FIVE YEAR 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, and Letters of
Credit issued for the account of, the Borrower (of which not more
than the amounts described herein at any time shall consist of
Letters of Credit). 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
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the direction of the management and policies of such
controlled Person whether by contract or otherwise.
"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
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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 hereunder 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.
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"Basis Point" shall mean 1/100th of 1%.
"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.
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"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 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
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in Section 4.1 have been satisfied or waived, which shall in
no event be later than October 31, 1996.
"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, 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 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 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
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gains and (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
9
Act ("FIFRA"), 7 U.S.C. Sub Para 136 et seq., the Surface Mining
Control and Reclamation Act ("SMCRA"), 30 U.S.C. Sub Para1201
et seq., the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. Para9601
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"), 4 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 Para 657, 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).
"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.
"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
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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, 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
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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
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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 and (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; 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
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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.
"L/C Exposure" shall mean, at any time, the amount
expressed in Dollars of the aggregate face amount of all
drafts which may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding
plus (without duplication) the face amount of all drafts
which have been presented under Letters of Credit but have
not yet been paid or have been paid but not reimbursed.
"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.
"Letter of Credit" shall mean the Letters of Credit
issued pursuant to Section 2.24.
"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.
"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.
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14
"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, 2001.
15
"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.
"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, 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.
16
"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 and L/C Exposure 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
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
17
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
18
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.
"364-Day Credit Agreement" shall mean the 364-Day
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.
"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 then current L/C Exposure plus 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 then current L/C Exposure plus (C) 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.
(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
19
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 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
5
20
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
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
21
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 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)
22
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.
(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.
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(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 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.
25
(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). 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
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
26
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.
(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
27
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.
28
(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 plus the then current
L/C Exposure.
(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) plus the then current L/C Exposure 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 plus the then
current L/C Exposure 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
Loans up to the full amount thereof before they are applied to
outstanding LIBOR 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
29
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
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
30
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.
(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
31
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, Section
2.21 or Section 2.24(g) or (ii) would require the Borrower to pay
an increased amount under this Section 2.15, Section 2.16,
Section 2.21 or Section 2.24(g), 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,
Section 2.21 or Section 2.24(g) would be materially reduced or
the taxes or other amounts otherwise payable under this Section
2.15, Section 2.16, Section 2.21 or Section 2.24(g) 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
32
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 (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
33
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.
SECTION 2.18. Pro Rata Treatment.
Except as permitted under Sections 2.14, 2.15(c), 2.16,
2.17 and 2.23, (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,
34
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
35
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 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
36
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 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:
37
- ---------------------------------------------------------------------
S&P/Moody's
Rating Equivalent
of the Borrower's Facility Fee Applicable LIBOR
senior unsecured (in Basis Spread (in Basis
long-term debt Points) Points)
- ---------------------------------------------------------------------
AA-/Aa3 or better 6.0 12.75
- ---------------------------------------------------------------------
A+/A1 7.0 13.00
- ---------------------------------------------------------------------
A/A2 8.0 14.50
- ---------------------------------------------------------------------
A-/A3 9.0 16.00
- ---------------------------------------------------------------------
BBB+/Baa1 10.0 20.00
- ---------------------------------------------------------------------
BBB/Baa2 12.5 22.50
- ---------------------------------------------------------------------
BBB-/Baa3 17.5 32.50
- ---------------------------------------------------------------------
BB+/Bal or worse 25.0 37.50
- ---------------------------------------------------------------------
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
38
2.23 and pursuant to Section 2.23 of the 364-Day Credit Agreement
may total no more than $500,000,000, (ii) so long as the 364-Day
Credit Agreement is in effect, any increase of the Commitments
hereunder is in the same amount as any increase of the
Commitments under the 364-Day 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. Letters of Credit.
(a) (i) Upon the terms and subject to the conditions
hereof, each Issuing Lender agrees to issue Letters of Credit
payable in Dollars from time to time after the Closing Date and
prior to the earlier of the Maturity Date and the termination of
the Commitments, upon the request of the Borrower, provided that
(A) the Borrower shall not request that any Letter of Credit be
issued if, after giving effect thereto, the sum of the then
current L/C Exposure plus the aggregate Loans then outstanding
would exceed the Total Commitment, (B) in no event shall any
Issuing Lender issue (x) any Letter of Credit having an
expiration date later than five Business Days before the Maturity
Date or (y) any Letter of Credit having an expiration date more
than one year after its date of issuance, provided that any
Letter of Credit with a one-year tenor may provide for the
renewal thereof for additional one-year periods (which shall in
no event extend beyond the date referred to in clause (x) above),
(C) the Borrower shall not request that an Issuing Lender issue
any Letter of Credit if, after giving effect to such issuance,
the L/C Exposure would exceed $100,000,000, and (D) an Issuing
Lender shall be prohibited from issuing Letters of Credit
hereunder upon the occurrence and during the continuance of an
Event of Default. In addition to the foregoing, the Borrower may
5
39
request the issuance of the Avis L/C in an aggregate amount not
exceeding $400,000,000, which may have an expiration date no
later than eighteen months after the first date of issuance
thereof, for use solely in connection with the Borrower's
acquisition of Avis, provided that in no event shall the sum of
the total L/C Exposure at any time exceed $400,000,000.
