364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT
AGREEMENT (the "Agreement") dated as of October 2, 1996, among
HFS INCORPORATED, a Delaware corporation (the "Borrower"), the
Lenders referred to herein and THE CHASE MANHATTAN BANK, a New
York banking corporation, as agent (the "Administrative Agent")
for the Lenders.
INTRODUCTORY STATEMENT
The Borrower has requested that the Lenders establish a $500,000,000
committed revolving credit facility pursuant to which Revolving Credit Loans may
be made to the Borrower. In addition, the Borrower has requested that the
Lenders provide a procedure pursuant to which each Lender may bid on an
uncommitted basis on short-term borrowings by the Borrower.
Subject to the terms and conditions set forth herein, the Administrative
Agent is willing to act as agent for the Lenders, and each Lender is willing to
make Loans to the Borrower and to participate in Letters of Credit.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise requires, the
following terms shall have the meanings indicated, all accounting terms not
otherwise defined herein shall have the respective meanings accorded to them
under GAAP and all terms defined in the New York Uniform Commercial Code and not
otherwise defined herein shall have the respective meanings accorded to them
therein:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Revolving Credit Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article 2.
"Affiliate" shall mean any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, the Borrower. For
purposes of this definition, a Person shall be deemed to be "controlled by"
another if such latter Person possesses, directly or indirectly, power either to
(i) vote 10% or more of the securities having ordinary voting power for the
election of directors of such controlled Person or (ii) direct or cause the
direction of the management and policies of such controlled Person whether by
contract or otherwise.
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"Alternate Base Rate" shall mean for any day, a rate per annum (rounded
upwards to the nearest 1/16 of 1% if not already an integral multiple of 1/16 of
1%) equal to the greatest of (a) the Prime Rate in effect for such day, (b) the
Federal Funds Effective Rate in effect for such day plus 1/2 of 1% or (c) the
Base CD Rate in effect for such day plus 1%. For purposes hereof, "Prime Rate"
shall mean the rate per annum publicly announced by the Administrative Agent
from time to time as its prime rate in effect at its principal office in New
York City. For purposes of this Agreement, any change in the Alternate Base Rate
due to a change in the Prime Rate shall be effective on the date such change in
the Prime Rate is announced as effective. "Federal Funds Effective Rate" shall
mean, for any period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. "Base CD Rate" shall mean the sum
of (a) the product of (i) the Average Weekly Three-Month Secondary CD Rate times
(ii) a fraction of which the numerator is 100% and the denominator is 100% minus
the aggregate rates of (A) basic and supplemental reserve requirements in effect
on the date of effectiveness of such Average Weekly Three-Month Secondary CD
Rate, as set forth below, under Regulation D of the Board applicable to
certificates of deposit in units of $100,000 or more issued by a "member bank"
located in a "reserve city" (as such terms are used in Regulation D) and (B)
marginal reserve requirements in effect on such date of effectiveness under
Regulation D applicable to time deposits of a "member bank" and (b) the
Assessment Rate. "Average Weekly Three-Month Secondary CD Rate" shall mean the
three-month secondary certificate of deposit ("CD") rate for the most recent
weekly period covered therein in the Federal Reserve Statistical release
entitled "Weekly Summary of Lending and Credit Measures (Averages of daily
figures)" released in the week during which occurs the day for which the CD rate
is being determined. The CD rate so reported shall be in effect, for the
purposes of this definition, for each day of the week in which the release date
of such publication occurs. If such publication or a substitute containing the
foregoing rate information is not published by the Federal Reserve for any week,
such average rate shall be determined by the Administrative Agent on the basis
of quotations received by it from three New York City negotiable certificate of
deposit dealers of recognized standing on the first Business Day of the week
succeeding such week for which such rate information is not published. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain
the Base CD Rate or Federal Funds Effective Rate, or both, for any reason,
including, without limitation, the inability or failure of the Administrative
Agent to obtain sufficient bids or publications in accordance with the terms
hereof, the Alternate Base Rate shall be determined without regard to clause (b)
or (c), or both, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Average
Weekly Three-Month Secondary CD Rate shall be effective on the effective date of
such change in the CD Rate. Any change in the Alternate Base Rate due to a
change in the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Federal Funds Effective Rate.
"Applicable Law" shall mean all provisions of statutes, rules, regulations
and orders of governmental bodies or regulatory agencies applicable to a Person,
and all orders and decrees of all courts and arbitrators in proceedings or
actions in which the Person in question is a party.
"Assessment Rate" shall mean, for any day, the net annual assessment rate
(rounded upwards, if necessary, to the next higher Basis Point) as most recently
estimated by the Administrative Agent for determining the then current annual
assessment payable by the Administrative Agent to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or such
successor) of time deposits made in dollars at the Administrative Agent's
domestic offices.
"Assignment and Acceptance" shall mean an agreement in the form of Exhibit
C hereto, executed by the assignor, assignee and the other parties as
contemplated thereby.
"Avis" shall mean Avis, Inc., a Delaware corporation.
"Avis L/C" shall mean one or more Letters of Credit issued under the Five
Year Credit Agreement in an amount equal to the L/C Amount (as defined in the
Avis Merger Agreement as in effect on the date hereof).
"Avis Merger Agreement" shall mean the Agreement and Plan of Merger, dated
as of August 23, 1996 and as amended as of September 11, 1996, by and among the
Borrower, Avis Acquisition Corp., U.S. Trust Company of California, N.A., as
trustee of the trust forming a part of the Avis, Inc. Employee Stock Ownership
Plan, and Avis.
"Basis Point" shall mean 1/100th of 1%.
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"Board" shall mean the Board of Governors of the Federal Reserve System.
"Borrower Stock Price" shall mean, for any day, the per share closing price
of the common stock, par value $.01 per share, of Borrower on the New York Stock
Exchange Composite Transaction Reporting System for the trading day immediately
preceding such day; provided that the definition of Borrower Stock Price shall
be adjusted as such shares of common stock are, from time to time, converted
into or exchanged for a different number or kind of shares of the Borrower or
other securities of the Borrower by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares or otherwise.
"Borrowing" shall mean a group of Loans of a single Interest Rate Type made
by the Lenders (or in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.4) on a
single date and as to which a single Interest Period is in effect.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banks in the State of New York are permitted to close; provided,
however, that when used in connection with a LIBOR Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in Dollar
deposits on the London Interbank Market.
"Capital Expenditures" shall mean, with respect to any Person for any
period, the aggregate of all expenditures (whether paid in cash or accrued as a
liability) by such Person during that period which, in accordance with GAAP, are
or should be included in "additions to property, plant or equipment" or similar
items reflected in the statement of cash flows of such Person.
"Capital Lease" shall mean as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Collateral Account" shall mean a collateral account established with
the Administrative Agent, in the name of the Administrative Agent and under its
sole dominion and control, into which the Borrower shall from time to time
deposit Dollars pursuant to the express provisions of this Agreement requiring
such deposit.
"Cash Equivalents" shall mean (i) investments in commercial paper maturing
in not more than 270 days from the date of issuance which at the time of
acquisition is rated at least A-1 or the equivalent thereof by S&P, or P-1 or
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the equivalent thereof by Moody's, (ii) investments in direct obligations
or obligations which are guaranteed or insured by the United States of America
or any agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof) having a
maturity of not more than three years from the date of acquisition, (iii)
investments in certificates of deposit maturing not more than one year from the
date of origin issued by a bank or trust company organized or licensed under the
laws of the United States of America or any state or territory thereof having
capital, surplus and undivided profits aggregating at least $500,000,000 and A
rated or better by S&P or Moody's, (iv) money market mutual funds having assets
in excess of $2,000,000,000, (v) investments in asset-backed or mortgage-backed
securities, including investments in collateralized, adjustable rate mortgage
securities and those mortgage-backed securities which are rated at least AA by
S&P or Aa by Moody's or are of comparable quality at the time of investment, and
(vi) banker's acceptances maturing not more than one year from the date of
origin issued by a bank or trust company organized or licensed under the laws of
the United States of America or any state or territory thereof and having a
capital, surplus and undivided profits aggregating at least $500,000,000, and
rated A or better by S&P or Moody's.
"Change in Control" shall mean (i) the acquisition 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),
directly or indirectly, beneficially or of record, of ownership or control of in
excess of 30% of the voting common stock of the Borrower on a fully diluted
basis at any time or (ii) if at any time, individuals who at the date hereof
constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Borrower, as the case may be, was approved
by a vote of the majority of the directors then still in office who were either
directors at the date hereof or whose election or a nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office.
"Chase" shall mean The Chase Manhattan Bank, a New York banking
corporation.
"Closing Date" shall mean the date on which the conditions precedent to the
making of the Loans as set forth in Section 4.1 have been satisfied or waived,
which shall in no event be later than October 31, 1996.
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"Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations issued thereunder, as now and hereafter in effect, or any successor
provision thereto.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender as set forth (i) on Schedule 2.1 hereto, (ii) any applicable
Assignment and Acceptance to which it may be a party, and/or (iii) any
applicable Commitment Increase Supplement, and/or (iv) any agreement delivered
pursuant to Section 2.24(d), as the case may be, as such Lender's Commitment may
be permanently terminated or reduced from time to time pursuant to Section 2.12
or 2.24 or Article 7 or increased pursuant to Section 2.23. The Commitments
shall automatically and permanently terminate on the earlier of (a) the Maturity
Date or (b) the date of termination in whole pursuant to Section 2.12 or Article
7.
"Commitment Expiration Date" shall have the meaning assigned to such term
in Section 2.24(a).
"Commitment Increase Supplement" shall mean a Commitment Increase
Supplement, substantially in the form of Exhibit G.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to Section 2.4 in the form of Exhibit E-3.
"Competitive Bid Accept/Reject Letter" shall mean a notification made by
the Borrower pursuant to Section 2.4(d) in the form of Exhibit E-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender pursuant to Section 2.4(b), (a) in the case of a LIBOR Loan, the Margin
and (b) in the case of a Fixed Rate Loan, the fixed rate of interest offered by
the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section 2.4
in the form of Exhibit E-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bids for such Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.4.
"Competitive Loan" shall mean a Loan from a Lender to the Borrower pursuant
to the bidding procedure described in Section 2.4. Each Competitive Loan shall
be a LIBOR Competitive Loan or a Fixed Rate Loan.
"Competitive Note" shall have the meaning assigned to such term in Section
2.8.
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"Consolidated Assets" shall mean, at any date of determination, the total
assets of the Borrower and its Consolidated Subsidiaries determined in
accordance with GAAP.
"Consolidated EBITDA" shall mean, without duplication, for any period for
which such amount is being determined, the sum of the amounts for such period of
(i) Consolidated Net Income, (ii) provision for taxes based on income, (iii)
depreciation expense, (iv) Consolidated Interest Expense, (v) amortization
expense, plus (vi) other non-cash items reducing Consolidated Net Income, all as
determined on a consolidated basis for the Borrower and its Consolidated
Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" shall mean for any period for which such
amount is being determined, total interest expense paid or payable in cash
(including that properly attributable to Capital Leases in accordance with GAAP
but excluding in any event all capitalized interest and amortization of debt
discount and debt issuance costs) of the Borrower and its Consolidated
Subsidiaries on a consolidated basis including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net cash costs (or minus net
profits) under Interest Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period for which such amount
is being determined, the net income (loss) of the Borrower and its Consolidated
Subsidiaries during such period determined on a consolidated basis for such
period taken as a single accounting period in accordance with GAAP, provided
that there shall be excluded (i) income (or loss) of any Person (other than a
Consolidated Subsidiary of the Borrower) in which the Borrower or any of its
Consolidated Subsidiaries has an equity investment or comparable interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or of its Consolidated Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the date
it becomes a Consolidated Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Consolidated Subsidiaries or the
Person's assets are acquired by the Borrower or any of its Consolidated
Subsidiaries, (iii) the income of any Consolidated Subsidiary of the Borrower to
the extent that the declaration or payment of dividends or similar distributions
by that Consolidated Subsidiary of the income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Consolidated Subsidiary, (iv) any extraordinary after-tax gains and
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(v) any extraordinary pretax losses but only to the extent attributable to
a write-down of financing costs relating to any existing and future
indebtedness.
"Consolidated Subsidiaries" shall mean all Subsidiaries of the Borrower
that are required to be consolidated with the Borrower for financial reporting
purposes in accordance with GAAP.
"Consolidated Total Indebtedness" shall mean the total amount of
Indebtedness of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis using GAAP principles of consolidation, but without regard to
whether or not any such Indebtedness would be required to be shown on a
consolidated balance sheet prepared in accordance with GAAP; provided that (i)
if the Borrower Stock Price is $40 or more on the last day of any fiscal
quarter, then an amount equal to 50% of the amount of the L/C Exposure in
respect of the Avis L/C shall be included in determining Consolidated Total
Indebtedness on such day rather than the actual amount thereof and (ii)
Consolidated Total Indebtedness shall be deemed to include, at the time of any
computation thereof, the aggregate amount of any outstanding loans to, any
investment in the capital stock of, any purchase price in excess of the fair
market value of assets of, and any other investments by the Borrower and its
Subsidiaries (other than Avis and its Subsidiaries) in, Avis and its
Subsidiaries (other than the purchase price paid by the Borrower to acquire
Avis). The amount of any such investment at any time shall equal the original
cost thereof plus any additions thereto (in each case without giving effect to
any appreciation or depreciation in the value thereof) net of any returns
thereon actually received by the Borrower or any of its Subsidiaries (other than
Avis and its Subsidiaries).
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Environmental Laws" shall mean any and all federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning, any Hazardous Material or
environmental protection or health and safety, as now or may at any time
hereafter be in effect, including without limitation, the Clean Water Act also
known as the Federal Water Pollution Control Act ("FWPCA") 33 U.S.C. Para 1251
et seq., the Clean Air Act ("CAA"), 42 U.S.C. Sub Para 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. Sub Para 136 et
9
seq., the Surface Mining Control and Reclamation Act ("SMCRA"), 30-U.S.C.
Sub Para 1201 et seq., the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), 42 U.S.C. Para 9601 et seq., the Superfund
Amendment and Reauthorization Act of 1986 ("SARA"), Public Law 99-499, 100 Stat.
1613, the Emergency Planning and Community Right to Know Act ("ECPCRKA"), 42
U.S.C. Para 11001 et seq., the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Para 6901 et seq., the Occupational Safety and Health Act as amended
("OSHA"), 29 U.S.C. Para 655 and Para657, together, in each case, with any
amendment thereto, and the regulations adopted and publications promulgated
thereunder and all substitutions thereof.
"Environmental Liabilities" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
such Act may be amended, and the regulations promulgated thereunder.
"Existing Credit Agreement" shall have the meaning assigned to such term in
Section 4.1(h).
"Extension Request" means each request by the Borrower made pursuant to
Section 2.24 for the Lenders to extend the Maturity Date, which shall contain
the information in respect of such extension specified in Exhibit H and shall be
delivered to the Administrative Agent in writing.
"Event of Default" shall have the meaning given such term in Article 7
hereof.
"Facility Fee" shall have the meaning given such term in Section 2.7
hereof.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed Rate
Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such loan in its
Competitive Bid.
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"Five Year Credit Agreement" shall mean the Five Year Competitive Advance
and Revolving Credit Agreement, dated as of the date hereof, among the Borrower,
the lenders referred to therein and Chase, as administrative agent.
"Fundamental Documents" shall mean this Agreement, any Revolving Credit
Notes, any Competitive Notes and any other ancillary documentation which is
required to be, or is otherwise, executed by the Borrower and delivered to the
Administrative Agent in connection with this Agreement.
"GAAP" shall mean generally accepted accounting principles consistently
applied (except for accounting changes in response to FASB releases or other
authoritative pronouncements) provided, however, that all calculations made
pursuant to Sections 6.7 and 6.8 and the related definitions shall have been
computed based on such generally accepted accounting principles as are in effect
on the date hereof.
"Governmental Authority" shall mean any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
or any court, in each case whether of the United States or foreign.
"Guaranty" shall mean, as to any Person, any direct or indirect obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, Capital
Lease, dividend or other monetary obligation ("primary obligation") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services, in each case, primarily for the purpose of
assuring the owner of any such primary obligation of the repayment of such
primary obligation or (d) as a general partner of a partnership or a joint
venturer of a joint venture in respect of indebtedness of such partnership or
such joint venture which is treated as a general partnership for purposes of
Applicable Law. The amount of any Guaranty shall be deemed to be an amount equal
to the stated or determinable amount (or portion thereof) of the primary
obligation in respect of which such Guaranty is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder); provided, however,
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that the amount of any Guaranty shall be limited to the extent necessary so
that such amount does not exceed the value of the assets of such Person (as
reflected on a consolidated balance sheet of such Person prepared in accordance
with GAAP) to which any creditor or beneficiary of such Guaranty would have
recourse. Notwithstanding the foregoing definition, the term "Guaranty" shall
not include any direct or indirect obligation of a Person as a general partner
of a general partnership or a joint venturer of a joint venture in respect of
Indebtedness of such general partnership or joint venture, to the extent such
Indebtedness is contractually non-recourse to the assets of such Person as a
general partner or joint venturer (other than assets comprising the capital of
such general partnership or joint venture).
"Hazardous Materials" shall mean any flammable materials, explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or similar materials defined as such in any Environmental Law.
"Hotel Subsidiary" shall mean any Subsidiary of the Borrower which (a) is
engaged as its principal activity, in the hotel franchising business or related
activities or (b) owns or licenses from a Person other than the Borrower or
another Subsidiary, any Proprietary Right related to the hotel franchising
business.
"Indebtedness" shall mean (without double counting), at any time and with
respect to any Person, (i) indebtedness of such Person for borrowed money
(whether by loan or the issuance and sale of debt securities) or for the
deferred purchase price of property or services purchased (other than amounts
constituting trade payables arising in the ordinary course and payable within
120 days); (ii) indebtedness of others which such Person has directly or
indirectly assumed or guaranteed (but only to the extent so assumed or
guaranteed) or otherwise provided credit support therefor, including without
limitation, Guaranties; (iii) indebtedness of others secured by a Lien on assets
of such Person, whether or not such Person shall have assumed such indebtedness
(but only to the extent of the fair market value of such assets); (iv)
obligations of such Person in respect of letters of credit, acceptance
facilities, or drafts or similar instruments issued or accepted by banks and
other financial institutions for the account of such Person (other than trade
payables arising in the ordinary course and payable within 120 days); or (v)
obligations of such Person under Capital Leases.
