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TRANCHE B
CREDIT AGREEMENT
Dated as of December 19, 1997
among
DOUBLETREE CORPORATION,
as a Borrower,
PROMUS HOTELS, INC.,
as a Borrower,
PROMUS HOTEL CORPORATION (f/k/a Parent Holding Corp.) AND
PROMUS OPERATING COMPANY, INC. (f/k/a Promus Acquisition Corp.
f/k/a Promus Hotel Corporation),
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO,
BANKERS TRUST COMPANY, THE BANK OF NOVA SCOTIA and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Co-Syndication Agents,
AND
NATIONSBANK, N.A.,
as Agent
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TABLE OF CONTENTS
Page No.
SECTION 1 DEFINITIONS..................................................................1
1.1 Definitions................................................................1
1.2 Computation of Time Periods...............................................20
1.3 Accounting Terms..........................................................20
SECTION 2 CREDIT FACILITIES...........................................................21
2.1 Committed Revolving Loans.................................................21
2.2 [Intentionally Left Blank]................................................24
2.3 [Intentionally Left Blank]................................................25
2.4 Competitive Loan Subfacility..............................................25
2.5 Amortization of Loans Outstanding at the Termination Date.................27
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES..............................28
3.1 Default Rate..............................................................28
3.2 Extension and Conversion..................................................28
3.3 Reductions In Commitments and Prepayments.................................29
3.4 Fees......................................................................31
3.5 Capital Adequacy..........................................................32
3.6 Inability To Determine Interest Rate......................................32
3.7 Illegality................................................................33
3.8 Requirements of Law.......................................................33
3.9 Taxes.....................................................................34
3.10 Indemnity................................................................37
3.11 Pro Rata Treatment.......................................................37
3.12 Sharing of Payments......................................................38
3.13 Place and Manner of Payments.............................................39
3.14 [Intentionally Left Blank]...............................................40
3.15 Replacement of Lenders...................................................40
3.16 Change of Lending Office.................................................40
SECTION 4 GUARANTY....................................................................41
4.1 The Guarantee.............................................................41
4.2 Obligations Unconditional.................................................42
4.3 Reinstatement.............................................................43
4.4 Certain Additional Waivers................................................43
4.5 Remedies..................................................................43
4.6 Continuing Guarantee......................................................43
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SECTION 5 CONDITIONS..................................................................44
5.1 Conditions to Initial Extensions of Credit................................44
5.2 Each Extension of Credit..................................................46
SECTION 6 REPRESENTATIONS AND WARRANTIES..............................................46
6.1 Financial Condition.......................................................46
6.2 No Change.................................................................48
6.3 Corporate and Partnership Existence; Compliance with Law..................48
6.4 Corporate Power; Authorization; Enforceable Credit Party Obligations .....49
6.5 No Legal Bar..............................................................49
6.6 No Material Litigation....................................................49
6.7 No Default................................................................50
6.8 Ownership of Property; Liens..............................................50
6.9 Intellectual Property.....................................................50
6.10 No Burdensome Restrictions...............................................50
6.11 Taxes....................................................................50
6.12 ERISA....................................................................51
6.13 Investment Company Act; Other Regulations................................51
6.14 Subsidiaries.............................................................52
6.15 Purpose of Loans.........................................................52
6.16 Environmental Matters....................................................52
SECTION 7 AFFIRMATIVE COVENANTS.......................................................54
7.1 Information Covenants.....................................................54
7.2 Preservation of Existence and Franchises..................................56
7.3 Books and Records.........................................................56
7.4 Compliance with Law.......................................................56
7.5 Payment of Taxes and Other Claims.........................................56
7.6 Insurance.................................................................57
7.7 Maintenance of Property...................................................57
7.8 Performance of Obligations................................................57
7.9 Use of Proceeds...........................................................57
7.10 Audits/Inspections.......................................................57
7.11 Financial Covenants......................................................58
7.12 Federal Regulations......................................................58
SECTION 8 NEGATIVE COVENANTS..........................................................58
8.1 Liens.....................................................................58
8.2 Nature of Business........................................................58
8.3 Consolidation, Merger, Sale or Purchase of Assets.........................59
8.4 Investments...............................................................60
8.5 Transactions with Affiliates..............................................60
8.6 Fiscal Year...............................................................61
8.7 No Dividend Restrictions..................................................61
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SECTION 9 EVENTS OF DEFAULT...........................................................61
9.1 Events of Default.........................................................61
9.2 Acceleration; Remedies....................................................64
SECTION 10 AGENCY PROVISIONS..........................................................65
10.1 Appointment..............................................................65
10.2 Delegation of Duties.....................................................65
10.3 Exculpatory Provisions...................................................66
10.4 Reliance on Communications...............................................66
10.5 Notice of Default........................................................67
10.6 Non-Reliance on Agent and Other Lenders..................................67
10.7 Indemnification..........................................................67
10.8 Agent in its Individual Capacity.........................................68
10.9 Successor Agent..........................................................68
10.10 Co Agents...............................................................69
SECTION 11 MISCELLANEOUS..............................................................69
11.1 Notices..................................................................69
11.2 Right of Set-Off.........................................................70
11.3 Benefit of Agreement.....................................................70
11.4 No Waiver; Remedies Cumulative...........................................74
11.5 Payment of Expenses, etc.................................................75
11.6 Amendments, Waivers and Consents.........................................75
11.7 Counterparts.............................................................77
11.8 Headings.................................................................77
11.9 Survival of Indemnification..............................................77
11.10 Governing Law; Submission to Jurisdiction; Venue........................77
11.11 Severability............................................................78
11.12 Entirety................................................................78
11.13 Survival of Representations and Warranties..............................78
11.14 Knowledge Standard......................................................78
11.15 Confidentiality.........................................................79
11.16 Agent's and Lender's Covenant...........................................79
11.17 Concerning Joint and Several Liability of the Borrowers.................79
11.18 No Bankruptcy Proceedings...............................................82
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Schedules
- - ---------
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Tranche B Committed Revolving Note
Schedule 2.4(b)-1 Form of Tranche B Competitive Bid Request
Schedule 2.4(b)-2 Form of Notice of Tranche B Competitive Bid Request
Schedule 2.4(c) Form of Tranche B Competitive Bid
Schedule 2.4(d) Form of Tranche B Competitive Bid Accept/Reject Letter
Schedule 2.4(h) Form of Tranche B Competitive Loan Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 3.9 Form of U.S. Tax Compliance Certificate
Schedule 6.4 Consents
Schedule 6.8 Excluded Assets
Schedule 6.9 Intellectual Property Claims
Schedule 6.14 Subsidiaries
Schedule 7.1(c) Form of Officer's Compliance Certificate
Schedule 11.1 Schedule of Addresses
Schedule 11.3(b) Form of Tranche B Assignment and Acceptance
Schedule 11.3(e) Form of Designation Agreement
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TRANCHE B
CREDIT AGREEMENT
THIS TRANCHE B CREDIT AGREEMENT dated as of December 19, 1997 (as amended,
restated, supplemented, modified and extended from time to time, the "Credit
Agreement" and sometimes, this "Credit Agreement"), is by and among DOUBLETREE
CORPORATION, a Delaware corporation ("Doubletree"), PROMUS HOTELS, INC., a
Delaware corporation ("PHI" --hereinafter Doubletree and PHI are sometimes
individually referred to as a "Borrower" or collectively referred to as the
"Borrowers"), PROMUS HOTEL CORPORATION (f/k/a Parent Holding Corp.), a Delaware
corporation (the "Parent Company"), PROMUS OPERATING COMPANY, INC. (f/k/a Promus
Acquisition Corp. f/k/a Promus Hotel Corporation), a Delaware corporation ("Old
PHC"--hereinafter the Parent Company and Old PHC are sometimes individually
referred to as a "Guarantor" or collectively referred to as "Guarantors"), the
several lenders identified on the signature pages hereto and such other lenders
as may from time to time become a party hereto (the "Lenders"), BANKERS TRUST
COMPANY, THE BANK OF NOVA SCOTIA AND CANADIAN IMPERIAL BANK OF COMMERCE, as
co-syndication agents (each in such capacity, a "Co-Agent") and NATIONSBANK,
N.A., as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrowers have requested that the Lenders provide a senior
credit facility in the amount of $250,000,000; and
WHEREAS, the Lenders have agreed to make the requested senior credit
facility available on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural number the singular:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such
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Person), controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control an entity if such Person
possesses, directly or indirectly, the power (i) to vote 10% or more of the
securities or other ownership interests having ordinary voting power for
the election of directors of such corporation or the members of the
managing body of such Person or (ii) to direct or cause direction of the
management and policies of such corporation or other entity, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" means NationsBank, N.A. and any successors and permitted
assigns in such capacity.
"Agent's Fee Letter" means the letter agreement dated as of November
10, 1997 among NationsBank, N.A., NationsBanc/Montgomery Securities, Inc.
and the Borrowers, as amended, modified, supplemented or replaced from time
to time.
"Agent's Fees" has the meaning given to such term in Section 3.4(c).
"Applicable Percentage" means the appropriate applicable percentages
corresponding to the lowest Pricing Level available, as determined by
either the then current Leverage Ratio or the Unsecured Senior Debt Rating
in effect as of the most recent Calculation Date, as shown below:
Applicable Percentage Applicable Percentage for
for Committed Revolving Committed Revolving Applicable
Pricing Leverage Unsecured Senior Loans Consisting of Loans Consisting of Percentage for
Level Ratio Debt Rating Eurodollar Loans Base Rate Loans Commitment Fee
------- -------- ---------------- ----------------------- ------------------------- --------------
I Less than 1.25 to 1.0 Greater than A- or A3 .19% 0.0% .06%
II Equal to or greater Greater than or equal .25% 0.0% .075%
than 1.25 to 1.0 but to BBB+ or Baa1 but
less than 1.75 to 1.0 less than or equal to
A- or A3
III Equal to or greater Greater than or equal .27% 0.0% .105%
than 1.75 to 1.0 but to BBB or Baa2 but
less than 2.25 to 1.0 less than BBB+ or
Baa1
IV Equal to or greater Greater than or equal .325% 0.0% .125%
than 2.25 but less to BBB- or Baa3 but
than 2.75 to 1.0 less than BBB or
Baa2
V Equal to or greater Less than BBB- or .45% 0.0% .175%
than 2.75 to 1.0 Baa3
The Applicable Percentage for Committed Revolving Loans and the
Commitment Fees shall, in each case, be determined and adjusted on the date
(each a "Calculation Date") not later than five Business Days after (x) the
date by which the Parent Company is required
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to provide the officer's certificate in accordance with the provisions of
Section 7.1(c) or (y) the date there is a change in the Unsecured Senior
Debt Rating; provided that the Applicable Percentage for Committed
Revolving Loans and the Commitment Fees shall be no more favorable to the
Borrowers than Pricing Level III (as shown above) until the Calculation
Date occurring immediately after the fiscal quarter of the Parent Company
ending on June 30, 1998; and provided further that if the Parent Company
fails to timely provide the officer's certificate required by Section
7.1(c), the Applicable Percentage for Committed Revolving Loans and the
Commitment Fees shall be based on the then current Unsecured Senior Debt
Rating until such time that an appropriate officer's certificate is
provided whereupon the Pricing Level shall be determined by the then
current Leverage Ratio or Unsecured Senior Debt Rating, as applicable. Each
determination of the Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentage shall be applicable to all existing Committed
Revolving Loans and Letters of Credit as well as any new Committed
Revolving Loans made or Letters of Credit issued. For purposes of
determining the Applicable Percentage as of any Calculation Date, the then
current Leverage Ratio shall be the Leverage Ratio for the four (4)
consecutive fiscal quarterly periods most recently ended.
