Exhibit 10.23(a)
EXECUTION COPY
$1,750,000,000
THREE YEAR COMPETITIVE ADVANCE AND
REVOLVING CREDIT AGREEMENT
Dated as of August 29, 2000
among
CENDANT CORPORATION
as Borrower
and
THE LENDERS REFERRED TO HEREIN
and
THE CHASE MANHATTAN BANK, as Administrative Agent
THE BANK OF NOVA SCOTIA and
CREDIT LYONNAIS NEW YORK BRANCH, as Co-Documentation Agents
BANK OF AMERICA, N.A., as Syndication Agent
CHASE SECURITIES INC., as Lead Arranger
TABLE OF CONTENTS
PAGE
1. DEFINITIONS............................................................1
2. THE LOANS.............................................................15
SECTION 2.1. Commitments.........................................15
SECTION 2.2. Loans...............................................16
SECTION 2.3. Use of Proceeds.....................................17
SECTION 2.4. Competitive Bid Procedure...........................17
SECTION 2.5. Revolving Credit Borrowing Procedure................19
SECTION 2.6. Refinancings........................................20
SECTION 2.7. Fees................................................20
SECTION 2.8. Repayment of Loans; Evidence of Debt................21
SECTION 2.9. Interest on Loans...................................22
SECTION 2.10. Interest on Overdue Amounts.........................23
SECTION 2.11. Alternate Rate of Interest..........................23
SECTION 2.12. Termination and Reduction of Commitments............24
SECTION 2.13. Prepayment of Loans.................................24
SECTION 2.14. Eurodollar Reserve Costs............................25
SECTION 2.15. Reserve Requirements; Change in Circumstances.......25
SECTION 2.16. Change in Legality..................................27
SECTION 2.17. Reimbursement of Lenders............................28
SECTION 2.18. Pro Rata Treatment..................................29
SECTION 2.19. Right of Setoff.....................................29
SECTION 2.20. Manner of Payments..................................30
SECTION 2.21. United States Withholding...........................30
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SECTION 2.22. Certain Pricing Adjustments.........................31
SECTION 2.23. INTENTIONALLY OMITTED...............................32
SECTION 2.24. Letters of Credit...................................32
3. REPRESENTATIONS AND WARRANTIES OF BORROWER............................38
SECTION 3.1. Corporate Existence and Power.......................39
SECTION 3.2. Corporate Authority, No Violation and Compliance with
Law.................................................39
SECTION 3.3. Governmental and Other Approval and Consents........39
SECTION 3.4. Financial Statements of Borrower....................39
SECTION 3.5. No Material Adverse Change..........................40
SECTION 3.6. [Reserved]..........................................40
SECTION 3.7. Copyrights, Patents and Other Rights................40
SECTION 3.8. Title to Properties.................................40
SECTION 3.9. Litigation..........................................40
SECTION 3.10. Federal Reserve Regulations.........................40
SECTION 3.11. Investment Company Act..............................41
SECTION 3.12. Enforceability......................................41
SECTION 3.13. Taxes...............................................41
SECTION 3.14. Compliance with ERISA...............................41
SECTION 3.15. Disclosure..........................................42
SECTION 3.16. Environmental Liabilities...........................42
4. CONDITIONS OF LENDING.................................................42
SECTION 4.1. Conditions Precedent to Closing.....................42
SECTION 4.2. Conditions Precedent to Each Extension of Credit....44
5. AFFIRMATIVE COVENANTS.................................................44
ii
SECTION 5.1. Financial Statements, Reports, etc..................45
SECTION 5.2. Corporate Existence; Compliance with Statutes.......46
SECTION 5.3. Insurance...........................................46
SECTION 5.4. Taxes and Charges...................................47
SECTION 5.5. ERISA Compliance and Reports........................47
SECTION 5.6. Maintenance of and Access to Books and Records;
Examinations........................................48
SECTION 5.7. Maintenance of Properties...........................48
SECTION 5.8. Changes in Character of Business....................48
6. NEGATIVE COVENANTS....................................................48
SECTION 6.1. Limitation on Indebtedness..........................48
SECTION 6.2. INTENTIONALLY OMITTED...............................49
SECTION 6.3. Hotel Subsidiaries..................................49
SECTION 6.4. Consolidation, Merger, Sale of Assets...............49
SECTION 6.5. Limitations on Liens................................50
SECTION 6.6. Sale and Leaseback..................................51
SECTION 6.7. Debt to Capitalization Ratio........................51
SECTION 6.8. Interest Coverage Ratio.............................51
SECTION 6.9. Accounting Practices................................51
7. EVENTS OF DEFAULT.....................................................51
8. THE ADMINISTRATIVE AGENT AND EACH ISSUING LENDER......................54
SECTION 8.1. Administration by Administrative Agent..............54
SECTION 8.2. Advances and Payments...............................54
SECTION 8.3. Sharing of Setoffs and Cash Collateral..............55
SECTION 8.4. Notice to the Lenders...............................55
iii
SECTION 8.5. Liability of Administrative Agent and each Issuing
Lender..............................................55
SECTION 8.6. Reimbursement and Indemnification...................56
SECTION 8.7. Rights of Administrative Agent......................57
SECTION 8.8. Independent Investigation by Lenders................57
SECTION 8.9. Notice of Transfer..................................57
SECTION 8.10. Successor Administrative Agent......................57
SECTION 8.11. Resignation of an Issuing Lender....................58
9. MISCELLANEOUS.........................................................58
SECTION 9.1. Notices.............................................58
SECTION 9.2. Survival of Agreement, Representations and
Warranties, etc.....................................58
SECTION 9.3. Successors and Assigns; Syndications; Loan Sales;
Participations......................................59
SECTION 9.4. Expenses; Documentary Taxes.........................63
SECTION 9.5. Indemnity...........................................63
SECTION 9.6. CHOICE OF LAW.......................................64
SECTION 9.7. No Waiver...........................................64
SECTION 9.8. Extension of Maturity...............................64
SECTION 9.9. Amendments, etc.....................................64
SECTION 9.10. Severability........................................65
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL............65
SECTION 9.12. Headings............................................66
SECTION 9.13. Execution in Counterparts...........................66
SECTION 9.14. Entire Agreement....................................67
SECTION 9.15. Confidentiality.....................................67
SECTION 9.16. Delivery of Addenda.................................67
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SCHEDULES
2.1 Commitments
3.9 Litigation
6.1 Existing Indebtedness
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Competitive Note
B-1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
B-2 Opinion of Vice Chairman and General Counsel
C Form of Assignment and Acceptance
D Form of Compliance Certificate
E-1 Form of Competitive Bid Request
E-2 Form of Competitive Bid Invitation
E-3 Form of Competitive Bid
E-4 Form of Competitive Bid Accept/Reject Letter
F Form of Revolving Credit Borrowing Request
G Form of Settlement Letter of Credit
H Form of Addendum
v
THREE YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT (the
"AGREEMENT") dated as of August 29, 2000, among CENDANT CORPORATION, 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
$1,750,000,000 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, with an exception for the Settlement Letter
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, to issue the Settlement Letter of
Credit for the account of the Borrower and to participate in other 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.
"ADDENDUM" shall mean an instrument, substantially in the form of
Exhibit H hereto, by which a Lender becomes a party to this Agreement.
