provide such required notice, and negotiations are entered into but do not
result in agreement by the Parent Borrower and such Lender or the Administrative Agent within the
30-Business Day period, then the relevant Borrower or the relevant Account Party (as the case may
be) shall pay the amount shown as due on the certificate on the last day of such period, but in
either event not earlier than the date as of which the relevant Additional Costs or Taxes are
incurred, (ii) other than with respect to Other



 









 





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Taxes, unless the appropriate notice and certificate are delivered to the Parent Borrower within
the 60-day period described in Section 2.18(a), the relevant Borrower or the relevant Account Party
(as the case may be) shall be liable only for Additional Costs, Taxes or amounts required to be
paid which are attributable to the period from and after the date such notice and certificate have
been received by such Borrower or such Account Party, as applicable, (iii) neither the Borrowers
nor the Account Parties shall be liable for any amounts incurred as a result of any change in an
Applicable Lending Office of any Issuing Bank or Lender to the extent that such Issuing Bank or
Lender shall have had knowledge at the time of such change in Applicable Lending Office that
reimbursement or recoupment under Section 2.14 would arise as a result of such change, (iv) each
Lender or the Administrative Agent shall in good faith allocate all Additional Costs, Taxes and
payments required to be made fairly among all its commitments (whether or not it seeks compensation
from all affected borrowers), (v) in no event shall the Borrowers or the Account Parties be liable
for any taxes (other than Other Taxes) that would not have been imposed but for a connection
between such Lender or the Administrative Agent (other than by reason of the activities
contemplated by this Agreement) and the relevant taxing jurisdiction, (vi) neither any Lender nor
the Administrative Agent shall be entitled to exercise any right or benefit afforded hereby or
receive any payment otherwise due under Sections 2.14 and 2.16 (including, without limitation, any
repayment by any Borrower or any Account Party (as the case may be) of any refund of Taxes pursuant
to Section 2.16(h)) which arises from any gross negligence, fraud or wilful misconduct of any
Lender or the Administrative Agent, or the failure of such Lender or the Administrative Agent to
comply with the terms of this Agreement, (vii) if Lender or the Administrative Agent shall have
recouped any amount or received any offsetting tax benefit (other than a refund of Taxes as
described in Section 2.16(h)) or reserve or capital benefits theretofore paid to it by any Borrower
or any Account Party (as the case may be), such Lender or the Administrative Agent shall promptly
pay to such Borrower or such Account Party (as the case may be) an amount equal to the amount of
the recoupment received by such Lender or the Administrative Agent reduced by any reasonable
out-of-pocket expenses of such Lender or the Administrative Agent attributable to such recoupment,
as determined in good faith by such Lender or the Administrative Agent, and (viii) the liability of
the Borrowers and the Account Parties to any Lender or the Administrative Agent with respect to any
taxes shall be reduced to the extent that such Lender or the Administrative Agent receives an
offsetting tax benefit (or could have received such a benefit by taking reasonable measures to
receive it); provided that there shall not be any reductions pursuant to this clause (viii) with
respect to any tax benefit (x) the existence of which such Lender or Administrative Agent is
unaware, (y) the claiming of which would result in any cost or tax to such Lender or the
Administrative Agent (unless the relevant Borrower or the relevant Account Party (as the case may
be) shall have agreed to pay its reasonably allocable portion of such cost or tax) and (z) unless
the relevant Borrower or the relevant Account Party (as the case may be) shall agree to indemnify
the Lender or the Administrative Agent to the extent any tax benefit taken into account under this
clause (viii) is
thereafter lost or becomes unavailable.



     (d) In addition to their obligations under Section 2.14 hereof, each of the Lenders and the
Administrative Agent hereby agrees to execute and deliver, and to make any required filings of, all
certificates, agreements, documents, reports, statements and other instruments as are reasonably
necessary to effectuate the purposes of this Section 2.18 and Sections 2.14 and 2.16. The Parent
Borrower agrees to pay all filing fees incurred by any Lender or the
Administrative Agent in performing its obligations under this Section 2.18.



 









 





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     SECTION 2.19. Borrowing Subsidiaries. The Parent Borrower may, at any time and from time to
time so long as no Default has occurred and is continuing, designate any Subsidiary (other than any
Foreign Subsidiary) to be a Borrowing Subsidiary hereunder by delivering to the Administrative
Agent a Subsidiary Borrowing Election with respect to such Subsidiary. The eligibility of any
Borrowing Subsidiary to borrow hereunder shall terminate when the Administrative Agent receives a
Subsidiary Borrower Termination with respect to such Subsidiary. Each Subsidiary Borrower Election
delivered to the Administration Agent shall be duly executed on behalf of the relevant Subsidiary
and the Parent Borrower, and each Subsidiary Borrower Termination delivered to the Administrative
Agent shall be duly executed on behalf of the Parent Borrower. The delivery of a Subsidiary
Borrower Termination shall not affect any obligation of the relevant Subsidiary incurred in its
capacity as a Borrower, and such Subsidiary shall continue to constitute a Borrowing Subsidiary for
all purposes hereof (other than the right to borrow Loans) until all its obligations hereunder as a
Borrower have been discharged and paid in full. The Administrative Agent shall promptly give notice
to the Lenders and the Issuing Banks of its receipt of any Subsidiary Borrower Election or
Subsidiary Borrower Termination.



