EXECUTION COPY
AMENDMENT (this "Amendment"), dated as of February 4, 1999, to the FIVE
YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT and the 364- DAY
COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT, each of which is dated as of
October 2, 1996 (as each of the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreements"), by and among CENDANT
CORPORATION, a Delaware corporation (the "Borrower"), the financial institutions
parties thereto (the "Lenders"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as agent for the Lenders (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that certain provisions of the
Credit Agreements be amended as set forth herein, and;
WHEREAS, the Lenders are willing to agree to such amendments on the
terms set forth herein;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the undersigned hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreements and used
herein shall have the meanings given to them in the Credit Agreements.
2. Amendments to Section 1.
(a) Section 1 of each Credit Agreement is amended by adding the
following definitions in alphabetical order:
"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.
"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.
(b) Section 1 of each Credit Agreement is amended by deleting the
definitions of "Capital Expenditures", "CFHC", "Receivables Facility" and
"Restricted Payments" therefrom in their entirety.
(c) Section 1 of each Credit Agreement is amended by deleting the
definitions of "Consolidated EBITDA", "Consolidated Net Income", "Consolidated
Net Worth", "Consolidated
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Total Indebtedness", "Fundamental Documents", "Interest Coverage Ratio",
"Material Adverse Effect" and "Subsidiary" in their entireties and substituting
therefor the following:
"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) non-recurring cash charges or expenses in fiscal
year 1998 not to exceed $363,600,000 to the extent incurred or paid in such
period, (vii) non-recurring cash charges or expenses in fiscal year 1998 to
the extent incurred or paid in such period in connection with the
termination of the American Bankers Insurance Group, Inc. transaction (in
addition to the amounts referred to in the preceding clause (vi)), plus
(viii) other non-cash items reducing Consolidated Net Income minus (ix) 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 Net Income" shall mean, for any period for which such
amount is being determined, the net income (loss) of the Borrower and its
Consolidated Subsidiaries during such period determined on a consolidated
basis for such period taken as a single accounting period in accordance with
GAAP, provided that there shall be excluded (i) income (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 of 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.
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"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 amount of
Indebtedness at any time shall be reduced (but not to less than zero) by the
amount of Excess Cash.
"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.
"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.
"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 8-K dated August 28, 1998 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).
"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
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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.
3. Amendment to Section 5.1. Section 5.1 of each Credit Agreement is
amended by deleting clause (d) therefrom and substituting therefor the phrase
"(d) INTENTIONALLY OMITTED;".
4. Amendment to Section 5.6. Section 5.6 of each Credit Agreement is
amended by adding the word "reasonable" immediately before the word "access".
5. Amendment to Section 6.1. Section 6.1 of each Credit Agreement is
amended by (i) adding the word "and" at the end of paragraph (g) and (ii)
deleting paragraphs (h) and (i) and substituting therefor the following:
(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 10 to 1.
6. Amendment to Section 6.5. Section 6.5 of each Credit Agreement is
amended by deleting clause (g) therefrom and substituting therefor the phrase
"(g) INTENTIONALLY OMITTED;".
7. Amendment to Section 6.6. Section 6.6 of each Credit Agreement is
amended by adding the phrase "and its Subsidiaries" after the word "Borrower"
and before the phrase "may enter into sale-leaseback transactions relating to
assets not in excess of $200,000,000 in the aggregate on a cumulative basis."
8. Amendment to Section 6.7. Section 6.7 of each Credit Agreement is
hereby amended by deleting such Section in its entirety and substituting Section
6.7 therefor the following:
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.
9. Effective Date. This Amendment shall become effective on the date
(the "Effective Date") on which the Borrower, the Administrative Agent and the
Required Lenders under each Credit Agreement shall have duly executed and
delivered to the Administrative Agent this Amendment.
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10. Representations and Warranties. The Borrower hereby represents and
warrants that (a) each of the representations and warranties in Section 3 of
each Credit Agreement shall be, after giving effect to this Amendment, true and
correct in all material respects as if made on and as of the Effective Date
(unless such representations and warranties are stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date) and (b) after
giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing.
11. No Other Amendments; Confirmation. Except as expressly amended
hereby, the provisions of each Credit Agreement and each of the Fundamental
Documents are and shall remain in full force and effect.
12. Governing Law. This Amendment and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
13. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
above written.