"AFFILIATE" shall mean any Person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, the
Borrower. For purposes of this definition, a Person shall be deemed to be
"controlled by" another if such latter Person possesses, directly or
indirectly, power either to (i) vote 10% or more of the securities having
ordinary voting power for the election of directors of such controlled
Person or (ii) direct or cause the direction of the management and
policies of such controlled Person whether by contract or otherwise.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upwards to the nearest 1/16 of 1% if not already an integral
multiple of 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect for such day, (b) the Federal Funds Effective Rate in effect for
such day plus 1/2 of 1% or (c) the Base CD Rate in effect for such day
plus 1%. For purposes hereof, "PRIME RATE" shall mean the rate per annum
publicly announced by the Administrative Agent from time to time as its
prime rate in effect at its principal office in New York City. For
purposes of this Agreement, any change in the Alternate Base Rate due to a
change in the Prime Rate shall be effective on the date such change in the
Prime Rate is announced as effective. "FEDERAL FUNDS EFFECTIVE RATE" shall
mean, for any period, a fluctuating interest rate per annum equal for each
day during such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
it. "BASE CD RATE" shall mean the sum of (a) the product of (i) the
Average Weekly Three-Month Secondary CD Rate times (ii) a fraction of
which the numerator is 100% and the denominator is 100% minus the
aggregate rates of (A) basic and supplemental reserve requirements in
effect on the date of effectiveness of such Average Weekly Three-Month
Secondary CD Rate, as set forth below, under Regulation D of the Board
applicable to certificates of deposit in units of $100,000 or more issued
by a "member bank" located in a "reserve city" (as such terms are used in
Regulation D) and (B) marginal reserve requirements in effect on such date
of effectiveness under Regulation D applicable to time deposits of a
"member bank" and (b) the Assessment Rate. "AVERAGE WEEKLY THREE-MONTH
SECONDARY CD RATE" shall mean the three-month secondary certificate of
deposit ("CD") rate for the most recent weekly period covered therein in
the Federal Reserve Statistical release entitled "Weekly Summary of
Lending and Credit Measures (Averages of daily figures)" released in the
week during which occurs the day for which the CD rate is being
determined. The CD rate so reported shall be in effect, for the purposes
of this definition, for each day of the week in which the release date of
such publication occurs. If such publication or a substitute containing
the foregoing rate information is not published by the Federal Reserve for
any week, such average rate shall be determined by the Administrative
Agent on the basis of quotations received by it from three New York City
negotiable certificate of deposit dealers of recognized standing on the
first Business Day of the week succeeding such week for which such rate
information is not published. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or Federal
Funds Effective Rate, or both, for any reason, including, without
limitation, the inability or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to clause (b) or
(c), or both, until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the
Average Weekly Three-Month Secondary CD Rate shall be effective on the
effective date of such change in the CD Rate. Any change in the Alternate
Base Rate due to a change in the Federal
2
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.
"BASIS POINT" shall mean 1/100th of 1%.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System.
"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 LEASE" shall mean as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a capital
lease on the balance sheet of that Person.
"CASH COLLATERAL ACCOUNT" shall mean a collateral account
established with the Administrative Agent, in the name of the
Administrative Agent and under its sole dominion and control, into which
the Borrower shall from time to time deposit Dollars pursuant to the
express provisions of this Agreement requiring such deposit.
"CASH EQUIVALENTS" shall mean any of the following, to the extent
acquired for investment and not with a view to achieving trading profits:
(i) obligations fully backed by the full faith and credit of the United
States of America maturing not in excess of twelve months from the date of
acquisition, (ii) commercial paper maturing not in excess
3
of twelve months from the date of acquisition and rated "P-1" by Moody's
or "A-1" by S&P on the date of such acquisition, (iii) the following
obligations of any Lender or any domestic commercial bank having capital
and surplus in excess of $500,000,000, which has, or the holding company
of which has, a commercial paper rating meeting the requirements specified
in clause (ii) above: (a) time deposits, certificates of deposit and
acceptances maturing not in excess of twelve months from the date of
acquisition, or (b) repurchase obligations with a term of not more than
thirty (30) days for underlying securities of the type referred to in
clause (i) above, (iv) money market funds that invest exclusively in
interest bearing, short-term money market instruments: (a) having an
average remaining maturity of not more than twelve months and (b)(1) rated
at least "P-1" by Moody's or "A-1" by S&P or (2) which are issued or
directly and fully guaranteed or insured by the United States government
or any agency or instrumentality thereof, and (v) municipal securities:
(a) for which the pricing period in effect is not more than twelve months
long and (b) rated at least "P-1" by Moody's or "A-1" by S&P.
"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 Closing Date), 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 Closing Date 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
Closing Date 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 effectiveness of this Agreement as set forth in Section 4.1 have
been satisfied or waived, which shall in no event be later than September
30, 2000.
"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 and/or (ii) any
applicable Assignment and Acceptance to which it may be a party, 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. 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.
4
"COMMITMENT PERCENTAGE" shall mean, as to any Lender at any time,
the percentage which such Lender's Commitment then constitutes of the
Total Commitment or, at any time after the Commitments shall have expired
or terminated, the percentage which the aggregate principal amount of such
Lender's Loans and participating interests in Letters of Credit then
outstanding constitutes of the aggregate principal amount of the Loans and
participating interests in Letters of Credit then outstanding.
"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.
"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, (vi) other non-cash items reducing
Consolidated Net Income, plus (vii) any cash contributions by the Borrower
and its Subsidiaries during such period into the Settlement Trust to the
extent such cash contributions reduce Consolidated Net Income for such
period minus (viii) any cash expenditures during such period to the extent
such cash expenditures (x) did not reduce Consolidated Net Income for such
period and (y) were applied against reserves that constituted non-cash
items which reduced Consolidated Net Income during prior periods, all as
determined on a consolidated basis for the Borrower and its Consolidated
5
Subsidiaries in accordance with GAAP. Notwithstanding the foregoing, in
calculating Consolidated EBITDA pro forma effect shall be given to each
acquisition of a Subsidiary or any entity acquired in a merger in any
relevant period for which the covenants set forth in Sections 6.7 and 6.8
are being calculated as if such acquisition had been made on the first day
of such period.
"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 MINUS, without duplication, any interest income of the Borrower
and its Consolidated Subsidiaries on a consolidated basis during such
period.
"CONSOLIDATED NET INCOME" shall mean, for any period for which such
amount is being determined, the net income (or 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
(loss) of any Person (other than a Consolidated Subsidiary of the
Borrower) in which the Borrower or any of its Consolidated Subsidiaries
has any equity investment or comparable interest, except to the extent of
the amount of dividends or other distributions actually paid to the
Borrower or its Consolidated Subsidiaries by such Person during such
period, (ii) 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, (iii) any
extraordinary after-tax gains and (iv) any extraordinary or unusual pretax
losses.
"CONSOLIDATED NET WORTH" shall mean, as of any date of
determination, all items which in conformity with GAAP would be included
under shareholders' equity on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date plus mandatorily redeemable preferred
securities issued by Subsidiaries of the Borrower (other than PHH and its
Subsidiaries). Consolidated Net Worth shall include the Borrower's equity
interest in PHH.
"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 (i) the total amount of
Indebtedness of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis using GAAP principles of consolidation, which is,
at the dates as of
6
which Consolidated Total Indebtedness is to be determined, includable as
liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries, plus (ii) without duplication of any items included in
Indebtedness pursuant to the foregoing clause (i), indebtedness of others
which the Borrower or any of its Consolidated Subsidiaries 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. For purposes of this definition, the
amount of Indebtedness at any time shall be reduced (but not to less than
zero) by the amount of Excess Cash.
"DEBT TO CAPITALIZATION RATIO" shall mean at any time the ratio of
(x) Consolidated Total Indebtedness to (y) the sum of (i) Consolidated
Total Indebtedness plus (ii) Consolidated Net Worth.