"Interest Coverage Ratio" shall mean, for each period for which it is to be
determined, the ratio of (i) Consolidated EBITDA minus the amount of Restricted
Payments and Capital Expenditures of the Borrower and its Consolidated
Subsidiaries (determined on a consolidated basis, in accordance with GAAP) to
the extent paid in cash (including cash payments during such period to liquidate
any such item previously accrued as a liability) to (ii) Consolidated Interest
Expense.
"Interest Payment Date" shall mean, with respect to any Borrowing, the last
day of the Interest Period applicable thereto and, in the case of a LIBOR
Borrowing with an Interest Period of more than three months' duration or a Fixed
Rate Borrowing with an Interest Period of more than 90 days' duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months, duration or 90 days' duration, as the case may be, been applicable
to such Borrowing, and, in addition, the date of any refinancing or conversion
of a Borrowing with, or to, a Borrowing of a different Interest Rate Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing, the period
commencing on the date of such Borrowing, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3, 6 or, subject to each Lender's
approval, 12 months thereafter, as the Borrower may elect, (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing and ending on the
earliest of (i) the next succeeding March 31, June 30, September 30 or December
31, commencing December 31, 1996, (ii) the Maturity Date and (iii) the date such
Borrowing is refinanced with a Borrowing of a different Interest Rate Type in
accordance with Section 2.6 or is prepaid in accordance with Section 2.13, (c)
as to any Fixed Rate Borrowing, the period commencing on the date of such
Borrowing and ending on the date specified in the Competitive Bids in which the
offer to make the Fixed Rate Loans comprising such Borrowing were extended,
which shall not be earlier than seven days after the date of such Borrowing or
later than 360 days after the date of such Borrowing and (d) with respect to
Loans made by an Objecting Lender, no Interest Period with respect to such
Objecting Lender's Loans shall end after such Objecting Lender's Commitment
Expiration Date; provided, however, that (i) if any Interest Period would end on
a day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of LIBOR Loans 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 (ii) no
Interest Period with respect to any LIBOR Borrowing or Fixed Rate Borrowing may
be selected which would result in the aggregate amount of LIBOR Loans and Fixed
Rate Loans having Interest Periods ending after any day on which a Commitment
reduction is scheduled to occur being in excess of the Total Commitment
scheduled to be in effect after such date. Interest shall accrue from, and
including, the first day of an Interest Period to, but excluding, the last day
of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement or other similar financial agreement or
arrangement.
"Interest Rate Type" when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include LIBOR, the Alternate Base Rate and the Fixed Rate.
"Issuing Lender" shall mean Chase or its Affiliates, and/or such other of
the Lenders as may be designated in writing by the Borrower and which agrees in
writing to act as such in accordance with the terms hereof.
"Lender and "Lenders" shall mean the financial institutions whose names
appear at the foot hereof and any assignee of a Lender pursuant to Section
9.3(b).
"Lending Office" shall mean, with respect to any of the Lenders, the branch
or branches (or affiliate or affiliates) from which any such Lender's LIBOR
Loans, Fixed Rate Loans or ABR Loans, as the case may be, are made or maintained
and for the account of which all payments of principal of, and interest on, such
Lender's LIBOR Loans, Fixed Rate Loans or ABR Loans are made, as notified to the
Administrative Agent from time to time.
"LIBOR" shall mean, with respect to any LIBOR Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
Basis Point) equal to the rate at which Dollar deposits approximately equal in
principal amount to (a) in the case of a Revolving Credit Borrowing, Chase's
portion of such LIBOR Borrowing and (b) in the case of a Competitive Borrowing,
a principal amount that would have been Chase's portion of such Competitive
Borrowing had such Competitive Borrowing been a Revolving Credit Borrowing, and
for a maturity comparable to such Interest Period, are offered to the principal
London office of Chase 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.
"LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR Loans.
14
"LIBOR Competitive Loan" shall mean any Competitive Loan bearing interest
at a rate determined by reference to LIBOR in accordance with the provisions of
Article 2.
"LIBOR Loan" shall mean any LIBOR Competitive Loan or LIBOR Revolving
Credit Loan.
"LIBOR Revolving Credit Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to LIBOR in accordance with the
provisions of Article 2.
"LIBOR Spread" shall mean, at any date or any period of determination, the
LIBOR Spread that would be in effect on such date or during such period pursuant
to the chart set forth in Section 2.22 based on the rating of the Borrower's
senior unsecured long-term debt.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind whatsoever (including any conditional sale or other
title retention agreement, any lease in the nature thereof or agreement to give
any financing statement under the Uniform Commercial Code of any jurisdiction).
"Loan" shall mean a Competitive Loan or a Revolving Credit Loan, whether
made as a LIBOR Loan, an ABR Loan or a Fixed Rate Loan, as permitted hereby.
"Margin" shall mean, as to any LIBOR Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to four
decimal places) to be added to, or subtracted from, LIBOR in order to determine
the interest rate applicable to such Loan, as specified in the Competitive Bid
relating to such Loan.
"Margin Stock" shall be as defined in Regulation U of the Board.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean (i) any Subsidiary of the Borrower which,
together with its Subsidiaries at the time of determination hold, or, solely
with respect to Sections 7(f) and 7(g), any group of Subsidiaries which, if
merged into each other at the time of determination would hold, assets
constituting 10% or more of Consolidated Assets or accounts for 10% or more of
Consolidated EBITDA for the Rolling Period immediately preceding the date of
determination or (ii) any Subsidiary of the Borrower which holds material
trademarks, tradenames or other intellectual property rights.
"Maturity Date" shall mean October 1, 1997 or such later date as shall be
determined pursuant to the provisions of Section 2.24 with respect to
non-Objecting Lenders.
"Moody's" shall mean Moody's Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in Section 3(37) of ERISA.
"Notes" shall mean the Competitive Notes and the Revolving Credit Notes.
"non-Objecting Lender" shall mean any Lender that is not an Objecting
Lender.
"Obligations" shall mean the obligation of the Borrower to make due and
punctual payment of principal of, and interest on, the Loans, the Facility Fee,
reimbursement obligations in respect of Letters of Credit and all other monetary
obligations of the Borrower to the Administrative Agent, any Issuing Lender or
any Lender under this Agreement, the Notes or the Fundamental Documents or with
respect to any Interest Rate Protection Agreements entered into between the
Borrower and any Lender.
"Objecting Lender" shall mean any Lender that does not consent to the
extension of the Maturity Date pursuant to Section 2.24.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Encumbrances" shall mean Liens permitted under Section 6.5
hereof.
"Person" shall mean any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean an employee pension benefit plan described in Section
3(2) of ERISA, other than a Multiemployer Plan.
"Pro Forma Basis" shall mean in connection with any transaction for which a
determination on a Pro Forma Basis is required to be made hereunder, that such
determination shall be made (i) after giving effect to any issuance of
Indebtedness, any acquisition, any disposition or any other transaction (as
applicable) and (ii) assuming that the issuance of Indebtedness, acquisition,
16
disposition or other transaction and, if applicable, the application of any
proceeds therefrom, occurred at the beginning of the most recent Rolling Period
ending at least thirty (30) days prior to the date on which such issuance of
Indebtedness, acquisition, disposition or other transaction occurred.
"Receivables" shall mean accounts receivables (and related rights) of the
Borrower or any Subsidiary.
"Receivables Facility" shall mean the Coldwell Banker Relocation Services,
Inc. receivables facility evidenced by the Amended and Restated Investor Funding
Agreement, dated as of October 5, 1994 among Coldwell Banker Funding
Corporation, Bankers Trust Company, the Investors party thereto, Citicorp North
America Inc. and Bank of America Illinois, The Homeowner Employee Asset
Receivable Trust Amended and Restated Pooling and Servicing Agreement, dated as
October 5, 1994 among Coldwell Banker Funding Corporation, Coldwell Banker
Relocation Services, Inc., Citicorp North America, Inc. and Bankers Trust
Company and the Amended and Restated Purchase Agreement, dated as of October 5,
1994 by and between Coldwell Banker Relocation Services, Inc. and Coldwell
Banker Funding Corporation, as each of the foregoing may from time to time be
amended, modified or supplemented and any replacement or refinancing thereof
whether or not with the same parties.
"Reportable Event" shall mean any reportable event as defined in Section
4043(b) of ERISA, other than a reportable event as to which provision for 30-day
notice to the PBGC would be waived under applicable regulations had the
regulations in effect on the Closing Date been in effect on the date of
occurrence of such reportable event.
"Required Lenders" shall mean at any time, Lenders holding Commitments
representing 51% of the Total Commitment, except that (i) for purposes of
determining the Lenders entitled to declare the principal of and the interest on
the Loans and the Notes and all other amounts payable hereunder or thereunder to
be forthwith due and payable pursuant to Article 7 and (ii) at all times after
the termination of the Total Commitment in its entirety, "Required Lenders"
shall mean Lenders holding 51% of the aggregate principal amount of the Loans at
the time outstanding.
"Restricted Payment" shall mean (i) any distribution, dividend or other
direct or indirect payment on account of shares of any class of stock of the
Borrower or any Subsidiary now or hereafter outstanding except for
distributions, dividends or other payments solely in shares of capital stock of
a Subsidiary which are distributed pro rata to its stockholders or solely in
shares of capital stock of the Borrower, (ii) any redemption or other
17
acquisition or re-acquisition by the Borrower or a Subsidiary of any class
of its own stock or other equity interest of the Borrower, a Subsidiary or an
Affiliate now or hereafter outstanding, and (iii) any payment made to retire, or
obtain the surrender of any outstanding warrants or options or other rights to
purchase or acquire shares of any class of stock of the Borrower or a Subsidiary
now or hereafter outstanding; provided, however, that the term "Restricted
Payment" as used herein, shall not include any distribution, dividend,
redemption or other payment made to the Borrower by any of its Consolidated
Subsidiaries, or to any of the Borrower's Consolidated Subsidiaries by the
Borrower or any of its other Consolidated Subsidiaries.
"Revolving Credit Borrowing" shall mean a Borrowing consisting of
simultaneous Revolving Credit Loans from each of the Lenders.
"Revolving Credit Borrowing Request" shall mean a request made pursuant to
Section 2.5 in the form of Exhibit F.
"Revolving Credit Loans" shall mean the Loans made by the Lenders to the
Borrower pursuant to a notice given by the Borrower under Section 2.5. Each
Revolving Credit Loan shall be a LIBOR Revolving Credit Loan or an ABR Loan.
"Revolving Credit Note" shall have the meaning assigned to such term in
Section 2.8.
"Rolling Period" shall mean with respect to any fiscal quarter, such fiscal
quarter and the three immediately preceding fiscal quarters considered as a
single accounting period.
"S&P" shall mean Standard & Poor's Ratings Services.
"Statutory Reserves" shall mean 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 and any other banking authority to which the
Administrative Agent or any Lender is subject, for Eurocurrency Liabilities (as
defined in Regulation D). Such reserve percentages shall include those imposed
under Regulation D. LIBOR Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Subsidiary" shall mean with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether now
existing or hereafter organized) of which at least a majority of the voting
stock or other ownership interests having ordinary voting power for the election
of directors (or the equivalent) is, at the time as of which any determination
is being made, owned or controlled by such Person or one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person;
provided that for purposes of Sections 6.1, 6.2, 6.5, 6.7 and 6.8 hereof, Avis
and its Subsidiaries shall be deemed not to be Subsidiaries of the Borrower.
"Supermajority Lenders" means Lenders (a) which are not Objecting Lenders
with respect to any previous Extension Request and (b) which have Commitments
representing at least 75% of the aggregate Commitment Percentages of such
non-Objecting Lenders.
"Total Commitment" shall mean, at any time, the aggregate amount of the
Lenders' Commitments as in effect at such time.
2. THE LOANS
SECTION 2.1. Commitments.
(a) Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Revolving Credit Loans to the Borrower, at any time and
from time to time on and after the Closing Date and until the earlier of the
Maturity Date and the termination of the Commitment of such Lender, in an
aggregate principal amount at any time outstanding not to exceed such Lender's
Commitment minus the sum of such Lender's pro rata share of the amount by which
the Competitive Loans outstanding at such time shall be deemed to have used such
Lender's Commitment pursuant to Section 2.18 subject, however, to the conditions
that (a) at no time shall (i) the sum of (A) the outstanding aggregate principal
amount of all Revolving Credit Loans made by all Lenders plus (B) the
outstanding aggregate principal amount of all Competitive Loans made by all
Lenders exceed (ii) the Total Commitment and (b) at all times the outstanding
aggregate principal amount of all Revolving Credit Loans made by each Lender
shall equal the product of (i) the percentage that its Commitment represents of
the Total Commitment times (ii) the outstanding aggregate principal amount of
all Revolving Credit Loans made pursuant to a notice given by the Borrower under
Section 2.5. The Commitments of the Lenders may be terminated or reduced from
time to time pursuant to Section 2.12 or Article 7.
5 19
(b) Within the foregoing limits, the Borrower may borrow, pay or repay and
reborrow hereunder, on and after the Closing Date and prior to the Maturity
Date, upon the terms and subject to the conditions and limitations set forth
herein.
SECTION 2.2. Loans.
(a) Each Revolving Credit Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
Commitments; provided, however, that the failure of any Lender to make any
Revolving Credit Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.4. The Revolving Credit Loans or
Competitive Loans comprising any Borrowing shall be (i) in the case of
Competitive Loans and LIBOR Loans, in an aggregate principal amount that is an
integral multiple of $5,000,000 and not less than $10,000,000 and (ii) in the
case of ABR Loans, in an aggregate principal amount that is an integral multiple
of $500,000 and not less than $5,000,000 (or if less, an aggregate principal
amount equal to the remaining balance of the available Total Commitment).
(b) Each Competitive Borrowing shall be comprised entirely of LIBOR
Competitive Loans or Fixed Rate Loans, and each Revolving Credit Borrowing shall
be comprised entirely of LIBOR Revolving Credit Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.4 or 2.5, as applicable. Each Lender
may at its option make any LIBOR Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan, provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement and the applicable Note.
Borrowings of more than one Interest Rate Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in an aggregate of more than 9 separate
Revolving Credit Loans of any Lender being outstanding hereunder at any one
time. For purposes of the calculation required by the immediately preceding
sentence, LIBOR Revolving Credit Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Loans and all Loans of a single Interest Rate Type made on a single
date shall be considered a single Loan if such Loans have a common Interest
Period.
(c) Subject to Section 2.6, each Lender shall make each Loan to be made by
it hereunder on the proposed date thereof by making funds available at the
offices of the Administrative. Agent's Agent Bank Services Department, 140 East
45th Street, New York, New York 10017, Attention: Sandra Miklave, for credit to
HFS Incorporated Clearing Account, Account No. 144812905 (Reference: HFS
Incorporated Credit Agreement dated as of October 2, 1996) no later than 1:00
20
P.M. New York City time in Federal or other immediately available funds.
Upon receipt of the funds to be made available by the Lenders to fund any
Borrowing hereunder, the Administrative Agent shall disburse such funds by
depositing them into an account of the Borrower maintained with the
Administrative Agent. Competitive Loans shall be made by the Lender or Lenders
whose Competitive Bids therefor are accepted pursuant to Section 2.4 in the
amounts so accepted and Revolving Credit Loans shall be made by all the Lenders
pro rata in accordance with Section 2.1 and this Section 2.2.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
SECTION 2.3. Use of Proceeds.
The proceeds of the Loans shall be used for working capital and general
corporate purposes of the Company and its Subsidiaries, including, without
limitation, for acquisitions, support of the Borrower's commercial paper program
and refinancing of the Borrower's indebtedness under the Existing Credit
Agreement.
SECTION 2.4. Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Borrower shall hand deliver
or telecopy to the Administrative Agent a duly completed Competitive Bid Request
in the form of Exhibit E-1, to be received by the Administrative Agent (i) in
the case of a LIBOR Competitive Borrowing, not later than 10:00 a.m., New York
City time, four Business Days before a proposed Competitive Borrowing and (ii)
in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City
time, one Business Day before a proposed Competitive Borrowing. No ABR Loan
shall be requested in, or made pursuant to, a Competitive Bid Request. A
Competitive Bid Request that does not conform substantially to the format of
Exhibit E-1 may be rejected in the Administrative Agent's sole discretion, and
the Administrative Agent shall promptly notify the Borrower of such rejection by
telecopier. Such request for Competitive Bids shall in each case refer to this
Agreement and specify (i) whether the Borrowing then being requested is to be a
LIBOR Borrowing or a Fixed Rate Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day) and the aggregate principal amount thereof,
which shall be in a minimum principal amount of $10,000,000 and in an integral
multiple of $5,000,000, and (iii) the Interest Period with respect thereto
(which may not end after the Maturity Date). Promptly after its receipt of a
Competitive Bid Request that is not rejected as aforesaid, the Administrative
Agent shall invite by telecopier (in the form set forth in Exhibit E-2) the
Lenders to bid, on the terms and subject to the conditions of this
21
Agreement, to make Competitive Loans pursuant to the Competitive Bid
Request.
(b) Each Lender may, in its sole discretion, make one or more Competitive
Bids to the Borrower responsive to a Competitive Bid Request. Each Competitive
Bid by a Lender must be received by the Administrative Agent via telecopier, in
the form of Exhibit E-3, (i) in the case of a LIBOR Competitive Borrowing, not
later than 9:30 a.m., New York City time, three Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing. Multiple bids will be accepted by the Administrative Agent.
Competitive Bids that do not conform substantially to the format of Exhibit E-3
may be rejected by the Administrative Agent after conferring with, and upon the
instruction of, the Borrower, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (i) the principal
amount (which shall be in a minimum principal amount of $10,000,000 and in an
integral multiple of $5,000,000 and which may equal the entire principal amount
of the Competitive Borrowing requested by the Borrower) of the Competitive Loan
or Loans that the Lender is willing to make to the Borrower, (ii) the
Competitive Bid Rate or Rates at which the Lender is prepared to make the
Competitive Loan or Loans and (iii) the Interest Period or Interest Periods with
respect thereto. If any Lender shall elect not to make a Competitive Bid, such
Lender shall so notify the Administrative Agent via telecopier (i) in the case
of LIBOR Competitive Loans, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case of
Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing; provided, however, that failure by any Lender to
give such notice shall not cause such Lender to be obligated to make any
Competitive Loan as part of such proposed Competitive Borrowing. A Competitive
Bid submitted by a Lender pursuant to this paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the Borrower by
telecopier of all the Competitive Bids made, the Competitive Bid Rate or Rates
and the principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Lender that made each bid. The
Administrative Agent shall send a copy of all Competitive Bids to the Borrower
for its records as soon as practicable after completion of the bidding process
set forth in this Section 2.4.