In the event the Unsecured Senior Debt Rating and the Leverage Ratio
would provide for two different Pricing Levels, the lowest Pricing Level
determined by reference to the Unsecured Senior Debt Rating or the Leverage
Ratio shall be applicable.
In the event the two Unsecured Senior Debt Ratings would provide for
two different Pricing Levels, the Pricing Level determined by reference to
the Unsecured Senior Debt Rating shall be the Pricing Level that is one
level lower (i.e. lower pricing) than the highest (i.e. most expensive)
Pricing Level indicated by either of the two Unsecured Senior Debt Ratings.
The Parent Company (or its Subsidiaries on behalf of the Parent
Company) shall promptly deliver to the Agent information regarding any
change in such Unsecured Senior Debt Ratings, as determined by S&P and
Moody's, that would change the existing Pricing Level pursuant to the
preceding paragraph. Under the column "Unsecured Senior Debt Rating" in the
table above, the ratings of A-, BBB+, BBB, and BBB- refer to S&P ratings
and the ratings of A3, Baa1, Baa2 and Baa3 refer to Moody's ratings.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/1000 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus ? of 1% or
(b) the Prime Rate in effect on such day. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest
error) that it is unable after due inquiry to ascertain the
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Federal Funds Rate for any reason, including the inability of the Agent to
obtain sufficient quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (a) of the first sentence
of this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrowers" has the meaning given to such term in the introductory
paragraph hereof.
"Business" has the meaning given to such term in Section 6.16(a).
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina and New York, New
York are authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in U.S. dollar deposits in London,
England and New York, New York.
"Calculation Date" has the meaning given to such term in the
definition of "Applicable Percentage".
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Closing Date" means the later of the date hereof or the date on which
the Lenders make their initial Loans.
"Co-Agents" has the meaning given to such term in the introductory
paragraph hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" means the Revolving Commitment, individually or
collectively, as appropriate.
"Commitment Fee" has the meaning given to such term in Section 3.4(a).
"Commitment Percentage" means the Revolving Commitment Percentage.
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"Committed Revolving Loans" has the meaning given to such term in
Section 2.1(a).
"Committed Revolving Note" or "Committed Revolving Notes" means the
promissory notes of the Borrowers in favor of each of the Lenders
evidencing the Committed Revolving Loans provided pursuant to Section
2.1(e), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or replaced
from time to time.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with either Borrower within the
meaning of Section 4001(a)(14)(B) of ERISA or is part of a group which
includes either Borrower and which is treated as a single employer under
Section 414(b), (c) or (m) of the Code.
"Competitive Bid" means an offer by a Lender to make a Competitive
Loan pursuant to the terms of Section 2.4(c).
"Competitive Bid Rate" means, as to any Competitive Bid made by a
Lender in accordance with the provisions of Section 2.4, the fixed rate of
interest offered by the Lender making the Competitive Bid.
"Competitive Bid Request" means a request by the Borrowers for
Competitive Bids in accordance with the provisions of Section 2.4(b), a
form of which is attached at Schedule 2.4(b)-1.
"Competitive Bid Request Fee" means the administrative fee payable to
the Agent, if any, in connection with a Competitive Bid Request as provided
in the Agent's Fee Letter.
"Competitive Loan" means a loan made by a Lender pursuant to the
provisions of Section 2.4.
"Competitive Loan Lenders" means, at any time, those Lenders which
have Competitive Loans outstanding.
"Competitive Loan Maximum Amount" has the meaning given to such term
in Section 2.4(a).
"Competitive Loan Note" or "Competitive Loan Notes" means the
promissory notes of the Borrowers in favor of each of the Lenders
evidencing the Competitive Loans, if any, provided pursuant to Section
2.4(h), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or replaced
from time to time.
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"Consolidated Adjusted EBITDA" means, for any period, the amount equal
to (i) the sum of Consolidated Net Income for such period plus Consolidated
Interest Expense for such period to the extent deducted in the calculation
of Consolidated Net Income plus the minority interest share of net income
for such period to the extent deducted in the calculation of Consolidated
Net Income minus the minority interest share of net loss for such period to
the extent included in the calculation of Consolidated Net Income plus all
provisions for any Federal, state or other income taxes plus depreciation
and amortization, in each case for the Parent Company and its Subsidiaries
on a consolidated basis, but excluding in each case the portion of such
components attributable to Joint Ventures, determined in accordance with
GAAP plus (ii) all cash distributions from Joint Ventures received by the
Parent Company, the Borrowers or any of their respective Subsidiaries for
such period.
"Consolidated Assets" means the assets of the Parent Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP.
"Consolidated Funded Debt" means Funded Debt of the Parent Company and
its Subsidiaries on a consolidated basis determined in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period, all interest
expense, including the amortization of debt discount and premium and the
interest component under Capital Leases for the Parent Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income of the
Parent Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP, but excluding for purposes hereof extraordinary gains
or losses, and any taxes on such excluded gains and any tax deductions or
credits on account of any such excluded losses.
"Consolidated Net Worth" means total stockholders' equity for the
Parent Company and its Subsidiaries on a consolidated basis as determined
in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
material security issued by such Person or of any material agreement,
instrument or other undertaking to which such Person is a party or by which
it or any of its property is bound.
"Credit Date" means (i) the date of each request for an Extension of
Credit pursuant to a Notice of Borrowing or a Notice of Conversion, in the
case of Committed Revolving Loans, and a Competitive Bid Request, in the
case of Competitive Loans, and (ii) the date of any such Extension of
Credit relating thereto.
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"Credit Documents" means this Credit Agreement, the Notes and all
other related agreements and documents executed by any Credit Party and
issued or delivered hereunder or thereunder or pursuant hereto or thereto.
"Credit Party" means any of the Borrowers and the Guarantors.
"Credit Party Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the Agent, whenever
arising, under this Credit Agreement, the Notes or any of the other Credit
Documents to which either Borrower or any other Credit Party is a party.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time
(a) has failed to make a Loan or fund a Participation Interest required
pursuant to the terms of this Credit Agreement, (b) has failed to pay to
the Agent or any Lender an amount owed by such Lender pursuant to the terms
of this Credit Agreement or (c) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver, trustee
or similar official.
"Designated Lender" means a special purpose corporation that is
identified as such on the signature pages hereto next to the caption
"Designated Lender" as well as each special purpose corporation that (i)
shall have become a party to this Credit Agreement pursuant to Section
11.3(e) hereof, and (ii) is not otherwise a Lender.
"Designating Lender" means each Lender that is identified as such on
the signature pages hereto next to the caption "Designating Lender" and
immediately below the signature of its Designated Lender as well as each
Lender that shall designate a Designated Lender pursuant to Section 11.3(e)
hereof.
"Designation Agreement" means a designation agreement in substantially
the form of Schedule 11.3(e) attached hereto entered into by a Lender and a
Designated Lender and accepted by the Borrowers and the Agent.
"Disapproving Lenders" has the meaning given to such term in Section
2.1(a).
"Disqualified Stock" means any capital stock which, by its terms (or
by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part
on, or prior to, or is exchangeable for debt securities of the Parent
Company or any
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of its Subsidiaries prior to, the first anniversary of the Termination Date
under the Tranche A Credit Agreement.
"Dividends" means any payment, distribution or dividend (other than a
dividend or distribution payable solely in stock of the Person making such
payment, distribution or dividend) on, or any payment on account of the
purchase, redemption or retirement of, or any other distribution in respect
of, any shares of any class of stock or other ownership interest in a
Person (including any such payment or distribution in cash or in property
or obligations).
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Eligible Assignee" means (A) (i) a commercial bank or other financial
institution organized under the laws of the United States or any state
thereof and (ii) a commercial bank or other financial institution organized
under the laws of any other country, or a political subdivision thereof,
provided that (a) such bank or other financial institution is acting
through a branch or agency located in the United States or (b) such bank or
other financial institution is organized under the laws of a country that
is a member of the Organization for Economic Cooperation and Development or
a political subdivision of such country, in each case (under clauses (i)
and (ii) above) that is reasonably acceptable to the Agent and the
Borrowers and (B) any Lender or its parent company or any affiliate of such
Lender which is at least 50% owned by such Lender or its parent company. It
shall be deemed reasonable for the Borrowers to refuse to accept as an
"Eligible Assignee" any entity the inclusion of which as a Lender hereunder
would be reasonably likely to increase amounts payable by the Borrowers
under Sections 3.5, 3.8, 3.9 or 3.10 or give rise to the circumstances
described in Section 3.6.
"Eligible Participant" means any entity satisfying the requirements
set forth in the first sentence of the definition of "Eligible Assignee"
other than the requirement for the Borrowers' or the Agent's approval.
"Environmental Laws" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, codes,
rules, judgments, orders, decrees, permits, licenses or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"Eurodollar Loan" means any Loan bearing interest at a rate determined
by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any Interest Period, the
average daily percentage (expressed as a decimal) which is in effect from
time to time during such Interest Period under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as such
regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with
respect to Eurocurrency liabilities as that term is defined in Regulation D
(or against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is determined),
whether or not any Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions
or offsets that may be available from time to time to a Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning given to such term in Section 9.1.
"Excess Funding Borrower" has the meaning given to such term in
Section 11.17(h).
"Excess Payment" has the meaning given to such term in Section
11.17(h).
"Excluded Taxes" has the meaning given to such term in Section 3.9(a).
"Existing Credit Agreements" means (i) each of Tranche A and Tranche B
Credit Agreements dated as of June 7, 1995 among Embassy Suites, Inc.,
Promus Hotels, Inc., certain subsidiary guarantors, the several lenders
party thereto and NationsBank, N.A., f/k/a NationsBank, N.A. (Carolinas) as
Agent and (ii) the Credit Agreement dated as of
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November 8, 1996 among Doubletree Corporation, the various banks party
thereto, Morgan Stanley Senior Funding, Inc., as Syndication Agent and as
Arranger, and The Bank of Nova Scotia, as Administrative Agent.
"Extension of Credit" means, as to any Lender, the making of a Loan by
such Lender.
"Federal Funds Rate" means, for any day, the rate of interest per
annum (rounded upwards, if necessary, to the nearest whole multiple of
1/1000 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (A) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day and (B) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as
determined by the Agent.
"Former Plan" means any employee benefit plan in respect of which
either Borrower or a Commonly Controlled Entity has engaged in a
transaction described in Section 4069 or Section 4212(c) of ERISA and with
respect to which transaction either Borrower or Commonly Controlled Entity,
as applicable, has as its principal purpose the evasion of liability
described in such sections.