"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.ss. 1251 ET SEQ.,
-- ---
the Clean Air Act ("CAA"), 42 U.S.C.ss.ss. 7401 ET SEQ., the FederaL
-- ---
Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C.ss.ss. 136
et SEQ., the Surface Mining Control and Reclamation Act ("SMCRA"),
---
30 U.S.C.ss.ss. 1201 ET SEQ., the Comprehensive Environmental Response,
-- ---
Compensation and Liability Act ("CERCLA"), 42 U.S.C.ss. 9601 ET SEQ.,
-- ---
the Superfund Amendment and Reauthorization Act of 1986 ("SARA"),
Public Law 99-499, 100 Stat. 1613, the Emergency Planning and Community
Right to Know Act ("ECPCRKA"), 42 U.S.C.ss. 11001 ET SEQ., the Resource
-- ---
Conservation and Recovery Act ("RCRA"), 42 U.S.C.ss. 6901 ET SEQ., the
-- ---
Occupational Safety and Health Act as amended ("OSHA"), 29 U.S.C.ss. 655
andss. 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.
7
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as such Act may be amended, and the regulations promulgated
thereunder.
"EXCESS CASH" shall mean all cash and cash equivalents of the
Borrower and its Consolidated Subsidiaries at such time determined on a
consolidated basis in accordance with GAAP in excess of $25,000,000.
"EXISTING 364-DAY CREDIT AGREEMENT" shall have the meaning assigned
to such term in Section 4.1(h).
"EXTENSIONS OF CREDIT" shall mean the making of a Loan or the
issuance of a Letter of Credit.
"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 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 Closing Date.
"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.
"GRANTING LENDER" shall have the meaning assigned to such term in
Section 9.3(k).
"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
8
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 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 180 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 180 days); or (v) obligations of such
Person under Capital Leases.
9
"INTEREST COVERAGE RATIO" shall mean, for each period for which it
is to be determined, the ratio of (i) Consolidated EBITDA to (ii)
Consolidated Interest Expense.
"INTEREST PAYMENT DATE" shall mean, with respect to any Borrowing,
the last day of the Interest Period applicable thereto and, in the case of
a LIBOR Borrowing with an Interest Period of more than three months'
duration or a Fixed Rate Borrowing with an Interest Period of more than 90
days' duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months, duration or 90 days'
duration, as the case may be, been applicable to such Borrowing, and, in
addition, the date of any refinancing or conversion of a Borrowing with,
or to, a Borrowing of a different Interest Rate Type.
"INTEREST PERIOD" shall mean (a) as to any LIBOR Borrowing, the
period commencing on the date of such Borrowing, and ending on the
numerically corresponding day (or, if there is no numerically
corresponding day or if the date of the LIBOR Borrowing is the last day of
any month, 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, (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 Borrowing is determined. For purposes hereof,
"Rate" shall include LIBOR, the Alternate Base Rate and the Fixed Rate.
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"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 agree in writing to act as such in accordance with the terms hereof,
PROVIDED that, with respect to the Settlement Letter of Credit, "Issuing
Lender" shall mean each of the Lenders hereunder.
"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 any Letter 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.
"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.
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"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 (it is understood that,
for purposes of this definition, the accounting irregularities and errors
disclosed in the Borrower's report on Form 10-K for the period ending
December 31, 1999 filed with the Securities and Exchange Commission and
the class action lawsuits disclosed therein and other class action
lawsuits arising as a result of the accounting irregularities and errors
disclosed therein do not constitute a Material Adverse Effect).
"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 August 29, 2003.
"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.
"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, the
12
Utilization 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.
"PHH" shall mean PHH Corporation, a Maryland corporation.
"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.
"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.
"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.
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"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.
"SETTLEMENT" shall mean the settlement of a consolidated class
action lawsuit pending against the Borrower styled In re Cendant
Corporation Litigation, No. 98-CV-1664 (WHW)(D.N.J.).
"SETTLEMENT AGREEMENT" shall mean the Stipulation of Settlement with
the Borrower and Certain Other Defendants, executed March 17, 2000.
"SETTLEMENT LETTER OF CREDIT" shall have the meaning assigned to
such term in Section 2.24(l).
"SETTLEMENT TRUST" shall mean the escrow account established
pursuant to the Settlement Agreement.
"S&P" shall mean Standard & Poor's Ratings Services.
"SPC" shall have the meaning assigned to such term in Section
9.3(k).
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board and any other banking
authority to which the Administrative Agent or any Lender is subject, for
Eurocurrency Liabilities (as defined in Regulation D). Such reserve
percentages shall include those imposed under Regulation D. LIBOR Loans
shall be deemed to constitute Eurocurrency Liabilities and as such shall
be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from
time to time to any Lender under Regulation D. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" shall mean with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether
now existing or hereafter organized) of which at least a majority of the
voting stock or other ownership interests having ordinary voting power for
the election of directors (or the equivalent) is, at the time as of which
any determination is being made, owned or controlled by such Person or one
or more subsidiaries of such Person or by such Person and one or more
subsidiaries
14
of such Person; PROVIDED that for purposes of Sections 6.1, 6.5, 6.6, 6.7
and 6.8 hereof, PHH and its Subsidiaries shall be deemed not to be
Subsidiaries of the Borrower except that (a) Consolidated Net Worth shall
be calculated in accordance with the definition thereof and (b) in
calculating Consolidated EBITDA for any fiscal quarter the amount of any
cash dividends or any other cash distributions actually paid by PHH or any
Subsidiary of PHH to the Borrower and its Subsidiaries (excluding the
Subsidiaries of PHH) (i) during such period and (ii) up to the time of the
delivery of the certificate pursuant to Section 5.1(c) hereof related to
such period shall be included in such calculation. Any such cash dividends
and distributions received from PHH and its Subsidiaries in one period and
included in calculating Consolidated EBITDA for any prior period shall not
be included in calculating Consolidated EBITDA for any fiscal quarter
ending on or after the first anniversary of the date such dividends and
distributions are received.
"SURETY BONDS" shall mean the surety bonds issued for the account of
the Borrower to guarantee the Borrower's payment and funding obligations
to the Settlement Trust.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of
the Lenders' Commitments as in effect at such time.
"UTILIZATION FEE" shall have the meaning assigned to such term in
Section 2.7 hereof.
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.
15
(b) Within the foregoing limits, the Borrower may borrow, pay or repay
and reborrow hereunder, on and after the Closing Date and prior to the Maturity
Date, upon the terms and subject to the conditions and limitations set forth
herein.
SECTION 2.2. LOANS.
(a) Each Revolving Credit Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
Commitments; PROVIDED, HOWEVER, that the failure of any Lender to make any
Revolving Credit Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.4. The Revolving Credit Loans or
Competitive Loans comprising any Borrowing shall be (i) in the case of
Competitive Loans and LIBOR Loans, in an aggregate principal amount that is an
integral multiple of $5,000,000 and not less than $10,000,000 and (ii) in the
case of ABR Loans, in an aggregate principal amount that is an integral multiple
of $500,000 and not less than $5,000,000 (or if less, an aggregate principal
amount equal to the remaining balance of the available Total Commitment).
(b) Each Competitive Borrowing shall be comprised entirely of LIBOR
Competitive Loans or Fixed Rate Loans, and each Revolving Credit Borrowing shall
be comprised entirely of LIBOR Revolving Credit Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.4 or 2.5, as applicable. Each Lender
may at its option make any LIBOR Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan, PROVIDED that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement and the applicable Note.