CENDANT CORPORATION
By: /s/ James Buckman
--------------------------------
Name: James Buckman
Title: Vice Chairman and General
Counsel
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ Carol A. Ulmer
--------------------------------
Name: Carol A. Ulmer
Title: Vice President
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ABN-AMRO BANK N.V. NEW YORK BRANCH
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
BANK OF AMERICA NT&SA
By: /s/ Steve Aronowitz
--------------------------------
Name: Steve Aronowitz
Title: Managing Director
THE BANK OF NEW YORK
By: /s/ Eliza S. Adams
--------------------------------
Name: Eliza S. Adams
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Brian Allen
--------------------------------
Name: Brian Allen
Title: Sr. Relationship Manager
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BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ W.A. DiNicola
--------------------------------
Name: W.A. DiNicola
Title: Vice President
BAYERISCHE LANDESBANK
GIROZENTRALE CAYMAN ISLANDS BRANCH
By:
--------------------------------
Name:
Title:
BAYERISCHE HYPO-UND VEREINSBANK AG,
NEW YORK BRANCH
By: /s/ Marianne Weinzinger
--------------------------------
Name: Marianne Weinzinger
Title: Director
By: /s/ Pamela J. Gillons
--------------------------------
Name: Pamela J. Gillons
Title: Associate Director
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CIBC INC.
By: /s/ Gerald Giradi
--------------------------------
Name: Gerald Giradi
Title: Executive Director
CITIBANK, N.A.
By:
--------------------------------
Name:
Title:
COMERICA BANK
By: /s/ Kimberly S. Kersten
--------------------------------
Name: Kimberly S. Kersten
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Vladmir Labun
--------------------------------
Name: Vladimir Labun
Title: First Vice President -
Manager
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CREDIT SUISSE FIRST BOSTON
By: /s/ Bill O'Daly
--------------------------------
Name: Bill O'Daly
Title: Vice President
By: /s/ Kristin Lepri
--------------------------------
Name: Kristin Lepri
Title: Associate
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CAYMAN
ISLAND BRANCH
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
FIRST AMERICAN NATIONAL BANK
By:
--------------------------------
Name:
Title:
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FIRST HAWAIIAN BANK
By:
--------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Corey M. Helfand
--------------------------------
Name: Corey M. Helfand
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Corey M. Helfand
--------------------------------
Name: Corey M. Helfand
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Christopher M. McLaughlin
--------------------------------
Name: Christopher M. McLaughlin
Title: Vice President
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FLEET NATIONAL BANK
By: /s/ Barbara A. Keegan
--------------------------------
Name: Barbara Agnostini Keegan
Title: Vice President
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By:
--------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED NEW YORK BRANCH
By: /s/ William Kennedy
--------------------------------
Name: William Kennedy
Title: Vice President
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MELLON BANK, N.A.
By: /s/ Donald G. Cassidy, Jr.
--------------------------------
Name: Donald G. Cassidy, Jr.
Title: First Vice President
NATIONSBANK, N.A.
By:
--------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY
By: /s/ Eric Q. Strickland
--------------------------------
Name: Eric Q. Strickland
Title: Vice President
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PARIBAS
By: /s/ Duane Helkowski
--------------------------------
Name: Duane Helkowski
Title: Vice President
By: /s/ Scott C. Sergeant
--------------------------------
Name: Scott C. Sergeant
Title: Associate
PNC BANK, N.A.
By:
--------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By: /s/ David A. Barsalou
--------------------------------
Name: David A. Barsalou
Title: Senior Manager
THE SAKURA BANK, LIMITED
By:
--------------------------------
Name:
Title:
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THE SANWA BANK, LIMITED
By: /s/ Dominic J. Sarrosso
--------------------------------
Name: Dominic J. Sarrosso
Title: Vice President
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By: /s/ J. Bruce Meredith
--------------------------------
Name: J. Bruce Meredith
Title: Senior Vice President
SUMMIT BANK
By:
--------------------------------
Name:
Title:
THE TOKAI BANK LIMITED NEW YORK
BRANCH
By:
--------------------------------
Name:
Title:
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UNITED STATES NATIONAL BANK OF
OREGON
By:
--------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By: /s/ Alan S. Bookspan
--------------------------------
Name: Allan S. Bookspan
Title: Vice President
By: /s/ Walter T. Duffy III
--------------------------------
Name: Walter T. Duffy III
Title: Associate
BANKERS TRUST COMPANY
By:
--------------------------------
Name:
Title: