EXECUTION COPY
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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
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TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................................1
2. THE LOANS...............................................................................18
SECTION 2.1. Commitments..........................................................18
SECTION 2.2. Loans................................................................18
SECTION 2.3. Use of Proceeds......................................................19
SECTION 2.4. Competitive Bid Procedure............................................20
SECTION 2.5. Revolving Credit Borrowing Procedure.................................22
SECTION 2.6. Refinancings.........................................................23
SECTION 2.7. Fees.................................................................24
SECTION 2.8. Repayment of Loans; Evidence of Debt.................................24
SECTION 2.9. Interest on Loans....................................................26
SECTION 2.10. Interest on Overdue Amounts.........................................26
SECTION 2.11. Alternate Rate of Interest..........................................27
SECTION 2.12. Termination and Reduction of Commitments............................27
SECTION 2.13. Prepayment of Loans.................................................28
SECTION 2.14. Eurodollar Reserve Costs............................................28
SECTION 2.15. Reserve Requirements; Change in Circumstances ......................29
SECTION 2.16. Change in Legality..................................................31
SECTION 2.17. Reimbursement of Lenders............................................32
SECTION 2.18. Pro Rata Treatment..................................................33
SECTION 2.19. Right of Setoff.....................................................34
SECTION 2.20. Manner of Payments..................................................34
SECTION 2.21. United States Withholding...........................................34
SECTION 2.22. Certain Pricing Adjustments.........................................36
SECTION 2.23. INTENTIONALLY OMITTED...............................................37
SECTION 2.24. Letters of Credit...................................................37
3. REPRESENTATIONS AND WARRANTIES OF BORROWER..............................................45
SECTION 3.1. Corporate Existence and Power........................................45
SECTION 3.2. Corporate Authority, No Violation and Compliance with Law............45
SECTION 3.3. Governmental and Other Approval and Consents.........................46
SECTION 3.4. Financial Statements of Borrower.....................................46
SECTION 3.5. No Material Adverse Change...........................................46
SECTION 3.6. [Reserved]...........................................................46
SECTION 3.7. Copyrights, Patents and Other Rights.................................46
SECTION 3.8. Title to Properties..................................................47
SECTION 3.9. Litigation...........................................................47
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Page
SECTION 3.10. Federal Reserve Regulations.........................................47
SECTION 3.11. Investment Company Act..............................................47
SECTION 3.12. Enforceability......................................................47
SECTION 3.13. Taxes...............................................................48
SECTION 3.14. Compliance with ERISA...............................................48
SECTION 3.15. Disclosure..........................................................48
SECTION 3.16. Environmental Liabilities...........................................49
4. CONDITIONS OF LENDING...................................................................49
SECTION 4.1. Conditions Precedent to Closing......................................49
(a) Loan Documents............................................................49
(b) Corporate Documents for the Borrower......................................49
(c) Financial Statements......................................................49
(d) Opinions of Counsel.......................................................50
(e) No Material Adverse Change................................................50
(f) Payment of Fees...........................................................50
(g) Litigation................................................................50
(h) Existing Credit Agreements................................................50
(i) Officer's Certificate.....................................................50
(j) Other Documents...........................................................51
SECTION 4.2. Conditions Precedent to Each Extension of Credit.....................51
(a) Notice....................................................................51
(b) Representations and Warranties............................................51
(c) No Event of Default.......................................................51
5. AFFIRMATIVE COVENANTS...................................................................52
SECTION 5.1. Financial Statements, Reports, etc...................................52
SECTION 5.2. Corporate Existence; Compliance with Statutes........................54
SECTION 5.3. Insurance............................................................54
SECTION 5.4. Taxes and Charges....................................................54
SECTION 5.5. ERISA Compliance and Reports.........................................55
SECTION 5.6. Maintenance of and Access to Books and Records; Examinations.........56
SECTION 5.7. Maintenance of Properties............................................56
SECTION 5.8. Changes in Character of Business.....................................56
6. NEGATIVE COVENANTS......................................................................56
SECTION 6.1. Limitation on Indebtedness...........................................56
SECTION 6.2. INTENTIONALLY OMITTED................................................57
SECTION 6.3. Hotel Subsidiaries...................................................57
SECTION 6.4. Consolidation, Merger, Sale of Assets................................57
SECTION 6.5. Limitations on Liens.................................................58
SECTION 6.6. Sale and Leaseback...................................................59
SECTION 6.7. Debt to Capitalization Ratio.........................................59
SECTION 6.8. Interest Coverage Ratio..............................................60
SECTION 6.9. Accounting Practices.................................................60
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Page
7. EVENTS OF DEFAULT.......................................................................60
8. THE ADMINISTRATIVE AGENT AND EACH ISSUING LENDER........................................63
SECTION 8.1. Administration by Administrative Agent...............................63
SECTION 8.2. Advances and Payments................................................63
SECTION 8.3. Sharing of Setoffs and Cash Collateral...............................64
SECTION 8.4. Notice to the Lenders................................................64
SECTION 8.5. Liability of Administrative Agent and each Issuing Lender............64
SECTION 8.6. Reimbursement and Indemnification....................................65
SECTION 8.7. Rights of Administrative Agent.......................................66
SECTION 8.8. Independent Investigation by Lenders.................................66
SECTION 8.9. Notice of Transfer...................................................66