Borrowings of more than one Interest Rate Type may be outstanding at the same
time; PROVIDED, HOWEVER, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in an aggregate of more than 9 separate
Revolving Credit Loans of any Lender being outstanding hereunder at any one
time. For purposes of the calculation required by the immediately preceding
sentence, LIBOR Revolving Credit Loans having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Loans and all Loans of a single Interest Rate Type made on a single
date shall be considered a single Loan if such Loans have a common Interest
Period.
(c) Subject to Section 2.6, each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by making funds available at the
offices of the Administrative. Agent's Agent Bank Services Department, 1 Chase
Manhattan Plaza, 8th Floor, New York, New York 10081, Attention: Sharon
Hambousi, for credit to Cendant Corporation Clearing Account, Account No.
144812905 (Reference: Cendant Corporation Credit Agreement dated as of August
29, 2000) no later than 1:00 P.M. New York City time (2:00 P.M. New York City
time, in the case of an ABR Borrowing) 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
16
amounts so accepted and Revolving Credit Loans shall be made by all the Lenders
pro rata in accordance with Section 2.1 and this Section 2.2.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
SECTION 2.3. USE OF PROCEEDS.
The proceeds of the Loans shall be used for working capital and general
corporate purposes of the Borrower 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 364-Day 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 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
17
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) 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
18
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.
(i) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Competitive Loans unless at the time of
such request 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
19
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 September 30, 2000, 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 average daily amount of the Commitment of such Lender,
whether used or unused, during the preceding quarter (or shorter period
commencing with the
20
date hereof, 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 to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31,
commencing September 30, 2000, and on the date on which the Commitment of such
Lender shall be terminated as provided herein and, if applicable, the date on
which the Obligations have been paid in full, a utilization fee (a "UTILIZATION
Fee"), at a rate per annum equal to 0.125%, on the amount of the Commitment of
such Lender (or, following termination of the Commitments, if applicable, the
Commitment of such Lender in effect immediately prior to such termination),
whether used or unused, for each day 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) on which the
aggregate principal amount of Loans and L/C Exposure exceeds 33% of the
aggregate amount of the Total Commitments. All Utilization Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Utilization Fee due to each Lender shall be payable in arrears and
shall cease to accrue on the date on which the Obligations, including any
outstanding Loans, have been paid in full and the Commitments terminated.
(c) 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 July 20, 2000 among the Borrower, Chase and Chase Securities
Inc.
(d) 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
21
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 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.
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(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 plus the applicable margin,
if any, for ABR Loans from time to time in effect pursuant to Section 2.22.
(c) Subject to the provisions of Section 2.10, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.4.
(d) Interest on each Loan shall be payable in arrears on each Interest
Payment Date applicable to such Loan. The LIBOR or the Alternate Base Rate for
each Interest Period or day within an Interest Period shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.10. INTEREST ON OVERDUE AMOUNTS.
If the Borrower shall default in the payment of the principal of, or
interest on, any Loan or any other amount becoming due hereunder, the Borrower
shall on demand from time to time pay interest, to the extent permitted by
Applicable Law, on such defaulted amount up to (but not including) the date of
actual payment (after as well as before judgment) at a rate per annum computed
on the basis of the actual number of days elapsed over a year of 365 or 366
days, as applicable, in the case of amounts bearing interest determined by
reference to the Prime Rate and a year of 360 days in all other cases, equal to
(a) in the case of the remainder of the then current Interest Period for any
LIBOR Loan or Fixed Rate Loan, the rate applicable to such Loan under Section
2.9 plus 2% per annum and (b) in the case of any other amount, the rate that
would at the time be applicable to an ABR Loan under Section 2.9 plus 2% per
annum.
SECTION 2.11. ALTERNATE RATE OF INTEREST.
In the event, and on each occasion, that on the day two Business Days
prior to the commencement of any Interest Period for a LIBOR Loan, the
Administrative Agent shall have determined that Dollar deposits in the amount of
the requested principal amount of such LIBOR Loan 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
23
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 and (b) September 30, 2000 if
the Closing Date has not occurred on or prior to such date.
(b) The Total Commitment shall automatically be reduced to
$1,250,000,000 on the date that is the second anniversary of the Closing Date.
(c) 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.
(d) 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
24
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 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 affecting this
25
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 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
26
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, Utilization Fees and all
other amounts (including without limitation all amounts payable under this
Section) owing hereunder to such Lender as at such effective date for such
assignment.
SECTION 2.16. CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain any LIBOR Loan or to
give effect to its obligations as contemplated hereby, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that LIBOR Loans will not thereafter be made by such
Lender hereunder, whereupon such Lender shall not submit a Competitive Bid
in response to a request for LIBOR Competitive Loans and the Borrower
shall be prohibited from requesting LIBOR Revolving Credit Loans from such
Lender hereunder unless such declaration is subsequently withdrawn; and
27
(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 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
28
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 and 2.17 (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 and Utilization Fees, each reduction of
the Total Commitment and each refinancing of any Borrowing with, or conversion
of any Borrowing to, a Revolving Credit Borrowing, or continuation of any
Borrowing as a Revolving Credit Borrowing, shall be allocated pro rata among the
Lenders in accordance with their respective Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amount of their outstanding Revolving Credit Loans). Each payment of
principal of any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
principal amounts of their outstanding Competitive Loans comprising such
Borrowing. Each payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders that shall not have made
Loans as part of such Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender's percentage of such Borrowing computed in
accordance with Section 2.1, to the next higher or lower whole dollar amount.
SECTION 2.19. RIGHT OF SETOFF.
If any Event of Default shall have occurred and be continuing and any
Lender shall have requested the Administrative Agent to declare the Loans
immediately due and payable pursuant to Article 7, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender and any
other indebtedness at any time owing by such Lender to, or for the credit or the
account of, the Borrower, against any of and all the obligations now or
hereafter existing under this Agreement and the Loans held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or such Loans and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such setoff and
application made by such Lender, but the failure to give such notice shall not
affect the validity
29
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 without deduction,
setoff or counterclaim at the office of the Administrative Agent's Agent Bank
Services Department, 1 Chase Manhattan Plaza, 8th Floor, New York, New York
10081, Attention: Sharon Hambousi, for credit to Cendant Corporation Clearing
Account, Account No. 144812905 (Reference: Cendant Corporation Credit Agreement
dated August 29, 2000) 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 or the issuance of the
initial Letter of Credit 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
30
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrower or the Administrative Agent
may withhold taxes from such payments at the applicable statutory rate in the
case of payments to or for any Lender organized under the laws of a jurisdiction
outside the United States.
(c) Each Lender agrees (i) that as between it and the Borrower or the
Administrative Agent, it shall be the Person to deduct and withhold taxes, and
to the extent required by law it shall deduct and withhold taxes, on amounts
that such Lender may remit to any other Person(s) by reason of any undisclosed
transfer or assignment of an interest in this Agreement to such other Person(s)
pursuant to paragraph (g) of Section 9.3 and (ii) to indemnify the Borrower and
the Administrative Agent and any officers, directors, agents, or employees of
the Borrower or the Administrative Agent against, and to hold them harmless
from, any tax, interest, additions to tax, penalties, reasonable counsel and
accountants' fees, disbursements or payments arising from the assertion by any
appropriate taxing authority of any claim against them relating to a failure to
withhold taxes as required by Applicable Law with respect to amounts described
in clause (i) of this paragraph (c).