(ii) Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby agrees to,
have irrevocably purchased from the applicable Issuing Lender, a
participation in such Letter of Credit in accordance with the
percentage which its Commitment represents to the Total
Commitment.
(iii) Each Letter of Credit may, at the option of the
applicable Issuing Lender, provide that such Issuing Lender may
(but shall not be required to) pay all or any part of the maximum
amount which may at any time be available for drawing thereunder
to the beneficiary thereof upon the occurrence of an Event of
Default and the acceleration of the maturity of the Loans,
provided that, if payment is not then due to the beneficiary,
such Issuing Lender shall deposit the funds in question in an
account with such Issuing Lender to secure payment to the
beneficiary and any funds so deposited shall be paid to the
beneficiary of the Letter of Credit if conditions to such payment
are satisfied or returned to the Administrative Agent for
distribution to the Lenders (or, if all Obligations shall have
been paid in full in cash, to the Borrower) if no payment to the
beneficiary has been made and the final date available for
drawings under the Letter of Credit has passed. Each payment or
deposit of funds by an Issuing Lender as provided in this
paragraph shall be treated for all purposes of this Agreement as
a drawing duly honored by such Issuing Lender under the related
Letter of Credit.
(iv) Letters of Credit issued under the Existing Credit
Agreement and outstanding on the Closing Date shall be deemed to
be Letters of Credit issued under this Agreement on the Closing
Date.
(b) Whenever the Borrower desires the issuance of a
Letter of Credit, it shall deliver to the Administrative Agent
and the applicable Issuing Lender a written notice no later than
1:00 p.m. (New York time) at least five Business Days prior to
the proposed date of issuance provided, however, that the
Borrower and the Administrative Agent and such Issuing Lender may
agree to a shorter time period. That notice shall specify (i)
the Issuing Lender for such Letter of Credit, (ii) the proposed
date of issuance (which shall be a Business Day under the laws of
the jurisdiction of the applicable Issuing Lender), (iii) the
face amount of the Letter of Credit, (iv) the expiration date of
the Letter of Credit and (v) the name and address of the
beneficiary. Such notice shall be accompanied by a brief
description of the underlying transaction and upon the request of
40
the applicable Issuing Lender, the Borrower shall provide
additional details regarding the underlying transaction.
Concurrently with the giving of written notice of a request for
the issuance of a Letter of Credit, the Borrower shall specify a
precise description of the documents and the verbatim text of any
certificate to be presented by the beneficiary of such Letter of
Credit which, if presented by such beneficiary prior to the
expiration date of the Letter of Credit, would require the
applicable Issuing Lender to make payment under the Letter of
Credit; provided that the applicable Issuing Lender, in its
reasonable discretion, may require customary changes in any such
documents and certificates. Upon issuance of any Letter of
Credit, the applicable Issuing Lender shall notify the
Administrative Agent of the issuance of such Letter of Credit.
Promptly after receipt of such notice, the Administrative Agent
shall notify each Lender of the issuance and the amount of each
such Lender's respective participation therein.
(c) The payment of drafts under any Letter of Credit
shall be made in accordance with the terms of such Letter of
Credit and, in that connection, any Issuing Lender shall be
entitled to honor any drafts and accept any documents presented
to it by the beneficiary of such Letter of Credit in accordance
with the terms of such Letter of Credit and believed by such
Issuing Lender in good faith to be genuine. No Issuing Lender
shall have any duty to inquire as to the accuracy or authenticity
of any draft or other drawing documents which may be presented to
it, but shall be responsible only to determine in accordance with
customary commercial practices that the documents which are
required to be presented before payment or acceptance of a draft
under any Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of
Credit.