SECTION 8.10. Successor Administrative Agent......................................67
SECTION 8.11. Resignation of an Issuing Lender....................................67
9. MISCELLANEOUS...........................................................................67
SECTION 9.1. Notices..............................................................67
SECTION 9.2. Survival of Agreement, Representations and Warranties, etc...........68
SECTION 9.3. Successors and Assigns; Syndications; Loan Sales; Participations.....68
SECTION 9.4. Expenses; Documentary Taxes..........................................73
SECTION 9.5. Indemnity............................................................73
SECTION 9.6. CHOICE OF LAW........................................................74
SECTION 9.7. No Waiver............................................................74
SECTION 9.8. Extension of Maturity................................................74
SECTION 9.9. Amendments, etc......................................................74
SECTION 9.10. Severability........................................................75
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL............................76
SECTION 9.12. Headings............................................................77
SECTION 9.13. Execution in Counterparts...........................................77
SECTION 9.14. Entire Agreement....................................................77
SECTION 9.15. Confidentiality.....................................................77
SECTION 9.16. Delivery of Addenda.................................................77
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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
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.
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"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
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deposit ("CD") rate for the most recent weekly period covered therein in
the Federal Reserve Statistical release entitled "Weekly Summary of Lending
and Credit Measures (Averages of daily figures)" released in the week
during which occurs the day for which the CD rate is being determined. The
CD rate so reported shall be in effect, for the purposes of this
definition, for each day of the week in which the release date of such
publication occurs. If such publication or a substitute containing the
foregoing rate information is not published by the Federal Reserve for any
week, such average rate shall be determined by the Administrative Agent on
the basis of quotations received by it from three New York City negotiable
certificate of deposit dealers of recognized standing on the first Business
Day of the week succeeding such week for which such rate information is not
published. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or Federal Funds Effective Rate, or
both, for any reason, including, without limitation, the inability or
failure of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base Rate
shall be determined without regard to clause (b) or (c), or both, until the
circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Average Weekly Three-Month
Secondary CD Rate shall be effective on the effective date of such change
in the CD Rate. Any change in the Alternate Base Rate due to a change in
the Federal Funds Effective Rate shall be effective on the effective date
of such change in the Federal Funds Effective Rate.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of governmental bodies or regulatory agencies
applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question is a
party.
"Assessment Rate" shall mean, for any day, the net annual assessment
rate (rounded upwards, if necessary, to the next higher Basis Point) as
most recently estimated by the Administrative Agent for determining the
then current annual assessment payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by
such Corporation (or such successor) of time deposits made in dollars at
the Administrative Agent's domestic offices.
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"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 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
5
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.
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"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.
"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.
7
"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
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)
8
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 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
9
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 and ss. 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
10
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e)
any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as such Act may be amended, and the regulations promulgated thereunder.
"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
11
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 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
12
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.
"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'
13
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.
14
"Interest Rate Type" when used in respect of any Loan or Borrowing,
shall refer to the Rate by reference to which interest on such Loan or on
the Loans comprising such Borrowing is determined. For purposes hereof,
"Rate" shall include LIBOR, the Alternate Base Rate and the Fixed Rate.
"Issuing Lender" shall mean Chase or its Affiliates, and/or such other
of the Lenders as may be designated in writing by the Borrower and which
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
15
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.
"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.
16
"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 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.
17
"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.
18
"Revolving Credit Borrowing" shall mean a Borrowing consisting of
simultaneous Revolving Credit Loans from each of the Lenders.
"Revolving Credit Borrowing Request" shall mean a request made pursuant
to Section 2.5 in the form of Exhibit F.
"Revolving Credit Loans" shall mean the Loans made by the Lenders to
the Borrower pursuant to a notice given by the Borrower under Section 2.5.
Each Revolving Credit Loan shall be a LIBOR Revolving Credit Loan or an ABR
Loan.
"Revolving Credit Note" shall have the meaning assigned to such term in
Section 2.8.
"Rolling Period" shall mean with respect to any fiscal quarter, such
fiscal quarter and the three immediately preceding fiscal quarters
considered as a single accounting period.
"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
19
D). Such reserve percentages shall include those imposed under Regulation
D. LIBOR Loans shall be deemed to constitute Eurocurrency Liabilities and
as such shall be deemed to be subject to such reserve requirements without
benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Lender under Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Subsidiary" shall mean with respect to any Person, any corporation,
association, joint venture, partnership or other business entity (whether
now existing or hereafter organized) of which at least a majority of the
voting stock or other ownership interests having ordinary voting power for
the election of directors (or the equivalent) is, at the time as of which
any determination is being made, owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person; provided that for purposes of Sections 6.1,
6.5, 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.