(d) The Borrower may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Borrower shall notify the Administrative
Agent by telephone, promptly confirmed by telecopier in the form of a
Competitive Bid Accept/Reject Letter whether and to what extent it has decided
22
to accept or reject any or all of the bids referred to in paragraph (c)
above, (i) in the case of a LIBOR Competitive Borrowing, not later than 10:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:30
a.m., New York City time, on the day of a proposed Competitive Borrowing;
provided, however, that (A) the failure by the Borrower to give such notice
shall be deemed to be a rejection of all the bids referred to in paragraph (c)
above, (B) the Borrower shall not accept a bid made at a particular Competitive
Bid Rate if the Borrower has decided to reject a bid made at a lower Competitive
Bid Rate, (C) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the principal amount specified in the Competitive Bid
Request, (D) if the Borrower shall accept a bid or bids made at a particular
Competitive Bid Rate but the amount of such bid or bids shall cause the total
amount of bids to be accepted by the Borrower to exceed the amount specified in
the Competitive Bid Request, then the Borrower shall accept a portion of such
bid or bids in an amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted at lower
Competitive Bid Rates with respect to such Competitive Bid Request (it being
understood that acceptance in the case of multiple bids at such Competitive Bid
Rate, shall be made pro rata in accordance with the amount of each such bid at
such Competitive Bid Rate) and (E) except pursuant to clause (D) above, no bid
shall be accepted for a Competitive Loan unless such Competitive Loan is in a
minimum principal amount of $10,000,000 and an integral multiple of $5,000,000;
provided further, however, that if a Competitive Loan must be in an amount less
than $10,000,000 because of the provisions of clause (D) above, such Competitive
Loan shall be in a minimum principal amount of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (D), the amounts shall be rounded to integral multiples of $1,000,000 in
a manner that shall be in the discretion of the Borrower. A notice given by the
Borrower pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether its Competitive Bid has been accepted (and if so, in what amount and at
what Competitive Bid Rate) by telecopy sent by the Administrative Agent, and
each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its bid has been accepted.
(f) A Competitive Bid Request shall not be made within four Business Days
after the date of any previous Competitive Bid Request, or such shorter period
as may be agreed upon by the Borrower and the Administrative Agent.
23
(g) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at which the other Lenders are
required to submit their bids to the Administrative Agent pursuant to paragraph
(b) above.
(h) All notices required by this Section 2.4 shall be given in accordance
with Section 9.1.
(i) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Competitive Loans unless at the time the
Borrower has a senior unsecured long-term debt rating of BBB- or better from S&P
or Baa3 or better from Moody's.
SECTION 2.5. Revolving Credit Borrowing Procedure.
In order to effect a Revolving Credit Borrowing, the Borrower shall hand
deliver or telecopy to the Administrative Agent a Borrowing notice in the form
of Exhibit F (a) in the case of a LIBOR Borrowing, not later than 12:00 (noon),
New York City time, three Business Days before a proposed Borrowing, and (b) in
the case of an ABR Borrowing, not later than 12:00 (noon), New York City time,
on the day of a proposed Borrowing. No Fixed Rate Loan shall be requested or
made pursuant to a Revolving Credit Borrowing Request. Such notice shall be
irrevocable and shall in each case specify (a) whether the Borrowing then being
requested is to be a LIBOR Borrowing or an ABR Borrowing, (b) the date of such
Revolving Credit Borrowing (which shall be a Business Day) and the amount
thereof and (c) if such Borrowing is to be a LIBOR Borrowing, the Interest
Period with respect thereto. If no election as to the Interest Rate Type of a
Revolving Credit Borrowing is specified in any such notice, then the requested
Revolving Credit Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any LIBOR Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. If the Borrower shall not have given notice in accordance with this
Section 2.5 of its election to refinance a Revolving Credit Borrowing prior to
the end of the Interest Period in effect for such Borrowing, then the Borrower
shall (unless such Borrowing is repaid at the end of such Interest Period) be
deemed to have given notice of an election to refinance such Borrowing with an
ABR Borrowing. The Administrative Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.5 and of each Lender's portion of the
requested Borrowing.
SECTION 2.6. Refinancings.
The Borrower may refinance all or any part of any Borrowing with a
Borrowing of the same or a different Interest Rate Type made pursuant to
24
Section 2.4 or pursuant to a notice under Section 2.5, subject to the
conditions and limitations set forth herein and elsewhere in this Agreement,
including refinancings of Competitive Borrowings with Revolving Credit
Borrowings and Revolving Credit Borrowings with Competitive Borrowings;
provided, however, that at any time after the occurrence, and during the
continuation, of a Default or an Event of Default, a Revolving Credit Borrowing
or portion thereof may only be refinanced with an ABR Borrowing. Any Borrowing
or part thereof so refinanced shall be deemed to be repaid in accordance with
Section 2.8 with the proceeds of a new Borrowing hereunder and the proceeds of
the new Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the Lenders to the
Administrative Agent or by the Administrative Agent to the Borrower pursuant to
Section 2.2(c); provided, however, that (a) if the principal amount extended by
a Lender in a refinancing is greater than the principal amount extended by such
Lender in the Borrowing being refinanced, then such Lender shall pay such
difference to the Administrative Agent for distribution to the Borrower or any
Lenders described in clause (b) below, as applicable, (b) if the principal
amount extended by a Lender in the Borrowing being refinanced is greater than
the principal amount being extended by such Lender in the refinancing, the
Administrative Agent shall return the difference to such Lender out of amounts
received pursuant to clause (a) above, and (c) to the extent any Lender fails to
pay the Administrative Agent amounts due from it pursuant to clause (a) above,
any Loan or portion thereof being refinanced with such amounts shall not be
deemed repaid in accordance with Section 2.6 and, to the extent of such failure,
the Borrower shall pay such amount to the Administrative Agent as required by
Section 2.10; and (d) to the extent the Borrower fails to pay to the
Administrative Agent any amounts due in accordance with Section 2.10 as a result
of the failure of a Lender to pay the Administrative Agent any amounts due as
described in clause (c) above, the portion of any refinanced Loan deemed not
repaid shall be deemed to be outstanding solely to the Lender which has failed
to pay the Administrative Agent amounts due from it pursuant to clause (a) above
to the full extent of such Lender's portion of such Loan.
SECTION 2.7. Fees.
(a) The Borrower agrees to pay to each Lender, through the Administrative
Agent, on each March 31, June 30, September 30 and December 31, commencing
December 31, 1996, and on the date on which the Commitment of such Lender shall
be terminated as provided herein, a facility fee (a "Facility Fee",) at the rate
per annum from time to time in effect in accordance with Section 2.22, on the
amount of the Commitment of such Lender, whether used or unused, during the
preceding quarter (or shorter period commencing with the Closing Date, or ending
with the Maturity Date or any date on which the Commitment of such Lender shall
be terminated). All Facility Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Facility Fee due to each
Lender shall commence to accrue on the Closing Date, shall be payable in arrears
and shall cease to accrue on the earlier of the Maturity Date and the
termination of the Commitment of such Lender as provided herein.
(b) The Borrower agrees to pay the Administrative Agent, for its own
account, the fees at the times and in the amounts provided for in the letter
agreement dated August 28, 1996 among the Borrower, Chase and Chase Securities
Inc.
(c) All fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the fees shall be refundable under any
circumstances.
SECTION 2.8. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Credit Loan of such Lender on the Maturity Date (or
such earlier date on which the Revolving Credit Loans become due and payable
pursuant to Article 7); provided, that the Revolving Credit Loans made by
Objecting Lenders shall be repaid as provided in Section 2.24. The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Revolving Credit Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.9.
(b) The Borrower unconditionally promises to pay to the Administrative
Agent, for the account of each Lender that makes a Competitive Loan, on the last
day of the Interest Period applicable to such Competitive Loan, the principal
amount of such Competitive Loan. The Borrower further unconditionally promises
to pay interest on each such Competitive Loan for the period from and including
the date of Borrowing of such Competitive Loan on the unpaid principal amount
thereof from time to time outstanding at the applicable rate per annum
determined as provided in, and payable as specified in, Section 2.9.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Revolving Credit Loan and Competitive Loan of such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 9.3(e), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan and Competitive Loan made
hereunder, the Interest Rate Type thereof and each Interest Period applicable
26
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(e) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations of
the Borrower therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Revolving Credit Loans and Competitive
Loans made to the Borrower by such Lender in accordance with the terms of this
Agreement.
(f) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A-1 with appropriate insertions as to date
and principal amount (a "Revolving Credit Note").
(g) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Competitive Loans of such Lender,
substantially in the form of Exhibit A-2 with appropriate insertions as to date
and principal amount (a "Competitive Note").
SECTION 2.9. Interest on Loans.
(a) Subject to the provisions of Section 2.10, the Loans comprising each
LIBOR Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to (i) in the
case of each LIBOR Revolving Credit Loan, LIBOR for the Interest Period in
effect for such Borrowing plus the applicable LIBOR Spread from time to time in
effect and (ii) in the case of each LIBOR Competitive Loan, LIBOR for the
Interest Period in effect for such Borrowing plus the Margin offered by the
Lender making such Loan and accepted by the Borrower pursuant to Section 2.5.
Interest on each LIBOR Borrowing shall be payable on each applicable Interest
Payment Date.
(b) Subject to the provisions of Section 2.10, the Loans comprising each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when determined
by reference to the Prime Rate and over a year of 360 days at all other times)
at a rate per annum equal to the Alternate Base Rate.
5 27
(c) Subject to the provisions of Section 2.10, each Fixed Rate Loan shall
bear interest at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the fixed rate of interest
offered by the Lender making such Loan and accepted by the Borrower pursuant to
Section 2.4.
(d) Interest on each Loan shall be payable in arrears on each Interest
Payment Date applicable to such Loan. The LIBOR or the Alternate Base Rate for
each Interest Period or day within an Interest Period shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.10. Interest on Overdue Amounts.
If the Borrower shall default in the payment of the principal of, or
interest on, any Loan or any other amount becoming due hereunder, the Borrower
shall on demand from time to time pay interest, to the extent permitted by
Applicable Law, on such defaulted amount up to (but not including) the date of
actual payment (after as well as before judgment) at a rate per annum computed
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as applicable, in the case of amounts bearing interest determined by
reference to the Prime Rate and a year of 360 days in all other cases, equal to
(a) in the case of the remainder of the then current Interest Period for any
LIBOR Loan or Fixed Rate Loan, the rate applicable to such Loan under Section
2.9 plus 2% per annum and (b) in the case of any other amount, the rate that
would at the time be applicable to an ABR Loan under Section 2.9 plus 2% per
annum.
SECTION 2.11. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two Business Days prior
to the commencement of any Interest Period for a LIBOR Loan, the Administrative
Agent shall have determined that Dollar deposits in the amount of the requested
principal amount of such LIBOR are not generally available in the London
Interbank Market, or that the rate at which such Dollar deposits are being
offered will not adequately and fairly reflect the cost to any Lender of making
or maintaining its portion of such LIBOR Loans during such Interest Period, or
that reasonable means do not exist for ascertaining LIBOR, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopier
notice of such determination to the Borrower and the Lenders. In the event of
any such determination, until the Administrative Agent shall have determined
that circumstances giving rise to such notice no longer exist, (a) any request
by the Borrower for a LIBOR Competitive Borrowing pursuant to Section 2.4 shall
be of no force and effect and shall be denied by the Administrative Agent and
(b) any request by the Borrower for a LIBOR Borrowing pursuant to Section 2.5
shall be deemed to be a request for an ABR Loan. Each determination by the
Administrative Agent hereunder shall be conclusive absent manifest error.
SECTION 2.12. Termination and Reduction of
Commitments.
(a) The Commitments of all of the Lenders shall be automatically terminated
on the earlier of (a) the Maturity Date or (b) October 31, 1996 if the Closing
Date has not occurred on or prior to such date.
(b) Subject to Section 2.13(b), upon at least three Business Days, prior
irrevocable written or telecopy notice to the Administrative Agent, the Borrower
may at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Total Commitment; provided, however, that (i) each
partial reduction of the Total Commitment shall be in an integral multiple of
$5,000,000 and in a minimum principal amount of $10,000,000 and (ii) the
Borrower shall not be entitled to make any such termination or reduction that
would reduce the Total Commitment to an amount less than the sum of the
aggregate outstanding principal amount of the Loans.
(c) Each reduction in the Total Commitment hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments. The Borrower
shall pay to the Administrative Agent for the account of the Lenders on the date
of each termination or reduction in the Total Commitment, the Facility Fees on
the amount of the Total Commitment so terminated or reduced accrued to the date
of such termination or reduction.
SECTION 2.13. Prepayment of Loans.
(a) Prior to the Maturity Date, the Borrower shall have the right at any
time to prepay any Revolving Credit Borrowing, in whole or in part, subject to
the requirements of Section 2.17 but otherwise without premium or penalty, upon
prior written or telecopy notice to the Administrative Agent before 12:00 noon
New York City time at least one Business Day in the case of an ABR Loan and at
least three Business Days in the case of a LIBOR Loan; provided, however, that
each such partial prepayment shall be in an integral multiple of $5,000,000 and
in a minimum aggregate principal amount of $10,000,000. The Borrower shall not
have the right to prepay any Competitive Borrowing without the consent of the
relevant lender.
(b) On any date when the sum of the aggregate outstanding Loans (after
giving effect to any Borrowings effected on such date) exceeds the Total
Commitment, the Borrower shall make a mandatory prepayment of the Revolving
Credit Loans in such amount as may be necessary so that the aggregate amount of
outstanding Loans after giving effect to such prepayment does not exceed the
Total Commitment then in effect. Any prepayments required by this paragraph
shall be applied to outstanding ABR Revolving Credit Loans.
(c) Each notice of prepayment pursuant to Section 2.13(a) shall specify the
specific Borrowing(s), the prepayment date and the aggregate principal amount of
each Borrowing to be prepaid, shall be irrevocable and shall commit the Borrower
to prepay such Borrowing(s) by the amount stated therein. All prepayments under
this Section 2.13 shall be accompanied by accrued interest on the principal
amount being prepaid, to the date of prepayment.
SECTION 2.14. Eurodollar Reserve Costs.
The Borrower shall pay to the Administrative Agent for the account of each
Lender, so long as such Lender shall be required under regulations of the Board
to maintain reserves with respect to liabilities or assets consisting of, or
including, Eurocurrency Liabilities (as defined in Regulation D of the Board),
additional interest on the unpaid principal amount of each LIBOR Loan made to
the Borrower by such Lender, from the date of such Loan until such Loan is paid
in full, at an interest rate per annum equal at all times during the Interest
Period for such Loan to the remainder obtained by subtracting (i) LIBOR for such
Interest Period from (ii) the rate obtained by multiplying LIBOR as referred to
in clause (i) above by the Statutory Reserves of such Lender for such Interest
Period. Such additional interest shall be determined by such Lender and notified
to the Borrower (with a copy to the Administrative Agent) not later than five
Business Days before the next Interest Payment Date for such Loan, and such
additional interest so notified to the Borrower by any Lender shall be payable
to the Administrative Agent for the account of such Lender on each Interest
Payment Date for such Loan.
SECTION 2.15. Reserve Requirements; Change in
Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in Applicable Law or regulation 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) (i) shall subject any Lender to, or increase the net amount of, any tax,
levy, impost, duty, charge, fee, deduction or withholding with respect to any
LIBOR Loan or Fixed Rate Loan, or shall change the basis of taxation of payments
to any Lender of the principal of or interest on any LIBOR Loan or Fixed Rate
Loan made by such Lender or any other fees or amounts payable hereunder (other
than (x) taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or its applicable
Lending Office or by any political subdivision or taxing authority therein (or
any tax which is enacted or adopted by such jurisdiction, political
30
subdivision or taxing authority as a direct substitute for any such taxes)
or (y) any tax, assessment, or other governmental charge that would not have
been imposed but for the failure of any Lender to comply with any certification,
information, documentation or other reporting requirement), (ii) shall 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, or (iii) shall impose on any Lender or the London Interbank Market
any other condition affecting this Agreement or any LIBOR Loan or Fixed Rate
Loan made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any LIBOR Loan or
Fixed Rate Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) in respect
thereof by an amount deemed in good faith by such Lender to be material, then
the Borrower shall pay such additional amount or amounts as will compensate such
Lender for such increase or reduction to such Lender upon demand by such Lender.
(b) If, after the date of this Agreement, any Lender shall have determined
in good faith that the adoption after the date hereof of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
Lending Office of such Lender) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of the
Lender's holding company, if any, as a consequence of its obligations hereunder
to a level below that which such Lender (or its holding company) could have
achieved but for such applicability, adoption, change or compliance (taking into
consideration such Lender's policies or the policies of its holding company, as
the case may be, with respect to capital adequacy) by an amount deemed by such
Lender to be material, then, from time to time, the Borrower shall pay to the
Administrative Agent for the account of such Lender such additional amount or
amounts as will compensate such Lender for such reduction upon demand by such
Lender.
(c) A certificate of a Lender setting forth in reasonable detail (i) such
amount or amounts as shall be necessary to compensate such Lender as specified
in paragraph (a) or (b) above, as the case may be, and (ii) the calculation of
such amount or amounts referred to in the preceding clause (i), shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay the Administrative Agent for the account of such Lender the
amount shown as due on any such certificate within 10 Business Days after its
receipt of the
same.
31
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any Interest Period shall not constitute a
waiver of such Lender's rights to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to such Interest Period or any other Interest Period. The
protection of this Section 2.14 shall be available to each Lender regardless of
any possible contention of invalidity or inapplicability of the law, regulation
or condition which shall have been imposed.