ARTICLE III




Representations and Warranties




     Each of Holdings, the Parent Borrower and Purchasing represents and warrants to the Lenders
that:



     SECTION 3.01. Organization; Powers. Each of the Loan Parties is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and is qualified to do
business in, and is in good standing in, every jurisdiction where such qualification is required,
except, in each case, where the failure to do so, individually or in the aggregate, would not
result in a Material Adverse Effect.



     SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into by each Loan
Party are within such Loan Party’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly executed and delivered
by each of Holdings, the Parent Borrower and Purchasing and constitutes, and each other Loan
Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of Holdings, the Parent Borrower, Purchasing
or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer 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 (i) such as have been obtained or made and are in full force and effect or as to
which the failure to be made or obtained and to be in full force and effect would not result in a
Material Adverse Effect and (ii) filings of periodic reports with the Securities and



 









 





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Exchange Commission, (b) will not violate any applicable law or material regulation or the charter,
by-laws or other organizational documents of Holdings or any Subsidiary or any material order of
any Governmental Authority, (c) will not violate or result in a default under any material
provision of any indenture, agreement or other instrument binding upon Holdings or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by
Holdings or any Subsidiary, and (d) will not result in the creation or imposition of any Lien on
any asset of Holdings or any of its Subsidiaries.



     SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
Holdings 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 January 31,
2004, reported on by KPMG LLP, independent public accountants and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended October 30, 2004, 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 Holdings 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 January 31, 2004, there has been no material adverse change in the business, assets,
operations or condition of Holdings and its Subsidiaries, taken as a whole.



     SECTION 3.05. Properties. (a) Each of Holdings and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to the business of
Holdings and its Subsidiaries (taken as a whole), except for minor defects in title and leases
being contested, in each case, that do not materially interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended purposes.



     (b) Each of Holdings and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by Holdings and its Subsidiaries does not infringe upon the rights of any other Person,
except for any defects in ownership or licenses and any such infringements that, individually or in
the aggregate, would not 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 Holdings, the Parent Borrower or Purchasing, threatened against or affecting Holdings
or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, would, individually or in the aggregate, result in
a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan
Documents or the Transactions.



     (b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, would not result in a Material Adverse Effect, neither Holdings
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



 









 





 47




notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.



     (c) Since the date of this Agreement, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.



     SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings 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, material agreements and other material instruments binding upon it
or its property, except where the failure to do so, individually or in the aggregate, would not
result in a Material Adverse Effect. No Default has occurred and is continuing.



     SECTION 3.08. Investment and Holding Company Status. No Loan Party is (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
“holding company” as defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.



     SECTION 3.09. Taxes. Each of Holdings 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 shown to be due and payable on such returns, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which Holdings or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure to do so would not
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, would 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 the fair market value of the assets of such Plan by a material amount, 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 the fair market
value of the assets of all such underfunded Plans by a material amount.



     SECTION 3.11. Disclosure. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on behalf of any Loan Party
to the Administrative Agent, any Issuing Bank or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder (as modified or supplemented by
other information so furnished and taken as a whole with such other information) contains any
material misstatement of fact or omits 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, Holdings,



 









 





 48




the Parent Borrower and Purchasing represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.



     SECTION 3.12. Material Subsidiaries. Schedule 3.12 sets forth the name of each Subsidiary of
Holdings that is a Material Subsidiary as of the Effective Date.



ARTICLE IV




Conditions




     SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of each Issuing
Bank 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
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 a favorable written opinion (addressed to the
Administrative Agent, the Issuing Banks and the Lenders and dated the Effective Date) of Shearman &
Sterling LLP, special New York counsel for the Loan Parties, substantially in the form of Exhibit
B, and covering such other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Required Lenders shall reasonably request. Each of Holdings, the Parent
Borrower and Purchasing hereby requests such counsel to deliver such opinion.



     (c) 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 each Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.



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



     (e) 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 at least two Business Days prior
to the Effective Date, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by any Loan Party hereunder.



     (f) The Administrative Agent shall have received a counterpart of the Guarantee Agreement
signed on behalf of each of Holdings and the Parent Borrower.



 









 





 49




     (g) Prior to or concurrently with the effectiveness of the Commitments, the commitments under
the Existing Credit Agreement shall be terminated, all loans and other amounts accrued or owing
thereunder shall be paid and all Liens securing obligations thereunder shall be released, and the
Administrative Agent shall have received duly executed payoff letters, UCC-3 termination statements
and such other release documents as the Administrative Agent may deem necessary to evidence such
payment and release.



     (h) The Lenders shall have received all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money laundering rules and
regulations, including the Patriot Act.