20
2. THE LOANS
SECTION 2.1. Commitments.
(a) Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Revolving Credit Loans to the Borrower, at any time and
from time to time on and after the Closing Date and until the earlier of the
Maturity Date and the termination of the Commitment of such Lender, in an
aggregate principal amount at any time outstanding not to exceed such Lender's
Commitment minus the sum of such Lender's pro rata share of the then current L/C
Exposure plus the amount by which the Competitive Loans outstanding at such time
shall be deemed to have used such Lender's Commitment pursuant to Section 2.18
subject, however, to the conditions that (a) at no time shall (i) the sum of (A)
the outstanding aggregate principal amount of all Revolving Credit Loans made by
all Lenders plus (B) the then current L/C Exposure plus (C) the outstanding
aggregate principal amount of all Competitive Loans made by all Lenders exceed
(ii) the Total Commitment and (b) at all times the outstanding aggregate
principal amount of all Revolving Credit Loans made by each Lender shall equal
the product of (i) the percentage that its Commitment represents of the Total
Commitment times (ii) the outstanding aggregate principal amount of all
Revolving Credit Loans made pursuant to a notice given by the Borrower under
Section 2.5. The Commitments of the Lenders may be terminated or reduced from
time to time pursuant to Section 2.12 or Article 7.
(b) Within the foregoing limits, the Borrower may borrow, pay or repay
and reborrow hereunder, on and after the Closing Date and prior to the Maturity
Date, upon the terms and subject to the conditions and limitations set forth
herein.
SECTION 2.2. Loans.
(a) Each Revolving Credit Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
Commitments; provided, however, that the 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
21
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
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.
22
(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)
23
in the case of a LIBOR Competitive Borrowing, not later than 9:30 a.m., New York
City time, three Business Days before a proposed Competitive Borrowing and (ii)
in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City
time, on the day of a proposed Competitive Borrowing. Multiple bids will be
accepted by the Administrative Agent. Competitive Bids that do not conform
substantially to the format of Exhibit E-3 may be rejected by the Administrative
Agent after conferring with, and upon the instruction of, the Borrower, and the
Administrative Agent shall notify the Lender making such nonconforming bid of
such rejection as soon as practicable. Each Competitive Bid shall refer to this
Agreement and specify (i) the principal amount (which shall be in a minimum
principal amount of $10,000,000 and in an integral multiple of $5,000,000 and
which may equal the entire principal amount of the Competitive Borrowing
requested by the Borrower) of the Competitive Loan or Loans that the Lender is
willing to make to the Borrower, (ii) the Competitive Bid Rate or Rates at which
the Lender is prepared to make the Competitive Loan or Loans and (iii) the
Interest Period or Interest Periods with respect thereto. If any Lender shall
elect not to make a Competitive Bid, such Lender shall so notify the
Administrative Agent via telecopier (i) in the case of LIBOR Competitive Loans,
not later than 9:30 a.m., New York City time, three Business Days before a
proposed Competitive Borrowing and (ii) in the case of Fixed Rate Loans, not
later than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Loan as part
of such proposed Competitive Borrowing. A Competitive Bid submitted by a Lender
pursuant to this paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the Borrower by
telecopier of all the Competitive Bids made, the Competitive Bid Rate or Rates
and the principal amount of each Competitive Loan in respect of which a
Competitive Bid was made and the identity of the Lender that made each bid. The
Administrative Agent shall send a copy of all Competitive Bids to the Borrower
for its records as soon as practicable after completion of the bidding process
set forth in this Section 2.4.
(d) The Borrower may in its sole and absolute discretion, subject only
to the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Borrower shall notify the Administrative
Agent by telephone, promptly confirmed by telecopier in the form of a
Competitive Bid Accept/Reject Letter whether and to what extent it has decided
to accept or reject any or all of the bids referred to in paragraph (c)
24
above, (i) in the case of a LIBOR Competitive Borrowing, not later than 10:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later than 10:30
a.m., New York City time, on the day of a proposed Competitive Borrowing;
provided, however, that (A) the failure by the Borrower to give such notice
shall be deemed to be a rejection of all the bids referred to in paragraph (c)
above, (B) the Borrower shall not accept a bid made at a particular Competitive
Bid Rate if the Borrower has decided to reject a bid made at a lower Competitive
Bid Rate, (C) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the principal amount specified in the Competitive Bid
Request, (D) if the Borrower shall accept a bid or bids made at a particular
Competitive Bid Rate but the amount of such bid or bids shall cause the total
amount of bids to be accepted by the Borrower to exceed the amount specified in
the Competitive Bid Request, then the Borrower shall accept a portion of such
bid or bids in an amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted at lower
Competitive Bid Rates with respect to such Competitive Bid Request (it being
understood that acceptance in the case of multiple bids at such Competitive Bid
Rate, shall be made pro rata in accordance with the amount of each such bid at
such Competitive Bid Rate) and (E) except pursuant to clause (D) above, no bid
shall be accepted for a Competitive Loan unless such Competitive Loan is in a
minimum principal amount of $10,000,000 and an integral multiple of $5,000,000;
provided further, however, that if a Competitive Loan must be in an amount less
than $10,000,000 because of the provisions of clause (D) above, such Competitive
Loan shall be in a minimum principal amount of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (D), the amounts shall be rounded to integral multiples of $1,000,000 in
a manner that shall be in the discretion of the Borrower. A notice given by the
Borrower pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether its Competitive Bid has been accepted (and if so, in what amount and at
what Competitive Bid Rate) by telecopy sent by the Administrative Agent, and
each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its bid has been accepted.