(d) Each assignee of a Lender's interest in this Agreement in conformity
with Section 9.3 shall be bound by this Section 2.21, so that such assignee will
have all of the obligations and provide all of the forms and statements and all
indemnities, representations and warranties required to be given under this
Section 2.21.
(e) In the event that any withholding taxes shall become payable solely
as a result of any change in any statute, treaty, ruling, determination or
regulation occurring after the Initial Date in respect of any sum payable
hereunder or under any other Fundamental Document to any Lender or the
Administrative Agent (i) the sum payable by the Borrower shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.21) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law. For purposes of this Section 2.21, the term
"Initial Date" shall mean (i) in the case of the Administrative Agent, the date
hereof, (ii) in the case of each Lender as of the date hereof, the date hereof
and (iii) in the case of any other Lender, the effective date of the Assignment
and Acceptance pursuant to which it became a Lender.
SECTION 2.22. CERTAIN PRICING ADJUSTMENTS.
The Facility Fee and the applicable LIBOR Spread in effect from time to
time shall be determined in accordance with the following table:
S&P/Moody's Rating
Equivalent
of the Borrower's senior Facility Fee Applicable LIBOR
UNSECURED LONG-TERM (IN BASIS SPREAD (IN BASIS
DEBT POINTS) POINTS)
------------------------ ---------- ----------------
A/A2 or better 8.0 29.5
31
S&P/Moody's Rating
Equivalent
of the Borrower's senior Facility Fee Applicable LIBOR
UNSECURED LONG-TERM (IN BASIS SPREAD (IN BASIS
DEBT POINTS) POINTS)
------------------------ ---------- ----------------
A-/A3 10.0 40.0
BBB+/Baa1 12.5 50.0
BBB/Baa2 15.0 60.0
BBB-/Baa3 17.5 70.0
BB+/Bal or lower 32.5 117.5
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 lower
rating will determine the Facility Fee and applicable LIBOR Spread. 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. The applicable margin for ABR Loans shall be 1% less
than the applicable LIBOR Spread (but not less than 0%).
SECTION 2.23. INTENTIONALLY OMITTED.
SECTION 2.24. LETTERS OF CREDIT.
(i) Upon the terms and subject to the conditions hereof, each
Issuing Lender agrees to issue standby 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 (other than the Settlement Letter of Credit) if,
after giving effect to such issuance, the L/C Exposure would exceed
32
$250,000,000, 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.
(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.
(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 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.
33
(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 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.
(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,
34
documentation 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 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.
(f) 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
35
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
(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.
(g) 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
36
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.
(h) 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.
(i) Upon the request of the Administrative Agent, each Issuing Lender
shall furnish to the Administrative Agent copies of any Letter of Credit issued
by such Issuing Lender and such related documentation as may be reasonably
requested by the Administrative Agent.
(j) 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.
(k) Notwithstanding the other provisions of this Agreement, each Lender
agrees, severally and not jointly, to issue no later than five Business Days
after a written notice requesting the issuance of the Settlement Letter of
Credit is received by the Administrative Agent a standby letter of credit (the
"SETTLEMENT LETTER OF CREDIT"), substantially in the form of Exhibit G, for the
account of the Borrower to support a portion of the Borrower's payment
obligations under the Settlement. The Settlement Letter of Credit shall be a
Letter of Credit issued under this Agreement (and the other provisions of this
Agreement applicable to Letters of Credit (other than Section 2.24(b) but
including Section 2.24(e)) shall apply to the Settlement Letter of Credit)
provided that:
(i) The initial face amount of the Settlement Letter of Credit
shall be $1,750,000,000 and the face amount shall thereafter be reduced in
accordance with Section 2.24(l)(vii).
(ii) The Settlement Letter of Credit shall be deemed not to be
a utilization of the $250,000,000 available sublimit for the issuance of
the Letters of Credit under Section 2.24(a).
(iii) The scheduled expiration date of the Settlement Letter
of Credit shall be August 24, 2003 (or any earlier date requested by the
Borrower).
37
(iv) The Settlement Letter of Credit will be issued on a
several and ratable basis by each of the Lenders, with each Lender's
obligations thereunder being set forth therein and being equal to the
product of (x) its Commitment Percentage and (y) the drawable amount of
the Settlement Letter of Credit.
(v) In the event any of the Borrower's reimbursement
obligations with respect to the Settlement Letter of Credit are not
converted to an ABR Loan as provided in Section 2.24(e), the Borrower
shall pay such reimbursement obligations to the Administrative Agent, for
the account of the Lenders, rather than directly to the Lenders, which
shall be credited to the Lenders in accordance with Section 8.2(b).
(vi) No fronting fee of the type described in Section
2.24(f)(i)(C) shall be payable in respect of the Settlement Letter of
Credit.
(vii) The drawable amount of the Settlement Letter of Credit
and the amount of the Surety Bonds shall be reduced by the Borrower in 12
consecutive quarterly installments by the last Business Day of each March,
June, September and December, commencing in the first full calendar
quarter following the issuance of the Settlement Letter of Credit. The
amount of each of the first four quarterly reductions shall be
$150,000,000, and the amount of each of the subsequent eight quarterly
reductions shall be $200,000,000, PROVIDED that if the amount of the
reduction in any quarter exceeds the required amount set forth above, the
amount of such excess shall be carried forward and the amount of the
required reduction for the next following quarterly installment shall be
reduced by such excess. Any reduction of the drawable amount of the
Settlement Letter of Credit and the amount of the Surety Bonds shall be
applied thereto ratably in accordance with the then respective outstanding
amounts thereof. Notwithstanding the foregoing, in the event that the
issuers of the Surety Bonds do not require a reduction or for any other
reason the Surety Bonds are not reduced on any of the required reduction
dates in accordance with the preceding sentence, the Borrower will instead
reduce the drawable amount of the Settlement Letter of Credit by the
amount not so applied (the amounts not so applied the "UNAPPLIED SURETY
AMOUNTS") to the reduction of the Surety Bonds (such reduction to be in
addition to the reduction of the drawable amount of the Settlement Letter
of Credit otherwise required to be made); provided, however, that if at
any time there exists any Unapplied Surety Amounts, the Borrower, at its
option, may elect to first apply all or any portion of such Unapplied
Surety Amounts to reduce the amount of the Surety Bonds up to the
aggregate amount of such Unapplied Surety Amounts; provided further that
(i) such amount applied to reduce the Surety Bonds in excess of the amount
that the Surety Bonds would have been reduced without giving effect to
this proviso shall reduce the Unapplied Surety Amounts and (ii) any amount
in excess of the Unapplied Surety Amounts shall be applied ratably as
provided above.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement and to
make the Loans, issue the Settlement Letter of Credit and issue and participate
in the other Letters of Credit provided for herein, the Borrower makes the
following representations and warranties to
38
the Administrative Agent and the Lenders, all of which shall survive the
execution and delivery of this Agreement, the issuance of the Notes and the
making of the Loans and issuance of the Letters of Credit:
SECTION 3.1. CORPORATE EXISTENCE AND POWER.
The Borrower and its Subsidiaries have been duly organized and are
validly existing in good standing under the laws of their respective
jurisdictions of incorporation and are in good standing or have applied for
authority to operate as a foreign corporation in all jurisdictions where the
nature of their properties or business so requires it and where a failure to be
in good standing as a foreign corporation would have a Material Adverse Effect.
The Borrower has the corporate power to execute, deliver and perform its
obligations under this Agreement and the other Fundamental Documents and other
documents contemplated hereby and to borrow hereunder.
SECTION 3.2. CORPORATE AUTHORITY, NO VIOLATION AND COMPLIANCE WITH
LAW.