The Administrative Agent shall notify the Parent 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 each Issuing Bank 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 April 29, 2005 (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, and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit,
is subject to the satisfaction of the following conditions:



     (a) The representations and warranties of the Loan Parties set forth in the Loan Documents
(except, in the case of Borrowings made solely to refinance maturing commercial paper issued by any
of the Borrowers, the representations and warranties made under Sections 3.04(b), 3.06(a)(i) and
3.06(c)) shall be true and correct on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.



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



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



     SECTION 4.03. Borrowing Subsidiaries. The obligation of each Lender to make a Loan on the
occasion of the first Borrowing by a Borrowing Subsidiary is subject to receipt by the
Administrative Agent of a Subsidiary Borrower Election with respect to such Borrowing Subsidiary in
accordance with Section 2.19 and to the satisfaction of the following further conditions:



     (a) The Administrative Agent shall have received one or more favorable written opinions of
counsel for such Borrowing Subsidiary reasonably acceptable to the Administrative Agent, with
respect to (i) the organization and existence of such Borrowing Subsidiary, (ii) the



 









 





 50




due authorization, execution and delivery of the Subsidiary Borrower Election, (iii) the legality,
validity and binding effect on such Borrowing Subsidiary of the Subsidiary Borrower Election and
this Agreement and (iv) such other matters relating to such Borrowing Subsidiary as the
Administrative Agent shall reasonably request.



     (b) 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 such Borrowing Subsidiary and its authorization to be a Borrower, all in form
and substance reasonably satisfactory to the Administrative Agent and its counsel.



The Administrative Agent shall promptly provide to each Lender any documentation with respect to
any Borrowing Subsidiary that was delivered to the Administrative Agent pursuant to 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, each of
Holdings, the Parent Borrower and Purchasing covenants and agrees with the Lenders that:



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



     (a) as soon as available and, in any event, within 90 days after the end of each fiscal year
of Holdings, its audited consolidated balance sheets 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 KPMG LLP 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 Holdings and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;



     (b) as soon as available and, in any event, within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of Holdings, its consolidated balance sheets 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
Holdings and its consolidated Subsidiaries on a consolidated basis in accordance




 










 






51




with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes;




     (c) concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of Holdings or the Parent Borrower (i) certifying as to whether
a Default has occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.07 and 6.08 and (iii) 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 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;



     (d) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by Holdings 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 Holdings
to its shareholders generally, as the case may be;



     (e) promptly after Moody’s or S&P shall have announced a change in the Rating established or
deemed to have been established for the Parent Borrower, written notice of such Rating change;



     (f) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of Holdings or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.



     SECTION 5.02. Notices of Material Events.The Parent Borrower will furnish to the
Administrative Agent for distribution to each Lender prompt written notice of the following:



     (a) the occurrence of any Default;



     (b) the filing or commencement of any actions, suits or proceedings by or before
any arbitrator or Governmental Authority against or affecting Holdings, the Parent Borrower or any
Subsidiary thereof (i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, would, individually or in the aggregate, result in a Material
Adverse Effect; and



     (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, would result in liability of Holdings and its Subsidiaries in an aggregate amount
exceeding $100,000,000;



Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Parent 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.




 









 








52




     SECTION 5.03. Existence; Conduct of Business. Each of Holdings and the Parent Borrower will,
and will cause each of its Material 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 the business of Holdings and its
Subsidiaries (taken as a whole); provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, transfer of assets or dissolution permitted under Section 6.03.



     SECTION 5.04. Payment of Obligations. Each of Holdings and the Parent Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not
paid, would 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) Holdings, the Parent 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 would not result in a Material Adverse Effect.



     SECTION 5.05. Maintenance of Properties. Each of Holdings and the Parent Borrower will, and
will cause each of its Subsidiaries to, keep and maintain all property material to the conduct of
the business of Holdings and its Subsidiaries (taken as a whole) in good working order and
condition, ordinary wear and tear excepted; provided that nothing in this Section shall prevent
Holdings or any Subsidiary from discontinuing the operations or maintenance of any of its
properties no longer deemed by Holdings or such Subsidiary, as applicable, to be useful in the
conduct of its business.



     SECTION 5.06. Insurance. Each of Holdings and the Parent Borrower will, and will cause each of
its Material Subsidiaries to, maintain, with financially sound and reputable insurance companies
insurance in such amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same or similar businesses
operating in the same or similar locations. The Parent Borrower will furnish to the Lenders, upon
request of the Administrative Agent, information in reasonable detail as to the insurance so
maintained.



     SECTION 5.07. Books and Records; Inspection Rights; Inventory Audits. Each of Holdings and the
Parent Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and
account in accordance with GAAP. Each of Holdings and the Parent Borrower will, and will cause each
of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice and without disruption of the normal and ordinary conduct of
the business of Holdings, the Parent Borrower or any such Subsidiary, to visit and inspect its
properties, to examine and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at such reasonable times
and as often as reasonably requested.



     SECTION 5.08. Compliance with Laws. Each of Holdings and the Parent 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, would not result in a Material Adverse Effect.