(f) A Competitive Bid Request shall not be made within four Business
Days after the date of any previous Competitive Bid
25
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 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
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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.
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(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 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.
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SECTION 2.8. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Credit Loan of such Lender on the Maturity Date (or
such earlier date on which the Revolving Credit Loans become due and payable
pursuant to Article 7). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Revolving Credit Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.9.
(b) The Borrower unconditionally promises to pay to the Administrative
Agent, for the account of each Lender that makes a Competitive Loan, on the last
day of the Interest Period applicable to such Competitive Loan, the principal
amount of such Competitive Loan. The Borrower further unconditionally promises
to pay interest on each such Competitive Loan for the period from and including
the date of Borrowing of such Competitive Loan on the unpaid principal amount
thereof from time to time outstanding at the applicable rate per annum
determined as provided in, and payable as specified in, Section 2.9.
(c) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Revolving Credit Loan and Competitive Loan of such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 9.3(e), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan and Competitive Loan made
hereunder, the Interest Rate Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(e) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations of
the Borrower therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of
29
the Borrower to repay (with applicable interest) the Revolving Credit Loans and
Competitive Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.
(f) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Revolving Credit Loans of such
Lender, substantially in the form of Exhibit A-1 with appropriate insertions as
to date and principal amount (a "Revolving Credit Note").
(g) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Competitive Loans of such Lender,
substantially in the form of Exhibit A-2 with appropriate insertions as to date
and principal amount (a "Competitive Note").
SECTION 2.9. Interest on Loans.
(a) Subject to the provisions of Section 2.10, the Loans comprising
each LIBOR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to (i)
in the case of each LIBOR Revolving Credit Loan, LIBOR for the Interest Period
in effect for such Borrowing plus the applicable LIBOR Spread from time to time
in effect and (ii) in the case of each LIBOR Competitive Loan, LIBOR for the
Interest Period in effect for such Borrowing plus the Margin offered by the
Lender making such Loan and accepted by the Borrower pursuant to Section 2.5.
Interest on each LIBOR Borrowing shall be payable on each applicable Interest
Payment Date.
(b) Subject to the provisions of Section 2.10, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate 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.
30
(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 Loan. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
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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)
32
plus the then current L/C Exposure exceeds the Total Commitment, the Borrower
shall make a mandatory prepayment of the Revolving Credit Loans in such amount
as may be necessary so that the aggregate amount of outstanding Loans plus the
then current L/C Exposure after giving effect to such prepayment does not exceed
the Total Commitment then in effect. Any prepayments required by this paragraph
shall be applied to outstanding ABR Loans up to the full amount thereof before
they are applied to outstanding LIBOR Revolving Credit Loans.
(c) Each notice of prepayment pursuant to Section 2.13(a) shall specify
the specific Borrowing(s), the prepayment date and the aggregate principal
amount of each Borrowing to be prepaid, shall be irrevocable and shall commit
the Borrower to prepay such Borrowing(s) by the amount stated therein. All
prepayments under this Section 2.13 shall be accompanied by 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)
33
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 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,
34
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 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,
35
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
36
(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
37
determination) with maturities approximately equal to the remaining Interest
Period for such Loan times (z) the number of days remaining in the Interest
Period for such Loan. Each Lender shall deliver to the Borrower from time to
time one or more certificates setting forth the amount of such loss (and in
reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error. The
Borrower shall pay to the Administrative Agent for the account of each Lender
the amount shown as due on any certificate within thirty (30) days after its
receipt of the same.
(b) In the event the Borrower fails to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.13(a), the
Borrower on demand by any Lender shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
loss incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Each Lender shall
deliver to the Borrower and the Administrative Agent from time to time one or
more certificates setting forth the amount of such loss (and in reasonable
detail the manner of computation thereof) as determined by such Lender, which
certificates shall be conclusive absent manifest error.
SECTION 2.18. Pro Rata Treatment.