"Funded Debt" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) all purchase
money indebtedness of such Person, including, without limitation, the
principal portion of all obligations of such Person under Capital Leases,
(iii) all Guaranty Obligations of such Person (excluding any of such
obligations to maintain working capital, solvency or other balance sheet
condition of any other Person (including, without limitation, keep well
agreements, maintenance agreements, comfort letters or similar agreements
or arrangements)) and (iv) the amount of any Qualified Stock; provided
that, "Funded Debt" shall not include indebtedness owing under or in
connection with Joint Ventures to the extent such indebtedness is
Non-Recourse Indebtedness. The Funded Debt of any Person shall include the
Funded Debt of any partnership or joint venture in which such Person is a
general partner (except as set forth in the preceding proviso).
"GAAP" means generally accepted accounting principles in the United
States.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
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"Guarantors" has the meaning given to such term in the introductory
paragraph hereof.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including,
without limitation, any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including,
without limitation, keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Guaranty Obligation is made.
"Indebtedness" of any Person means, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (iii) all obligations of
such Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into in the ordinary course of business), (iv) all obligations of such
Person issued or assumed as the deferred purchase price of Property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business) which would appear as liabilities on a balance
sheet of such Person, (v) all obligations of such Person under take-or-pay
arrangements or under commodities agreements, (vi) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds or production from, Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, (vii) all Guaranty Obligations of such Person, (viii) the
principal portion of all obligations of such Person under Capital Leases,
(ix) all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements, (x) the maximum amount of all letters of credit issued
or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), and (xi) the amount of any Disqualified Stock. The
Indebtedness
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of any Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner (except to the extent any
such Indebtedness is Non-Recourse Indebtedness).
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245(b)(i) of ERISA.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/1000 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two (2) Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the
term "Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/1000 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of all
such rates (rounded upwards, if necessary, to the nearest 1/1000 of 1%). If
for any reason neither of such rates is available, the term "Interbank
Offered Rate" shall mean, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/1000 of 1%) equal to the rate at which deposits in Dollars approximately
equal in principal amount to the Eurodollar Loan of the Agent, in its
capacity as a Lender, included in such Eurodollar Loan, and for a maturity
comparable to such Interest Period are offered to the principal London
office of the Agent in immediately available funds in the London interbank
market at approximately 11:00 A.M.. (London time) on the date that is two
(2) Business Days prior to the first day of such Interest Period. If no
such offers or quotes are generally available for such amount, then the
Agent shall be entitled to determine the Eurodollar Rate by estimating in
its reasonable judgment the per annum rate (as described above) that would
be applicable if such quote or offers were generally available.
"Interest Payment Date" means (i) as to any Base Rate Loan, the last
day of each March, June, September and December, the date of repayment of
principal of such Loan and the Termination Date, (ii) as to any Eurodollar
Loan or any Competitive Loan, the last day of each Interest Period for such
Loan and the Termination Date, or the Term Loan Maturity Date, if
applicable, and in addition where the applicable Interest Period is more
than three (3) months, then also on the date three (3) months from the
beginning of the Interest Period, and each three (3) months thereafter. If
an Interest Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding Business
Day, except that in the case of Eurodollar Loans where the
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next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day.
"Interest Period" means (i) with respect to any Eurodollar Loan, a
period of one, two, three or six months' duration, as the Borrower may
elect, commencing in each case on the date of the borrowing (including
extensions and conversions) and (ii) with respect to any Competitive Loan,
a period beginning on the date of borrowing and ending on the date
specified in the respective Competitive Bid whereby the offer to make such
Competitive Loan was extended, which shall be not less than seven (7) days
nor more than ninety (90) days' duration; provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that in the case of Eurodollar Loans, where the next succeeding
Business Day falls in the next succeeding calendar month, then on the next
preceding Business Day), (B) no Interest Period shall extend beyond the
Termination Date, or if the Borrower has elected to amortize the payment of
the principal balance of Committed Revolving Loans and Competitive Loans
outstanding as of the Termination Date, in accordance with the provisions
of Section 2.5, then no Interest Period may extend beyond a Term Loan
Amortization Date (including the Term Loan Maturity Date) unless the
portion of Term Loans consisting of Base Rate Loans together with the
Eurodollar Loans with Interest Periods expiring prior to or concurrently
with the date such Term Loan Amortization Date is due, is at least equal to
the amount of such principal amortization payment due on such date, and (C)
in the case of Eurodollar Loans, where an Interest Period begins on a day
for which there is no numerically corresponding day in the calendar month
in which the Interest Period is to end, such Interest Period shall, subject
to clause (A) above, end on the last Business Day of such calendar month.
"Investment", in any Person, means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, or any capital
contribution to such Person or any other similar investment in such Person.
"Joint Obligations" has the meaning given to such term in Section
11.17(h).
"Joint Venture" means any corporation, general or limited partnership
or limited liability company or any other entity similar to the foregoing
allowed to be formed under applicable law in which the Parent Company or
any of its Subsidiaries is a shareholder, partner, member or owner which is
not a Subsidiary of the Parent Company and is not consolidated with the
Parent Company in accordance with GAAP.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and each Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
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"Leverage Ratio" means, for any period, the ratio of Consolidated
Funded Debt as of the end of such period to Consolidated Adjusted EBITDA
for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" means a Committed Revolving Loan, a Term Loan and/or
a Competitive Loan, as appropriate.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, operations or business of the Parent Company and its
Subsidiaries taken as a whole, (ii) the ability of the Borrowers and the
Guarantors taken as a whole to perform any material obligation under the
Credit Documents or (iii) the material rights and remedies of the Agent and
the Lenders under the Credit Documents.
"Material Environmental Amount" means any amount payable by the Parent
Company or its Subsidiaries not subject to payment or reimbursement by
another Person in respect of or under any Environmental Law for remedial
costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof, that has a Material Adverse Effect.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Merger Agreement" means that certain Agreement and Plan of Merger,
dated as of September 1, 1997, by and among the Parent Company, Old PHC and
Doubletree.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A. and its successors and permitted
assigns.
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"Non-Excluded Taxes" has the meaning given to such term in Section
3.9(a).
"Non-Recourse Indebtedness" means Indebtedness with respect to which
recourse for payment is limited to specific assets encumbered by a Lien
securing such Indebtedness; provided, however, that personal recourse of a
holder of Indebtedness against any obligor with respect thereto for fraud,
misrepresentation, misapplication of cash, waste and other circumstances
customarily excluded from non-recourse provisions in non-recourse financing
of real estate shall not, by itself, prevent any Indebtedness from being
characterized as Non-Recourse Indebtedness.
"Note" or "Notes" means the Committed Revolving Notes and/or the
Competitive Notes, collectively, separately or individually, as
appropriate.
"Notice of Borrowing" means the written notice of borrowing as
referenced and defined in Section 2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of extension
or conversion as referenced and defined in Section 3.2.
"Obligations" means the Loans.
"Old PHC" has the meaning given to such term in the introductory
paragraph hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, and any successor thereto.
"Parent Company" has the meaning given to such term in the
introductory paragraph hereof
"Participation Interest" means the purchase by a Lender of a
participation interest in Committed Revolving Loans as provided in Section
3.12.
"Permitted Liens" means:
(i) Liens (other than Liens created or imposed by the PBGC under
ERISA) for taxes, assessments or governmental charges or levies not
yet due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
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(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iii) Liens (other than Liens created or imposed by the PBGC
under ERISA) incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases,
operating, reciprocal easement or similar agreements, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(iv) Liens in connection with attachments or judgments (including
judgment or appeal bonds) in respect of which the Parent Company or
any of its Subsidiaries shall in good faith be prosecuting an appeal
or proceedings for review in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or
proceeding;
(v) easements, rights-of-way, restrictions (including zoning
restrictions and operating, reciprocal easement or similar
agreements), and minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(vi) leases or subleases granted to others not interfering in any
material respect with the business of the Parent Company or any of its
Subsidiaries;
(vii) any interest or title of a lessor (including Liens and
underlying leases to which such lessor or its property may be subject)
under, and Liens arising from Uniform Commercial Code financing
statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases permitted by this Credit
Agreement;
(viii) Liens deemed to exist in connection with Investments in
repurchase agreements;
(ix) normal and customary rights of setoff upon deposits of cash
in favor of banks or other depository institutions;
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(x) Liens on the equity interest in or assets of any Subsidiary
or Joint Venture that is not 100% owned directly or indirectly by the
Parent Company; and
(xi) Liens not otherwise permitted hereunder securing amounts in
an aggregate principal amount not to exceed 15% of Consolidated Assets
(excluding from the calculation thereof the Consolidated Assets of any
Person other than the Parent Company and its wholly-owned
Subsidiaries) at any one time outstanding.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA which is not a Multiemployer Plan and in respect of which the
Borrower or a Commonly Controlled Entity is an "employer" as defined in
Section 3(5) of ERISA.
"Plan Reorganization" means with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Prime Rate" means the per annum rate of interest established and
announced from time to time by the Agent at its principal office in
Charlotte, North Carolina as its Prime Rate. Any change in the interest
rate resulting from a change in the Prime Rate shall become effective as of
12:01 A.M. of the Business Day on which each change in the Prime Rate is
announced by the Agent. The Prime Rate is a reference rate used by the
Agent in determining interest rates on certain loans and is not intended to
be the lowest rate of interest charged on any extension of credit to any
debtor.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four fiscal-quarter period ending as of the last day of the fiscal quarter
most recently ended preceding the date of such transaction with respect to
which the Agent has received annual or quarterly financial information,
accompanied by an officer's certificate, in accordance with the provisions
of Section 7.1. As used herein, "transaction" shall mean any merger or
consolidation as referred to in Section 8.3(a) and 8.3(c) or any sale,
transfer or other disposition as referred to in Section 8.3(b).
"Pro Rata Share" has the meaning given to such term in Section
11.17(h).
"Projections" has the meaning given to such term in Section 6.1(c).
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"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualified Stock" means any capital stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the holder thereof, in whole or in part on,
or on or after, or is exchangeable for debt securities of the Parent
Company or any of its Subsidiaries on or after, the first anniversary of
the Termination Date under the Tranche A Credit Agreement.
"Regulation D, G, T, U, or X" means Regulation D, G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Reportable Event" means a "reportable event" as defined in Section
4043(b) of ERISA with respect to which the notice requirements to the PBGC
have not been waived.
"Required Lenders" means Lenders holding in the aggregate more than
fifty (50%) of the Commitments, or if the aggregate Commitments have been
terminated, Lenders in the aggregate holding more than fifty (50%) of the
principal amount of Obligations then outstanding; provided, however, that
if any Lender shall be a Defaulting Lender at such time then there shall be
excluded from the determination of Required Lenders the amount of such
Defaulting Lender's Commitments or Obligations, as appropriate.
"Requirements of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
or assets.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender to make Committed Revolving Loans in an aggregate
principal amount at any time outstanding up to such Lender's Revolving
Committed Amount as specified in Schedule 2.1(a), as such amount may be
increased or reduced from time to time in accordance with the provisions
hereof.
"Revolving Commitment Percentage" means, for each Lender, a fraction
(expressed as a percentage) the numerator of which is the Revolving
Commitment of such Lender at such time and the denominator of which is the
Revolving Committed Amount at such time, provided that if the Revolving
Commitment Percentage of any Lender is to be determined after the Revolving
Committed Amount has been terminated,
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then the Revolving Commitment Percentage of such Lender shall be determined
immediately prior (and without giving effect) to such termination.