(d) If any Issuing Lender shall make payment on any
draft presented under a Letter of Credit, such Issuing Lender
shall give notice of such payment to the Administrative Agent and
the Lenders and each Lender hereby authorizes and requests such
Issuing Lender to advance for its account pursuant to the terms
hereof its share of such payment based upon its participation in
the Letter of Credit and agrees promptly to reimburse such
Issuing Lender in immediately available funds for the Dollar
equivalent of the amount so advanced on its behalf. If such
reimbursement is not made by any Lender in immediately available
funds on the same day on which such Issuing Lender shall have
made payment on any such draft, such Lender shall pay interest
thereon to such Issuing Lender at a rate per annum equal to the
Issuing Lender's cost of obtaining overnight funds in the New
York Federal Funds Market.
(e) In the case of any draft presented under a Letter
of Credit which is required to be paid at any time on or before
the Maturity Date and provided that the conditions specified in
Section 4.2 are then satisfied, such payment shall constitute an
41
ABR Loan hereunder, and interest shall accrue from the date the
applicable Issuing Lender makes payment of a draft under the
Letter of Credit. If any draft is presented under a Letter of
Credit and (i) the conditions specified in Section 4.2 are not
satisfied or (ii) if the Commitments have been terminated, then
the Borrower will, upon demand by the Administrative Agent, pay
to the applicable Issuing Lender, in immediately available funds,
the full amount of such draft.
(f) (i) The Borrower agrees to pay the following
amount to each Issuing Lender with respect to Letters of Credit
issued by it hereunder:
(A) with respect to drawings made under any Letter of
Credit, interest, payable on demand, on the amount paid by
such Issuing Lender in respect of each such drawing from the
date of the drawing to, but excluding, the date such amount
is reimbursed by the Borrower at a rate which is at all
times equal to 2% per annum in excess of the Alternate Base
Rate; provided that no such default interest shall be
payable if such reimbursement is made from the proceeds of
Revolving Credit Loans pursuant to Section 2.24(e);
(B) with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance
with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment,
transfer or drawing, as the case may be; and
(C) a fronting fee computed at the rate agreed to by
the Borrower and the applicable Issuing Lender, on the daily
average face amount of each outstanding Letter of Credit
issued by such Issuing Lender, such fee to be due and
payable in arrears on and through the last day of each
fiscal quarter of the Borrower, on the Maturity Date and on
the expiration of the last outstanding Letter of Credit.
(ii) The Borrower agrees to pay to the Administrative
Agent for distribution to each Lender in respect of all Letters
of Credit outstanding, such Lender's pro rata share of a
commission on the maximum amount available from time to time to
be drawn under such outstanding Letters of Credit calculated at a
rate per annum equal to the applicable LIBOR Spread from time to
time in effect hereunder. Such commission shall be payable in
arrears on and through the last day of each fiscal quarter of the
Borrower and on the later of the Maturity Date and the expiration
of the last outstanding Letter of Credit.
(iii) Promptly upon receipt by any Issuing Lender or the
Administrative Agent (as applicable) of any amount described in
clause (i)(A) or (ii) of this Section 2.24(f), or any amount
described in Section 2.24(e) previously reimbursed to the
applicable Issuing Lender by the Lenders, such Issuing Lender or
42
the Administrative Agent (as applicable) shall distribute to each
Lender its pro rata share of such amount. Amounts payable under
clauses (i)(B) and (i)(C) of this Section 2.24(f) shall be paid
directly to the Issuing Lender and shall be for its exclusive
use.
(g) If by reason of (i) any change after the date
hereof in Applicable Law, or in the interpretation or
administration thereof (including, without limitation, any
request, guideline or policy not having the force of law) by any
Governmental Authority charged with the administration or
interpretation thereof, or (ii) compliance by any Issuing Lender
or any Lender with any direction, request or requirement (whether
or not having the force of law) issued after the date hereof by
any Governmental Authority or monetary authority (including any
change whether or not proposed or published prior to the date
hereof), including, without limitation, Regulation D of the
Board:
(A) any Issuing Lender or any Lender shall be subject
to any tax, levy, charge or withholding of any nature (other
than withholding tax imposed by the United States of America
or any political subdivision or taxing authority thereof or
therein or any other tax, levy, charge or withholding (i)
that is measured with respect to the overall net income of
such Issuing Lender or such Lender (or is imposed in lieu of
a tax on net income) or of a Lending office of such Issuing
Lender or such Lender, and that is imposed by the United
States of America, or by the jurisdiction in which such
Issuing Lender or such Lender is incorporated, or in which
such Lending Office is located, managed or controlled or in
which such Issuing Lender or such Lender has its principal
office (or any political subdivision or taxing authority
thereof or therein) or (ii) that is imposed solely by reason
of such Issuing Lender or such Lender failing to make a
declaration of, or otherwise to establish, non-residence, or
to make any other claim for exemption, or otherwise to
comply with any certification, identification, information,
documentation or reporting requirements prescribed under the
laws of the relevant jurisdiction, in those cases where such
Issuing Lender or such Lender may properly make the
declaration or claim or so establish non-residence or
otherwise comply) or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment of
its obligations under this Section 2.24, whether directly or
by such being imposed on or suffered by any Issuing Lender
or any Lender;
(B) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any
Letter of Credit issued by any Issuing Lender or
participations therein purchased by any Lender; or
43
(C) there shall be imposed on any Issuing Lender or
any Lender any other condition regarding this Section 2.24,
any Letter of Credit or any participation therein;
and the result of the foregoing is directly or indirectly to
increase the cost to any Issuing Lender or any Lender of issuing,
making or maintaining any Letter of Credit or of purchasing or
maintaining any participation therein, or to reduce the amount
receivable in respect thereof by any Issuing Lender or any
Lender, then and in any such case the Issuing Lender or such
Lender may, at any time, notify the Borrower, and the Borrower
shall pay on demand such amounts as such Issuing Lender or such
Lender may specify to be necessary to compensate such Issuing
Lender or such Lender for such additional cost or reduced
receipt. The determination by any Issuing Lender or any Lender,
as the case may be, of any amount due pursuant to this Section
2.24 as set forth in a certificate setting forth the calculation
thereof in reasonable detail shall, in the absence of manifest
error, be final, conclusive and binding on all of the parties
hereto.