Except as permitted under Sections 2.14, 2.15(c), 2.16 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
38
Competitive Loans comprising such Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective amounts of
accrued and unpaid interest on their outstanding Competitive Loans comprising
such Borrowing. For purposes of determining the available Commitments of the
Lenders at any time, each outstanding Competitive Borrowing shall be deemed to
have utilized the Commitments of the Lenders (including those Lenders that shall
not have made Loans as part of such Competitive Borrowing) pro rata in
accordance with such respective Commitments. Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round each Lender's percentage of
such Borrowing computed in accordance with Section 2.1, to the next higher or
lower whole dollar amount.
SECTION 2.19. Right of Setoff.
If any Event of Default shall have occurred and be continuing and any
Lender shall have requested the Administrative Agent to declare the Loans
immediately due and payable pursuant to Article 7, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender and any
other indebtedness at any time owing by such Lender to, or for the credit or the
account of, the Borrower, against any of and all the obligations now or
hereafter existing under this Agreement and the Loans held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or such Loans and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such setoff and
application made by such Lender, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
under this Section 2.19 are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have.
SECTION 2.20. Manner of Payments.
All payments by the Borrower hereunder and under the Notes shall be
made in Dollars in Federal or other immediately available funds 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
39
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 subject to United
States withholding tax or are subject
40
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
41
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 Applicable
Equivalent of the LIBOR
Borrower's senior Facility Fee Spread (in
unsecured long-term (in Basis Basis
debt Points) Points)
- ------------------- --------------- --------------
A/A2 or better 8.0 29.5
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
42
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.
(a) (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 $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
43
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.
(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
44
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.
(f) (i) The Borrower agrees to pay the following amount to each Issuing
Lender with respect to Letters of Credit issued by it hereunder:
(A) with respect to drawings made under any Letter of Credit, interest,
payable on demand, on the amount paid by such Issuing Lender in respect of
each such drawing from the date of the drawing to, but excluding, the date
such amount is reimbursed by the Borrower at a rate which is at all times
equal to 2% per annum in excess of the Alternate Base Rate; provided that
no such default interest shall be payable if such reimbursement is made
from the proceeds of Revolving Credit Loans pursuant to Section 2.24(e);
45
(B) with respect to the issuance, amendment or transfer of each Letter
of Credit and each drawing made thereunder, 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 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.
(g) If by reason of (i) any change after the date hereof in Applicable
Law, or in the interpretation or administration thereof (including, without
limitation, any request, guideline or policy not having the force of law) by any
Governmental Authority charged with the administration or interpretation
thereof, or (ii) compliance by any Issuing Lender or any Lender with any
direction, request or requirement (whether or not having the force of law)
issued after the date hereof by any Governmental Authority or monetary authority
(including any change whether or not proposed or published prior to the date
hereof), including, without limitation, Regulation D of the Board:
46
(A) any Issuing Lender or any Lender shall be subject to any tax, levy,
charge or withholding of any nature (other than withholding tax imposed by
the United States of America or any political subdivision or taxing
authority thereof or therein or any other tax, levy, charge or withholding
(i) that is measured with respect to the overall net income of such Issuing
Lender or such Lender (or is imposed in lieu of a tax on net income) or of
a Lending office of such Issuing Lender or such Lender, and that is imposed
by the United States of America, or by the jurisdiction in which such
Issuing Lender or such Lender is incorporated, or in which such Lending
Office is located, managed or controlled or in which such Issuing Lender or
such Lender has its principal office (or any political subdivision or
taxing authority thereof or therein) or (ii) that is imposed solely by
reason of such Issuing Lender or such Lender failing to make a declaration
of, or otherwise to establish, non-residence, or to make any other claim
for exemption, or otherwise to comply with any certification,
identification, information, documentation or reporting requirements
prescribed under the laws of the relevant jurisdiction, in those cases
where such Issuing Lender or such Lender may properly make the declaration
or claim or so establish non-residence or otherwise comply) or to any
variation thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this Section 2.24, whether directly or
by such being imposed on or suffered by any Issuing Lender or any Lender;
(B) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letter of Credit issued
by any Issuing Lender or participations therein purchased by any Lender; or
(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
47
Section 2.24 as set forth in a certificate setting forth the calculation thereof
in reasonable detail shall, in the absence of manifest error, be final,
conclusive and binding on all of the parties hereto.
(h) If at any time when an Event of Default shall have occurred and be
continuing, any Letters of Credit shall remain outstanding, then either the
applicable Issuing Lender(s) or the Required Lenders may, at their option,
require the Borrower to deposit Cash Equivalents in a Cash Collateral Account in
an amount equal to the full amount of the L/C Exposure or to furnish other
security acceptable to the Administrative Agent and the applicable Issuing
Lender(s). Any amounts so delivered pursuant to the preceding sentence shall be
applied to reimburse the applicable Issuing Lender(s) for the amount of any
drawings honored under Letters of Credit issued by it; provided, however, that
if prior to the Maturity Date, no Event of Default is then continuing, the
Administrative Agent shall return all of such collateral relating to such
deposit to the Borrower if requested by it.