 









 





53




     SECTION 5.09. Use of Proceeds and Letters of Credit. The proceeds of the Loans will be used
only for general corporate purposes, including working capital requirements, liquidity and the
repayment of maturing commercial paper and other Indebtedness of the Parent Borrower and Purchasing
(including Indebtedness under the Existing Credit Agreement). 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. Letters of Credit will be issued to
support obligations of the Account Parties in respect of purchases of inventory in the ordinary
course of business, as well as other obligations of Holdings and its Subsidiaries incurred without
violation of this Agreement.



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, each of Holdings, the Parent
Borrower and Purchasing covenants and agrees with the Lenders that:



     SECTION 6.01. Subsidiary Indebtedness. Neither Holdings nor the Parent Borrower will permit
any Subsidiary that is not a Guarantee Party to create, incur, assume or permit to exist any
Indebtedness, except:



     (a) Indebtedness of any Subsidiary that is not a Guarantee Party to Holdings or any other
Subsidiary;



     (b) Indebtedness of any Subsidiary that is not a Guarantee Party incurred to finance the
acquisition, construction or improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (b) and clause (c) below shall not exceed
$250,000,000 at any time outstanding;



     (c) Indebtedness of any Person that becomes a Subsidiary that is not a Guarantee Party after
the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such Person becoming a
Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (c) and
clause (b) above shall not exceed $250,000,000 at any time outstanding; and



     (d) other unsecured Indebtedness in an aggregate principal amount not exceeding $150,000,000
at any time outstanding.



     SECTION 6.02. Liens. Neither Holdings nor the Parent Borrower will, nor will they permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property



 









 





54




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) Liens created under the Loan Documents or Letters of Credit;



     (b) Permitted Encumbrances;



     (c) any Lien on any property or asset of Holdings or any Subsidiary existing on
the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any
other property or asset of Holdings or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof, other than in respect of any premium
or fee payable in connection with such extension, renewal or replacement;



     (d) any Lien existing on any property or asset prior to the acquisition thereof by Holdings or
any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition or such Person becoming a
Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of
Holdings or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures
on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be,
and extensions, renewals and replacements thereof that do not increase the outstanding principal
amount thereof, other than in respect of any premium or fee payable in connection with such
extension, renewal or replacement;



     (e) Liens on fixed or capital assets acquired, constructed or improved by Holdings or any
Subsidiary; provided that (i) such security interests secure Indebtedness incurred to finance the
acquisition, construction or improvement of such fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding principal amount thereof
(which Indebtedness, in the case of a Subsidiary which is not a Guarantee Party, must be
Indebtedness which is permitted by clause (b) of Section 6.01), (ii) such security interests and
the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or
the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of Holdings or any
Subsidiaries;



     (f) Liens in respect of leases or subleases granted to other Persons in the ordinary course of
business and not materially interfering with the conduct of business of Holdings and its
Subsidiaries;



     (g) Liens arising out of conditional sale, title retention, consignment (including “sale or
return” arrangements) or similar arrangements for the sale of goods entered into by the Parent
Borrower or any of its Subsidiaries in the ordinary course of business in accordance with



 









 





55




the past practices of the Parent Borrower and its Subsidiaries, provided that the aggregate amount
of such goods shall not exceed $500,000,000;




     (h) Liens in favor of customs and revenue authorities arising as a matter of law securing
payment of customs duties in connection with the importation of goods;



     (i) Liens on accounts receivable of the Parent Borrower or any of its Subsidiaries that arise
from the securitization of such accounts receivable;



     (j) Liens securing Indebtedness of a Subsidiary to the Parent Borrower; provided, if any such
Indebtedness is secured by Liens on inventory, such Indebtedness shall not be pledged by the Parent
Borrower; and



     (k) other Liens securing monetary obligations; provided that (i) the sum of the aggregate
amount of all monetary obligations secured by Liens pursuant to this clause (k), plus the aggregate
amount of all cash consideration received on or after the Effective Date in respect of sale
leaseback transactions made in reliance on clause (b) of Section 6.05, shall not exceed 7.50% of
Net Tangible Assets at any time and (ii) the aggregate book value of all inventory subject to Liens
pursuant to this clause (k) shall not at any time exceed $225,000,000.



     SECTION 6.03. Fundamental Changes. (a) Neither Holdings nor the Parent Borrower will, nor will
they 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 sell, transfer, lease or otherwise dispose of (in
one transaction or in a series of transactions) all or substantially all of the assets of the
Parent Borrower and its Subsidiaries, taken as a whole, 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 Person may merge into the Parent Borrower in a transaction in which the
Parent Borrower is the surviving corporation, (ii) any Person may merge into or consolidate with
any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to
such merger or consolidation is a Guarantee Party) is a Guarantee Party and (iii) any Subsidiary
(other than a Guarantee Party) may liquidate or dissolve if the Parent Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the Parent Borrower and is
not materially disadvantageous to the Lenders; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted
unless also permitted by Section 6.04.



     (b) Holdings will not, and will not permit any of its Subsidiaries to, engage to any extent
material to Holdings and its Subsidiaries (taken as a whole) in any business other than businesses
of the type conducted by Holdings and its Subsidiaries on the date of execution of this Agreement
and businesses reasonably related, ancillary or complementary to the business or businesses of
Holdings or any Subsidiary.



     SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. Neither Holdings nor
the Parent Borrower will, nor will they permit any Subsidiary 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 Equity Interests, evidences of Indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make



 









 





56




or hold any loans or advances to, Guarantee any obligations of, or make or hold 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, except:




     (a) Permitted Investments;



     (b) investments existing on the date hereof;



     (c) investments by Holdings and its Subsidiaries in Equity Interests in their
respective Subsidiaries;



     (d) loans or advances made by Holdings to any Subsidiary and made by any Subsidiary to
Holdings or any other Subsidiary;



     (e) Guarantees, subject to the limitations of Section 6.01 in the case of Indebtedness of
Subsidiaries that are not Guarantee Parties;



     (f) investments received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary
course of business; and



     (g) other investments; provided that at the time of and after giving effect to any such
investment, (i) Holdings and the Parent Borrower will be in compliance on a pro forma basis with
the covenants contained in Sections 6.07 and 6.08, recomputed as of the last day of the most
recently ended fiscal quarter of the Parent Borrower for which financial statements are available
as if such investment and all other investments made in reliance on this clause (g) had occurred on
the first day of each relevant period for testing such compliance and (ii) no Default shall have
occurred and be continuing.



     SECTION 6.05. Sale and Leaseback Transactions. Neither Holdings nor the Parent Borrower will,
nor will they permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby
it shall sell or transfer any property (real or personal) used or useful in its business, whether
now owned or hereinafter acquired, and thereafter rent or lease such property, or other property
that it intends to use for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale of fixed or capital assets that (a) is made for cash
consideration in an amount not less than the cost of such fixed or capital asset and is consummated
within 90 days after Holdings, the Parent Borrower or such Subsidiary, as applicable, acquires or
completes the construction of such fixed or capital asset or (b) is made for cash consideration in
an amount not less than the fair value of such fixed or capital
asset; provided that the sum of the
aggregate amount of all cash consideration received on or after the Effective Date in respect of
all sale and leaseback transactions made in reliance on this clause (b), plus the aggregate amount
of all monetary obligations secured by Liens pursuant to clause (k) of Section 6.02, shall not
exceed 7.50% of Net Tangible Assets at any time.



     SECTION
6.06. Restrictive Agreements. Neither Holdings nor the Parent Borrower will, nor will
they permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability
of Holdings or any Subsidiary to create, incur or permit to exist any



 









 





57




Lien upon any of its property or assets to secure the Obligations (or any Indebtedness incurred to
refinance or replace the Obligations); provided that (a) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (b) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on Schedule 6.06 or to
any refinancing, extension or renewal of, or any amendment or modification of, any Indebtedness or
other agreement existing on the date hereof containing any such restriction or condition (but
without expanding the scope of any such restriction or condition), (c) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided that such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (d) the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to the property or assets
securing such Indebtedness and (e) the foregoing shall not apply to customary provisions in leases
and other contracts restricting the assignment, pledge or mortgage thereof.




     SECTION
6.07. Leverage Ratio. The Leverage Ratio as of the last day of any fiscal quarter
shall not exceed 3.00 to 1.00.



     SECTION 6.08. Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio for any period of
four consecutive fiscal quarters of Holdings shall not be less than 3.20 to 1.00.



ARTICLE VII




Events of Default




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



     (a) any Borrower shall fail to pay any principal of any Loan of such Borrower or any Account
Party shall fail to reimburse any LC Disbursement made in respect of a Letter of Credit issued for
the account of such Account Party, in each case 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;



     (b) any Borrower or any Account Party shall fail to pay any interest or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable by it under this
Agreement or any other Loan Document, 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 any Loan Party in or
pursuant to any Loan Document or any amendment or modification thereof or waiver thereunder, or any
material representation or warranty in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or



 









 





58




any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in
any material respect when made or deemed made;




     (d) Holdings, the Parent Borrower or Purchasing shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to the existence of Holdings,
the Parent Borrower or Purchasing) or 5.09 or in Article VI;



     (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (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 Parent Borrower (which notice will be given at the request of
any Lender);



     (f) Holdings or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;



     (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause 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 (i) secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such Indebtedness and (ii)
Indebtedness in respect of which the holders thereof have the unconditional right to require the
issuer thereof to effect a redemption of such Indebtedness prior to the stated maturity of such
Indebtedness, solely as a result of the exercise by such holders of such right;



     (h) subject to Section 7.02, an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of
Holdings 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 Holdings 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;



     (i) subject to Section 7.02, Holdings 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 Holdings 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;



 









 





59




     (j) subject to Section 7.02, Holdings or any Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;



     (k) one or more judgments for the payment of money in an aggregate amount in excess of
$100,000,000 (to the extent not covered by independent third party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and
does not dispute coverage) shall be rendered against Holdings, any Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of Holdings 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, would result in a Material Adverse
Effect; or



     (m) a Change in Control shall occur;



then, and in every such event (other than an event with respect to Holdings, a Borrower or an
Account Party described in clause (h) or (i) of this Article), and at any time thereafter during
the continuance of such event, the Administrative Agent may, with the consent of the Required
Lenders, and shall, at the request of the Required Lenders, by notice to the Parent 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 Borrowers and the Account Parties 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 each Borrower and each Account Party; and in case of
any event with respect to Holdings, a Borrower or an Account Party 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
Borrowers and the Account Parties 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
each Borrower and each Account Party.