(h) If at any time when an Event of Default shall have
occurred and be continuing, any Letters of Credit shall remain
outstanding, then either the applicable Issuing Lender(s) or the
Required Lenders may, at their option, require the Borrower to
deposit Cash Equivalents in a Cash Collateral Account in an
amount equal to the full amount of the L/C Exposure or to furnish
other security acceptable to the Administrative Agent and the
applicable Issuing Lender(s). Any amounts so delivered pursuant
to the preceding sentence shall be applied to reimburse the
applicable Issuing Lender(s) for the amount of any drawings
honored under Letters of Credit issued by it; provided, however,
that if prior to the Maturity Date, no Event of Default is then
continuing, the Administrative Agent shall return all of such
collateral relating to such deposit to the Borrower if requested
by it.
(i) If at any time, the L/C Exposure exceeds the
aggregate Commitments, then the Required Lenders may, at their
option, require the Borrower to deposit Cash Equivalents in a
Cash Collateral Account in an amount sufficient to eliminate such
excess or to furnish other security for such excess acceptable to
the Administrative Agent and the Issuing Lender(s). Any amounts
so delivered pursuant to the preceding sentence shall be applied
to reimburse the applicable, Issuing Lender(s) for the amount of
any drawings honored under Letters of Credit; provided, however,
that if subsequent to any such deposit such excess is reduced to
an amount less than the portion of such deposited amounts and no
Default or Event of Default is then continuing, the Borrower
shall be entitled to receive such excess collateral if requested
by it.
(j) Upon the request of the Administrative Agent, each
Issuing Lender shall furnish to the Administrative Agent copies
44
of any Letter of Credit issued by such Issuing Lender and such
related documentation as may be reasonably requested by the
Administrative Agent.
(k) Notwithstanding the termination of the Commitments
and the payment of the Loans, the obligations of the Borrower
under this Section 2.24 shall remain in full force and effect
until the Administrative Agent, each Issuing Lender and the
Lenders shall have been irrevocably released from their
obligations with regard to any and all Letters of Credit.
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
509265\0432\02050\969T1AHE.CRA
45
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
46
infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
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).
47
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
48
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)
49
the unaudited consolidating balance sheets of the 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.
50
(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 and
Letter of Credit.
The obligation of the Lenders to make each Loan and of
any Issuing Lender to issue a Letter of Credit, 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 or Letter
of Credit 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 or the issuance of a Letter of Credit 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 or issuance of a Letter of Credit shall be deemed
to be a representation and warranty by the Borrower on the date
of such Borrowing or Letter of Credit 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 or
there shall be any outstanding L/C Exposure, the Borrower agrees
51
that, unless the Required Lenders shall otherwise consent in
writing, it will, and will cause each of its Subsidiaries to:
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;
52
(c) Together with the delivery of the statements
referred to in paragraphs (a) and (b) of this Section 5.1, a
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
53
as from time to time may be reasonably requested by any of
the Lenders; and
(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 436.1 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
54
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
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
55
set forth in the preceding clauses (a) and (c) unless such event,
individually or in the aggregate, could reasonably be expected to
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 or
there shall be any outstanding L/C Exposure, 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
56
renewals thereof, unless effected on substantially the same
terms or on terms not more adverse to the Lenders;
(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;
(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
57
occur or then be continuing and the aggregate principal
amount of such Guaranties shall not exceed $150,000,000.