(i) If at any time, the L/C Exposure exceeds the aggregate Commitments,
then the Required Lenders may, at their option, require the Borrower to deposit
Cash Equivalents in a Cash Collateral Account in an amount sufficient to
eliminate such excess or to furnish other security for such excess acceptable to
the Administrative Agent and the Issuing Lender(s). Any amounts so delivered
pursuant to the preceding sentence shall be applied to reimburse the applicable,
Issuing Lender(s) for the amount of any drawings honored under Letters of
Credit; provided, however, that if subsequent to any such deposit such excess is
reduced to an amount less than the portion of such deposited amounts and no
Default or Event of Default is then continuing, the Borrower shall be entitled
to receive such excess collateral if requested by it.
(j) Upon the request of the Administrative Agent, each Issuing Lender
shall furnish to the Administrative Agent copies of any Letter of Credit issued
by such Issuing Lender and such related documentation as may be reasonably
requested by the Administrative Agent.
(k) Notwithstanding the termination of the Commitments and the payment
of the Loans, the obligations of the Borrower under this Section 2.24 shall
remain in full force and effect until the Administrative Agent, each Issuing
Lender and the Lenders shall have been irrevocably released from their
obligations with regard to any and all Letters of Credit.
48
(l) 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).
(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,
49
June, September and December, commencing December 31, 2000. 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 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:
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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.
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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,
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.
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Except as set forth on Schedule 3.9, there are no lawsuits or other
proceedings pending (including, but not limited to, matters relating to
environmental liability), or, to the knowledge of the Borrower, threatened,
against or affecting the Borrower or any of its Subsidiaries or any of their
respective properties, by or before any Governmental Authority or arbitrator,
which could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, decree, rule or regulation of any Governmental
Authority, which default would have a Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans will be used, whether immediately, incidentally or
ultimately, for any purpose violative of or inconsistent with any of the
provisions of Regulation 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
53
to do so could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.14. Compliance with ERISA.
Each of the Borrower and its Subsidiaries is in compliance in all
material respects with the provisions of ERISA and the Code applicable to Plans,
and the regulations and published interpretations thereunder, if any, which are
applicable to it. Neither the Borrower nor any of its Subsidiaries has, with
respect to any Plan established or maintained by it, engaged in a prohibited
transaction which would subject it to a material tax or penalty on prohibited
transactions imposed by ERISA or Section 4975 of the Code. No liability to the
PBGC that is material to the Borrower and its Subsidiaries taken as a whole has
been, or to the Borrower's best knowledge is reasonably expected to be, incurred
with respect to the Plans and there has been no Reportable Event and no other
event or condition that presents a material risk of termination of a Plan by the
PBGC. Neither the Borrower nor any of its Subsidiaries has engaged in a
transaction which would result in the incurrence of a material liability under
Section 4069 of ERISA. As of the Closing Date, neither the Borrower nor any of
its Subsidiaries contributes to a Multiemployer Plan, and has not incurred any
liability that would be material to the Borrower and its Subsidiaries taken as a
whole on account of a partial or complete withdrawal (as defined in Sections
4203 and 4205 of ERISA, respectively) with respect to any Multiemployer Plan.
SECTION 3.15. Disclosure.
As of the Closing Date, neither this Agreement nor the Confidential
Information Memorandum dated 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.
54
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 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
55
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,
56
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.
(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
57
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:
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
58
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;
(e) Promptly upon any executive officer of the Borrower or any of its
Subsidiaries obtaining knowledge of the
59
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,
60
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; 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).
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SECTION 5.5. ERISA Compliance and Reports.