The execution, delivery and performance of this Agreement and the
other Fundamental Documents and the borrowings hereunder (a) have been duly
authorized by all necessary corporate action on the part of the Borrower, (b)
will not violate any provision of any Applicable Law (including any laws related
to franchising) applicable to the Borrower or any of its Subsidiaries or any of
their respective properties or assets, (c) will not violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries, or any indenture, any agreement for borrowed money, any bond, note
or other similar instrument or any other material agreement to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower or any
of its Subsidiaries or any of their respective properties or assets are bound,
(d) will not be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, any material indenture,
agreement, bond, note or instrument and (e) will not result in the creation or
imposition of any Lien upon any property or assets of the Borrower or any of its
Subsidiaries other than pursuant to this Agreement or any other Fundamental
Document.
SECTION 3.3. GOVERNMENTAL AND OTHER APPROVAL AND CONSENTS.
No action, consent or approval of, or registration or filing with,
or any other action by, any governmental agency, bureau, commission or court is
required in connection with the execution, delivery and performance by the
Borrower of this Agreement or the other Fundamental Documents.
SECTION 3.4. FINANCIAL STATEMENTS OF BORROWER.
The (a) revised audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries as of December 31, 1998 and the
audited consolidated financial statements of the Borrower and its Consolidated
Subsidiaries as of December 31, 1999, and (b) unaudited consolidated balance
sheets of the Borrower and its Consolidated Subsidiaries as of March 31, 2000
and June 30, 2000, together with the related unaudited statements of income,
39
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, 2000 and June 30, 2000 financial statements.
SECTION 3.5. NO MATERIAL ADVERSE CHANGE.
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 from that disclosed in the audited consolidated
financial statements (including the footnotes thereto) of the Borrower referred
to in Section 3.4 for its 1999 fiscal year.
SECTION 3.6. [RESERVED].
SECTION 3.7. COPYRIGHTS, PATENTS AND OTHER RIGHTS.
Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
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
40
immediately, incidentally or ultimately, for any purpose violative of or
inconsistent with any of the provisions of Regulation 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).
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.
41
SECTION 3.15. DISCLOSURE.
As of the Closing Date, neither this Agreement nor the Confidential
Information Memorandum dated July 2000, 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 Closing Date,
there is no fact known to the Borrower which, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. The
Borrower has delivered to the Administrative Agent certain projections relating
to the Borrower and its Consolidated Subsidiaries. Such projections are based on
good faith estimates and assumptions believed to be reasonable at the time made,
provided, HOWEVER, that the Borrower makes no representation or warranty that
such assumptions will prove in the future to be accurate or that the Borrower
and its Consolidated Subsidiaries will achieve the financial results reflected
in such projections.
SECTION 3.16. ENVIRONMENTAL LIABILITIES.
Except with respect to any matters, that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
4. CONDITIONS OF LENDING
SECTION 4.1. CONDITIONS PRECEDENT TO CLOSING.
The effectiveness of this Agreement 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
42
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)
revised audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries as of December 31, 1998 and the audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries as of
December 31, 1999 and (b) unaudited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries as of March 31, 2000 and June 30,
2000.
(d) OPINIONS OF COUNSEL. The Administrative Agent shall have
received the favorable written opinions, dated the date of the Extension of
Credit and addressed to the Administrative Agent and the Lenders, of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel to the Borrower and/or of James E.
Buckman, Vice Chairman 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 since December 31, 1999 no events and conditions have occurred
that have had, or could reasonably be expected to have, a Material Adverse
Effect.
(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; APPROVAL. (a) 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 and (b) the Settlement shall have received District
Court Approval (as defined in the Settlement Agreement).
(h) EXISTING CREDIT AGREEMENTS. (a) All obligations of the
Borrower under the 364-Day Competitive Advance and Revolving Credit Agreement,
dated as of October 2, 1996, as amended and restated through October 18, 1999,
among the Borrower, the lenders named therein and The Chase Manhattan Bank, as
administrative agent (the "Existing 364-Day Credit Agreement") shall have been
paid in full and the commitments of the lenders pursuant to the Existing 364-Day
Credit Agreement shall have been terminated; and (b) each of the Term Loan
Agreement, dated as of February 9, 1999, as amended, among the Borrower, the
lenders named therein and the Chase Manhattan Bank, as administrative agent, and
the Five Year Competitive Advance and Revolving Credit Agreement, dated as of
October 2, 1996, as amended, among the Borrower, the lenders named therein and
The Chase Manhattan Bank, as administrative agent, shall have been amended
pursuant to documentation satisfactory to the Administrative Agent.
(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 Closing Date, compliance with the
conditions set forth in paragraphs (b) and (c) of Section 4.2.
43
(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 EXTENSION 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 Extension of Credit
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.
(d) SETTLEMENT DOCUMENTS. In the case of the issuance of the
Settlement Letter of Credit, the Administrative Agent shall have received
satisfactory evidence that the aggregate amount of cash from the Borrower that
shall have been funded into the Settlement Trust, together with the aggregate
principal amount of Surety Bond(s) that have been issued guaranteeing payment to
the Settlement Trust, shall be equal to or greater than $1,080,000,000.
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 that, unless the Required Lenders shall otherwise consent in
writing, it will, and will cause each of its Subsidiaries to:
44
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) As soon as is practicable, but in any event within 55 days
after the end of each of the first three fiscal quarters of each fiscal year,
the unaudited consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries, as at the end of, and the related unaudited statements of income
(or changes in financial position) for such quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal quarter and
the corresponding figures as at the end of, and for, the corresponding period in
the preceding fiscal year, together with a certificate signed by the chief
financial officer or a vice president responsible for financial administration
of the Borrower to the effect that such financial statements, while not examined
by independent public accountants, reflect, in his opinion and in the opinion of
the Borrower, all adjustments necessary to present fairly the financial position
of the Borrower and its Consolidated Subsidiaries, as the case may be, as at the
end of the fiscal quarter and the results of their operations for the quarter
then ended in conformity with GAAP consistently applied, subject only to
year-end and audit adjustments and to the absence of footnote disclosure;
(c) Together with the delivery of the statements referred to in
paragraphs (a) and (b) of this Section 5.1, a 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) INTENTIONALLY OMITTED;
45
(e) Promptly upon any executive officer of the Borrower or any of
its Subsidiaries obtaining knowledge of the occurrence of any Default or Event
of Default, a certificate of the president or chief financial officer of the
Borrower specifying the nature and period of existence of such Default or Event
of Default and what action the Borrower has taken, is taking and proposes to
take with respect thereto;
(f) Promptly upon any executive officer of the Borrower or any of
its Subsidiaries obtaining knowledge of (i) the institution of any action, suit,
proceeding, investigation or arbitration by any Governmental Authority or other
Person against or affecting the Borrower or any of its Subsidiaries or any of
their assets, or (ii) any material development in any such action, suit,
proceeding, investigation or arbitration (whether or not previously disclosed to
the Lenders), which, in each case might reasonably be expected to have a
Material Adverse Effect, the Borrower shall promptly give notice thereof to the
Lenders and provide such other information as may be reasonably available to it
(without waiver of any applicable evidentiary privilege) to enable the Lenders
to evaluate such matters;
(g) With reasonable promptness, such other information and data
with respect to the Borrower and its Subsidiaries as from time to time may be
reasonably requested by any of the Lenders; and
(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. ss.ss. 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;
46
provided however, that (a) workmen's compensation insurance or similar coverage
may be effected with respect to its operations in any particular state or other
jurisdiction through an insurance fund operated by such state or jurisdiction
and (b) such insurance may contain self-insurance retention and deductible
levels consistent with normal industry practices.