(e) Each Lender agrees that, as promptly as practicable after it becomes
aware of the occurrence of an event or the existence of a condition that (i)
would cause it to incur any increased cost under this Section 2.15, Section 2.16
or Section 2.21 or (ii) would require the Borrower to pay an increased amount
under this Section 2.15, Section 2.16 or Section 2.21, it will use reasonable
efforts to notify the Borrower of such event or condition and, to the extent not
inconsistent with such Lender's internal policies, will use its reasonable
efforts to make, fund or maintain the affected Loans of such Lender, or, if
applicable to participate in Letters of Credit, through another Lending Office
of such Lender if as a result thereof the additional monies which would
otherwise be required to be paid or the reduction of amounts receivable by such
Lender thereunder in respect of such Loans or Letters of Credit would be
materially reduced, or any inability to perform would cease to exist, or the
increased costs which would otherwise be required to be paid in respect of such
Loans or Letters of Credit pursuant to this Section 2.15, Section 2.16 or
Section 2.21 would be materially reduced or the taxes or other amounts otherwise
payable under this Section 2.15, Section 2.16 or Section 2.21 would be
materially reduced, and if, as determined by such Lender, in its sole
discretion, the making, funding or maintaining of such Loans or Letters of
Credit through such other Lending Office would not otherwise materially
adversely affect such Loans or Letters of Credit or such Lender.
(f) In the event any Lender shall have delivered to the Borrower a notice
that LIBOR Loans are no longer available from such Lender pursuant to Section
2.16, that amounts are due to such Lender pursuant to paragraph (c) hereof or
that any of the events designated in paragraph (e) hereof have occurred, the
Borrower may (but subject in any such case to the payments required by Section
2.17), provided that there shall exist no Default or Event of Default, upon at
least five Business Days' prior written or telecopier notice to such Lender and
the Administrative Agent, but not more than 30 days after receipt of notice from
such Lender, identify to the Administrative Agent a lending institution
reasonably acceptable to the Administrative Agent which will purchase the
Commitment, the amount of outstanding Loans and any participations in Letters of
Credit from the Lender providing such notice and such Lender shall
thereupon assign its Commitment, any Loans owing to such Lender and any
participations in Letters of Credit and the Notes held by such Lender to such
replacement lending institution pursuant to Section 9.3. Such notice shall
specify an effective date for such assignment and at the time thereof, the
Borrower shall pay all accrued interest, Facility Fees and all other amounts
(including without limitation all amounts payable under this Section) owing
hereunder to such Lender as at such effective date for such assignment.
SECTION 2.16. Change in Legality.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain any LIBOR Loan or to
give effect to its obligations as contemplated hereby, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that LIBOR Loans will not thereafter be made by such Lender
hereunder, whereupon such Lender shall not submit a Competitive Bid in response
to a request for LIBOR Competitive Loans and the Borrower shall be prohibited
from requesting LIBOR Revolving Credit Loans from such Lender hereunder unless
such declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by it be converted to
ABR Loans, in which event (A) all such LIBOR Loans shall be automatically
converted to ABR Loans as of the effective date of such notice as provided in
Section 2.16(b) and (B) all payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBOR Loans shall instead be
applied to repay the ABR Loans resulting from the conversion of such LIBOR
Loans.
(b) For purposes of this Section 2.16, a notice to the Borrower by any
Lender pursuant to Section 2.16(a) shall be effective on the date of receipt
thereof by the Borrower.
SECTION 2.17. Reimbursement of Lenders.
(a) The Borrower shall reimburse each Lender on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
by any prepayment (for any reason) of any LIBOR or Fixed Rate Loan if such Loan
is repaid other than on the last day of the applicable Interest Period for such
Loan or (ii) in the event that after the Borrower delivers a notice of borrowing
under Section 2.5 in respect of LIBOR Revolving Credit Loans or a Competitive
Bid Accept/Reject Letter under Section 2.4(d), pursuant to which it has accepted
bids of one or more of the Lenders, the applicable Loan is not made on the first
day of the Interest Period specified by the Borrower for any reason other than
33
(I) a suspension or limitation under Section 2.16 of the right of the
Borrower to select a LIBOR Loan or (II) a breach by a Lender of its obligations
hereunder. In the case of such failure to borrow, such loss shall be the amount
as reasonably determined by such Lender as the excess, if any of (A) the amount
of interest which would have accrued to such Lender on the amount not borrowed,
at a rate of interest equal to the interest rate applicable to such Loan
pursuant to Section 2.9, for the period from the date of such failure to borrow,
to the last day of the Interest Period for such Loan which would have commenced
on the date of such failure to borrow, over (B) the amount realized by such
Lender in reemploying the funds not advanced during the period referred to
above. In the case of a payment other than on the last day of the Interest
Period for a Loan, such loss shall be the amount as reasonably determined by the
Administrative Agent as the excess, if any, of (A) the amount of interest which
would have accrued on the amount so paid at a rate of interest equal to the
interest rate applicable to such Loan pursuant to Section 2.9, for the period
from the date of such payment to the last day of the then current daily Interest
Period for such Loan, over (B) the amount equal to the product of (x) the amount
of the Loan so paid times (y) the current daily yield on U.S. Treasury
Securities (at such date of determination) with maturities approximately equal
to the remaining Interest Period for such Loan times (z) the number of days
remaining in the Interest Period for such Loan. Each Lender shall deliver to the
Borrower from time to time one or more certificates setting forth the amount of
such loss (and in reasonable detail the manner of computation thereof) as
determined by such Lender, which certificates shall be conclusive absent
manifest error. The Borrower shall pay to the Administrative Agent for the
account of each Lender the amount shown as due on any certificate within thirty
(30) days after its receipt of the same.
(b) In the event the Borrower fails to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.13(a), the
Borrower on demand by any Lender shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
loss incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Each Lender shall
deliver to the Borrower and the Administrative Agent from time to time one or
more certificates setting forth the amount of such loss (and in reasonable
detail the manner of computation thereof) as determined by such Lender, which
certificates shall be conclusive absent manifest error.
34
SECTION 2.18. Pro Rata Treatment.
Except as permitted under Sections 2.14, 2.15(c), 2.16, 2.17, 2.23 and
2.24, (i) each Revolving Credit Borrowing, each payment or prepayment of
principal of any Revolving Credit Borrowing, each payment of interest on the
Revolving Credit Loans, each payment of the Facility Fees, each reduction of the
Total Commitment and each refinancing of any Borrowing with, or conversion of
any Borrowing to, a Revolving Credit Borrowing, or continuation of any Borrowing
as a Revolving Credit Borrowing, shall be allocated pro rata among the Lenders
in accordance with their respective Commitments (or, if such Commitments shall
have expired or been terminated, in accordance with the respective principal
amount of their outstanding Revolving Credit Loans). Each payment of principal
of any Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective principal
amounts of their outstanding Competitive Loans comprising such Borrowing. Each
payment of interest on any Competitive Borrowing shall be allocated pro rata
among the Lenders participating in such Borrowing in accordance with the
respective amounts of accrued and unpaid interest on their outstanding
Competitive Loans comprising such Borrowing. For purposes of determining the
available Commitments of the Lenders at any time, each outstanding Competitive
Borrowing shall be deemed to have utilized the Commitments of the Lenders
(including those Lenders that shall not have made Loans as part of such
Competitive Borrowing) pro rata in accordance with such respective Commitments.
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing computed in accordance with Section 2.1,
to the next higher or lower whole dollar amount.
SECTION 2.19. Right of Setoff.
If any Event of Default shall have occurred and be continuing and any
Lender shall have requested the Administrative Agent to declare the Loans
immediately due and payable pursuant to Article 7, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender and any
other indebtedness at any time owing by such Lender to, or for the credit or the
account of, the Borrower, against any of and all the obligations now or
hereafter existing under this Agreement and the Loans held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or such Loans and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such setoff and
application made by such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section 2.19 are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.
SECTION 2.20. Manner of Payments.
All payments by the Borrower hereunder and under the Notes shall be made in
Dollars in Federal or other immediately available funds at the office of the
Administrative Agent's Agent Bank Services Department, 140 East 45th Street, New
York, New York 10017, Attention: Sandra Miklave, for credit to HFS Incorporated
Clearing Account, Account No. 144812905 (Reference: HFS Incorporated Credit
Agreement dated October 2, 1996) no later than 12:00 noon, New York City time,
on the date on which such payment shall be due. Interest in respect of any Loan
hereunder shall accrue from and including the date of such Loan to, but
excluding, the date on which such Loan is paid or refinanced with a Loan of a
different Interest Rate Type.
SECTION 2.21. United States Withholding.
(a) Prior to the date of the initial Loans hereunder, and from time to time
thereafter if requested by the Borrower or the Administrative Agent or required
because, as a result of a change in Applicable Law or a change in circumstances
or otherwise, a previously delivered form or statement becomes incomplete or
incorrect in any material respect, each Lender organized under the laws of a
jurisdiction outside the United States shall provide, if applicable, the
Administrative Agent and the Borrower with complete, accurate and duly executed
forms or other statements prescribed by the Internal Revenue Service of the
United States certifying such Lender's exemption from, or entitlement to a
reduced rate of, United States withholding taxes (including backup withholding
taxes) with respect to all payments to be made to such Lender hereunder and
under the Notes.
(b) The Borrower and the Administrative Agent shall be entitled to deduct
and withhold any and all present or future taxes or withholdings, and all
liabilities with respect thereto, from payments hereunder or under the Notes, if
and to the extent that the Borrower or the Administrative Agent in good faith
determines that such deduction or withholding is required by the law of the
United States, including, without limitation, any applicable treaty of the
United States. In the event the Borrower or the Administrative Agent shall so
determine that deduction or withholding of taxes is required, it shall advise
the affected Lender as to the basis of such determination prior to actually
deducting and withholding such taxes. In the event the Borrower or the
Administrative Agent shall so deduct or withhold taxes from amounts payable
hereunder, it (i) shall pay to or deposit with the appropriate taxing authority
in a timely manner the full amount of taxes it has deducted or withheld; (ii)
shall provide evidence of payment of such taxes to, or the deposit thereof with,
the appropriate taxing authority and a statement setting forth the amount of
taxes deducted or withheld, the applicable rate, and any other information or
36
documentation reasonably requested by the Lenders from whom the taxes were
deducted or withheld; and (iii) shall forward to such Lenders any receipt for
such payment or deposit of the deducted or withheld taxes as may be issued from
time to time by the appropriate taxing authority. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory to them
indicating that payments hereunder or under the Notes are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Administrative Agent may withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Lender organized under the laws of a jurisdiction outside
the United States.
(c) Each Lender agrees (i) that as between it and the Borrower or the
Administrative Agent, it shall be the Person to deduct and withhold taxes, and
to the extent required by law it shall deduct and withhold taxes, on amounts
that such Lender may remit to any other Person(s) by reason of any undisclosed
transfer or assignment of an interest in this Agreement to such other Person(s)
pursuant to paragraph (g) of Section 9.3 and (ii) to indemnify the Borrower and
the Administrative Agent and any officers, directors, agents, or employees of
the Borrower or the Administrative Agent against, and to hold them harmless
from, any tax, interest, additions to tax, penalties, reasonable counsel and
accountants' fees, disbursements or payments arising from the assertion by any
appropriate taxing authority of any claim against them relating to a failure to
withhold taxes as required by Applicable Law with respect to amounts described
in clause (i) of this paragraph (c).
(d) Each assignee of a Lender's interest in this Agreement in conformity
with Section 9.3 shall be bound by this Section 2.21, so that such assignee will
have all of the obligations and provide all of the forms and statements and all
indemnities, representations and warranties required to be given under this
Section 2.21.
(e) In the event that any withholding taxes shall become payable solely as
a result of any change in any statute, treaty, ruling, determination or
regulation occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Lender or the
Administrative Agent (i) the sum payable by the Borrower shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.21) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law. For purposes of this Section 2.21, the term
"Initial Date" shall mean (i) in the case of the Administrative Agent, the date
37
hereof, (ii) in the case of each Lender as of the date hereof, the date
hereof and (iii) in the case of any other Lender, the effective date of the
Assignment and Acceptance pursuant to which it became a Lender.
SECTION 2.22. Certain Pricing Adjustments.
The Facility Fee and the applicable LIBOR Spread in effect from time to
time shall be determined in accordance with the following table:
- ---------------------------------------------------------------
S&P/Moody's (Facility Fee
Rating Equivalent in Basis Applicable
of the Borrower's Points) LIBOR Spread
senior unsecured (in Basis
long-term debt Points)
- ---------------------------------------------------------------
AA-/Aa3 or better 4.0 14.75
- ---------------------------------------------------------------
A+/A1 5.0 15.00
- ---------------------------------------------------------------
A/A2 6.0 16.50
- ---------------------------------------------------------------
A-/A3 7.0 18.00
- ---------------------------------------------------------------
BBB+/Baa1 8.0 22.00
- ---------------------------------------------------------------
BBB/Baa2 10.0 25.00
- ---------------------------------------------------------------
BBB-/Baa3 12.5 37.50
- ---------------------------------------------------------------
BB+/Bal or worse 17.5 45.00
- ---------------------------------------------------------------
In the event the S&P rating on the Borrower's senior unsecured long-term
debt is not equivalent to the Moody's rating on such debt, the higher rating
will determine the Facility Fee and applicable LIBOR Spread, unless the S&P and
Moody's ratings are one or more levels apart, in which case the rating one level
below the higher rating will be determinative. In the event that the Borrower's
senior unsecured long-term debt is rated by only one of S&P and Moody's, then
that single rating shall be determinative. In the event that the Borrower's
senior unsecured long-term debt is not rated by either S&P or Moody's, then the
Facility Fee and the applicable LIBOR Spread shall be deemed to be calculated as
if the lowest rating category set forth above applied. Any increase in the
Facility Fee or the applicable LIBOR Spread determined in accordance with the
foregoing table shall become effective on the date of announcement or
publication by the Borrower or either such rating agency of a reduction in such
rating or, in the absence of such announcement or publication, on the effective
date of such decreased rating, or on the date of any request by the Borrower to
either of such rating agencies not to rate its senior unsecured long-term debt
or on the date either of such rating agencies announces it shall no longer rate
the Borrower's senior unsecured long-term debt. Any decrease in the Facility Fee
or applicable LIBOR Spread shall be effective on the date of announcement or
publication by either of such rating agencies of an increase in rating or in the
absence of announcement or publication on the effective date of such increase in
rating.
SECTION 2.23. Increase of Commitments. (a) At the request of the Borrower
to the Administrative Agent, the combined Commitments hereunder may be increased
after the Closing Date on one or more occasions by not more than $250,000,000
provided that (i) the aggregate of all such increases pursuant to this Section
2.23 and pursuant to Section 2.23 of the Five Year Credit Agreement may total no
more than $500,000,000, (ii) any increase of the Commitments hereunder is in the
same amount as any increase of the Commitments under the Five Year Credit
Agreement, (iii) each such increase is in a minimum amount of $25,000,000, (iv)
each Lender whose Commitment is increased consents and (v) the consent of the
Administrative Agent is obtained.
(b) In the event that the Borrower and one or more of the Lenders (or other
financial institutions which may elect to participate with the consent of the
Administrative Agent) shall agree, in accordance with Section 2.23(a), upon such
an increase in the aggregate Commitments, the Borrower, the Administrative Agent
and each financial institution in question shall enter into a Commitment
Increase Supplement setting forth the amounts of the increase in Commitments and
providing that the additional financial institutions participating shall be
deemed to be included as Lenders for all purposes of this Agreement. Upon the
execution and delivery of such Commitment Increase Supplement as provided above,
and upon satisfaction of such other conditions as the Administrative Agent may
specify (including the delivery of certificates and legal opinions on behalf of
the Borrower relating to the amendment and, if requested, new Notes), this
Agreement shall be deemed to be amended accordingly.
(c) No Lender shall have any obligation to increase its Commitment in the
event of such a request by the Borrower hereunder.
SECTION 2.24. Extension of Maturity Date. (a) Not less than 60 days and not
more than 90 days prior to the Maturity Date then in effect, provided that no
Event of Default shall have occurred and be continuing, the Borrower may request
an extension of such Maturity Date by submitting to the Administrative Agent an
Extension Request containing the information in respect of such extension
specified in Exhibit H, which the Administrative Agent shall promptly furnish to
each Lender. Each Lender shall, not less than 30 days and not more than 60 days
prior to the Maturity Date then in effect, notify the Borrower and the
Administrative Agent of its election to extend or not extend the Maturity Date
as requested in such Extension Request. Notwithstanding any provision of this
Agreement to the contrary, any notice by any Lender of its willingness to extend
the Maturity Date shall be revocable by such Lender in its sole and absolute
discretion at any time prior to the date which is 30 days prior to the Maturity
39
Date then in effect. If the Supermajority Lenders shall approve in writing
the extension of the Maturity Date requested in such Extension Request, the
Maturity Date shall automatically and without any further action by any Person
be extended for the period specified in such Extension Request; provided that
(i) each extension pursuant to this Section 2.24 shall be for a maximum of 364
days and (ii) the Commitment of any Lender which does not consent in writing to
such extension not less than 30 days and not more than 60 days prior to the
Maturity Date then in effect (an "Objecting Lender") shall, unless earlier
terminated in accordance with this Agreement, expire on the Maturity Date in
effect on the date of such Extension Request (such Maturity Date, if any,
referred to as the "Commitment Expiration Date" with respect to such Objecting
Lender). If not less than 30 days and not more than 60 days prior to the
Maturity Date then in effect, the Supermajority Lenders shall not approve in
writing the extension of the Maturity Date requested in an Extension Request,
the Maturity Date shall not be extended pursuant to such Extension Request. The
Administrative Agent shall promptly notify (y) the Lenders and the Borrower of
any extension of the Maturity Date pursuant to this Section 2.24 and (z) the
Borrower and any other Lender of any Lender which becomes an Objecting Lender.
(b) Revolving Credit Loans owing to any Objecting Lender on the Commitment
Expiration Date with respect to such Lender shall be repaid in full on or before
such Commitment Expiration Date.