Furnish to the Administrative Agent (a) as soon as possible, and in any
event within 30 days after any executive officer (as defined in Regulation C
under the Securities Act of 1933) of the Borrower knows that (i) any Reportable
Event with respect to any Plan has occurred, a statement of the chief financial
officer of the Borrower, setting forth details as to such Reportable Event and
the action which it proposes to take with respect thereto, together with a copy
of the notice, if any, required to be filed by the Borrower or any of its
Subsidiaries of such Reportable Event with the PBGC or (ii) an accumulated
funding deficiency has been incurred or an application has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard or an extension of any amortization period under Section 412 of the
Code with respect to a Plan, a Plan has been or is proposed to be terminated in
a "distress termination" (as defined in Section 4041(c) of ERISA), proceedings
have been instituted to terminate a Plan or a Multiemployer Plan, a proceeding
has been instituted to collect a delinquent contribution to a Plan or a
Multiemployer Plan, or either the Borrower or any of its Subsidiaries will incur
any liability (including any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Sections 4062, 4063, 4064
of ERISA or the withdrawal or partial withdrawal from a Multiemployer Plan under
Sections 4201 or 4204 of ERISA, a statement of the chief financial officer of
the Borrower, setting forth details an to such event and the action it proposes
to take with respect thereto, (b) promptly upon the reasonable request of the
Administrative Agent, copies of each annual and other report with respect to
each Plan and (c) promptly after receipt thereof, a copy of any notice the
Borrower or any of its Subsidiaries may receive from the PBGC relating to the
PBGC's intention to terminate any Plan or to appoint a trustee to administer any
Plan; provided that the Borrower shall not be required to notify the
Administrative Agent of the occurrence of any of the events set forth in the
preceding clauses (a) and (c) unless such event, individually or in the
aggregate, could reasonably be expected to 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
62
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);
(c) Guaranties;
63
(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
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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
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
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property or which is real property being improved by such acquired
property; (ii) the debt secured by the Lien is the unpaid balance of the
acquisition cost of the specific assets on which the Lien is granted; and
(iii) such transaction does not otherwise violate this Agreement;
(c) Liens upon real and/or personal property, which property was
acquired after the date of this Agreement (by purchase, construction or
otherwise) by the Borrower or any of its Material Subsidiaries, each of
which Liens existed on such property before the time of its acquisition and
was not created in anticipation thereof; provided, however, that no such
Lien shall extend to or cover any property of the Borrower or such Material
Subsidiary other than the respective property so acquired and improvements
thereon;
(d) Liens arising out of attachments, judgments or awards as to which
an appeal or other appropriate proceedings for contest or review are
promptly commenced (and as to which foreclosure and other enforcement
proceedings (i) shall not have been commenced (unless fully bonded or
otherwise effectively stayed) or (ii) in any event shall be promptly fully
bonded or otherwise effectively stayed);
(e) Liens created under any Fundamental Document;
(f) 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.
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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;
(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;
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(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
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bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors or
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its property or shall
file an answer or other pleading in any such case, proceeding or other
action admitting the material allegations of any petition, complaint or
similar pleading filed against it or consenting to the relief sought
therein; or the Borrower or any Material Subsidiary thereof shall take any
action to authorize any of the foregoing;
(g) any involuntary case, proceeding or other action against the
Borrower or any of its Material Subsidiaries shall be commenced seeking to
have an order for relief 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;
69
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may or shall, if directed by the Required
Lenders, take either or both of the following actions, at the same or different
times: terminate forthwith the Commitments and/or declare the principal of and
the interest on the Loans and the Notes and all other amounts payable hereunder
or thereunder to be forthwith due and payable, whereupon the same shall become
and be forthwith due and payable, without presentment, demand, protest, notice
of acceleration, notice of intent to accelerate or other notice of any kind, all
of which are hereby expressly waived, anything in this Agreement or in the Notes
to the contrary notwithstanding. If an Event of Default specified in paragraphs
(f) or (g) above shall have occurred, the principal of and interest on the Loans
and the Notes and all other amounts payable hereunder or thereunder shall
thereupon and concurrently become due and payable without presentment, demand,
protest, notice of acceleration, notice of intent to accelerate or other notice
of any kind, all of which are hereby expressly waived, anything in this
Agreement or the Notes to the contrary notwithstanding and the Commitments of
the Lenders shall thereupon forthwith terminate.
8. THE ADMINISTRATIVE AGENT 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.
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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 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.
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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
72
for any loss, unless the same shall happen through its gross negligence or
willful misconduct. The Administrative Agent, the Issuing Lenders and their
respective directors, officers, agents, and employees shall in no event be
liable to the Lenders or to any of them for any action taken or omitted to be
taken by it pursuant to instructions received by it from the Required Lenders or
in reliance upon the advice of counsel selected by it. Without limiting the
foregoing, neither the Administrative Agent, the Issuing Lenders nor any of
their respective directors, officers, employees, or agents shall be responsible
to any of the Lenders for the due execution, validity, genuineness,
effectiveness, sufficiency, or enforceability of, or for any statement,
warranty, or representation in, or for the perfection of any security interest
contemplated by, this Agreement or any related agreement, document or order, or
for the designation or failure to designate this transaction as a "Highly
Leveraged Transaction" for regulatory purposes, or shall be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants, or agreements of this
Agreement or any related agreement or document.
(b) Neither the Administrative Agent, the Issuing Lenders, nor any of
their respective directors, officers, employees, or agents shall have any
responsibility to the Borrower on account of the failure or delay in performance
or breach by any of the Lenders or the Borrower of any of their respective
obligations under this Agreement or the Notes or any related agreement or
document or in connection herewith or therewith.
(c) The Administrative Agent, and the Issuing Lenders, in such
capacities hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by it to be genuine or correct and
to have been signed or sent by a Person or Persons believed by it to be the
proper Person or Persons, and it shall be entitled to rely on advice of legal
counsel, independent public accountants, and other professional advisers and
experts selected by it, 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
73
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, 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.
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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 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.
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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.