SECTION 5.4. TAXES AND CHARGES.
Duly pay and discharge, or cause to be paid and discharged, before
the same shall become delinquent, all federal, state or local taxes,
assessments, levies and other governmental charges, imposed upon the Borrower or
any of its Subsidiaries or their respective properties, sales and activities, or
any part thereof, or upon the income or profits therefrom, as well as all claims
for labor, materials, or supplies which if unpaid could 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
47
required to notify the Administrative Agent of the occurrence of any of the
events set forth in the preceding clauses (a) and (c) unless such event,
individually or in the aggregate, could reasonably be expected to 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 reasonable 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 Closing Date, or required to
be incurred pursuant to a contractual obligation in existence on the Closing
Date, which in either case, is listed on Schedule 6.1 hereto, but not any
extensions or renewals thereof, unless effected on substantially the same terms
or on terms not more adverse to the Lenders;
(b) purchase money Indebtedness (including Capital Leases) to the
extent permitted under Section 6.5(b);
48
(c) Guaranties;
(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
$400,000,000;
(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;
(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 $400,000,000; and
(h) in addition to the Indebtedness permitted by paragraphs (a) -
(g) above, Indebtedness of PHH and its Subsidiaries so long as, after giving
effect to the incurrence of such Indebtedness and the use of the proceeds
thereof, the ratio of Indebtedness of PHH and its Subsidiaries to consolidated
shareholders' equity of PHH is less than 5 to 1.
SECTION 6.2. INTENTIONALLY OMITTED.
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 or the successor to the Borrower has
unconditionally assumed in writing all of the payment and performance
obligations of the Borrower under this Agreement and the other Fundamental
Documents, (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
49
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 any
such transaction described in any of the preceding clauses (i), (ii) and (iii)
no Default or Event of Default has occurred and is continuing.
(b) The Borrower and its Subsidiaries (either individually or
collectively and whether in one transaction or series of related transactions)
will not sell or otherwise dispose of all or substantially all of the assets of
the Borrower and its Subsidiaries, taken as a whole.
SECTION 6.5. LIMITATIONS ON LIENS.
Suffer any Lien on the property of the Borrower or any of the
Material Subsidiaries, except:
(a) deposits under worker's compensation, unemployment insurance
and social security laws or to secure statutory obligations or surety or appeal
bonds or performance or other similar bonds in the ordinary course of business,
or statutory Liens of landlords, carriers, warehousemen, mechanics and material
men and other similar Liens, in respect of liabilities which are not yet due or
which are being contested in good faith, Liens for taxes not yet due and
payable, and Liens for taxes due and payable, the validity or amount of which is
currently being contested in good faith by appropriate proceedings and as to
which foreclosure and other enforcement proceedings shall not have been
commenced (unless fully bonded or otherwise effectively stayed);
(b) purchase money Liens granted to the vendor or Person financing
the acquisition of property, plant or equipment if (i) limited to the specific
assets acquired and, in the case of tangible assets, other property which is 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;
50
(f) Liens existing on the date hereof and any extensions or
renewals thereof;
(g) INTENTIONALLY OMITTED.
(h) INTENTIONALLY OMITTED; and
(i) other Liens securing obligations having an aggregate principal
amount not to exceed 15% of Consolidated Net Worth.
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 and its Subsidiaries may enter into
sale-leaseback transactions relating to assets not in excess of $200,000,000 in
the aggregate on a cumulative basis.
SECTION 6.7. DEBT TO CAPITALIZATION RATIO.
Permit the Debt to Capitalization Ratio on the last day of any
fiscal quarter to be greater than 0.5 to 1.
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;
51
(b) default shall be made in the payment of any principal of or
interest on any Loan, any reimbursement obligation with respect to Letters of
Credit, 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 any Loan, any reimbursement obligation
with respect to Letters of Credit, or the Notes, such default shall continue
unremedied for five days after receipt by the Borrower of an invoice therefor;
(c) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Section 5.1(e) (with respect
to notice of Default or Events of Default), 5.8 or Article 6 of this Agreement;
(d) default shall be made by the Borrower in the due observance or
performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms of this Agreement, or any other Fundamental
Document and such default shall continue unremedied for thirty (30) days after
the Borrower obtains knowledge of such occurrence;
(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 $50,000,000 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 $50,000,000 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 $50,000,000 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
52
appointment of a receiver, trustee, custodian or other similar official for it
or for all or any substantial part of its property or shall file an answer or
other pleading in any such case, proceeding or other action admitting the
material allegations of any petition, complaint or similar pleading filed
against it or consenting to the relief sought therein; or the Borrower or any
Material Subsidiary thereof shall take any action to authorize any of the
foregoing;
(g) any involuntary case, proceeding or other action against the
Borrower or any of its Material Subsidiaries shall be commenced seeking to have
an order for relief 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
$50,000,000 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
(other than the final judgment(s) rendered to give effect to the Settlement); 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.
53
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 not the Administrative
Agent (regardless of whether such Lender bears the title co-agent, syndication
agent, documentation agent or any similar title, as indicated on the signature
pages hereto) for the credit facility hereunder shall not have any duties or
responsibilities except as a Lender hereunder.
SECTION 8.2. ADVANCES AND PAYMENTS.
(a) On the date of each Loan, the Administrative Agent shall be
authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with this
Agreement. Each of the Lenders hereby authorizes and requests the Administrative
Agent to advance for its account, pursuant to the terms hereof, the amount of
the Loan to be made by it, unless with respect to any Lender, such Lender has
theretofore specifically notified the Administrative Agent that such Lender does
not intend to fund that particular Loan. Each of the Lenders agrees forthwith to
reimburse the Administrative Agent in immediately available funds for the amount
so advanced on its behalf by the Administrative Agent pursuant to the
immediately preceding sentence. If any such reimbursement is not made in
immediately available funds on the same day on which the Administrative Agent
shall have made any such amount available on behalf of any Lender in accordance
with this Section 8.2, such Lender shall pay interest to the Administrative
Agent at a rate per annum equal to the Administrative Agent's cost of obtaining
overnight funds in the New York Federal Funds Market. Notwithstanding the
preceding sentence, if such reimbursement is not made by the second Business Day
following the day on which the Administrative Agent shall have made any such
amount available on behalf of any Lender or such Lender has indicated that it
does not intend to reimburse the Administrative Agent, the Borrower shall
immediately pay such unreimbursed advance amount (plus any accrued, but unpaid
interest at the rate applicable to ABR Loans) to the Administrative Agent.
(b) Any amounts received by the Administrative Agent in connection
with this Agreement or the Notes the application of which is not otherwise
provided for shall be applied, in accordance with each of the Lenders' pro rata
interest therein, first, to pay accrued but unpaid Facility Fees and Utilization
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, promptly after collection
54
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 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,
55
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, provided that, with respect to the Settlement Letter of
Credit, the Administrative Agent shall not have any duty to inquire as to the
accuracy or authenticity of any draft or other drawing documents which may be
presented to it in connection therewith, but shall be responsible only to
determine in accordance with customary commercial practices (including the
uniform customs and practice for documentary credits (1993 revision,
International Chamber of Commerce Publication No. 500)) that the documents which
are required to be presented before payment or acceptance of a draft under the
Settlement Letter of Credit have been delivered and that they comply on their
face with the requirements of the Settlement Letter of Credit.
SECTION 8.6. REIMBURSEMENT AND INDEMNIFICATION.