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);
58
(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
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.
59
SECTION 6.8. Interest Coverage Ratio.
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)
5
60
days after the Borrower obtains knowledge of such
occurrence;
(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;
5
61
(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
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.
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8. THE ADMINISTRATIVE AGENT AND EACH ISSUING LENDER
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
63
accordance with each of the Lenders' pro rata interest therein,
first, to pay accrued but unpaid Facility Fees, second, to pay
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 Sections 2.19, 2.24(h) or 2.24(i) 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 or L/C Exposure 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
or L/C Exposure of such other Lenders, so that the aggregate
unpaid principal amount of each of the Lenders' Loans and L/C
Exposure and its participation in Loans and L/C Exposure of the
other Lenders shall be in the same proportion to the aggregate
unpaid principal amount of all Loans and L/C Exposure then
outstanding as the principal amount of its Loans and L/C Exposure
prior to the obtaining of such payment was to the principal
amount of all Loans and L/C Exposure 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 and
each Issuing Lender.
(a) The Administrative Agent or any Issuing Lender,
when acting on behalf of the Lenders may execute any of its
64
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
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
65
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,
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 and
Letter of Credit reimbursement rights for all purposes, unless
and until a written notice of the assignment or transfer thereof
66
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.
SECTION 8.11. Resignation of an Issuing Lender.
Any Issuing Lender may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any
such resignation, such Issuing Lender shall be discharged from
any duties and obligations under this Agreement in its capacity
as an Issuing Lender with regard to Letters of Credit not yet
issued. After any retiring Issuing Lender's resignation
hereunder as an Issuing Lender, the provisions of this Agreement
shall continue to inure to its benefit as to any outstanding
Letters of Credit or otherwise with regard to outstanding L/C
Exposure and any actions taken or omitted to be taken by it while
it was an Issuing Lender 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
67
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
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
68
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
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
69
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
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
70
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
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
71
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
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
72
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
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 the issuance of any Letters of
Credit 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 and/or expiration of
the Letters of Credit.
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
5
73
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
and/or the expiration of the Letters of Credit.
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.
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
5
74
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; 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 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, A LENDER OR AN ISSUING 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
75
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, THE LENDERS AND EACH ISSUING LENDER. 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 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.
76
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 or the Letters of
Credit to be issued hereunder shall be replaced by the terms of
this Agreement.
77
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, individually
and as Administrative Agent
By:
Name:
Title:
- ------------------------------------------------------------------------------
Address: 270 Park Avenue
New York, Y 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) 446-4297
Telecopier: (212) 832-7129
78
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) 503-7939
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
79
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 urke
Telephone: (212) 841-2940
Telecopier: (212) 841-2333
80
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
81
CIBC INC.
By:
Name:
T tle:
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) 261-7316
Telecopier: (212) 459-3179
82
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, CAYMAN
ISLAND BRANCH
By:
Name:
Title:
Address: 609 Fifth Avenue
New York, New York 10017
Attn: Leo von Reissig
Telephone: (212) 745-1589
T lecopier: (212) 745-1556/1550
83
FIRST HAWAIIAN BANK
By:
Name:
Title:
Address: 1132 Bishop Street
19th Floor
Honolulu, Hawaii 96813
Attn: Kathryn Plumb
Telephone: (808) 525-8179
Telecopier: (808) 525-6372
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By:
Name:
Title:
Addr ss: 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:
Title:
Address: 245 Park Avenue
New York, New York 10167-0037
Attn: Adrienne Molloy
Telephone: (212) 309-1832
Telecopier: (212) 856-9450
84
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
Telecopier: (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
Chicago, Illinois 60675
Attn: Linda Honda
Telephone: (312) 444-3532
Telecopier: (312) 630-1566
85
PNC BANK, N.A.
By:
Name:
Title:
Address: Two Tower Center
East Brunswick, New Jersey 08816
Attn: Jean M. Styles
Telephone: (908) 220-3225
Telecopier: (908) 220-3231
ROYAL BANK OF CANADA
By:
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: (212) 756-6778
Telecopier: (212) 888-7651
86
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
SUM IT BANK
By:
Name:
Title:
Address: 25 East Salem Street
14th Floor
Hackensack, New Jersey 07601
Telephone: (201) 646-6189
Telecopier: (201) 343-6723
87
THE TOKAI BANK LIMITED NEW YORK BRANCH
By:
Name:
Title:
Address: 55 East 52nd Street
New York, New York 10055
Attn: Stuart M. chulman
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:
Titl :
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) 852-6307
88
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
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.
5
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