(c) The Borrower shall have the right, so long as no Event of Default has
occurred and is then continuing, upon giving notice to the Administrative Agent
and the Objecting Lender in accordance with Section 2.13, to prepay in full the
Revolving Credit Loans of the Objecting Lenders, together with accrued interest
thereon, any amounts payable pursuant to Sections 2.9, 2.10, 2.14, 2.15, 2.17,
2.21, and 9.4 and any accrued and unpaid Facility Fee or other amounts payable
to it hereunder and/or, upon giving not less than three Business Days' notice to
the Objecting Lenders and the Administrative Agent, to cancel the whole or part
of the Commitments of the Objecting Lenders.
(d) The Borrower may, with the consent of the Administrative Agent,
designate one or more financial institutions to act as a Lender hereunder in
place of any Objecting Lender, and upon the execution of an agreement
substantially in the form of Exhibit I by each such Objecting Lender (who hereby
agrees to execute such agreement), such replacement financial institution and
the Administrative Agent, such replacement financial institution shall become
and be a Lender hereunder with all the rights and obligations it would have had
if it had been named on the signature pages hereof, and having for all such
financial institutions aggregate Commitments of no greater than the whole of the
Commitment of the Objecting Lender in place of which such financial institutions
were designated; provided, that the Facility Fees, interest and other payment
40
to the Lenders due hereunder shall accrue for the account of each such
financial institution from the date of replacement pursuant to such agreement.
The Administrative Agent shall notify the Lenders of the execution of any such
agreement, the name of the financial institution executing such agreement and
the amount of such financial institution's Commitment.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement and to make the
Loans and participate in the Letters of Credit provided for herein, the Borrower
makes the following representations and warranties to the Administrative Agent
and the Lenders, all of which shall survive the execution and delivery of this
Agreement, the issuance of the Notes and the making of the Loans and issuance of
the Letters of Credit:
SECTION 3.1. Corporate Existence and Power.
The Borrower and its Subsidiaries have been duly organized and are validly
existing in good standing under the laws of their respective jurisdictions of
incorporation and are in good standing or have applied for authority to operate
as a foreign corporation in all jurisdictions where the nature of their
properties or business so requires it and where a failure to be in good standing
as a foreign corporation would have a Material Adverse Effect. The Borrower has
the corporate power to execute, deliver and perform its obligations under this
Agreement and the other Fundamental Documents and other documents contemplated
hereby and to borrow hereunder.
SECTION 3.2. Corporate Authority, No Violation and Compliance with Law.
The execution, delivery and performance of this Agreement and the other
Fundamental Documents and the borrowings hereunder (a) have been duly authorized
by all necessary corporate action on the part of the Borrower, (b) will not
violate any provision of any Applicable Law (including any laws related to
franchising) applicable to the Borrower or any of its Subsidiaries or any of
their respective properties or assets, (c) will not violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries, or any indenture, any agreement for borrowed money, any bond, note
or other similar instrument or any other material agreement to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower or any
of its Subsidiaries or any of their respective properties or assets are bound,
(d) will not be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, any material indenture,
agreement, bond, note or instrument and (e) will not result in the creation or
imposition of any Lien upon any property or assets of the Borrower or any of its
Subsidiaries other than pursuant to this Agreement or any other Fundamental
Document.
SECTION 3.3. Governmental and Other Approval and Consents.
No action, consent or approval of, or registration or filing with, or any
other action by, any governmental agency, bureau, commission or court is
required in connection with the execution, delivery and performance by the
Borrower of this Agreement or the other Fundamental Documents.
SECTION 3.4. Financial Statements of Borrower.
The (a) audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1994 and December 31, 1995, and (b)
unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of March 31, 1996 and June 30, 1996, together with the related
unaudited statements of income, shareholders' equity and cash flows for such
periods fairly present the financial condition of the Borrower and its
Consolidated Subsidiaries as at the dates indicated and the results of
operations and cash flows for the periods indicated in conformity with GAAP
subject to normal year-end adjustments in the case of the March 31, 1996 and
June 30, 1996 financial statements.
SECTION 3.5. No Material Adverse Change.
Since December 31, 1995 there has been no material adverse change in the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole; provided, however, that the
foregoing representation is made solely as of the Closing Date.
SECTION 3.6. Subsidiaries.
Annexed hereto as Schedule 3.6 is a correct and complete list as of the
date hereof of all Material Subsidiaries of the Borrower showing, as to each
Material Subsidiary, its name, the jurisdiction of its incorporation, its
authorized capitalization and the ownership of the capital stock of such
Material Subsidiary.
SECTION 3.7. Copyrights, Patents and Other Rights.
Each of the Borrower and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
42
SECTION 3.8. Title to Properties.
Each of the Borrower and its Material Subsidiaries will have at the Closing
Date good title or valid leasehold interests to each of the properties and
assets reflected on the balance sheets referred to in Section 3.4, except for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes, and all such properties and assets will be free and clear of Liens,
except Permitted Encumbrances.
SECTION 3.9. Litigation.
Except as set forth on Schedule 3.9, there are no lawsuits or other
proceedings pending (including, but not limited to, matters relating to
environmental liability), or, to the knowledge of the Borrower, threatened,
against or affecting the Borrower or any of its Subsidiaries or any of their
respective properties, by or before any Governmental Authority or arbitrator,
which could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, decree, rule or regulation of any Governmental
Authority, which default would have a Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. No part of the proceeds of
the Loans will be used, whether immediately, incidentally or ultimately, for any
purpose violative of or inconsistent with any of the provisions of Regulation G,
T, U or X of the Board.
SECTION 3.11. Investment Company Act.
The Borrower is not, and will not during the term of this Agreement be, (x)
an "investment company", within the meaning of the Investment Company Act of
1940, as amended or (y) subject to regulation under the Public Utility Holding
Company Act of 1935 or the Federal Power Act.
SECTION 3.12. Enforceability.
This Agreement and the other Fundamental Documents when executed will
constitute legal, valid and enforceable obligations (as applicable) of the
Borrower (subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity).
43
SECTION 3.13. Taxes.
The Borrower and each of its Subsidiaries has filed or caused to be filed
all federal, state and local tax returns which are required to be filed, and has
paid or has caused to be paid all taxes as shown on said returns or on any
assessment received by them in writing, to the extent that such taxes have
become due, except (a) as permitted by Section 5.4 hereof or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.14. Compliance with ERISA.
Each of the Borrower and its Subsidiaries is in compliance in all material
respects with the provisions of ERISA and the Code applicable to Plans, and the
regulations and published interpretations thereunder, if any, which are
applicable to it. Neither the Borrower nor any of its Subsidiaries has, with
respect to any Plan established or maintained by it, engaged in a prohibited
transaction which would subject it to a material tax or penalty on prohibited
transactions imposed by ERISA or Section 4975 of the Code. No liability to the
PBGC that is material to the Borrower and its Subsidiaries taken as a whole has
been, or to the Borrower's best knowledge is reasonably expected to be, incurred
with respect to the Plans and there has been no Reportable Event and no other
event or condition that presents a material risk of termination of a Plan by the
PBGC. Neither the Borrower nor any of its Subsidiaries has engaged in a
transaction which would result in the incurrence of a material liability under
Section 4069 of ERISA. As of the Closing Date, neither the Borrower nor any of
its Subsidiaries contributes to a Multiemployer Plan, and has not incurred any
liability that would be material to the Borrower and its Subsidiaries taken as a
whole on account of a partial or complete withdrawal (as defined in Sections
4203 and 4205 of ERISA, respectively) with respect to any Multiemployer Plan.
SECTION 3.15. Disclosure.
As of the Closing Date, neither this Agreement nor the Confidential
Information Memorandum dated September 1996, at the time it was furnished,
contained any untrue statement of a material fact or omitted to state a material
fact, under the circumstances under which it was made, necessary in order to
make the statements contained herein or therein not misleading. At the date
hereof, there is no fact known to the Borrower which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
The Borrower has delivered to the Administrative Agent certain projections
relating to the Borrower and its Consolidated Subsidiaries. Such projections are
based on good faith estimates and assumptions believed to be reasonable at the
time made, provided, however, that the Borrower makes no representation or
warranty that such assumptions will prove in the future to be accurate or that
the Borrower and its Consolidated Subsidiaries will achieve the financial
results reflected in such projections.
SECTION 3.16. Environmental Liabilities.
Except with respect to any matters, that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Initial Loans.
The obligation of each Lender to make its initial Loan is subject to the
following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received this
Agreement and each of the other Fundamental Documents, each executed and
delivered by a duly authorized officer of the Borrower.
(b) Corporate Documents for the Borrower. The Administrative Agent shall
have received, with copies for each of the Lenders, a certificate of the
Secretary or Assistant Secretary of the Borrower dated the date of the initial
Loans and certifying (A) that attached thereto is a true and complete copy of
the certificate of incorporation and by-laws of the Borrower as in effect on the
date of such certification; (B) that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of the Borrower
authorizing the borrowings hereunder and the execution, delivery and performance
in accordance with their respective terms of this Agreement and any other
documents required or contemplated hereunder; and (C) as to the incumbency and
specimen signature of each officer of the Borrower executing this Agreement or
any other document delivered by it in connection herewith (such certificate to
contain a certification by another officer of the Borrower as to the incumbency
and signature of the officer signing the certificate referred to in this
paragraph (b)).
(c) Financial Statements. The Lenders shall have received the (a) audited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of December 31, 1994 and December 31, 1995, (b) unaudited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1996 and
June 30, 1996, and (c) the unaudited consolidating balance sheets of the
45
Borrower and its Consolidated Subsidiaries as of December 31, 1995,
together with the related unaudited statements of income, shareholders' equity
and cash flows for such periods prepared in conformity with GAAP, subject to
normal year-end adjustments.
(d) Opinions of Counsel. The Administrative Agent shall have received the
favorable written opinions, dated the date of the initial Loans and addressed to
the Administrative Agent and the Lenders, of Skadden, Arps, Slate, Meagher &
Flom, counsel to the Borrower and of James E. Buckman, Executive Vice President
and General Counsel of the Borrower, substantially in the form of Exhibits B-1
and B-2 hereto, respectively.
(e) No Material Adverse Change. The Administrative Agent shall be satisfied
that no material adverse change shall have occurred with respect to the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Consolidated Subsidiaries, taken as a whole, since December 31,
1995.
(f) Payment of Fees. The Administrative Agent shall be satisfied that all
amounts payable to the Administrative Agent and the other Lenders pursuant
hereto or with regard to the transactions contemplated hereby have been or are
simultaneously being paid.
(g) Litigation. No litigation shall be pending or threatened which would be
likely to have a Material Adverse Effect, or which could reasonably be expected
to materially adversely affect the ability of the Borrower to fulfill its
obligations hereunder or to otherwise materially impair the interests of the
Lenders.
(h) Existing Credit Agreement. Simultaneously with the making of the
initial Loans, all obligations of the Borrower under the Competitive Advance and
Revolving Credit Agreement, dated as of December 16, 1993, as amended, among the
Borrower, the lenders named therein and The Chase Manhattan Bank, as
administrative agent (the "Existing Credit Agreement") shall have been paid in
full and the commitments of the lenders pursuant to the Existing Credit
Agreement shall have been terminated.
(i) Officer's Certificate. The Administrative Agent shall have received a
certificate of the Borrower's chief executive officer or chief financial officer
certifying, as of the date of the making of the initial Loans and issuance of
the initial Letters of Credit, compliance with the conditions set forth in
paragraphs (b) and (c) of Section 4.2. (j) Other Documents. The Administrative
Agent shall have received such other documents as the Administrative Agent may
reasonably require.
SECTION 4.2. Conditions Precedent to Each Loan.
The obligation of the Lenders to make each Loan, including the initial Loan
hereunder, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a notice with
respect to such Borrowing as required by Article 2 hereof.
(b) Representations and Warranties. The representations and warranties set
forth in Article 3 hereof (other than those set forth in Section 3.5, which
shall be deemed made only on the Closing Date) and in the other Fundamental
Documents shall be true and correct in all material respects on and as of the
date of each Borrowing hereunder (except to the extent that such representations
and warranties expressly relate to an earlier date) with the same effect as if
made on and as of such date; provided, however, that this condition shall not
apply to a Revolving Credit Borrowing which is solely refinancing outstanding
Revolving Credit Loans and which, after giving effect thereto, has not increased
the aggregate amount of outstanding Revolving Credit Loans.
(c) No Event of Default. On the date of each Borrowing hereunder, the
Borrower shall be in material compliance with all of the terms and provisions
set forth herein to be observed or performed and no Event of Default or Default
shall have occurred and be continuing; provided, however, that this condition
shall not apply to a Revolving Credit Borrowing which is solely refinancing
outstanding Revolving Credit Loans and which, after giving effect thereto, has
not increased the aggregate amount of outstanding Revolving Credit Loans.
Each Borrowing shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the matters specified in paragraphs
(b) and (c) of this Section.
5. AFFIRMATIVE COVENANTS
From the date of the initial Loan and for so long as the Commitments shall
be in effect or any amount shall remain outstanding under any Note or unpaid
under this Agreement, the Borrower agrees that, unless the Required Lenders
shall otherwise consent in writing, it will, and will cause each of its
Subsidiaries to:
47
SECTION 5.1. Financial Statements, Reports, etc.
Deliver to each Lender:
(a) As soon as is practicable, but in any event within 100 days after the
end of each fiscal year of the Borrower, the audited consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as at the end of, and the
related consolidated statements of income, shareholders' equity and cash flows
for such year, and the corresponding figures as at the end of, and for, the
preceding fiscal year, accompanied by an opinion of Deloitte & Touche LLP or
such other independent certified public accountants of recognized standing as
shall be retained by the Borrower and satisfactory to the Administrative Agent,
which report and opinion shall be prepared in accordance with generally accepted
auditing standards relating to reporting and which report and opinion shall (A)
be unqualified as to going concern and scope of audit and shall state that such
financial statements fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries, as at the dates indicated and the results of the
operations and cash flows for the periods indicated and (B) contain no material
exceptions or qualifications except for qualifications relating to accounting
changes (with which such independent public accountants concur) in response to
FASB releases or other authoritative pronouncements;
(b) Commencing with the quarter ending September 30, 1996 and as soon as is
practicable, but in any event within 55 days after the end of each of the first
three fiscal quarters of each fiscal year, the unaudited consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries, as at the end of, and
the related unaudited statements of income (or changes in financial position)
for such quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter and the corresponding figures as
at the end of, and for, the corresponding period in the preceding fiscal year,
together with a certificate signed by the chief financial officer or a vice
president responsible for financial administration of the Borrower to the effect
that such financial statements, while not examined by independent public
accountants, reflect, in his opinion and in the opinion of the Borrower, all
adjustments necessary to present fairly the financial position of the Borrower
and its Consolidated Subsidiaries, as the case may be, as at the end of the
fiscal quarter and the results of their operations for the quarter then ended in
conformity with GAAP consistently applied, subject only to year-end and audit
adjustments and to the absence of footnote disclosure;
(c) Together with the delivery of the statements
referred to in paragraphs (a) and (b) of this Section 5.1, a
48
certificate of the chief financial officer or a vice
president responsible for financial administration of the
Borrower, substantially in the form of Exhibit D hereto (i)
stating whether or not the signer has knowledge of any
Default or Event of Default and, if so, specifying each such
Default or Event of Default of which the signer has
knowledge, the nature thereof and any action which the
Borrower has taken, is taking, or proposes to take with
respect to each such condition or event and (ii)
demonstrating in reasonable detail compliance with the
provisions of Sections 6.7 and 6.8 hereof;
(d) Promptly upon their becoming available, copies of
all financial statements, reports, notices and proxy
statements sent or made available by the Borrower or any of
its Subsidiaries to its shareholders generally, of all
regular and periodic reports and all registration statements
and prospectuses, if any, filed by any of them with any
securities exchange or with the Securities and Exchange
Commission, or any comparable foreign bodies, and of all
press releases and other statements made available generally
by any of them to the public concerning material
developments in the business of the Borrower or any of its
Subsidiaries;
(e) Promptly upon any executive officer of the
Borrower or any of its Subsidiaries obtaining knowledge of
the occurrence of any Default or Event of Default, a
certificate of the president or chief financial officer of
the Borrower specifying the nature and period of existence
of such Default or Event of Default and what action the
Borrower has taken, is taking and proposes to take with
respect thereto;
(f) Promptly upon any executive officer of the
Borrower or any of its Subsidiaries obtaining knowledge of
(i) the institution of any action, suit, proceeding,
investigation or arbitration by any Governmental Authority
or other Person against or affecting the Borrower or any of
its Subsidiaries or any of their assets, or (ii) any
material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously
disclosed to the Lenders), which, in each case might
reasonably be expected to have a Material Adverse Effect,
the Borrower shall promptly give notice thereof to the
Lenders and provide such other information as may be
reasonably available to it (without waiver of any applicable
evidentiary privilege) to enable the Lenders to evaluate
such matters;
(g) With reasonable promptness, such other information
and data with respect to the Borrower and its Subsidiaries
as from time to time may be reasonably requested by any of
the Lenders; and
49
(h) Together with each set of financial statements
required by paragraph (a) above, a certificate of the
independent certified public accountants rendering the
report and opinion thereon (which certificate may be limited
to the extent required by accounting rules or otherwise) (i)
stating whether, in connection with their audit, any Default
or Event of Default has come to their attention, and if such
a Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof, and
(ii) stating that based on their audit nothing has come to
their attention which causes them to believe that the
matters specified in paragraph (c)(ii) above for the
applicable fiscal year are not stated in accordance with the
terms of this Agreement.
SECTION 5.2. Corporate Existence; Compliance with
Statutes.
Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate
existence, material rights, licenses, permits and franchises and
comply, except where failure to comply, either individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, with all provisions of Applicable Law,
and all applicable restrictions imposed by, any Governmental
Authority, including without limitation, the Federal Trade
Commission's "Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures" as amended from
time to time (16 C.F.R. Sub Para 36.1 et seq.) and all state laws and
regulations of similar import; provided, however, that mergers,
dissolutions and liquidations permitted under Section 6.4 shall
be permitted.
SECTION 5.3. Insurance.
Maintain with financially sound and reputable insurers
insurance in such amounts and against such risks as are
customarily insured against by companies in similar businesses;
provided however, that (a) workmen's compensation insurance or
similar coverage may be effected with respect to its operations
in any particular state or other jurisdiction through an
insurance fund operated by such state or jurisdiction and (b)
such insurance may contain self-insurance retention and
deductible levels consistent with normal industry practices.