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All warranties, representations and covenants made by the Borrower
herein or in any certificate or other instrument delivered by it or on its
behalf in connection with this Agreement shall be considered to have been relied
upon by the Administrative Agent and the Lenders and shall survive the making of
the Loans herein contemplated and the issuance and delivery to the
Administrative Agent of the Notes regardless of any investigation made by the
Administrative Agent or the Lenders or on their behalf and shall continue in
full force and effect so long as any amount due or to become due hereunder is
outstanding and unpaid and so long as the Commitment has not been terminated.
All statements in any such certificate or other instrument shall constitute
representations and warranties by the Borrower hereunder.
SECTION 9.3. Successors and Assigns; Syndications; Loan Sales;
Participations.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party (provided, however, that the Borrower may not assign its rights hereunder
without the prior written consent of all the Lenders), and all covenants,
promises and agreements by, or on behalf of, the Borrower which are contained in
this Agreement shall inure to the benefit of the successors and assigns of the
Lenders.
(b) Each of the Lenders may (but only with the prior written consent of
the Administrative Agent, the Issuing Lenders (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
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Commitment or Competitive Loans, as the case may be, of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Lender) shall be
in a minimum principal amount of $10,000,000 unless otherwise agreed by the
Borrower and the Administrative Agent and (4) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such assignment (if
required hereunder) and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, and from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
not earlier than five Business Days after the date of acceptance and recording
by the Administrative Agent, (x) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of the assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall cease
to be a party hereto).
(c) Notwithstanding the other provisions of this Section 9.3, each
Lender may at any time make a Ratable Assignment or a Non-Ratable Assignment of
its interests, rights and obligations under this Agreement to (i) any Affiliate
of such Lender or (ii) any other Lender hereunder.
(d) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in, or in connection with, this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental
Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Fundamental Documents; (iii) such assignee confirms that
it has received a copy of this Agreement, together with
78
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.
(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
79
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
80
granted any voting rights under this Agreement, except with respect to matters
requiring the consent of each of the Lenders hereunder, (iii) any such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iv) the participating banks or other entities shall be
entitled to the cost protection provisions contained in Sections 2.14, 2.15 and
2.17 hereof but a participant shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount to which the Lender
granting such participation would have been entitled to receive, and (v) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.3, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to the Administrative Agent by or
on behalf of the Borrower; provided that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall agree, by
executing a confidentiality letter in form and substance equivalent to the
confidentiality letter executed by the Lenders in connection with information
received by such Lenders relating to this transaction to preserve the
confidentiality of any confidential information relating to the Borrower
received from such Lender.
(i) Each Lender hereby represents that it is a commercial lender or
financial institution which makes loans in the ordinary course of its business
and that it will make the Loans hereunder for its own account in the ordinary
course of such business; provided, however, that, subject to preceding clauses
(a) through (h), the disposition of the Notes or other evidence of Indebtedness
held by that Lender shall at all times be within its exclusive control.
(j) The Borrower consents that any Lender may at any time and from time
to time pledge, or otherwise grant a security interest in, any Loan or any Note
evidencing such Loan (or any 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
81
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, 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
82
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 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
83
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
84
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
85
EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,
AND (B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING
ANY OFFSETS OR COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR
OTHERWISE ARISE FROM THE SAME SUBJECT MATTER. THE BORROWER HEREBY CONSENTS TO
SERVICE OF PROCESS BY MAIL AT ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN
PURSUANT TO SECTION 9.1 HEREOF. THE BORROWER AGREES THAT ITS SUBMISSION TO
JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS
BENEFIT OF THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH ISSUING LENDER. FINAL
JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION (A) BY SUIT, ACTION OR
PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE
CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF
THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY,
OR PURSUANT TO, THE LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT THE
ADMINISTRATIVE AGENT, A LENDER OR AN ISSUING LENDER MAY AT IS OPTION BRING SUIT,
OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST THE BORROWER OR ANY OF ITS
ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR
PLACE WHERE THE BORROWER OR SUCH ASSETS MAY BE FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE
WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT
THE PROVISIONS OF THIS SECTION 9.11(b) CONSTITUTE A MATERIAL INDUCEMENT UPON
WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO
THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION 9.11(b) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH
OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
SECTION 9.12. Headings.
Section headings used herein are for convenience only and are not to
affect the construction of or be taken into consideration in interpreting this
Agreement.
SECTION 9.13. Execution in Counterparts.
86
This Agreement may be executed in any number of counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.14. Entire Agreement.
This Agreement represents the entire agreement of the parties with
regard to the subject matter hereof and the terms of any letters and other
documentation entered into among the Borrower, the Administrative Agent or any
Lender (other than the provisions of the letter agreement dated 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.
87
Each initial Lender shall become a party to this Agreement by
delivering to the Administrative Agent an Addendum duly executed by such Lender.
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: /s/ Duncan H. Cocroft
----------------------------------
Name: Duncan H. Cocroft
Title: Senior Vice President
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a
Lender
By: /s/ D. Reid Morgan
-----------------------------------
Name: D. Reid Morgan
Title: Managing Director
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.