     SECTION 7.02. Exclusion of Immaterial Subsidiaries. Solely for purposes of determining whether
a Default has occurred under clause (h), (i) or (j) of Section 7.01, any reference in any such
clause to any “Subsidiary” shall be deemed to exclude any Subsidiary that is not a Material
Subsidiary affected by any event or circumstance referred to in any such clause; provided, that if
it is necessary to exclude more than one Subsidiary from clause (h), (i) or (j) of Section 7.01
pursuant to this Section in order to avoid a Default thereunder, all excluded Subsidiaries shall be
considered to be a single consolidated Subsidiary for purposes of determining whether any excluded
Subsidiary is a Material Subsidiary.



 









 





60




ARTICLE VIII




The Administrative Agent




     Each of the Lenders and the Issuing Banks 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 of the Loan
Documents, 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 Holdings, the Parent Borrower or any other Subsidiary
or Affiliate thereof as if it were not the Administrative Agent hereunder.



     The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. 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 by the Loan Documents 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 in the Loan Documents, the Administrative Agent shall
not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to Holdings 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
wilful 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 Holdings, the
Parent Borrower, Purchasing 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 any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the covenants, agreements or
other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document,
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,



 









 





61




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 Parent 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.



     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, each
Issuing Bank and the Parent Borrower. Upon any such resignation, the Required Lenders shall have
the right, with the consent of the Parent Borrower, to appoint a successor (provided, that such
Parent Borrower consent (i) shall not be unreasonably withheld and (ii) shall not be required if,
at the time of such appointment, an Event of Default has occurred and is continuing). 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 and the Issuing Banks, 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 Parent
Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Parent 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 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 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 other Loan Document or related agreement or any document furnished
hereunder or thereunder. The Sole Bookrunner and



 









 





62




Lead Arranger and the Co-Syndication Agents (each as identified on the cover page of this
Agreement), in their capacities as such, shall have no rights, powers, duties, liabilities,
fiduciary relationships or obligations under this Agreement or any other documents related thereto.




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 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 Holdings, the Parent Borrower or Purchasing, to it at J. C. Penney
Corporation, Inc., 6501 Legacy Drive, Mail Code 1304, Plano, TX 75024, Attention of
the Treasurer (Telecopy No. (972) 431-2044), with a copy to the General Counsel of
the Parent Borrower;




      (ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and
Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention of Mary McCormack (Telecopy No. (212) 552-7500), with a copy to
JPMorgan Chase Bank, N.A. 270 Park Avenue, New York 10017, Attention of Mr. Barry
Bergman (Telecopy No. (212) 270-5646); and




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



     (b) Notices and other communications to the Issuing Banks and Lenders hereunder may be
delivered or furnished 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 Issuing Bank or Lender. The
Administrative Agent, Holdings, the Parent Borrower or Purchasing 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. 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 or under any other Loan
Document 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, each



 









 





63




Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party 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) Except with respect to any amendment to this Agreement contemplated by the definition of
“Permitted Holding Company Reorganization” (which amendment shall be permitted if entered into by
the parties referred to therein), neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by Holdings, the
Borrowers, the Account Parties and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties that are parties thereto, in each case 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 2.17(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) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision of any Loan Document specifying the number or percentage
of Lenders required to waive, amend or modify any rights thereunder or make any determination or
grant any consent thereunder, without the written consent of each Lender, (vi) release any
Guarantee Party from its Guarantee under the Guarantee Agreement (except as expressly provided in
the Guarantee Agreement), or limit its liability in respect of such Guarantee, without the written
consent of each Lender or (vii) change Section 2.05(k)(i) in a manner that would alter the
participation obligation of any Lender, without the written consent
of such Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Bank or any Swingline Lender hereunder without the prior written
consent of the Administrative Agent, such Issuing Bank or such Swingline Lender, as the case may
be.



     SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Parent Borrower and the other Loan
Parties, jointly and severally, shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not the transactions
contemplated hereby or thereby shall be



 









 





64




consummated), (ii) all reasonable out-of-pocket expenses incurred by each Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (iii) 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
any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents, 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.




     (b) The Parent Borrower and the other Account Parties, jointly and severally, 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 any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective obligations
thereunder 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), or
(iii) 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 (x)
arise in connection with any judgment rendered by a court of competent jurisdiction in favor of any
Borrower or Account Party against such Indemnitee, (y) result from the gross negligence or wilful misconduct of such Indemnitee or (z) result from any dispute among the
Lenders and the Administrative Agent, or any of them, other than disputes resulting from the fault
of any Loan Party.