SECTION 5.4. Taxes and Charges.
Duly pay and discharge, or cause to be paid and
discharged, before the same shall become delinquent, all federal,
state or local taxes, assessments, levies and other governmental
charges, imposed upon the Borrower or any of its Subsidiaries or
their respective properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all
claims for labor, materials, or supplies which if unpaid could
50
reasonably be expected to result in a Material Adverse Effect;
provided, however, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings
and if the Borrower shall have set aside on its books reserves
(the presentation of which is segregated to the extent required
by GAAP) adequate with respect thereto if reserves shall be
deemed necessary by the Borrower in accordance with GAAP; and
provided, further, that the Borrower will pay all such taxes,
assessments, levies or other governmental charges forthwith upon
the commencement of proceedings to foreclose any Lien which may
have attached as security therefor (unless the same is fully
bonded or otherwise effectively stayed).
SECTION 5.5. ERISA Compliance and Reports.
Furnish to the Administrative Agent (a) as soon as
possible, and in any event within 30 days after any executive
officer (as defined in Regulation C under the Securities Act of
1933) of the Borrower knows that (i) any Reportable Event with
respect to any Plan has occurred, a statement of the chief
financial officer of the Borrower, setting forth details as to
such Reportable Event and the action which it proposes to take
with respect thereto, together with a copy of the notice, if any,
required to be filed by the Borrower or any of its Subsidiaries
of such Reportable Event with the PBGC or (ii) an accumulated
funding deficiency has been incurred or an application has been
made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard or an extension of
any amortization period under Section 412 of the Code with
respect to a Plan, a Plan has been or is proposed to be
terminated in a "distress termination" (as defined in Section
4041(c) of ERISA), proceedings have been instituted to terminate
a Plan or a Multiemployer Plan, a proceeding has been instituted
to collect a delinquent contribution to a Plan or a Multiemployer
Plan, or either the Borrower or any of its Subsidiaries will
incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal
from a Plan under Sections 4062, 4063, 4064 of ERISA or the
withdrawal or partial withdrawal from a Multiemployer Plan under
Sections 4201 or 4204 of ERISA, a statement of the chief
financial officer of the Borrower, setting forth details an to
such event and the action it proposes to take with respect
thereto, (b) promptly upon the reasonable request of the
Administrative Agent, copies of each annual and other report with
respect to each Plan and (c) promptly after receipt thereof, a
copy of any notice the Borrower or any of its Subsidiaries may
receive from the PBGC relating to the PBGC's intention to
terminate any Plan or to appoint a trustee to administer any
Plan; provided that the Borrower shall not be required to notify
the Administrative Agent of the occurrence of any of the events
set forth in the preceding clauses (a) and (c) unless such event,
individually or in the aggregate, could reasonably be expected to
51
result in a material liability to the Borrower and its
Subsidiaries taken as a whole.
SECTION 5.6. Maintenance of and Access to Books and
Records; Examinations.
Maintain or cause to be maintained at all times true
and complete books and records of its financial operations (in
accordance with GAAP) and provide the Administrative Agent and
its representatives access to all such books and records and to
any of their properties or assets during regular business hours,
in order that the Administrative Agent may make such audits and
examinations and make abstracts from such books, accounts and
records and may discuss the affairs, finances and accounts with,
and be advised as to the same by, officers and independent
accountants, all as the Administrative Agent may deem appropriate
for the purpose of verifying the various reports delivered
pursuant to this Agreement or for otherwise ascertaining
compliance with this Agreement.
SECTION 5.7. Maintenance of Properties.
Keep its properties which are material to its business
in good repair, working order and condition consistent with
industry practice.
SECTION 5.8. Changes in Character of Business.
Cause the Borrower and its Subsidiaries taken as a
whole to be primarily engaged in the franchising and services
businesses.
6. NEGATIVE COVENANTS
From the date of the initial Loan and for so long as
the Commitments shall be in effect or any amount shall remain
outstanding under any Note or unpaid under this Agreement, unless
the Required Lenders shall otherwise consent in writing, the
Borrower agrees that it will not, nor will it permit any of its
Subsidiaries to, directly or indirectly:
SECTION 6.1. Limitation on Indebtedness.
Incur, assume or suffer to exist any Indebtedness of
any Material Subsidiary except:
(a) Indebtedness in existence on the date hereof, or
required to be incurred pursuant to a contractual obligation
in existence on the date hereof, which in either case, is
listed on Schedule 6.1 hereto, but not any extensions or
renewals thereof, unless effected on substantially the same
terms or on terms not more adverse to the Lenders;
52
(b) purchase money Indebtedness (including Capital
Leases) to the extent permitted under Section 6.5(b);
(c) Guaranties to the extent permitted by Section 6.2;
(d) Indebtedness owing by any Material Subsidiary to
the Borrower or any other Subsidiary arising in the ordinary
course of business for normal business purposes;
(e) Indebtedness of any Material Subsidiary of the
Borrower issued and outstanding prior to the date on which
such Subsidiary became a Subsidiary of the Borrower (other
than Indebtedness issued in connection with, or in
anticipation of, such Subsidiary becoming a Subsidiary of
the Borrower); provided that immediately prior and on a Pro
Forma Basis after giving effect to, such Person becoming a
Subsidiary of the Borrower, no Default or Event of Default
shall occur or then be continuing and the aggregate
principal amount of such Indebtedness, when added to the
aggregate outstanding principal amount of Indebtedness
permitted by paragraphs (f) and (g) below, shall not exceed
$200,000,000;
(f) any renewal, extension or modification of
Indebtedness under paragraph (e) above so long (i) as such
renewal, extension or modification is effected on
substantially the same terms or on terms which, in the
aggregate, are not more adverse to the Lenders and (ii) the
principal amount of such Indebtedness is not increased; and
(g) other Indebtedness of any Material Subsidiary in
an aggregate principal amounts which, when added to the
aggregate outstanding principal amount of Indebtedness
permitted by paragraphs (e) and (f) above, does not exceed
$200,000,000.
SECTION 6.2. Limitation on Guaranties.
Assume or incur any Guaranty by any Material Subsidiary
except:
(a) endorsements of negotiable instruments for deposit
or collection in the ordinary course of business;
(b) Guaranties in existence on the date hereof which
are listed on Schedule 6.2; and
(c) other unsecured Guaranties (other than those by a
Hotel Subsidiary), provided that immediately prior and on a
Pro Forma Basis after giving effect to, the incurrence of
any such Guaranty, no Default or Event of Default shall
occur or then be continuing and the aggregate principal
amount of such Guaranties shall not exceed $150,000,000.
53
SECTION 6.3. Hotel Subsidiaries.
No Hotel Subsidiary shall incur or suffer to exist any
obligation to advance money to purchase securities from, or
otherwise make any investment in, any Person engaged in the
gaming business.
SECTION 6.4. Consolidation, Merger, Sale of Assets.
(a) Neither the Borrower nor any of its Material
Subsidiaries (in one transaction or series of transactions) will
wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, except any merger,
consolidation, dissolution or liquidation (i) in which the
Borrower is the surviving entity or if the Borrower is not a
party to such transaction then a Subsidiary is the surviving
entity, (ii) in which the surviving entity becomes a Subsidiary
of the Borrower immediately upon the effectiveness of such
merger, consolidation, dissolution or liquidation or (iii)
involving a Subsidiary in connection with a transaction permitted
by Section 6.4(b); provided, however, that immediately prior to
and on a Pro Forma Basis after giving effect to such transaction
no Default or Event of Default has occurred or is continuing.
(b) The Borrower and its Subsidiaries (either
individually or collectively and whether in one transaction or
series of related transactions) will not sell or otherwise
dispose of all or substantially all of the assets of the Borrower
and its Subsidiaries, taken as a whole.
SECTION 6.5. Limitations on Liens.
Suffer any Lien on the property of the Borrower or any
of the Material Subsidiaries, except:
(a) deposits under worker's compensation, unemployment
insurance and social security laws or to secure statutory
obligations or surety or appeal bonds or performance or
other similar bonds in the ordinary course of business, or
statutory Liens of landlords, carriers, warehousemen,
mechanics and material men and other similar Liens, in
respect of liabilities which are not yet due or which are
being contested in good faith, Liens for taxes not yet due
and payable, and Liens for taxes due and payable, the
validity or amount of which is currently being contested in
good faith by appropriate proceedings and as to which
foreclosure and other enforcement proceedings shall not have
been commenced (unless fully bonded or otherwise effectively
stayed);
(b) purchase money Liens granted to the vendor or
Person financing the acquisition of property, plant or
equipment if (i) limited to the specific assets acquired
and, in the case of tangible assets, other property which is
54
an improvement to or is acquired for specific use in
connection with such acquired property or which is real
property being improved by such acquired property; (ii) the
debt secured by the Lien is the unpaid balance of the
acquisition cost of the specific assets on which the Lien is
granted; and (iii) such transaction does not otherwise
violate this Agreement;
(c) Liens upon real and/or personal property, which
property was acquired after the date of this Agreement (by
purchase, construction or otherwise) by the Borrower or any
of its Material Subsidiaries, each of which Liens existed on
such property before the time of its acquisition and was not
created in anticipation thereof; provided, however, that no
such Lien shall extend to or cover any property of the
Borrower or such Material Subsidiary other than the
respective property so acquired and improvements thereon;
(d) Liens arising out of attachments, judgments or
awards as to which an appeal or other appropriate
proceedings for contest or review are promptly commenced
(and as to which foreclosure and other enforcement
proceedings (i) shall not have been commenced (unless fully
bonded or otherwise effectively stayed) or (ii) in any event
shall be promptly fully bonded or otherwise effectively
stayed);
(e) Liens created under any Fundamental Document;
(f) Existing Liens listed on Schedule 6.5 and any
extensions or renewals thereof; and
(g) Liens in connection with the Receivables Facility.
SECTION 6.6. Sale and Leaseback.
Enter into any arrangement with any Person or Persons,
whereby in contemporaneous transactions the Borrower or any of
its Subsidiaries sells essentially all of its right, title and
interest in a material asset and the Borrower or any of its
Subsidiaries acquires or leases back the right to use such
property except that the Borrower may enter into sale-leaseback
transactions relating to assets not in excess of $50,000,000 in
the aggregate on a cumulative basis.
SECTION 6.7. Leverage.
Permit the ratio of Consolidated Total Indebtedness on
the last day of any fiscal quarter to Consolidated EBITDA for the
Rolling Period ended on such day to be more than 3.5 to 1.0.
SECTION 6.8. Interest Coverage Ratio.
55
Permit the Interest Coverage Ratio for any Rolling
Period to be less than 3.0 to 1.0.
SECTION 6.9. Accounting Practices.
Establish a fiscal year ending on other than
December 31, or modify or change accounting treatments or
reporting practices except as otherwise required or permitted by
GAAP.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance
of any of the following events (herein called "Events of
Default"):
(a) any representation or warranty made by the
Borrower in this Agreement or any other Fundamental Document
or in connection with this Agreement or with the execution
and delivery of the Notes or the Borrowings hereunder, or
any statement or representation made in any report,
financial statement, certificate or other document furnished
by or on behalf of the Borrower or any of its Subsidiaries
to the Administrative Agent or any Lender under or in
connection with this Agreement, shall prove to have been
false or misleading in any material respect when made or
delivered;
(b) default shall be made in the payment of any
principal of or interest on the Notes or of any fees or
other amounts payable by the Borrower hereunder, 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 by
acceleration thereof or otherwise, and in the case of
payments of interest, such default shall continue unremedied
for five days, and in the case of payments other than of any
principal amount of or interest on the Notes, such default
shall continue unremedied for five days after receipt by the
Borrower of an invoice therefor;
(c) default shall be made in the due observance or
performance of any covenant, condition or agreement
contained in Section 5.1(e) (with respect to notice of
Default or Events of Default), 5.8 or Article 6 of this
Agreement;
(d) default shall be made by the Borrower in the due
observance or performance of any other covenant, condition
or agreement to be observed or performed pursuant to the
terms of this Agreement, or any other Fundamental Document
and such default shall continue unremedied for thirty (30)
days after the Borrower obtains knowledge of such
occurrence;
56
(e) (i) default in payment shall be made with respect
to any Indebtedness of the Borrower or any of its
Subsidiaries where the amount or amounts of such
Indebtedness exceeds $25,000,000 in the aggregate; or (ii)
default in payment or performance shall be made with respect
to any Indebtedness of the Borrower or any of its
Subsidiaries where the amount or amounts of such
Indebtedness exceeds $25,000,000 in the aggregate, if the
effect of such default is to result in the acceleration of
the maturity of such Indebtedness; or (iii) any other
circumstance shall arise (other than the mere passage of
time) by reason of which the Borrower or any Subsidiary of
the Borrower is required to redeem or repurchase, or offer
to holders the opportunity to have redeemed or repurchased,
any such Indebtedness where the amount or amounts of such
Indebtedness exceeds $25,000,000 in the aggregate; provided
that clause (iii) shall not apply to secured Indebtedness
that becomes due as a result of a voluntary sale of the
property or assets securing such Indebtedness and provided,
further clauses (ii) and (iii) shall not apply to any
Indebtedness of any Subsidiary issued and outstanding prior
to the date such Subsidiary became a Subsidiary of the
Borrower (other than Indebtedness issued in connection with,
or in anticipation of, such Subsidiary becoming a Subsidiary
of the Borrower) if such default or circumstance arises
solely as a result of a "change of control" provision
applicable to such Indebtedness which becomes operative as a
result of the acquisition of such Subsidiary by the Borrower
or any of its Subsidiaries;
(f) the Borrower or any of its Material Subsidiaries
shall generally not pay its debts as they become due or
shall admit in writing its inability to pay its debts, or
shall make a general assignment for the benefit of
creditors; or the Borrower or any of its Material
Subsidiaries shall commence any case, proceeding or other
action seeking to have an order for relief entered on its
behalf as debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or
its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment
of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property or
shall file an answer or other pleading in any such case,
proceeding or other action admitting the material
allegations of any petition, complaint or similar pleading
filed against it or consenting to the relief sought therein;
or the Borrower or any Material Subsidiary thereof shall
take any action to authorize any of the foregoing;
(g) any involuntary case, proceeding or other action
against the Borrower or any of its Material Subsidiaries
shall be commenced seeking to have an order for relief
57
entered against it as debtor or to adjudicate it a bankrupt
or insolvent, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or
its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment
of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property,
and such case, proceeding or other action (i) results in the
entry of any order for relief against it or (ii) shall
remain undismissed for a period of sixty (60) days;
(h) the occurrence of a Change in Control;
(i) final judgment(s) for the payment of money in
excess of $25,000,000 shall be rendered against the Borrower
or any of its Subsidiaries which within thirty (30) days
from the entry of such judgment shall not have been
discharged or stayed pending appeal or which shall not have
been discharged within thirty (30) days from the entry of a
final order of affirmance on appeal; or
(j) a Reportable Event relating to a failure to meet
minimum funding standards or an Inability to pay benefits
when due shall have occurred with respect to any Plan under
the control of the Borrower or any of its Subsidiaries and
shall not have been remedied within 45 days after the
occurrence of such Reportable Event, if the occurrence
thereof could reasonably be expected to have a Material
Adverse Effect;
then, in every such event and at any time thereafter during the
continuance of such event, the Administrative Agent may or shall,
if directed by the Required Lenders, take either or both of the
following actions, at the same or different times: terminate
forthwith the Commitments and/or declare the principal of and the
interest on the Loans and the Notes and all other amounts payable
hereunder or thereunder to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable,
without presentment, demand, protest, notice of acceleration,
notice of intent to accelerate or other notice of any kind, all
of which are hereby expressly waived, anything in this Agreement
or in the Notes to the contrary notwithstanding. If an Event of
Default specified in paragraphs (f) or (g) above shall have
occurred, the principal of and interest on the Loans and the
Notes and all other amounts payable hereunder or thereunder shall
thereupon and concurrently become due and payable without
presentment, demand, protest, notice of acceleration, notice of
intent to accelerate or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement or the
Notes to the contrary notwithstanding and the Commitments of the
Lenders shall thereupon forthwith terminate.
8. THE ADMINISTRATIVE AGENT
SECTION 8.1. Administration by Administrative Agent.
The general administration of the Fundamental Documents
and any other documents contemplated by this Agreement shall be
by the Administrative Agent or its designees. Each of the
Lenders hereby irrevocably authorizes the Administrative Agent,
at its discretion, to take or refrain from taking such actions as
agent on its behalf and to exercise or refrain from exercising
such powers under the Fundamental Documents, the Notes and any
other documents contemplated by this Agreement as are delegated
by the terms hereof or thereof, as appropriates together with all
powers reasonably incidental thereto. The Administrative Agent
shall have no duties or responsibilities except as set forth in
the Fundamental Documents. Any Lender which is a co-agent (as
indicated on the signature pages hereto) for the credit facility
hereunder shall not have any duties or responsibilities except as
a Lender hereunder.
SECTION 8.2. Advances and Payments.
(a) On the date of each Loan, the Administrative Agent
shall be authorized (but not obligated) to advance, for the
account of each of the Lenders, the amount of the Loan to be made
by it in accordance with this Agreement. Each of the Lenders
hereby authorizes and requests the Administrative Agent to
advance for its account, pursuant to the terms hereof, the amount
of the Loan to be made by it, unless with respect to any Lender,
such Lender has theretofore specifically notified the
Administrative Agent that such Lender does not intend to fund
that particular Loan. Each of the Lenders agrees forthwith to
reimburse the Administrative Agent in immediately available funds
for the amount so advanced on its behalf by the Administrative
Agent pursuant to the immediately preceding sentence. If any
such reimbursement is not made in immediately available funds on
the same day on which the Administrative Agent shall have made
any such amount available on behalf of any Lender in accordance
with this Section 8.2, such Lender shall pay interest to the
Administrative Agent at a rate per annum equal to the
Administrative Agent's cost of obtaining overnight funds in the
New York Federal Funds Market. Notwithstanding the preceding
sentence, if such reimbursement is not made by the second
Business Day following the day on which the Administrative Agent
shall have made any such amount available on behalf of any Lender
or such Lender has indicated that it does not intend to reimburse
the Administrative Agent, the Borrower shall immediately pay such
unreimbursed advance amount (plus any accrued, but unpaid
interest at the rate applicable to ABR Loans) to the
Administrative Agent.