"Revolving Committed Amount" means, (i) prior to the Termination Date,
collectively, the aggregate amount of all of the Revolving Commitments as
referenced in Section 2.1(a) and, individually, the amount of each Lender's
Revolving Commitment as specified in Schedule 2.1(a) and (ii) on or after
the Termination Date, as provided in Section 2.5(a).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA.
"Subject Properties" has the meaning given to such term in Section
6.16(a).
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, (b) any partnership,
association, joint venture or other entity in which such Person directly or
indirectly through Subsidiaries has more than 50% of the equity interest at
any time and in which such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
such partnership, association, joint venture or other entity, whether
through the ownership of equity interests, by contract or otherwise and (c)
any corporation, general or limited partnership or limited liability
company in which such Person, or any of its Subsidiaries, is a shareholder,
partner or member and which is consolidated with such Person in accordance
with GAAP. Unless otherwise specified, any reference to a Subsidiary is
intended as a reference to a Subsidiary of the Parent Company.
"Term Loan Amortization Date" shall have the meaning given to such
term in Section 2.5(a).
"Term Loan Maturity Date" shall have the meaning given to such term in
Section 2.5(a).
"Term Loans" shall have the meaning given to such term in Section
2.5(a).
"Termination Date" has the meaning given to such term in Section
2.1(a).
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"Tranche A Credit Agreement" means that Tranche A Credit Agreement
dated as of the date hereof among the Borrowers, the Guarantors, the
lenders named therein and party thereto and NationsBank, N.A., as Agent, as
amended, modified, supplemented, extended, renewed or restated from time to
time.
"Tranche B Credit Agreement" means this Credit Agreement, as amended,
modified, supplemented, extended, renewed or restated from time to time.
"Underfunding" means an excess of all accrued benefits under a Plan
(based on those assumptions used to fund such Plan), determined as of the
most recent annual valuation date, over the value of the assets of such
Plan allocable to such accrued benefits.
"Unsecured Senior Debt Rating" means the debt rating provided by S&P
and/or Moody's with respect to unsecured senior long term debt of the
Parent Company and its consolidated Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 ACCOUNTING TERMS.
The financial statements to be furnished by the Parent Company pursuant
hereto shall be made and prepared in accordance with GAAP consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Parent Company to the Agent); provided,
that, except as otherwise specifically provided herein, all computations
determining compliance with Section 7.11 shall utilize accounting principles and
policies in conformity with those used to prepare the annual audited financial
statements referenced in Sections 6.1(a) and (b).
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenant set forth in Section 7.11(b)
hereof (including without limitation for purposes of the definition of
"Applicable Percentage" set forth in Section 1.1), the Borrowers shall have the
option of calculating Consolidated Adjusted EBITDA on a Pro Forma Basis.
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SECTION 2
CREDIT FACILITIES
2.1 COMMITTED REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
each Lender severally agrees to make revolving credit loans ("Committed
Revolving Loans") to the Borrowers from time to time from the Closing Date
until the day 364 days after the date hereof, or such later date if such
date is extended pursuant to this Section 2.1(a) or such earlier date as
the Revolving Commitments shall have been terminated as provided herein
(the "Termination Date") for the purposes hereinafter set forth; provided,
however, that (i) with regard to each Lender individually, the sum of such
Lender's share of outstanding Committed Revolving Loans (other than
Committed Revolving Loans made for the purpose of repaying Competitive
Loans but not yet so applied) shall not exceed such Lender's Revolving
Committed Amount, and (ii) with regard to the Lenders collectively, the sum
of the aggregate amount of outstanding Committed Revolving Loans (other
than Committed Revolving Loans made for the purpose of repaying Competitive
Loans but not yet so applied) plus the aggregate amount of Competitive
Loans (other than Competitive Loans made for the purpose of repaying
Committed Revolving Loans but not yet so applied) shall not exceed TWO
HUNDRED FIFTY MILLION DOLLARS ($250,000,000) (as such aggregate maximum
amount may be reduced from time to time, the "Revolving Committed Amount").
Committed Revolving Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrowers may request, and may be
prepaid or repaid and reborrowed in accordance with the provisions hereof;
provided, however, that no more than ten (10) Eurodollar Loans shall be
outstanding hereunder at any time. For purposes hereof, Eurodollar Loans
with different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings, extensions
and conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new Eurodollar Loan
with a single Interest Period. Either Borrower may, within ninety (90) days
prior to the Termination Date, by notice to the Agent, make written request
of the Lenders to extend the Termination Date for an additional period of
364 days. Each of the Lenders must consent to any such extension (subject
to the Borrowers' right to terminate or replace the Commitments of
non-consenting Lenders as set forth below). The Agent will give prompt
notice to each of the Lenders of its receipt of any such request for
extension of the Termination Date. Each Lender shall make a determination
not later than thirty (30) days prior to the then applicable Termination
Date as to whether or not it will agree to extend the Termination Date as
requested; provided, however, that failure by any Lender to make a timely
response to the Borrowers' request for extension of the Termination Date
shall be deemed to constitute a refusal by the Lender to extend the
Termination Date. If, in response to a request for an extension of the
Termination Date,
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each of the Lenders agrees to the requested extension, then the Termination
Date shall be extended for the requested additional period of 364 days. If,
however, in response to a request for an extension of the Termination Date,
one or more Lenders shall fail to agree to the requested extension (the
"Disapproving Lenders"), then the Borrowers shall have the right (so long
as all Disapproving Lenders are treated as described in either clauses (A)
or (B) below) to either (A) replace each such Disapproving Lender with one
or more Replacement Lenders pursuant to Section 3.15 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
extension of the Termination Date or (B) terminate such Disapproving
Lender's Commitment and repay all outstanding Loans of such Disapproving
Lender in accordance with Sections 3.3(c) and 3.3(f), provided that, unless
the Commitments terminated and Loans repaid pursuant to the preceding
clause (B) are immediately replaced in full at such time through the
addition of new Lenders or the increase of the Commitments and/or
outstanding Loans of existing Lenders (who in each case must specifically
consent to any such increase), then in the case of any action pursuant to
the preceding clause (B), subject to the following proviso, the Required
Lenders (determined before giving effect to the proposed action) shall
specifically consent to such termination of Commitment and repayment of
Loans, provided further, notwithstanding the foregoing proviso, each of the
Lenders (other than the Lender whose Commitment is being terminated) shall
specifically consent to such termination of Commitment and repayment of
Loans if the aggregate amount of Commitments terminated pursuant to this
Section 2.1(a) (including the proposed termination) plus the aggregate
amount of Commitments terminated pursuant to Section 3.17 plus the
aggregate amount of Commitments terminated pursuant to Section 11.6(b)
shall exceed $35,000,000. If, prior to the applicable Termination Date, the
Borrowers either replace or terminate the Commitments of the Disapproving
Lenders in accordance with the foregoing terms, then the Termination Date
shall be extended for the requested additional period of 364 days. If,
however, the Borrowers fail to either replace or terminate the Commitments
of the Disapproving Lenders prior to the applicable Termination Date in
accordance with the foregoing terms, then the Termination Date shall not be
extended for the requested additional period of 364 days.
(b) Committed Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrowers shall request a Committed
Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing) from either Borrower to the Agent not
later than 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of the requested borrowing in the case of Base Rate Loans, and on
the third Business Day prior to the date of the requested borrowing in
the case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Committed Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and
(D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar
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Loans or a combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor. A form of Notice of Borrowing (a
"Notice of Borrowing") is attached as Schedule 2.1(b)(i). If the
Borrower giving such Notice of Borrowing shall fail to specify in any
such Notice of Borrowing (I) an applicable Interest Period in the case
of a Eurodollar Loan, then such notice shall be deemed to be a request
for an Interest Period of one month, or (II) the type of Committed
Revolving Loan requested, then such notice shall be deemed to be a
request for a Base Rate Loan hereunder. Promptly upon receipt of each
Notice of Borrowing, the Agent shall give notice to each Lender of the
contents thereof and each such Lender's Revolving Commitment
Percentage thereof.
(ii) Minimum Amounts. Each Committed Revolving Loan borrowing
shall be in a minimum aggregate amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof (or the remaining available
amount of the Revolving Commitment, if less, provided, however, that
no Eurodollar Loan shall be permitted for a principal amount less than
$5,000,000).
(iii) Advances. Each Lender will make its Revolving Commitment
Percentage of each Committed Revolving Loan borrowing available to the
Agent for the account of the Borrowers at the office of the Agent
specified in Schedule 11.1, or at such other office as the Agent may
designate in writing, by 10:00 A.M. (Charlotte, North Carolina time)
on the date specified in the applicable Notice of Borrowing in Dollars
(or by 1:00 P.M. (Charlotte, North Carolina time) on such date if the
applicable Notice of Borrowing is received on the same date) and in
funds immediately available to the Agent. Such borrowing will then be
made available to the Borrowers by the Agent by crediting the account
of the Borrowers on the books of such office with the aggregate of the
amounts made available to the Agent by the Lenders and in like funds
as received by the Agent.
(c) Repayment. The principal amount of all Committed Revolving Loans
shall be due and payable in full on the Termination Date except as
otherwise provided in Section 2.5.
(d) Interest. Subject to the provisions of Section 3.1, Committed
Revolving Loans shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as Committed Revolving
Loans shall be comprised of Base Rate Loans, the sum of the Base Rate
plus the Applicable Percentage; and
(ii) Eurodollar Loans. During such periods as Committed Revolving
Loans shall be comprised of Eurodollar Loans, the sum of the
Eurodollar Rate plus the Applicable Percentage.
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Interest on Committed Revolving Loans shall be payable in arrears on
each Interest Payment Date.
(e) Committed Revolving Notes. The Committed Revolving Loans made
by each Lender shall be evidenced by a duly executed promissory note
of the Borrowers to each Lender substantially in the form of Schedule
2.1(e).
(f) Increase in Revolving Commitments. Subject to the terms and
conditions set forth herein, the Borrowers shall have the right, at
any time and from time to time from the Closing Date until the
Termination Date, to increase the Revolving Committed Amount by an
amount up to $50,000,000 in the aggregate. The following terms and
conditions shall apply to any such increase: (i) any such increase
shall be obtained from existing Lenders or from other banks or other
financial institutions, in each case in accordance with the terms set
forth below, (ii) the Revolving Commitment of any Lender may not be
increased without the prior written consent of such Lender, (iii) any
increase in the aggregate Revolving Committed Amount shall be in a
minimum principal amount of $2,500,000 and integral multiples of
$250,000 in excess thereof, (iv) Schedule 2.1(a) shall be amended to
reflect the revised Revolving Commitments and Revolving Commitment
Percentages, (v) the Borrowers shall execute Committed Revolving Notes
as are necessary to reflect the increase in the Revolving Commitments,
(vi) if any Committed Revolving Loans are outstanding at the time of
any such increase, the Borrowers shall make such payments and
adjustments on the Committed Revolving Loans (including payment of any
break-funding amount owing under Section 3.10) as necessary to give
effect to the revised commitment percentages and outstandings of the
Lenders, and (vii) the conditions to Extensions of Credit in Section
5.2(b) and (c) shall be true and correct. The amount of any increase
in the Revolving Committed Amount hereunder shall be offered first to
the existing Lenders, and in the event the additional commitments
which existing Lenders are willing to take shall exceed the amount
requested by the Borrowers, such excess shall be allocated in
proportion to the commitments of such existing Lenders willing to take
additional commitments. If the amount of the additional commitments
requested by the Borrowers shall exceed the additional commitments
which the existing Lenders are willing to take, then the Borrowers may
invite other banks and financial institutions reasonably acceptable to
the Agent to join this Tranche A Credit Agreement as Lenders hereunder
for the portion of commitments not taken by existing Lenders, provided
that such other banks and financial institutions shall constitute
"Eligible Assignees" and, in any such case, such other banks and
financial institutions shall enter into such joinder agreements to
give effect thereto as the Agent and the Borrowers may reasonably
request.
2.2 [INTENTIONALLY LEFT BLANK].
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2.3 [INTENTIONALLY LEFT BLANK].
2.4 COMPETITIVE LOAN SUBFACILITY.
(a) Competitive Loans. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, the
Borrowers may, from time to time from the Closing Date until the
Termination Date, request and each Lender may, in its sole discretion,
agree to make, loans to the Borrowers ("Competitive Loans"); provided,
however, (i) the aggregate amount of Competitive Loans shall not at
any time exceed the Revolving Committed Amount (the "Competitive Loan
Maximum Amount"), and (ii) the sum of the aggregate amount of
Committed Revolving Loans (other than Committed Revolving Loans made
for the purpose of repaying Competitive Loans but not yet so applied)
plus the aggregate amount of Competitive Loans (other than Competitive
Loans made for the purpose of repaying Committed Revolving Loans but
not yet so applied) shall not at any time exceed the aggregate
Revolving Committed Amount. Each Competitive Loan shall be not less
than $5,000,000 in the aggregate and integral multiples of $1,000,000
in excess thereof (or the remaining available portion of the
Competitive Loan Maximum Amount, if less). Competitive Loans may be
repaid and reborrowed in accordance with the provisions hereof.
(b) Competitive Bid Requests. The Borrowers may solicit
Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Schedule 2.4(b)-1 to the Agent by 12:00
Noon (Charlotte, North Carolina time) on a Business Day not less than
two (2) nor more than ten (10) Business Days prior to the date of a
requested Competitive Loan borrowing. A Competitive Bid Request shall
specify (i) the date of the requested Competitive Loan borrowing
(which shall be a Business Day), (ii) the amount of the requested
Competitive Loan borrowing and (iii) the applicable Interest Periods
requested and shall be accompanied by payment of the Competitive Bid
Request Fee, if any. The Agent shall promptly notify the Lenders of
its receipt of a Competitive Bid Request and the contents thereof and
invite the Lenders to submit Competitive Bids in response thereto. A
form of such notice is provided in Schedule 2.4(b)-2. No more than ten
(10) Competitive Bid Requests (e.g., the Borrowers may request
Competitive Bids for no more than ten (10) different Interest Periods
at a time) shall be submitted at any one time and Competitive Bid
Requests may be made no more frequently than once every ten (10)
Business Days.
(c) Competitive Bid Procedure. Each Lender may, in its sole
discretion, make one or more Competitive Bids to the Borrowers in
response to a Competitive Bid Request. Each Competitive Bid must be
received by the Agent not later than 10:00 A.M. (Charlotte, North
Carolina time) on the proposed date of a Competitive Loan borrowing;
provided, however, that should the Agent, in its capacity as a Lender,
desire to submit a Competitive Bid it shall notify the Borrowers of
its Competitive Bid and the terms thereof not later than 9:30 A.M.
(Charlotte, North Carolina time) on the proposed date of
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a Competitive Loan borrowing. A Lender may offer to make all or part
of the requested Competitive Loan borrowing and may submit multiple
Competitive Bids in response to a Competitive Bid Request. The
Competitive Bid shall specify (i) the particular Competitive Bid
Request as to which the Competitive Bid is submitted, (ii) the minimum
(which shall be not less than $1,000,000 and integral multiples of
$500,000 in excess thereof) and maximum principal amounts of the
requested Competitive Loan or Loans as to which the Lender is willing
to make, and (iii) the applicable interest rate or rates and Interest
Period or Periods therefor. A form of such Competitive Bid is provided
in Schedule 2.4(c). A Competitive Bid submitted by a Lender in
accordance with the provisions hereof shall be irrevocable (absent
manifest error). The Agent shall promptly notify the Borrowers of all
Competitive Bids made and the terms thereof. The Agent shall send a
copy of each of the Competitive Bids to the Borrowers for their
records as soon as practicable.
(d) Acceptance of Competitive Bids. Either Borrower may, in its
sole and absolute discretion, subject only to the provisions of this
subsection (d), accept or refuse any Competitive Bid offered to it. To
accept a Competitive Bid, either Borrower shall give written
notification in the form of Schedule 2.4(d) hereto (or telephone
notice promptly confirmed in writing) of its acceptance of any or all
such Competitive Bids to the Agent by 11:00 A.M. (Charlotte, North
Carolina time) on the proposed date of a Competitive Loan advance;
provided, however, (i) the failure by the Borrowers to give timely
notice of their acceptance of a Competitive Bid shall be deemed to be
a refusal thereof, (ii) the Borrowers may accept Competitive Bids only
in ascending order of rates, (iii) the aggregate amount of Competitive
Bids accepted by the Borrowers shall not exceed the principal amount
specified in the Competitive Bid Request, (iv) the Borrowers may
accept a portion of a Competitive Bid in the event, and to the extent,
acceptance of the entire amount thereof would cause the Borrowers to
exceed the principal amount specified in the Competitive Bid Request,
subject however to the minimum amounts provided herein (and provided
that where two or more such Lenders may submit such a Competitive Bid
at the same such Competitive Bid Rate, then pro rata between or among
such Lenders) and (v) no bid shall be accepted for a Competitive Loan
unless such Competitive Loan is in a minimum principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof,
except that where a portion of a Competitive Bid is accepted in
accordance with the provisions of subsection (iv) hereof, then in a
minimum principal amount of $100,000 and integral multiples thereof
(but not in any event less than the minimum amount specified in the
Competitive Bid), and in calculating the pro rata allocation of
acceptances of portions of multiple bids at a particular Competitive
Bid Rate pursuant to subsection (iv) hereof, the amounts shall be
rounded to integral multiples of $100,000 in a manner which shall be
in the discretion of the Borrowers. A notice of acceptance of a
Competitive Bid given by the Borrowers in accordance with the
provisions hereof shall be irrevocable. The Agent shall, not later
than 12:00 Noon (Charlotte, North Carolina time) on the proposed date
of a Competitive Loan borrowing, notify each bidding Lender whether or
not its Competitive Bid has been accepted (and if
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so, in what amount and at what Competitive Bid Rate), 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.
(e) Funding of Competitive Loans. Each Lender which is to make a
Competitive Loan shall make its Competitive Loan borrowing available
to the Agent for the account of the Borrowers at the office of the
Agent specified in Schedule 11.1, or at such other office as the Agent
may designate in writing, by 1:00 P.M. (Charlotte, North Carolina
time) on the date specified in the Competitive Bid Request in Dollars
and in funds immediately available to the Agent. Such borrowing will
then be made available to the Borrowers by crediting the account of
the Borrowers on the books of such office with the aggregate of the
amount made available to the Agent by the Competitive Loan Lenders and
in like funds as received by the Agent.
(f) Maturity of Competitive Loans. Each Competitive Loan shall
mature and be due and payable in full on the last day of the Interest
Period applicable thereto. Unless the Borrowers shall give notice to
the Agent otherwise, the Borrowers shall be deemed to have requested a
Committed Revolving Loan borrowing in the amount of the maturing
Competitive Loan, the proceeds of which will be used to repay such
Competitive Loan.
(g) Interest on Competitive Loans. Subject to the provisions of
Section 3.1, Competitive Loans shall bear interest in each case at the
Competitive Bid Rate applicable thereto. Interest on Competitive Loans
shall be payable in arrears on each Interest Payment Date.
(h) Competitive Loan Notes. The Competitive Loans shall be
evidenced by a duly executed promissory note of the Borrowers to each
Lender in an original principal amount equal to the Competitive Loan
Maximum Amount and substantially in the form of Schedule 2.4(h).
2.5 AMORTIZATION OF LOANS OUTSTANDING AT THE TERMINATION DATE.
(a) Election to Amortize. The Borrowers shall have the option to
pay all or a portion of the outstanding principal balance of the
Committed Revolving Loans (including Competitive Loans outstanding as
of the Termination Date which are repaid with borrowings of Committed
Revolving Loans) in sixteen (16) equal consecutive quarterly
installments on the last day of each March, June, September and
December commencing with the first of such dates to occur after the
Termination Date (each such date referred to herein as a "Term Loan
Amortization Date" and the last such date referred to herein as the
"Term Loan Maturity Date"). Either Borrower may exercise such option
by giving written notice to the Agent at least fifteen (15) days prior
to the Termination Date. If the Agent does not receive such
notification within the time period specified in the preceding
sentence, the principal amount of all Committed Revolving
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Loans and Competitive Loans shall be due and payable on the Termination
Date. All Committed Revolving Loans and Competitive Loans remaining
outstanding after the Termination Date in accordance with the terms of this
Section 2.5 shall be referred to collectively as the "Term Loans". The Term
Loans may be comprised of Base Rate Loans and Eurodollar Loans as the
Borrowers may elect in accordance with the provisions hereof. Amounts
repaid or prepaid on the Term Loans may not be reborrowed by the Borrowers.
For purposes of this Credit Agreement, where the Borrowers shall elect to
amortize amounts outstanding under the Committed Revolving Loans and the
Competitive Loans in accordance herewith, then on and after the Termination
Date, references herein to the "Revolving Committed Amount" shall mean the
aggregate principal amount of the Term Loans as of the Termination Date
less all payments made or required to be made with respect to the Term
Loans hereunder, whether scheduled amortization payment, voluntary or
optional prepayment, mandatory prepayment or otherwise.
(b) Interest on Term Loans. It is the intention of the parties hereto
that the Term Loans bear interest on the same terms as apply to Committed
Revolving Loans prior to the Termination Date. In furtherance thereof, the
parties hereto agree that upon and after the occurrence of the Termination
Date and the Borrowers' election to amortize the payment of the outstanding
principal balance of the Term Loans, the Borrowers shall continue to have
all of the same rights with respect to the Term Loans as they had prior to
the Termination Date to extend and/or convert Committed Revolving Loans
under Section 3.2, subject to the limitations of Section 2.5(a).
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Overdue principal and, to the extent permitted by law, overdue interest in
respect of each Loan and any other overdue amount payable hereunder or under the
other Credit Documents shall bear interest, payable on demand, at a per annum
rate 2% greater than the rate which would otherwise be applicable (or if no rate
is applicable, whether in respect of interest, fees or other amounts, then 2%
greater than the Base Rate).
3.2 EXTENSION AND CONVERSION.
The Borrowers shall have the option, on any Business Day, to extend
existing Committed Revolving Loans into a subsequent permissible Interest Period
or to convert Committed Revolving Loans of one type into Committed Revolving
Loans of another type; provided, however, that (a) except as provided in Section
3.7, Eurodollar Loans may be converted into
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Base Rate Loans only on the last day of the Interest Period applicable thereto,
(b) Eurodollar Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in existence on the
date of extension or conversion, (c) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" set forth in Section 1.1 and shall be in such minimum amounts as
provided in Section 2.1(b)(ii), (d) no more than ten (10) separate Eurodollar
Loans shall be outstanding hereunder at any one time and (e) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Competitive Loans may not be extended or converted pursuant to this
Section 3.2. Each such extension or conversion shall be effected by either
Borrower by giving a notice (a "Notice of Extension/Conversion") in the form of
Schedule 3.2 (or telephone notice promptly confirmed in writing) to the Agent
prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in
the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Committed Revolving Loans to be so extended or
converted, the types of Committed Revolving Loans into which such Committed
Revolving Loans are to be converted and, if appropriate, the applicable Interest
Periods with respect thereto. Multiple Eurodollar Loans with Interest Periods
ending on the same date may be combined and extended as one Eurodollar Loan, and
a single Eurodollar Loan may be extended as multiple Eurodollar Loans. Each
request for extension of, or conversion into, Eurodollar Loans, shall constitute
a representation and warranty by the Borrowers of the matters specified in
Section 5.2(b) and (c). In the event the Borrowers fail to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Loans shall be automatically converted into Base Rate Loans at the end of their
Interest Period. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 REDUCTIONS IN COMMITMENTS AND PREPAYMENTS.
(a) Voluntary Reduction of Commitments. The Borrowers may from time to
time permanently reduce the Revolving Committed Amount in whole or in part
(in each such case in a minimum aggregate amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof) upon three (3) Business Days'
prior written notice to the Agent by either Borrower.
(b) [Intentionally Left Blank].
(c) Termination of Individual Lender Commitment. In the event any
Lender becomes a Defaulting Lender, becomes a Disapproving Lender or
delivers a notice to the Borrowers pursuant to Section 3.5 or 3.8 or in the
event of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to
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this Agreement which have been approved by the Required Lenders as provided
in Section 11.6(b), the Borrowers shall have the right, upon three (3)
Business Days' prior written notice to the Agent, to terminate the
Commitments of such Lender in accordance with the terms of Section 2.1(a),
3.17 or 11.6(b), as the case may be. At such time as any such termination
shall become effective in accordance with the terms hereof, such Lender
shall no longer constitute a "Lender" for purposes of this Agreement,
except with respect to indemnifications under this Agreement which shall
survive as to such repaid Lender.
(d) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Competitive Loans and Committed
Revolving Loans which are Eurodollar Loans may only be prepaid on three
Business Days' prior written notice to the Agent by either Borrower and any
prepayment of such Competitive Loans or Eurodollar Loans will be subject to
Section 3.10; and (ii) each such partial prepayment of Loans shall be in
the minimum principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof for all Competitive Loans and Committed
Revolving Loans.
(e) Mandatory Prepayments. If at any time (i) the sum of the aggregate
amount of outstanding Committed Revolving Loans (other than Committed
Revolving Loans made for the purpose of repaying Competitive Loans but not
yet so applied) plus the aggregate amount of Competitive Loans (other than
Competitive Loans made for the purpose of repaying Committed Revolving
Loans but not yet so applied) shall exceed the aggregate Revolving
Committed Amount, or (ii) the aggregate amount of Competitive Loans shall
exceed the Competitive Loan Maximum Amount, the Borrowers shall immediately
make payment on the Loans in an amount sufficient to eliminate such excess.
In the case of a mandatory prepayment required on account of subsection
(ii), the amount required to be prepaid hereunder shall serve to
temporarily reduce the Revolving Committed Amount (for purposes of
borrowing availability hereunder, but not for purposes of computation of
fees) by the amount of the payment required until such time as the
situation described in subsection (ii) shall no longer exist. Payments
required to be made hereunder shall be applied first to Committed Revolving
Loans or Competitive Loans, as appropriate, and with respect to the types
of Loans, first to Base Rate Loans and then to Eurodollar Loans in direct
order of their Interest Period maturities. To the extent that the Borrowers
are required to make a mandatory prepayment of the Loans which is required
to be applied to Competitive Loans or to Committed Revolving Loans which
are Eurodollar Loans (following the operation of the immediately preceding
sentence) on a date other than the last day of an Interest Period
applicable thereto, at the option of the Borrowers, the Agent shall hold
the amount of such prepayment in an account in the Agent's sole dominion
and control. The Agent shall invest the amounts held by it in such account
as directed by the Borrowers. On the last day of the Interest Period
relating to the next-maturing Competitive Loans or to Committed Revolving
Loans which are Eurodollar Loans, as appropriate, the Agent shall apply the
amounts held by it in such account to the prepayment of such maturing Loan
and the Agent shall
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notify the Borrowers of the application of such amounts. Upon the direction
of the Borrowers, the Agent shall apply any earnings on amounts held in
such account to the payment of accrued interest on such Loans or shall
release such earnings to the Borrowers.
(f) Prepayment of Loans of Individual Lender. In the event any Lender
becomes a Defaulting Lender, becomes a Disapproving Lender or delivers a
notice to the Borrowers pursuant to Section 3.5 or 3.8 or in the event of
certain refusals by a Lender to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which
have been approved by the Required Lenders as provided in Section 11.6(b),
the Borrowers shall have the right, upon three (3) Business Days' prior
written notice to the Agent, to repay all Loans, together with accrued and
unpaid interest, fees and all other amounts owing to such Lender, each in
accordance with the terms of Section 2.1(a), 3.17 or 11.6(b), as the case
may be.
(g) Notice. Either Borrower will provide notice to the Agent of any
prepayment by 11:00 A.M. (Charlotte, North Carolina time) on the day prior
to the date of prepayment. Amounts paid on the Loans under subsection (d)
hereof may be reborrowed in accordance with the provisions hereof.
3.4 FEES.
(a) Commitment Fee. In consideration of the Commitments by the Lenders
hereunder, the Borrowers agrees to pay to the Agent for the ratable benefit
of the Lenders a commitment fee (the "Commitment Fee") equal to the
Applicable Percentage per annum on (i) prior to the Termination Date the
aggregate Revolving Committed Amount in effect from time to time for the
applicable period and (ii) after the Termination Date the Term Loans
outstanding from time to time during the applicable period. The Commitment
Fee shall accrue from the date hereof and shall be payable quarterly in
arrears on the 15th day following the end of each calendar quarter and on
the Termination Date or, if the Borrowers have elected to amortize payment
of the principal balance of Committed Revolving Loans as of the Termination
Date in accordance with the provisions of Section 2.5(a), then the Term
Loan Maturity Date, as appropriate.
(b) [Intentionally Left Blank].
(c) Administrative Fees. The Borrowers agrees to pay to the Agent, for
its own account, the administrative and other fees referred to in the
Agent's Fee Letter (the "Agent's Fees").
(d) Competitive Bid Request Fee. The Borrowers shall make payment to
the Agent of the applicable Competitive Bid Request Fee, if any,
concurrently with delivery
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of such Competitive Bid Request (whether or not any Competitive Bid is
offered by a Lender, accepted by the Borrowers or extended by the offering
Lender pursuant thereto).
3.5 CAPITAL ADEQUACY.
If, after the date hereof, any Lender has determined that the adoption
after the date hereof of any applicable law, rule or regulation regarding
capital adequacy, or any change therein after the date hereof, or any change in
the interpretation or administration thereof after the date hereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender with any
request or directive arising after the date hereof regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or will have the effect of reducing the rate of return on
such Lender's or its parent company's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender or
its parent company could have achieved but for such adoption or change (taking
into consideration such Lender's policies with respect to capital adequacy),
then, upon notice from such Lender, the Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender and its parent
company for such reduction; provided, however, that a Lender shall not be
entitled to avail itself of the benefit of this Section 3.5 to the extent that
any such reduction in return was incurred more than ninety (90) days prior to
the time it gives notice to the Borrowers of the relevant circumstances. In
determining the additional amount payable under this Section 3.5, each Lender
will act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, provided, that such Lender's determination of
compensation owing under this Section 3.5 shall, absent manifest error, be final
and conclusive and binding on all parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 3.5, will
give prompt written notice thereof to the Borrowers, through the Agent, which
notice shall show the basis for calculation of such additional amounts.
3.6 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrowers absent manifest error) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Agent shall give telecopy or
telephonic notice thereof to the Borrowers and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans and (y) any Loans that were to have been converted on the first
day of such Interest Period to or continued as Eurodollar Loans shall be
converted to or continued as Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrowers have the right to convert Base Rate Loans to
Eurodollar Loans. This Section 3.6 shall not apply to Competitive Loans.
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3.7 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrowers
and the Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert Base Rate Loans to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain Eurodollar Loans, such
Lender shall then have a commitment only to make a Base Rate Loan when a
Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.10.
Notwithstanding the foregoing, to the extent a circumstance described above
relates to a Eurodollar Loan then being requested by the Borrowers pursuant to a
Notice of Borrowing or a Notice of Conversion, the Borrowers shall have the
option to rescind such Notice of Borrowing or Notice of Conversion as to all
Lenders by either Borrower giving notice (in writing or by telephone confirmed
in writing) to the Agent of such rescission on the date on which the Lender
affected by such circumstances gives notice thereof as described above. This
Section 3.7 shall not apply to Competitive Loans.
3.8 REQUIREMENTS OF LAW.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(i) shall subject such Lender to any tax of any kind whatsoever with
respect to any Eurodollar Loans made by it or its obligation to make
Eurodollar Loans, or change the basis of taxation of payments to such
Lender in respect thereof (except for Non-Excluded Taxes) covered by
Section 3.9 (including Non-Excluded Taxes imposed solely by reason of any
failure of such Lender to comply with its obligations under Section 3.9(b))
and Excluded Taxes;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities
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in or for the account of, advances, loans or other extensions of credit by,
or any other acquisition of funds by, any office of such Lender which is
not otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition (excluding any
tax of any kind) whatsoever;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrowers from such Lender, through the Agent, in accordance herewith, the
Borrowers shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such increased cost or reduced
amount receivable, provided that, in any such case, the Borrowers may elect to
convert the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by
either Borrower giving the Agent at least one Business Day's notice of such
election, in which case the Borrowers shall promptly pay to such Lender, upon
demand, without duplication, such amounts, if any, as may be required pursuant
to Section 3.10; provided, further, however, that a Lender shall not be entitled
to avail itself of the benefit of this Section 3.8 to the extent that any such
additional amounts were incurred more than ninety (90) days prior to the time it
gives notice to the Borrowers as provided in the next sentence. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section, it
shall provide prompt notice thereof to the Borrowers, through the Agent,
certifying (x) that one of the events described in this Section has occurred and
describing in reasonable detail the nature of such event, (y) as to the
increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section submitted by such Lender, through the Agent, to
the Borrowers shall be conclusive in the absence of manifest error. This Section
3.8 shall not apply to Competitive Loans.