Each of the Lenders severally and not jointly agrees (i) to
reimburse the Administrative Agent, in the amount of its proportionate share,
for any expenses and fees incurred for the benefit of the Lenders under the
Fundamental Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders, and any other expense incurred in connection with the administration or
enforcement thereof not reimbursed by the Borrower or one of its Subsidiaries,
and (ii) to indemnify and hold harmless the Administrative Agent and any of its
directors, 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,
56
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, issue the Settlement Letter of Credit and
issue and participate in the other 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 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
57
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 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 Stephanie Parker, or if to the
Borrower, to it at 6 Sylvan Way, Parsippany, NJ 07054-0278 Attention: David
Johnson, Chief Financial Officer and James E. Buckman, Vice Chairman and General
Counsel, with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 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 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
58
so long as any amount due or to become due hereunder is outstanding and unpaid
and so long as the Commitment has not been terminated. All statements in any
such certificate or other instrument shall constitute representations and
warranties by the Borrower hereunder.
SECTION 9.3. SUCCESSORS AND ASSIGNS; SYNDICATIONS; LOAN SALES;
PARTICIPATIONS.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided, however, that the Borrower may not assign its
rights hereunder without the prior written consent of all the Lenders), and all
covenants, promises and agreements by, or on behalf of, the Borrower which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Administrative Agent, the Issuing Lenders (other than the Issuing
Lenders with respect to the Settlement Letter of Credit) 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).
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(c) Notwithstanding the other provisions of this Section 9.3, each
Lender may at any time make a Ratable Assignment or a Non-Ratable Assignment of
its interests, rights and obligations under this Agreement to (i) any Affiliate
of such Lender or (ii) any other Lender hereunder.
(d) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in, or in connection with, this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental
Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Fundamental Documents; (iii) such assignee confirms that
it has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Sections 5.1(a) and 5.1(b) (or
if none of such financial statements shall have then been delivered, then copies
of the financial statements referred to in Section 3.4 hereof) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the assigning Lender, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the Fundamental Documents
as are delegated to the Administrative Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will be bound by the provisions of this Agreement and will perform in
accordance with its terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(e) The Administrative Agent, on behalf of the Borrower, shall
maintain at its address at which notices are to be given to it pursuant to
Section 9.1, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative Agent,
the Issuing Lenders and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Fundamental Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(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
substantially 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 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
61
(v) the Borrower, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to the
Administrative Agent by or on behalf of the Borrower; provided that prior to any
such disclosure, each such assignee or participant or proposed assignee or
participant shall agree, by executing a confidentiality letter in form and
substance equivalent to the confidentiality letter executed by the Lenders in
connection with information received by such Lenders relating to this
transaction to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
(i) Each Lender hereby represents that it is a commercial lender
or financial institution which makes loans in the ordinary course of its
business and that it will make the Loans hereunder for its own account in the
ordinary course of such business; provided, however, that, subject to preceding
clauses (a) through (h), the disposition of the Notes or other evidence of
Indebtedness held by that Lender shall at all times be within its exclusive
control.
(j) The Borrower consents that any Lender may at any time and from
time to time pledge, or otherwise grant a security interest in, any Loan or any
Note evidencing such Loan (or any part thereof), including any such pledge or
grant to any Federal Reserve Bank, and, with respect to any Lender which is a
fund, to the fund's trustee in support of its obligations to such trustee, 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.
(k) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Revolving Credit Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to Section 2.1 or
2.6, provided that (i) nothing herein shall constitute a commitment to make any
Revolving Credit Loan by any SPC and (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Revolving Credit
Loan or fund any other obligation required to be funded by it hereunder, the
Granting Lender shall be obligated to make such Revolving Credit Loan or fund
such obligation pursuant to the terms hereof. The making of a Revolving Credit
Loan by an SPC hereunder shall satisfy the obligation of the Granting Lenders to
make Revolving Credit Loans to the same extent, and as if, such Loan were made
by the Granting Lender. Each party hereto hereby agrees that no SPC shall be
liable for any payment under this Agreement for which a Lender would otherwise
be liable, for so long as, and to the extent, the related Granting Lender makes
such payment. In furtherance of the foregoing, each party hereto hereby agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding senior indebtedness of any SPC, it will not institute against
or join any other person in instituting against, such SPC any bankruptcy,
reorganization,
62
arrangement, insolvency or liquidation proceedings or similar proceedings under
the laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 9.3 any SPC may (i) with
notice to, but without the prior written consent of, the Borrower or the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Revolving Credit Loan to its Granting
Lender or to any financial institutions providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Revolving Credit Loans
made by SPC or to support the securities (if any) issued by such SPC to fund
such Revolving Credit Loans and (ii) disclose on a confidential basis any
non-public information relating to its Revolving Credit Loans to any rating
agency, commercial paper dealer or provider of a surety, guarantee or credit or
liquidity enhancement to such SPC.
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
63
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
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 any
64
reimbursement obligation with respect to a Letter of Credit) or decrease the
rate of interest payable thereon, or the rate at which the Facility Fees,
Utilization 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. 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 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
65
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.
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.
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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 July 20, 2000,
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.
SECTION 9.15. CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to keep
confidential all non-public information provided to it by the Borrower and its
Subsidiaries pursuant to this Agreement that is designated by the Borrower as
confidential; PROVIDED that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any participant or assignee (each, a "TRANSFEREE") of such Lender or prospective
Transferee which agrees to comply with the provisions of this Section, (c) to
any of its employees, directors, agents, attorneys, accountants and other
professional advisors, (d) upon the request or demand of any governmental or
regulatory authority having jurisdiction over it, (e) in response to any order
of any court or other governmental authority or as may otherwise be required
pursuant to any requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) which has been
publicly disclosed other than in breach of this Section 9.15, (h) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (i) in connection with the exercise of any remedy
hereunder or under any other Fundamental Document.
SECTION 9.16. DELIVERY OF ADDENDA.
Each initial Lender shall become a party to this Agreement by
delivering to the Administrative Agent an Addendum duly executed by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and the year first above written.
CENDANT CORPORATION
By:_______________________________
Name:
Title:
68
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By:________________________________
Name:
Title:
69
Schedule 2.1
COMMITMENTS
LENDER COMMITMENT
($MM)
The Chase Manhattan Bank $190.0
Bank of America, N.A. $160.0
The Bank of Nova Scotia $150.0
Credit Lyonnais New York Branch $150.0
First Union National Bank $145.0
The Industrial Bank of Japan, Limited $145.0
The Sumitomo Bank, Limited $100.0
BNP Paribas $100.0
Bank One, NA $75.0
Citibank, NA $75.0
Credit Suisse First Boston $75.0
Mellon Bank, N.A. $75.0
The Bank of New York $50.0
The Fuji Bank, Limited $50.0
The Northern Trust Company $50.0
The Royal Bank of Scotland plc $50.0
The Sanwa Bank, Limited $50.0
Westdeutsche Landesbank Girozentrale $50.0
Amsouth Bank $10.0
TOTAL $1,750.0
Schedule 3.9
LITIGATION
None
Schedule 6.1
EXISTING INDEBTEDNESS AND GUARANTEES
Lease Agreement dated 11/29/91 between Days Inns of America, Inc. and John
Hancock Life Insurance Company in the amount of $373,970.
Lease Agreement dated 8/1/93 between Coldwell Banker Corporation and Pitney
Bowes in the amount of $22,805.
Lease Agreement dated 6/1/95 between Coldwell Banker Corporation and Xerox
Corporation in the amount of $652,331.