     (c) To the extent that the Parent Borrower or any other Account Party fails to pay any amount
required to be paid by it to the Administrative Agent, any Issuing Bank or any Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the applicable Issuing Bank or the applicable Swingline Lender, 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, the applicable Issuing Bank
or the applicable Swingline Lender in its capacity as such.



     (d) To the extent permitted by applicable law, neither Holdings, any Borrower nor any Account
Party 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



 









 





65




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 not later than 30 days 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 Holdings, any Borrower nor any Account Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by Holdings, any Borrower or any Account Party
without such consent shall be null and void) and (ii) no Lender 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, any 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) of:




      (A) the Parent Borrower, provided that no consent of the Parent Borrower
shall be required for an assignment to a Lender, an Affiliate of a Lender or,
if an Event of Default under clause (a), (b), (h) or (i) of Section 7.01 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 to an assignee that is
a Lender or an Affiliate of a Lender immediately prior to giving effect to such
assignment.




(ii) Assignments shall be subject to the following 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, the amount of the Commitment 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
$10,000,000 unless each of the Parent Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Parent Borrower shall be required if an
Event of Default under clause (a), (b), (h) or (i) of Section 7.01 has occurred and is
continuing;



 









 





66





      (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; provided that such fee shall not apply to any assignment
made by a Lender to an Affiliate of such Lender; and




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




    (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, 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 2.14,
2.15, 2.16 and 9.03). 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 Borrowers
and the Account Parties, 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 Holdings, the Borrowers,
the Account Parties, 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 Parent Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.




    (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



 









 





67





	   	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.






    (vi) In the case of any assignment for which the Parent Borrower’s consent is
not required, the Administrative Agent shall provide the Parent Borrower with
notice promptly upon receipt of an Assignment and Assumption with respect to such
assignment;



     (c)(i) Any Lender may, without the consent of Holdings, any Borrower, any Account Party, the
Administrative Agent, any Issuing Bank or any Swingline Lender, 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 and (C) Holdings, the Borrowers, the Account Parties, the Administrative Agent,
each 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. 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 the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents;
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 the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, Holdings, the Borrowers and
the Account Parties agree that each Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 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 that such Participant agrees to be subject to Section 2.17(c) as though it were a
Lender.



     (ii) A Participant shall not be entitled to receive any greater payment under Section 2.14 or
2.16 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 prior written consent of the Parent Borrower. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Parent
Borrower is notified of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrowers and the Account Parties, to comply with Section 2.16(e) as though it
were a Lender.



     (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 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.



 









 





68




     SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the
Loan Parties in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the execution and delivery of
the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.14, 2.15, 2.16 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, the other Loan Documents 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
and either the Loans have become due and payable or any three Lenders representing at least
$50,000,000 in aggregate amount of the Commitments have requested the Administrative Agent, in
writing and in accordance with the provisions of Section 7.01, to declare the Loans to be forthwith
due and payable, each Issuing Bank and 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 Issuing Bank or Lender or Affiliate to or for the
credit or the account of any Borrower or any Account Party



 









 





69




against any of and all the obligations of such Borrower or such Account Party (as the case may be)
now or hereafter existing under this Agreement held by such Issuing Bank or Lender, irrespective of
whether or not such Issuing Bank or Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Issuing Bank and Lender under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Issuing Bank or Lender may have. Any Lender or Issuing Bank exercising its rights under this
Section shall give notice thereof to the relevant Borrower and the relevant Account Party on or
prior to the day of the exercise of such rights.




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



     (a) Each of Holdings, the Borrowers and the Account Parties 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 any Loan Document, 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 or any other Loan Document shall affect any right that the Administrative Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against Holdings, a Borrower or an Account Party or any of
their respective properties in the courts of any jurisdiction.



     (b) Each of Holdings, the Borrowers and the Account Parties 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 or any other Loan Document 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.



     (c) 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 or any other Loan Document 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, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY



 









 





70




(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.




     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, the Issuing Banks 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 (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 any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, (g) with the consent of the Parent 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 Holdings, a Borrower or an Account Party. For
the purposes of this Section, “Information” means all information received from Holdings, any
Borrower or any Account Party relating to Holdings, any Borrower, any Account Party or their
respective business, 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 Holdings, any
Borrower or any Account Party. 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. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at
any time the interest rate applicable to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such



 









 





71




Loan but were not payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by
such Lender.




     SECTION 9.14. USA Patriot Act. Each Lender hereby notifies each of the Loan Parties that
pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies Loan Parties, which information includes the name and address of such
Loan Parties and other information that will allow such Lender to identify such Loan Parties in
accordance with the Patriot Act.



     SECTION 9.15. Waiver Under Existing Credit Agreement. Each of the Lenders party hereto that is
a “Lender” under the Existing Credit Agreement hereby waives advance notice of the termination of
the commitments and prepayment of the loans under the Existing Credit
Agreement; provided that
notice thereof is provided on the Effective Date.



[The remainder of this page has been left blank intentionally.]





 









 






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.