3.9 TAXES.
(a) Except as provided below in this subsection (a), all payments made
by the Borrowers under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding taxes measured by or imposed upon the overall net
income or profits of any Lender or its applicable lending office, or any
branch or affiliate thereof, and all franchise taxes, branch taxes, taxes
on doing business or taxes on the overall capital or net worth of any
Lender or its applicable lending office, or any branch or affiliate
thereof, in each case imposed in lieu of net income taxes, imposed: (i) by
the jurisdiction under the laws of which such Lender, applicable lending
office, branch or
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affiliate is organized or is located, or in which its principal executive
office is located, or any nation within which such jurisdiction is located
or any political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such Lender, applicable
lending office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes
(such excluded taxes being herein referred to as "Excluded Taxes"). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Agent or any Lender hereunder or under any Notes,
the amounts so payable to the Agent or such Lender shall be increased to
the extent necessary to yield to the Agent or such Lender (after payment of
all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Credit Agreement
and any Notes, provided, however, that the Borrowers shall be entitled to
deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not organized under
the laws of the United States of America or a state thereof if such Lender
fails to comply with the requirements of subsection (b) below. Whenever any
Non-Excluded Taxes are payable by the Borrowers, as promptly as possible
thereafter, the Borrowers shall send to the Agent for its own account or
for the account of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrowers showing payment
thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrowers
shall indemnify the Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Agent or any Lender as
a result of any such failure. The agreements in this subsection (a) shall
survive the termination of this Credit Agreement and the payment of the
Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the Borrowers
under this Credit Agreement or the Notes to such Lender, deliver to
the Borrowers and the Agent (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, or successor
applicable form, as the case may be, certifying that it is entitled to
receive payments under this Credit Agreement and its Notes without
deduction or withholding of any United States federal income taxes and
(B) an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is entitled to
an exemption from United States backup withholding tax;
(ii) deliver to the Borrowers and the Agent two further
copies of any such form or certification on or before the date
that any such form
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or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrowers; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by
the Borrowers or the Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, (i) represent to the
Borrowers (for the benefit of the Borrowers and the Agent) that it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(ii) agree to furnish to the Borrowers on or before the date of any
payment by the Borrowers, with a copy to the Agent (A) a certificate
substantially in the form of Schedule 3.9 hereto (any such certificate
a "U.S. Tax Compliance Certificate") and (B) two accurate and complete
original signed copies of Internal Revenue Service Form W-8, or
successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code
with respect to payments to be made under this Credit Agreement and
its Notes (and to deliver to the Borrowers and the Agent two further
copies of such form on or before the date it expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrowers or the Agent
for filing and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the Borrowers,
to provide to the Borrowers (for the benefit of the Borrowers and the
Agent) such other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Credit Agreement and
its Notes;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender so advises the Borrowers and the Agent. Each Person that shall
become a Lender or a participant pursuant to Section 11.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the
forms, certifications and statements required pursuant to this subsection,
provided that in the case of a Participant the obligations of such
Participant pursuant to this subsection (b) shall be determined as if the
Participant were a Lender except that such Participant shall furnish all
such required forms, certifications and statements to the Lender from which
the related participation shall have been purchased.
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(c) If the Borrowers pay any additional amount under Section 3.9(a) to
a Lender and such Lender determines that it has received or realized in
connection therewith any refund or any reduction of, or credit against, its
tax liabilities in or with respect to the taxable year in which the
additional amount is paid, such Lender shall pay to the Borrowers an amount
that the Lender shall reasonably determine is equal to the net benefit,
after tax, which was obtained by the Lender in such taxable year as a
consequence of such refund, reduction or credit.
3.10 INDEMNITY.
The Borrowers agree to indemnify each Lender and to hold each Lender
harmless from any reasonable loss or expense which such Lender may sustain or
incur (other than through such Lender's gross negligence or willful misconduct)
as a consequence of (a) default by the Borrowers in making a borrowing of,
conversion into or continuation of Competitive Loans or Committed Revolving
Loans which are Eurodollar Loans after either Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrowers in making any prepayment of a Competitive Loan or a
Committed Revolving Loan which is a Eurodollar Loan after either Borrower has
given a notice thereof in accordance with the provisions of this Credit
Agreement or (c) the making of a prepayment of Competitive Loans or Committed
Revolving Loans which are Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto other than pursuant to Section 3.11(c).
Such indemnification may include an amount equal to the excess, if any, of (i)
the amount of interest which would have accrued on the amount so prepaid, or not
so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Competitive
Loan or a Committed Revolving Loan which is a Eurodollar Loan provided for
herein (excluding, however, the Applicable Percentage included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. This covenant shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.11 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Committed Revolving Loans. Each Committed Revolving Loan advance,
each payment or prepayment of principal of any Committed Revolving Loan,
each payment of interest on the Committed Revolving Loans, each payment of
the Commitment Fee, each reduction of the Revolving Committed Amount, and
each conversion or continuation of any Committed Revolving Loan, shall be
allocated pro rata
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among the relevant Lenders in accordance with the respective applicable
Revolving Committed Amounts (or, if the Commitments of such Lenders have
expired or been terminated, in accordance with the respective principal
amounts of the outstanding Loans and Participation Interests of such
Lenders).
(b) [Intentionally Left Blank].
(c) Funding. Unless the Agent shall have been notified in writing by
any Lender prior to a Committed Revolving Loan borrowing that such Lender
will not make the amount that would constitute its Revolving Commitment
Percentage of such borrowing available to the Agent, the Agent may assume
that such Lender is making such amount available to the Agent, and the
Agent may, in reliance upon such assumption, make available to the
Borrowers a corresponding amount. If such amount is not made available to
the Agent by the required time on the borrowing date therefor, such Lender
shall pay to the Agent, on demand, such amount with interest thereon at a
rate equal to the Federal Funds Rate for the period until such Lender makes
such amount immediately available to the Agent. A certificate of the Agent
submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's Revolving Commitment Percentage of such borrowing is not made
available to the Agent by such Lender within three Business Days of such
borrowing date, (i) the Agent shall notify the Borrowers of the failure of
such Lender to make such amount available to the Agent and the Agent shall
also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers and (ii) the Borrowers may, without waiving any rights it may
have against such Lender, borrow a like amount on an unsecured basis from
any commercial bank for a period ending on the date upon which such Lender
does in fact make such borrowing available, provided that at the time such
borrowing is made and at all times while such amount is outstanding the
Borrowers would be permitted to borrow such amount pursuant to Section 2.1
of this Credit Agreement.
3.12 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, or any other obligation owing to such
Lender under this Credit Agreement through the exercise of a right of setoff,
banker's lien or counterclaim, or pursuant 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, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Loans and other obligations in such amounts, and
make such other adjustments from time to time, as shall be equitable to the end
that all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree among
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themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.12 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.12 to share in the benefits of any recovery on such secured claim.
3.13 PLACE AND MANNER OF PAYMENTS.
Except as otherwise specifically provided herein, all payments hereunder
shall be made to the Agent in Dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind, at its offices
specified in Section 11.1 not later than 2:00 P.M. (Charlotte, North Carolina
time) on the date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Agent may (but shall
not be obligated to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Borrowers maintained with the
Agent (with notice to the Borrowers). The Borrowers shall, at the time it makes
any payment under this Credit Agreement, specify to the Agent the Loans, fees or
other amounts payable by the Borrowers hereunder to which such payment is to be
applied (and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Agent shall distribute such
payment to the Lenders in the manner set forth in Section 3.3(e) for mandatory
prepayments). The Agent will distribute such payments to such Lenders, if any
such payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on
a Business Day in like funds as received prior to the end of such Business Day
and otherwise the Agent will distribute such payment to such Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (subject to accrual of interest and fees for
the period of such extension), except that in the case of Eurodollar Loans, if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations
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of interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days, except with respect to computation of interest on Base
Rate Loans which shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of borrowing, but
exclude the date of payment.
3.14 [INTENTIONALLY LEFT BLANK].
3.15 REPLACEMENT OF LENDERS.
If any Lender either (i) becomes a Defaulting Lender, (ii) becomes a
Disapproving Lender or (iii) delivers a notice to the Borrowers pursuant to
Sections 3.5 or 3.8, the Borrowers shall have the right, if no Default or Event
of Default then exists, to replace such Lender (the "Replaced Lender") with one
or more Eligible Assignees (collectively, the "Replacement Lender"), provided
that (A) at the time of any replacement pursuant to this Section 3.15, the
Replacement Lender shall enter into one or more assignment agreements
substantially in the form of Schedule 11.3(b) pursuant to, and in accordance
with the terms of, Section 11.3(b) (and with all fees payable pursuant to said
Section 11.3(b) to be paid by the Replacement Lender) pursuant to which the
Replacement Lender shall acquire all of the rights and obligations of the
Replaced Lender hereunder and, in connection therewith, shall pay to the
Replaced Lender in respect thereof an amount equal to the sum of (a) the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Lender and (b) all accrued but theretofore unpaid, fees and other amounts owing
to the Replaced Lender pursuant to Section 3.4, and (B) all obligations of the
Borrowers owing to the Replaced Lender (including all obligations, if any, owing
pursuant to Section 3.5 or 3.8, but excluding those obligations specifically
described in clause (A) above in respect of which the assignment purchase price
has been, or is concurrently being paid) shall be paid in full by the Borrowers
to such Replaced Lender concurrently with such replacement.
3.16 CHANGE OF LENDING OFFICE.
Each Lender agrees that on the occurrence of any event giving rise to the
operation of Sections 3.5, 3.8 or 3.9 with respect to such Lender, it will, if
requested by the Borrowers, use reasonable efforts to designate another lending
office for any Loans affected by such event, provided that such designation is
made on such terms that such Lender and its lending office suffer no material
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section.
3.17 ADDITIONAL TERMINATION OF COMMITMENT RIGHTS.
If any Lender either becomes a Defaulting Lender or delivers a notice to
the Borrowers pursuant to Section 3.5 or 3.8, the Borrowers shall have the right
(so long as all such Defaulting Lenders or delivering Lenders are treated as
described in either clauses (A) or (B) below) to either (A) replace each such
Defaulting Lender or delivering Lender with one or more Replacement Lenders
pursuant to Section 3.15 or (B) terminate such Defaulting Lender's or
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delivering Lender's Commitment and repay all outstanding Loans of such Lender in
accordance with Sections 3.3(c) and 3.3(f), provided that, unless the
Commitments terminated and Loans repaid pursuant to the preceding clause (B) are
immediately replaced in full at such time through the addition of new Lenders or
the increase of the Commitments and/or outstanding Loans of existing Lenders
(who in each case must specifically consent to any such increase), then in the
case of any action pursuant to the preceding clause (B), subject to the
following proviso, the Required Lenders (determined before giving effect to the
proposed action) shall specifically consent to such termination of Commitment
and repayment of Loans, provided further, notwithstanding the foregoing proviso,
each of the Lenders (other than the Lender whose Commitment is being terminated)
shall specifically consent to such termination of Commitment and repayment of
Loans if the aggregate amount of Commitments terminated pursuant to this Section
3.17 (including the proposed termination) plus the aggregate amount of
Commitments terminated pursuant to Section 11.6(b) plus the aggregate amount of
Commitments terminated pursuant to Section 2.1(a) shall exceed $35,000,000.