(b) Any amounts received by the Administrative Agent
in connection with this Agreement or the Notes the application of
which is not otherwise provided for shall be applied, in
accordance with each of the Lenders' pro rata interest therein,
first, to pay accrued but unpaid Facility Fees, second, to pay
59
accrued but unpaid interest on the Notes, third, the principal
balance outstanding on the Notes and fourth, to pay other amounts
payable to the Administrative Agent and/or the Lenders. All
amounts to be paid to any of the Lenders by the Administrative
Agent shall be credited to the Lenders, after collection by the
Administrative Agent, in immediately available funds either by
wire transfer or deposit in such Lender's correspondent account
with the Administrative Agent, or as such Lender and the
Administrative Agent shall from time to time agree.
SECTION 8.3. Sharing of Setoffs and Cash Collateral.
Each of the Lenders agrees that if it shall, through
the operation of Section 2.19 hereof or the exercise of a right
of bank's lien, setoff or counterclaim against the Borrower,
including, but not limited to, a secured claim under Section 506
of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim and
received by such Lender under any applicable bankruptcy,
insolvency or other similar law, or otherwise, obtain payment in
respect of its Loans as a result of which the unpaid portion of
its Loans is proportionately less than the unpaid portion of any
of the other Lenders (a) it shall promptly purchase at par (and
shall be deemed to have thereupon purchased) from such other
Lenders a participation in the Loans of such other Lenders, so
that the aggregate unpaid principal amount of each of the
Lenders' Loans and its participation in Loans of the other
Lenders shall be in the same proportion to the aggregate unpaid
principal amount of all Loans then outstanding as the principal
amount of its Loans prior to the obtaining of such payment was to
the principal amount of all Loans outstanding prior to the
obtaining of such payment and (b) such other adjustments shall be
made from time to time as shall be equitable to ensure that the
Lenders share such payment pro rata.
SECTION 8.4. Notice to the Lenders.
Upon receipt by the Administrative Agent from the
Borrower of any communication calling for an action on the part
of the Lenders, or upon notice to the Administrative Agent of any
Event of Default, the Administrative Agent will in turn
immediately inform the other Lenders in writing (which shall
include telegraphic communications) of the nature of such
communication or of the Event of Default, as the case may be.
SECTION 8.5. Liability of Administrative Agent.
(a) The Administrative Agent or any Issuing Lender,
when acting on behalf of the Lenders may execute any of its
duties under this Agreement by or through its officers, agents,
or employees and neither the Administrative Agent, the Issuing
Lenders nor their respective directors, officers, agents, or
employees shall be liable to the Lenders or any of them for any
action taken or omitted to be taken in good faith, or be
60
responsible to the Lenders or to any of them for the consequences
of any oversight or error of judgment, or for any loss, unless
the same shall happen through its gross negligence or willful
misconduct. The Administrative Agent, the Issuing Lenders and
their respective directors, officers, agents, and employees shall
in no event be liable to the Lenders or to any of them for any
action taken or omitted to be taken by it pursuant to
instructions received by it from the Required Lenders or in
reliance upon the advice of counsel selected by it. Without
limiting the foregoing, neither the Administrative Agent, the
Issuing Lenders nor any of their respective directors, officers,
employees, or agents shall be responsible to any of the Lenders
for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement,
warranty, or representation in, or for the perfection of any
security interest contemplated by, this Agreement or any related
agreement, document or order, or for the designation or failure
to designate this transaction as a "Highly Leveraged Transaction"
for regulatory purposes, or shall be required to ascertain or to
make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants, or
agreements of this Agreement or any related agreement or
document.
(b) Neither the Administrative Agent, the Issuing
Lenders, nor any of their respective directors, officers,
employees, or agents shall have any responsibility to the
Borrower on account of the failure or delay in performance or
breach by any of the Lenders or the Borrower of any of their
respective obligations under this Agreement or the Notes or any
related agreement or document or in connection herewith or
therewith.
(c) The Administrative Agent, and the Issuing Lenders,
in such capacities hereunder, shall be entitled to rely on any
communication, instrument, or document reasonably believed by it
to be genuine or correct and to have been signed or sent by a
Person or Persons believed by it to be the proper Person or
Persons, and it shall be entitled to rely on advice of legal
counsel, independent public accountants, and other professional
advisers and experts selected by it.
SECTION 8.6. Reimbursement and Indemnification.
Each of the Lenders severally and not jointly agrees
(i) to reimburse the Administrative Agent, in the amount of its
proportionate share, for any expenses and fees incurred for the
benefit of the Lenders under the Fundamental Documents,
including, without limitation, counsel fees and compensation of
agents and employees paid for services rendered on behalf of the
Lenders, and any other expense incurred in connection with the
administration or enforcement thereof not reimbursed by the
Borrower or one of its Subsidiaries, and (ii) to indemnify and
hold harmless the Administrative Agent and any of its directors,
61
officers, employees, or agents, on demand, in the amount of its
proportionate share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against it or any of them in any way relating to or arising out
of the Fundamental Documents or any action taken or omitted by it
or any of them under the Fundamental Documents to the extent not
reimbursed by the Borrower or one of its Subsidiaries (except
such as shall result from the gross negligence or willful
misconduct of the Person seeking indemnification); and (iii) to
indemnify and hold harmless the Issuing Lenders and any of their
respective directors, officers, employees, or agents or demand in
the amount of its proportionate share from and against any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs expenses or disbursements of any
kind or nature whatever which may be imposed or incurred by or
asserted against it relating to or arising out of the issuance of
any Letters of Credit (except such as shall result from the gross
negligence or willful misconduct of the Person seeking
indemnification).
SECTION 8.7. Rights of Administrative Agent.
It is understood and agreed that Chase shall have the
same rights and powers hereunder (including the right to give
such instructions) as the other Lenders and may exercise such
rights and powers, as well as its rights and powers under other
agreements and instruments to which it is or may be party, and
engage in other transactions with the Borrower as though it were
not the Administrative Agent on behalf of the Lenders under this
Agreement.
SECTION 8.8. Independent Investigation by Lenders.
Each of the Lenders acknowledges that it has decided to
enter into this Agreement and to make the Loans and participate
in the Letters of Credit hereunder based on its own analysis of
the transactions contemplated hereby and of the creditworthiness
of the Borrower and agrees that neither the Administrative Agent
nor any Issuing Lender shall bear responsibility therefor.
SECTION 8.9. Notice of Transfer.
The Administrative Agent and the Issuing Lenders may
deem and treat any Lender which is a party to this Agreement as
the owners of such Lender's respective portions of the Loans for
all purposes, unless and until a written notice of the assignment
or transfer thereof executed by any such Lender shall have been
received by the Administrative Agent and become effective
pursuant to Section 9.3.
SECTION 8.10. Successor Administrative Agent.
The Administrative Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent from among the
Lenders. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such
appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation, the retiring
Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which with the consent of the
Borrower, which will not be unreasonably withheld, shall be a
commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor
Administrative Agent shall thereupon 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 under
this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of
this Article 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent
under this Agreement.
9. MISCELLANEOUS
SECTION 9.1. Notices.
Notices and other communications provided for herein
shall be in writing and shall be delivered or mailed (or in the
case of telegraphic communication, if by telegram, delivered to
the telegraph company and, if by telex, telecopy, graphic
scanning or other telegraphic communications equipment of the
sending party hereto, delivered by such equipment) addressed, if
to the Administrative Agent or Chase, to it at 270 Park Avenue,
New York, New York 10017-2070 Attn: Sandra Miklave, with a copy
to Rob Kellas, Vice President, or if to the Borrower, to it at
339 Jefferson Road, Parsippany, NJ 07054-0278 Attention: Stephen
P. Holmes, Executive Vice President and Chief Financial Officer
and James E. Buckman, Executive Vice President and General
Counsel, with a copy to Skadden, Arps, Slate, Meagher & Flom, 919
Third Avenue, New York, NY 10022, Attn: James Douglas, or if to a
Lender, to it at its address set forth on the signature page (or
in its Assignment and Acceptance, Commitment Increase Supplement
or other agreement pursuant to which it became a Lender
hereunder), or such other address as such party may from time to
time designate by giving written notice to the other parties
hereunder. 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 fifth Business Day
after the date when sent by registered or certified mail, postage
prepaid, return receipt requested, if by mail, or when delivered
63
to the telegraph company, charges prepaid, if by telegram, or
when receipt is acknowledged, if by any telecopier or telegraphic
communications equipment of the sender, in each case addressed to
such party as provided in this Section 9.1 or in accordance with
the latest unrevoked written direction from such party.
SECTION 9.2. Survival of Agreement, Representations
and Warranties, etc.
All warranties, representations and covenants made by
the Borrower herein or in any certificate or other instrument
delivered by it or on its behalf in connection with this
Agreement shall be considered to have been relied upon by the
Administrative Agent and the Lenders and shall survive the making
of the Loans herein contemplated and the issuance and delivery to
the Administrative Agent of the Notes regardless of any
investigation made by the Administrative Agent or the Lenders or
on their behalf and shall continue in full force and effect so
long as any amount due or to become due hereunder is outstanding
and unpaid and so long as the Commitment has not been terminated.
All statements in any such certificate or other instrument shall
constitute representations and warranties by the Borrower
hereunder.
SECTION 9.3. Successors and Assigns; Syndications;
Loan Sales; Participations.
(a) Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party (provided, however, that
the Borrower may not assign its rights hereunder without the
prior written consent of all the Lenders), and all covenants,
promises and agreements by, or on behalf of, the Borrower which
are contained in this Agreement shall inure to the benefit of the
successors and assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior
written consent of the Administrative Agent, the Issuing Lenders
and the Borrower, which consents shall not be unreasonably
withheld or delayed) assign to one or more banks or other
entities either (i) all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it) (a
"Ratable Assignment") or (ii) all or a portion of its rights and
obligations under and in respect of (A) its Commitment under this
Agreement and the same portion of the Revolving Credit Loans at
the time owing to it or (B) the Competitive Loans at the time
owing to it (including, without limitation, in the case of any
such type of Loan, the same portion of the associated Note) (a
"Non-Ratable Assignment"); provided, however, that (1) each
Non-Ratable Assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and
obligations in respect of the Loans and the Commitment (if
64
applicable) which are the subject of such assignment, (2) each
Ratable Assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under
this Agreement, (3) the amount of the Commitment or Competitive
Loans, as the case may be, of the assigning Lender subject to
each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to
the Lender) shall be in a minimum principal amount of $10,000,000
unless otherwise agreed by the Borrower and the Administrative
Agent and (4) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such
assignment (if required hereunder) and a processing and
recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, and from and after the effective date
specified in each Assignment and Acceptance, which effective date
shall be not earlier than five Business Days after the date of
acceptance and recording by the Administrative Agent, (x) the
assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or
the remaining portion of the assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall
cease to be a party hereto).
(c) Notwithstanding the other provisions of this
Section 9.3, each Lender may at any time make a Ratable
Assignment or a Non-Ratable Assignment of its interests, rights
and obligations under this Agreement to (i) any Affiliate of such
Lender or (ii) any other Lender hereunder.
(d) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in, or in connection with,
this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Fundamental Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) such Lender assignor
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under the Fundamental Documents; (iii) such assignee
confirms that it has received a copy of this Agreement, together
with copies of the most recent financial statements delivered
65
pursuant to Sections 5.1(a) and 5.1(b) (or if none of such
financial statements shall have then been delivered, then copies
of the financial statements referred to in Section 3.4 hereof)
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the assigning Lender, the
Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee appoints
and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the
Fundamental Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that
it will be bound by the provisions of this Agreement and will
perform in accordance with its terms all of the obligations which
by the terms of this Agreement are required to be performed by it
as a Lender.
(e) The Administrative Agent, on behalf of the
Borrower, shall maintain at its address at which notices are to
be given to it pursuant to Section 9.1, a copy of each Assignment
and Acceptance delivered to it and a register for the recordation
of the names and addresses of the Lenders and the Commitments of,
and principal amount of the Loans owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower,
the Administrative Agent, the Issuing Lenders and the Lenders may
(and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is
recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of
this Agreement and the other Fundamental Documents,
notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect
thereto being made in the Register. The Register shall be
available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(f) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, any Notes
subject to such assignment (if required hereunder) and the
processing and recordation fee, the Administrative Agent (subject
to the right, if any, of the Borrower to require its consent
thereto) shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt written notice
thereof to the Borrower. If a portion of the Commitment has been
assigned by an assigning Lender, then such Lender shall deliver
66
its Revolving Credit Note, if any, at the same time it delivers
the applicable Assignment and Acceptance to the Administrative
Agent. If only Competitive Loans have been assigned by the
assigning Lender, such Lender shall not be required to deliver
its Competitive Note to the Administrative Agent, unless such
Lender no longer holds a Commitment under this Agreement, in
which event such assigning Lender shall deliver its Competitive
Note, if any, at the same time it delivers the applicable
Assignment and Acceptance to the Administrative Agent. Within
five Business Days after receipt of the notice, the Borrower, at
its own expense, shall execute and deliver to the applicable
Lenders at their request, either (A) a new Revolving Credit Note
to the order of such assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and
Acceptance and a Competitive Note to the order of such assignee
in an amount equal to the Total Commitment hereunder, and a new
Revolving Credit Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder, or (B)
if Competitive Loans only have been assigned and the assigning
Lender holds a Commitment under this Agreement, then a new
Competitive Note to the order of the assignee Lender in an amount
equal to the outstanding principal amount of the Competitive
Loan(s) purchased by it pursuant to the Assignment and
Acceptance, or (C) if Competitive Loans only have been assigned
and the assigning Lender does not hold a Commitment under this
Agreement, a new Competitive Note to the order of such assignee
in an amount equal to the outstanding principal amount of the
Competitive Loans(s) purchased by it pursuant to such Assignment
and Acceptance and, a new Competitive Note to the order of the
assigning Lender in an amount equal to the outstanding principal
amount of the Competitive Loans retained by it hereunder. Any
new Revolving Credit Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of the Commitments
of the respective Lenders. All new Notes shall be dated the date
hereof and shall otherwise be in substantially the forms of
Exhibits A-1 and A-2 hereto, as the case may be.
(g) Each of the Lenders may without the consent of the
Borrower, the Administrative Agent or any Issuing Lender sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitment and the Loans owing to it and the Note or Notes held
by it); provided, however, that (i) any such Lender's obligations
under this Agreement shall remain unchanged, (ii) such
participant shall not be granted any voting rights under this
Agreement, except with respect to matters requiring the consent
of each of the Lenders hereunder, (iii) any such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iv) the participating banks or
other entities shall be entitled to the cost protection
provisions contained in Sections 2.14, 2.15 and 2.17 hereof but a
participant shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount to which
67
the Lender granting such participation would have been entitled
to receive, and (v) the Borrower, the Administrative Agent and
the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and
obligations under this Agreement.
(h) The Lenders may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 9.3, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the
Borrower furnished to the Administrative Agent by or on behalf of
the Borrower; provided that prior to any such disclosure, each
such assignee or participant or proposed assignee or participant
shall agree, by executing a confidentiality letter in form and
substance equivalent to the confidentiality letter executed by
the Lenders in connection with information received by such
Lenders relating to this transaction to preserve the
confidentiality of any confidential information relating to the
Borrower received from such Lender.
(i) Each Lender hereby represents that it is a
commercial lender or financial institution which makes loans in
the ordinary course of its business and that it will make the
Loans hereunder for its own account in the ordinary course of
such business; provided, however, that, subject to preceding
clauses (a) through (h), the disposition of the Notes or other
evidence of Indebtedness held by that Lender shall at all times
be within its exclusive control.
(j) The Borrower consents that any Lender may at any
time and from time to time pledge, or otherwise grant a security
interest in, any Loan or any Note evidencing such Loan (or any
part thereof), including any such pledge or grant to any Federal
Reserve Bank, and this Section shall not apply to any such pledge
or grant; provided that no such pledge or grant shall release a
Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
SECTION 9.4. Expenses; Documentary Taxes.
Whether or not the transactions hereby contemplated
shall be consummated, the Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in
connection with the syndication, preparation, execution, delivery
and administration of this Agreement, the Notes, the making of
the Loans and issuance and administration of the Letters of
Credit, including but not limited to any internally allocated
audit costs, the reasonable fees and disbursements of Simpson
Thacher & Bartlett, counsel to the Administrative Agent, as well
as all reasonable out-of-pocket expenses incurred by the Lenders
in connection with any restructuring or workout of this
Agreement, or the Notes or the Letters of Credit or in connection
with the enforcement or protection of the rights of the Lenders
in connection with this Agreement or the Notes or the Letters of
68
Credit or any other Fundamental Document, and with respect to any
action which may be instituted by any Person against any Lender
or any Issuing Lender in respect of the foregoing, or as a result
of any transaction, action or nonaction arising from the
foregoing, including but not limited to the fees and
disbursements of any counsel for the Lenders or any Issuing
Lender. Such payments shall be made on the date of execution of
this Agreement and thereafter on demand. The Borrower agrees
that it shall indemnify the Administrative Agent, the Lenders and
the Issuing Lenders from, and hold them harmless against, any
documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of
this Agreement or the Notes or any other Fundamental Document.
The obligations of the Borrower under this Section shall survive
the termination of this Agreement and/or the payment of the
Loans.
SECTION 9.5. Indemnity.
Further, by the execution hereof, the Borrower agrees
to indemnify and hold harmless the Administrative Agent and the
Lenders and the Issuing Lenders and their respective directors,
officers, employees and agents (each, an "Indemnified Party")
from and against any and all expenses (including reasonable fees
and disbursements of counsel), losses, claims, damages and
liabilities arising out of any claim, litigation, investigation
or proceeding (regardless of whether any such Indemnified Party
is a party thereto) in any way relating to the transactions
contemplated hereby, but excluding therefrom all expenses,
losses, claims, damages, and liabilities arising out of or
resulting from the gross negligence or willful misconduct of the
Indemnified Party seeking indemnification, provided, however,
that the Borrower shall not be liable for the fees and expenses
of more than one separate firm for all such Indemnified Parties
in connection with any one such action or any separate but
substantially similar or related actions in the same
jurisdiction, nor shall the Borrower be liable for any settlement
of any proceeding effected without the Borrower's written
consent, and provided further, however, that this Section 9.5
shall not be construed to expand the scope of the Borrower's
reimbursement obligations specified in Section 9.4. The
obligations of the Borrower under this Section 9.5 shall survive
the termination of this Agreement and/or payment of the Loans.
SECTION 9.6. CHOICE OF LAW.
THIS AGREEMENT AND THE NOTES HAVE BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF SUCH
STATE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS RELATING TO
INTEREST RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
69
SECTION 9.7. No Waiver.
No failure on the part of the Administrative Agent, any
Lender or any Issuing Lender to exercise, and no delay in
exercising, any right, power or remedy hereunder or under the
Notes or with regards to the Letters of Credit shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 9.8. Extension of Maturity.
Except as otherwise specifically provided in Article 8
hereof, should any payment of principal of or interest on the
Notes or any other amount due hereunder become due and payable on
a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day and, in the case of
principal, interest shall be payable thereon at the rate herein
specified during such extension.
SECTION 9.9. Amendments, etc.
No modification, amendment or waiver of any provision
of this Agreement, and no consent to any departure by the
Borrower herefrom or therefrom, shall in any event be effective
unless the same shall be in writing and signed or consented to in
writing by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the
purpose for which given; provided, however, that no such
modification or amendment shall without the written consent of
each Lender affected thereby (x) increase the Commitment of a
Lender or postpone or waive any scheduled reduction in the
Commitments, or (y) alter the stated maturity or principal amount
of any installment of any Loan, or decrease the rate of interest
payable thereon, or the rate at which the Facility Fees or letter
of credit fees accrue or (z) waive a default under Section 7(b)
hereof with respect to a scheduled principal installment of any
Loan; and provided, further that no such modification or
amendment shall without the written consent of all of the Lenders
(i) amend or modify any provision of this Agreement which
provides for the unanimous consent or approval of the Lenders, or
(ii) amend this Section 9.9 or the definition of Required Lenders
or Supermajority Lenders; and provided, further that no such
modification or amendment shall decrease the Commitment of any
Lender without the written consent of such Lender. No such
amendment or modification may adversely affect the rights and
obligations of the Administrative Agent or any Issuing Lender
hereunder without its prior written consent; and provided,
further that the consent of the Lenders shall not be required
with respect to any amendment to this Agreement pursuant to
Section 2.23. No notice to or demand on the Borrower shall
entitle the Borrower to any other or further notice or demand in
70
the same, similar or other circumstances. Each holder of a Note
shall be bound by any amendment, modification, waiver or consent
authorized as provided herein, whether or not a Note shall have
been marked to indicate such amendment, modification, waiver or
consent and any consent by any holder of a Note shall bind any
Person subsequently acquiring a Note, whether or not a Note is so
marked.
SECTION 9.10. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY
TRIAL.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK LOCATED
IN NEW YORK COUNTY AND TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT
BY THE ADMINISTRATIVE AGENT OR A LENDER. THE BORROWER TO THE
EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES
NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY
CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE
FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,
AND (B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION,
SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT
COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE
SAME SUBJECT MATTER. THE BORROWER HEREBY CONSENTS TO SERVICE OF
PROCESS BY MAIL AT ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN
PURSUANT TO SECTION 9.1 HEREOF. THE BORROWER AGREES THAT ITS
SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY
MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT
AND THE LENDERS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION (A) BY SUIT, ACTION OR
PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH
SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF
INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY THEREIN
DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY, OR PURSUANT TO,
THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT THE
ADMINISTRATIVE AGENT, A LENDER OR AN ISSUING LENDER MAY AT IS
71
OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS
AGAINST THE BORROWER OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL
COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE
BORROWER OR SUCH ASSETS MAY BE FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM
IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY
HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS
OF THIS SECTION 9.11(b) CONSTITUTE A MATERIAL INDUCEMENT UPON
WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY IN
ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9.11(b) WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO
THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
SECTION 9.12. Headings.
Section headings used herein are for convenience only
and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 9.13. Execution in Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all
of which taken together shall constitute one and the same
instrument.
SECTION 9.14. Entire Agreement.
This Agreement represents the entire agreement of the
parties with regard to the subject matter hereof and the terms of
any letters and other documentation entered into among the
Borrower, the Administrative Agent or any Lender (other than the
provisions of the letter agreement dated August 28, 1996, among
the Borrower, Chase and Chase Securities Inc., relating to fees
and expenses and syndication issues) prior to the execution of
this Agreement which relate to Loans to be made shall be replaced
by the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first
above written.
BORROWER:
HFS INCORPORATED
By:
Name:
Title:
LENDERS:
THE CHASE MANHATTAN BANK, individua ly
and as Administrative Agent
By:
Name:
Title:
Address: 270 Park Avenue
New York, NY 10017
Attn: Rob Kellas
Vice President
Telephone:
Telecopier:
- -
ABN-AMRO BANK N.V. NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
Address: 500 Park Avenue
New York, New York 10022
Attn: Daphne Lee
Telephone: (212) 446-429
Telecopier: (212) 832-7129
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BANK OF AMERICA NT&SA
By:
Name:
Title:
Address: 1850 Gateway Blvd.
Concord, California 94520
Attn: Michelle Zurca
Telephone: (510) 675-7178
Telecopier: (510) 603-8259
With a copy to:
Address: 335 Madison Avenue
New York, New York 10017
Attn: Dale R. Mason, VP
Telephone: (212) 503-793
Telecopier: (212) 503-7878
THE BANK OF NEW YORK
By:
Name:
Title:
Address: One Wall Street
22nd Floor
New York, New York 10280
Attn: Eliza S. Adams
Telephone: (212) 635-1370
Telecopier: (212) 635-1480
74
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
Address: One Liberty Plaza
New York, New York 10006
Attn: Brian Allen
Telephone: (212) 225-5030
Telecopier: (212) 225-5090/5091
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By:
Name:
Title:
Address: 1251 Avenue of the Americas
New York, New York 10020-1104
Paula Mueller
Telephone: (212) 782-4228
Telecopier: (212) 782-6445
BANQUE PARIBAS
By:
Name: Title:
By:
Name:
Title:
Address: 787 Seventh Avenue
New York, New York 10019
Attn: Duane Helkowski/
Roseann Burke
Telephone: (212) 841-2940
Telecopier: (212) 841-2333
75
BAYERISCHE LANDESBANK GIROZENTRALE
CAYMAN ISLANDS BRANCH
By:
Name:
Title:
By:
Name:
Title:
Address: 560 Lexington Avenue
New York, New York 10022
Attn: Patricia Sanchez
Telephone: (212) 310-9810
Telecopier: (212) 310-9930
BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
Address: 335 Madison Avenue
19th Floor
New York, New York 10017
Attn: Marianne Weinzinger
Telephone: (212) 210-0352
Telecopier: (212) 880-9724
76
CIBC INC.
By:
Name:
Title:
Address: Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attn: Timothy E. Doyle
Telephone: (212) 856-3650
Telecopier: (212) 856-3991
COMERICA BANK
By:
Name:
Title:
Address: 500 Woodward Avenue
Detroit, Michigan 48226-3280
Attn: Venus C. Moses
Telephone: (313) 222-3319
Telecopier: (313) 222-3330
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
Address: 1301 Avenue of the Americas
New York, New York 10019
Attn: Scott R. Chappelka
Telephone: (212) 261-73 6
Telecopier: (212) 459-3179
77
CREDIT SUISSE NEW YORK
By:
Name:
Title:
By:
Name:
Title:
Address: 12 East 49th Street
New York, New York 10017
Attn: Gina Manginello - Northeast
Group
Telephone: (212) 238-5407
Telecopier: (212) 238-5439
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYM N
ISLAND BRANCH
By:
Name:
Title:
Address: 609 Fifth Avenue
New York, New York 10017
Attn: Leo von Reissig
Telephone: (212) 745-1589
Telecopier: (212) 745-1556/1550
78
FIRST HAWAIIAN BANK
By:
Name:
Title:
Address: 1132 Bishop Street
19th Floor
Honolulu, Hawaii 96813
Att : Kathryn Plumb
Telephone: (808) 525-8179
Telecopier: (808) 525-6372
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By:
Name:
Title:
Address: Two World Trade Center
New York, New York 10048
Attn: Linda Murtha
Telephone: (212) 898-2066
Telecopier: (212) 912-0516
THE INDUSTRIAL BANK OF JAPAN, LIMITED
NEW YORK BRANCH
By:
Name:
dress: 245 Park Avenue
New York, New York 10167-0037
Attn: Adrienne Molloy
Telephone: (212) 309-1832
Telecopier: (212) 856-9450
79
MELLON BANK, N.A.
By:
Name:
Title:
Address: 65 East 55th Street
15th Floor
New York, New York 10022
Attn: Caroline R. Walsh
Telephone: (212) 702-5347
elecopier: (212) 702-5269
NATIONSBANK, N.A.
By:
Name:
Title:
Address: 101 North Tryon Street
15th Floor
Charlotte, North Carolina 28255
Attn: Carole Greene
Telephone: (704) 386-8389
Telecopier: (704) 386-8694
THE NORTHERN TRUST COMPANY
By:
Name:
Title:
Address: 50 South LaSalle Street
Name:
Title:
Address: One Financial Square
New York, New York 10005-3531
Attn: Sheryl L. Greenberg
Telephone: (212) 428-6476
Telecopier: (212) 428-6459
THE SAKURA BANK, LIMITED
By:
Name:
Title:
Address: 277 Park Avenue
45th Floor
New York, New York 10172-0121
Attn: David H. Speir
Telephone: (21 ) 756-6778
Telecopier: (212) 888-7651
80
THE SANWA BANK, LIMITED
By:
Name:
Title:
Address: 55 East 52nd Street
26th Floor -
U.S. Corporate Finance
New York, New York 10055
Attn: Dominic J. Sorresso
Telephone: (212) 339-6194
Telecopier: (212) 754-1304
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By: Name:
Title:
Address: 277 Park Avenue
New York, New York 10172
Attn: Dan Lenzo
Telephone: (212) 224-4141
Telecopier: (212) 224-5188
SUMMIT BANK
By:
Name:
Title:
Address: 25 East Salem Street
14th Floor
Hackensack, New Jersey 07601
Telephone: (201) 646-6189
Telecopier: (201) 343-6723
81
THE TOKAI BANK LIMITED NEW YORK BRANCH
By:
Name:
Title:
Address: 55 East 52nd Street
New York, New York 10055
Attn: Stuart M. Schulman
Telephone: (212) 339-1117
Telecopier: (212) 754-2170
UNITED STATES NATIONAL BANK OF OREGON
By:
Name:
Title:
Address: 555 SW Oak Street
PL-4
Portland, Oregon 97204
Attn: Douglas A. Rich
Telephone: (503) 275-3680
Telecopier: (503) 275-4267
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By:
Name:
Title:
By:
Name:
Title:
Address: 1211 Avenue of the Americas
24th Floor
New York, New York 10036
Attn: Ralph White
Telephone: (212) 852-6096
Telecopier: (212) 852-6 07
82
THE YASUDA TRUST AND BANKING CO., LTD.
NEW YORK BRANCH
By:
Name:
Title:
Address: 666 Fifth Avenue
Suite 801
New York, New York 10103
Attn: Nick Pullen
Telephone: (212) 373-5720
Telecopier: (212) 373-5796
Schedule 2.1
- -------------------------------------------------------------------------------
Commitments
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Lender Commitment
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Chase Manhattan Bank $35,000,000.00
- -------------------------------------------------------------------------------
Bank of America NT&SA $22,500,000.00
- -------------------------------------------------------------------------------
The Bank of New York $22,500,000.00
- -------------------------------------------------------------------------------
The Bank of Nova Scotia $22,500,000.00
- -------------------------------------------------------------------------------
Banque Paribas $22,500,000.00
- -------------------------------------------------------------------------------
CIBC, Inc. $22,500,000.00
- -------------------------------------------------------------------------------
Credit Lyonnais New York Branch $22,500,000.00
- -------------------------------------------------------------------------------
Credit Suisse New York $22,500,000.00
- -------------------------------------------------------------------------------
The Fuji Bank, Limited New York Branch $22,500,000.00
- -------------------------------------------------------------------------------
Mellon Bank, N.A. $22,500,000.00
- -------------------------------------------------------------------------------
NationsBank, N.A. $22,500,000.00
- -------------------------------------------------------------------------------
The Sakura Bank, Limited $22,500,000.00
- -------------------------------------------------------------------------------
ABN-Amro Bank N.V. New York Branch $15,000,000.00
- -------------------------------------------------------------------------------
Royal Bank of Canada $15,000,000.00
- -------------------------------------------------------------------------------
Summit Bank $15,000,000.00
- -------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi Trust Company $12,500,000.00
- -------------------------------------------------------------------------------
Bayerische Vereinsbank AG, $12,500,000.00
New York Branch
- -------------------------------------------------------------------------------
Comerica Bank $12,500,000.00
- -------------------------------------------------------------------------------
The Industrial Bank of Japan, Limited $12,500,000.00
New York Branch
- -------------------------------------------------------------------------------
The Northern Trust Company $12,500,000.00
- -------------------------------------------------------------------------------
PNC Bank, N.A. $12,500,000.00
- -------------------------------------------------------------------------------
The Sanwa Bank, Limited $12,500,000.00
- -------------------------------------------------------------------------------
The Sumitomo Bank, Limited, $12,500,000.00
New York Branch
- -------------------------------------------------------------------------------
The Tokai Bank Limited New York Branch $12,500,000.00
- -------------------------------------------------------------------------------
United States National Bank of Oregon $12,500,000.00
- -------------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale $12,500,000.00
- -------------------------------------------------------------------------------
The Yasuda Trust and Banking Co., Ltd. $12,500,000.00
New York Branch
- -------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale $ 7,500,000.00
Cayman Islands Branch
- -------------------------------------------------------------------------------
DG Bank Deutsche Genossenschaftsbank, $ 7,500,000.00
Cayman Island Branch
- -------------------------------------------------------------------------------
First Hawaiian Bank $ 7,500,000.00
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL $ 500,000,000.00
- -------------------------------------------------------------------------------
Schedule 3.6
Material Subsidiaries
- ---------------------------------------------------------------------------------------------------
Ownership of
Subsidiary Jurisdiction of Authorized Shares Capital
Name Incorporation Capitalization Issued Stock*
- ---------------------------------------------------------------------------------------------------
TM Acquisition Delaware 3,000 Common 100 HFS
Corp. Common Incorporated
CTM Holding Delaware 1,000 Common 100 C21 Holding
Corp. Common Corp.
C21 Holding Delaware 1,000 1,000 HFS
Corp. Preferred Preferred Incorporated
Days Inns of Delaware 1,000 Common 10 Common HFS
America, Inc. Incorporated
Ramada Delaware 1,000 Common 100 HFS
Franchise Common Incorporated
Systems, Inc.
Coldwell Delaware 100 Common 100 HFS
Banker Common Incorporated
Corporation
* Ownership is 100% unless otherwise indicated.
Schedule 3.9
Litigation
None
Schedule 6.1
Existing Indebtedness and Guarantees
Lease Agreement dated 11/29/91 between Days Inns of America, Inc.
and John Hancock Life Insurance Company in the amount of
$373,970.
Lease Agreement dated 8/1/93 between Coldwell Banker Corporation
and Pitney Bowes in the amount of $22,805.
Lease Agreement dated 6/1/95 between Coldwell Banker Corporation
and Xerox Corporation in the amount of $652,331.
Unsecured borrowings by Coldwell Banker Corporation from Wells
Fargo Bank in principal amount of $27,000,000.
Schedule 6.2
Existing Guarantees
None
Schedule 6.5
Existing Liens
Equipment Lease HFS as Lessee, AT&T 7/19/91
Capital Corp as Lessor
Equipment Lease HFS as Lessee, AT&T 12/28/93
Capital Corp as Lessor
Lease Agreement HFS as Lessee, AT&T 11/20/91
Capital Corp as Lessor
Assignment License, Parks Inns 1/25/89
Security Agreement International, Inc. and
and Master The Boston Park Plaza
Development Hotel Operating
Agreement Company, Inc. d/b/a The
Boston Park Plaza Hotel
Modification and Parks Inns 5/25/92
Amendment of International, Inc. and
Assignment, License, The Boston Park Plaza
Security Agreement Hotel Operating
and Master Company, Inc. d/b/a The
Development Boston Park Plaza Hotel
Agreement
Phone System Lease HFS as Lessee, AT&T 11/22/93
Agreement Credit as Lessor
Equipment Lease HFS as Lessee, Alco as 1/26/96
Lessor
Office Lease HFS as Lessee, Hogan 7/1/96
Burt as Lessor
Office Lease HFS as Lessee, Murrel 7/15/96
Company as Lessor
Office Lease HFS as Lessee, Williams 5/1/95
Investment Co. as
Lessor
Office Lease HFS as Lessee, 12/1/95
Bellemeade as Lessor
Office Lease HFS as Lessee, Meriden 4/1/96
Penn Limited as Lessor
Office Lease HFS as Lessee, Office 4/29/93
Building Partners as
Lessor
Office Lease HFS as Lessee, Parkway 6/1/96
Plaza as Lessor
2
Office Lease HFS as Lessee, Servco 10/1/95
Financial as Lessor
Office Lease HFS as Lessee, 712 5/20/94
Fifth Avenue
Associates as Lessor
Office Lease HFS as Lessee, Linque 5/3/91
Management as Lessor
Office Lease HFS as Lessee, 3100 3/1/89
Center as Lessor
Office Lease HFS as Lessee, Cherokee 2/1/89
Place as Lessor
Office Lease HFS as Lessee, Xerox 1/10/96
Centre Partners as
Lessor
Office Equipment Coldwell Banker Corp. 8/1/93
as Lessee, Pitney Bowes
as Lessor
Office Equipment Coldwell Banker Corp. 10/1/93
as Lessee, Xerox Corp.
as Lessor
Office Equipment Coldwell Banker Corp. 6/1/95
as Lessee, Xerox Corp.
as Lessor
Office Equipment HFS as Lessee, Bell 12/11/92
Atlantic Tricon as
Lessor
Office Equipment HFS as Lessee, Copelco 5/28/94
Credit Corp. as Lessor