	 	 	 	 	 	 	 
	 
	 	J. C. PENNEY COMPANY, INC.,
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ROBERT B. CAVANAUGH
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Robert B. Cavanaugh
	

	 	 	 	Title:
	 	Executive Vice President
and Chief Financial Officer
	 
	 	 	 	 	 	 
	 
	 	J. C. PENNEY CORPORATION, INC.,
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ MICHAEL D. PORTER
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Michael D. Porter
	

	 	 	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 	 	 
	 
	 	J. C. PENNEY PURCHASING CORPORATION,
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ FRANK N. NAPOLI
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Frank N. Napoli
	

	 	 	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 	 	 
	 
	 	JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent,
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ BARRY K. BERGMAN
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Barry K. Bergman
	

	 	 	 	Title:
	 	Managing Director
	 
	 	 	 	 	 	 
	 
	 	WACHOVIA BANK,
NATIONAL ASSOCIATION, individually and as LC Agent,
	 
	 	 	 	 	 	 
	 
	 	by	 	 
	 
	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Banco Popular de Puerto Rico
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ HECTOR J. GONZALEZ
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Hector J. Gonzalez
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	BARCLAYS BANK PLC
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ NICHOLAS A. BELL
	 
	 	 	 	 
	

	 	 	 	Name:
	 	NICHOLAS A. BELL
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	DIRECTOR

LOAN TRANSACTION MANAGEMENT






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	CITIBANK, N.A.
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ MARCO MERLINO
	 
	 	 	 	 
	

	 	 	 	Name:
	 	MARCO MERLINO
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	MANAGING DIRECTOR






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Credit Suisse First Boston, acting through its Cayman Islands Branch
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ PHILLIP HO
	 
	 	 	 	 
	

	 	 	 	Name:
	 	PHILLIP HO
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	DIRECTOR
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ CASSANDRA DROOGAN
	 
	 	 	 	 
	

	 	 	 	Name:
	 	CASSANDRA DROOGAN
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	ASSOCIATE






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	FLEET NATIONAL
BANK, as Issuing Bank with respect to certain
Existing Letters of Credit and as Issuing Bank in its capacity
as an Affiliate of Bank of America, N.A.
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ROSS EVANS
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Ross Evans
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	HIBERNIA NATIONAL BANK
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ DAVID A. HOLDEN
	 
	 	 	 	 
	

	 	 	 	Name:
	 	David A. Holden
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	HSBC BANK USA
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ROBERT CORDER
	 
	 	 	 	 
	

	 	 	 	Name:
	 	ROBERT CORDER
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	SVP






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Key Bank National Association
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ MICHAEL J. VEGH
	 
	 	 	 	 
	

	 	 	 	Name:
	 	MICHAEL J. VEGH
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	ASSISTANT VICE PRESIDENT






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	National City Bank
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ MICHAEL J. DURBIN
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Michael J. Durbin
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	PNC Bank, National Association
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ PHILLIP K. LIEBSCHER
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Phillip K. Liebscher
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Sovereign Bank
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ JUDITH C. E. KELLY
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Judith C. E. Kelly
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	STANDARD CHARTERED BANK
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ALAN BABCOCK
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Alan Babcock
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ROBERT K. REDDINGTON
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Robert K. Reddington
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	AVP/Credit Documentation Standard Chartered Bank






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	STATE STREET BANK AND TRUST COMPANY
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ JUAN G. SIERRA
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Juan G. Sierra
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Assistant Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	THE BANK OF NEW YORK
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ RANDOLPH E. J. MEDRANO
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Randolph E. J. Medrano
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	THE BANK OF TOKYO-MITSUBISHI, LTD.
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ DOUGLAS M. BARNELL
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Douglas M. Barnell
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Group Head
	

	 	 	 	 	 	Southwest Corporate






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	The Northern Trust Company
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ KATHLEEN D. SCHURR
	 
	 	 	 	 
	

	 	 	 	Name:
	 	KATHLEEN D. SCHURR
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	VICE PRESIDENT






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	The Royal Bank of Scotland plc
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ CHARLOTTE SOHN FUIKS
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Charlotte Sohn Fuiks
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	UMB Bank, n.a.
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ DAVID A. PROFFITT
	 
	 	 	 	 
	

	 	 	 	Name:
	 	DAVID A. PROFFITT
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	SENIOR VICE PRESIDENT






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Union Bank of California, N.A.
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ THERESA L. ROCHA
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Theresa L. Rocha
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	U.S. Bank National Association
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ DOUGLAS A. RICH
	 
	 	 	 	 
	

	 	 	 	Name:
	 	DOUGLAS A. RICH
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	VICE PRESIDENT






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Wachovia Bank, National Association
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ SUSAN T. GALLAGHER
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Susan T. Gallagher
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President






 








 





	 	 	 	 	 	 	 
	 
	 	SIGNATURE PAGE TO J.C. PENNEY
COMPANY, INC. CREDIT AGREEMENT,
DATED AS OF THE DATE FIRST WRITTEN
ABOVE
	 
	 	 	 	 	 	 
	 
	 	LENDER:	 	Wells Fargo Bank, N.A.
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	by	 	/s/ ZACH JOHNSON
	 
	 	 	 	 
	

	 	 	 	Name:
	 	Zach Johnson
	 
	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President