SECTION 4
GUARANTY
4.1 THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender and the Agent as hereinafter provided the prompt payment of the Credit
Party Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Credit Party Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, following receipt of demand therefor, and that
in the case of any extension of time of payment or renewal of any of the Credit
Party Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, in the event of a bankruptcy or other similar
insolvency proceeding of a Guarantor, the obligations of each such Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its Credit Party Obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.
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4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents, or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Credit Party
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Without limiting the generality of the foregoing, it is agreed that, to the
fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents or any other agreement or instrument referred to therein
shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents or any other agreement or instrument referred to therein
shall be waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever (other than any notice specifically required hereunder), and any
requirement that the Agent or any Lender exhaust any right, power or remedy or
proceed against any Person under any of the Credit Documents or any other
agreement or instrument referred to therein, or against any other Person under
any other guarantee of, or security for, any of the Credit Party Obligations.
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4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sections
26-7 through 26-9, inclusive. Each of the Guarantors further agrees that it
shall have no right of subrogation, reimbursement or indemnity, nor any right of
recourse to security, if any, for the Credit Party Obligations so long as any
amounts payable to the Agent or the Lenders in respect of the Credit Party
Obligations shall remain outstanding and until all of the Commitments shall have
expired or been terminated.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.
4.6 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
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SECTION 5
CONDITIONS
5.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT.
The obligation of each Lender to make its initial Extensions of Credit to
the Borrowers are subject to the satisfaction of the following conditions on or
prior to the Closing Date:
(a) Executed Credit Documents. Receipt by the Agent of executed
counterparts of this Credit Agreement, the Notes and the other Credit
Documents.
(b) Tranche A Credit Agreement. Receipt by the Agent of copies of the
executed Tranche A Credit Agreement, the promissory notes issued thereunder
and the other collateral, security and other documents relating thereto.
(c) No Default; Representations and Warranties. As of the Closing Date
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects.
(d) Opinion of Counsel. Receipt by the Agent of an opinion, or
opinions, satisfactory to the Agent, addressed to the Agent and the Lenders
and dated as of the Closing Date, from legal counsel to the Credit Parties
and in form reasonably acceptable to the Agent and the Credit Parties.
(e) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party and the transactions contemplated
therein and authorizing execution and
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delivery thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and effect as of
the Closing Date.
(iv) Good Standing. Copies of (a) certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing would have a Material Adverse Effect and (b) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(f) Fees and Expenses. Provided the Borrowers have received proper
documentation and support therefor, payment by the Borrowers of all fees
and expenses owed by it to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Agent's Fee
Letter.
(g) Merger Agreement Transactions. The transactions contemplated by
the Merger Agreement shall have been consummated in accordance with the
terms of the Merger Agreement and the Agent shall have received a copy of
the final, executed Merger Agreement.
(h) Repayment of Existing Indebtedness. The Agent shall have received
evidence satisfactory to it that the Existing Credit Agreements have been
terminated and that all amounts due and owing thereunder have been paid or
will be paid with the proceeds of the initial Extension of Credit
hereunder.
(i) Consents. All material consents and approvals of the boards of
directors, shareholders, governmental and regulatory bodies and other
applicable third parties necessary in connection with the transactions
contemplated by the Merger Agreement and the financing transactions
contemplated under this Credit Agreement shall have been obtained.
(j) Compliance with Law. The transactions contemplated by the Merger
Agreement and the financing transactions under this Credit Agreement shall
be in compliance with all applicable laws and regulations (including
applicable securities and banking laws, rules and regulations).
(k) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by the Agent
or the Required Lenders.
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5.2 EACH EXTENSION OF CREDIT.
The obligation of each Lender to make any Extension of Credit, including
the conversion to or extension of any Eurodollar Loan is subject to satisfaction
of the following conditions in addition to the satisfaction on the Closing Date
of the conditions set forth in Section 5.1:
(a) (i) In the case of any Committed Revolving Loan, the Agent shall
have received an appropriate Notice of Borrowing or Notice of
Conversion/Extension; and (ii) in the case of any Competitive Loan, the
applicable Competitive Loan Lender shall have received an appropriate
notice of acceptance of its related Competitive Bid;
(b) The representations and warranties set forth in Section 6 hereof
shall be true and correct in all material respects as of such date (except
for those which expressly relate to an earlier date); and
(c) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto.
The delivery of each Notice of Borrowing and each Notice of Conversion relating
to an extension of or conversion into Eurodollar Loans and each request for a
Competitive Bid pursuant to a Competitive Bid Request shall constitute a
representation and warranty by the Borrowers of the correctness of the matters
specified in subsections (b) and (c) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Agent and each Lender to make the Extensions of Credit
requested to be made by it on the Closing Date and on each Credit Date
thereafter, the Credit Parties hereby represent and warrant, on the Closing
Date, and on every Credit Date thereafter (except to the extent the following
representations warranties relate to a specific date), to the Agent and each
Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of Old PHC and its
consolidated Subsidiaries as of December 31, 1996 and the audited
consolidated statements of earnings and statements of cash flows for the
year ended December 31, 1996 have heretofore been furnished to the Agent.
Such financial statements (including the notes thereto) (i) have been
audited by Arthur Andersen LLP, (ii) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby and (iii)
(on the basis disclosed in the footnotes to such financial statements)
present fairly, in all material
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respects, the consolidated financial condition, results of operations and
cash flows of Old PHC and its consolidated Subsidiaries as of such date and
for such periods. The unaudited interim balance sheets of Old PHC and its
consolidated Subsidiaries as at the end of, and the related unaudited
interim statements of earnings and of cash flows for each of the three
fiscal quarters ending on or prior to September 30, 1997 have heretofore
been furnished to the Agent. Such interim financial statements for each
such quarterly period, (i) have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (ii) (on
the basis disclosed in the footnotes to such financial statements) present
fairly, in all material respects, the consolidated financial condition,
results of operations and cash flows of Old PHC and its consolidated
Subsidiaries as of such date and for such periods subject to year-end and
audit adjustments. During the period from December 31, 1996 to and
including the Closing Date, there has been no sale, transfer or other
disposition by Old PHC or any of its Subsidiaries of any material part of
the business or property of Old PHC and its consolidated Subsidiaries,
taken as a whole, and no purchase or other acquisition by any of them of
any business or property (including any capital stock of any other person)
material in relation to the consolidated financial condition of Old PHC and
its consolidated Subsidiaries, taken as a whole, in each case, which, is
not reflected in the foregoing financial statements or in the notes thereto
or has not otherwise been disclosed in writing to the Lenders on or prior
to the Closing Date.
(b) The audited consolidated balance sheet of Doubletree and its
consolidated Subsidiaries as of December 31, 1996 and the audited
consolidated statements of earnings and statements of cash flows for the
year ended December 31, 1996 have heretofore been furnished to the Agent.
Such financial statements (including the notes thereto) (i) have been
audited by KPMG Peat Marwick LLP, (ii) have been prepared in accordance
with GAAP consistently applied throughout the periods covered thereby and
(iii) (on the basis disclosed in the footnotes to such financial
statements) present fairly, in all material respects, the consolidated
financial condition, results of operations and cash flows of Doubletree and
its consolidated Subsidiaries as of such date and for such periods. The
unaudited interim balance sheets of Doubletree and its consolidated
Subsidiaries as at the end of, and the related unaudited interim statements
of earnings and of cash flows for, each fiscal month and quarterly period
ended after September 30, 1997 and prior to the Closing Date have
heretofore been furnished to the Agent. Such interim financial statements
for each such quarterly period, (i) have been prepared in accordance with
GAAP consistently applied throughout the periods covered thereby and (ii)
(on the basis disclosed in the footnotes to such financial statements)
present fairly, in all material respects, the consolidated financial
condition, results of operations and cash flows of Doubletree and its
consolidated Subsidiaries as of such date and for such periods subject to
year-end and audit adjustments. During the period from December 31, 1996 to
and including the Closing Date, there has been no sale, transfer or other
disposition by Doubletree or any of its Subsidiaries of any material part
of the business or property of Doubletree and its consolidated
Subsidiaries, taken as a whole, and no purchase or other
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acquisition by any of them of any business or property (including any
capital stock of any other person) material in relation to the consolidated
financial condition of Doubletree and its consolidated Subsidiaries, taken
as a whole, in each case, which, is not reflected in the foregoing
financial statements or in the notes thereto or has not otherwise been
disclosed in writing to the Lenders on or prior to the Closing Date.
(c) On and as of the Closing Date, (i) the financial projections (the
"Projections") prepared by the Parent Company and the Borrowers and
contained in the Confidential Offering Memorandum delivered to the Lenders
by the Agent prior to the Closing Date were prepared based upon the
assumptions concerning various industry trends described therein for the
periods presented, (ii) the Projections were based on good faith
assumptions and estimates, and (iii) although a range of possible different
assumptions and estimates might also be reasonable, the Parent Company and
the Borrowers are not aware of any facts that would lead them to believe
that the assumptions and estimates on which the Projections were based are
not reasonable; provided that no assurance can be given that the projected
results will be realized or with respect to the ability of the Parent
Company and the Borrowers to achieve the projected results, and while the
Projections are necessarily presented with numerical specificity, the
actual results achieved during the periods presented in all likelihood will
differ from the projected results and such differences may be material.
6.2 NO CHANGE.
Since December 31, 1996, there has been no development or event relating to
or affecting the Parent Company and its Subsidiaries which has had or would be
reasonably expected to have a Material Adverse Effect.
6.3 CORPORATE AND PARTNERSHIP EXISTENCE; COMPLIANCE WITH LAW.
Each of the Parent Company and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization except to the extent that the failure to be so organized, existing
or in good standing would not be reasonably expected to have a Material Adverse
Effect, (b) has the corporate or partnership power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, except to
the extent that the failure to have such legal right would not be reasonably
expected to have a Material Adverse Effect, (c) is duly qualified and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not be reasonably expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law,
except to the extent that the failure to comply therewith would not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
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6.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE CREDIT PARTY OBLIGATIONS.
Each of the Credit Parties has the corporate power and authority, and the
legal right, to make, deliver and perform the Credit Documents to which it is a
party and to borrow and accept Extensions of Credit hereunder or to issue the
guarantee hereunder, and has taken all necessary corporate action to authorize
the borrowings or guarantees and Extensions of Credit or guarantee such
borrowings and Extensions of Credit, as appropriate, on the terms and conditions
of this Credit Agreement and any Notes and to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. No material
consent or authorization of, filing with, notice to or other similar act by or
in respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of either Borrower or either Guarantor in
connection with the borrowings or guarantees hereunder or with the execution,
delivery, performance, validity or enforceability of the Credit Documents to
which either Borrower is a party, except for material consents, authorizations,
notices and filings described in Schedule 6.4, all of which have been obtained
or made or have the status described in such Schedule 6.4. This Credit Agreement
has been, and each other Credit Document to which it is a party will be, duly
executed and delivered on behalf of the Borrowers and the Guarantors. This
Credit Agreement constitutes, and each other Credit Document to which it is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of the Borrowers and the Guarantors enforceable against them in
accordance with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 NO LEGAL BAR.
The execution, delivery and performance of the Credit Documents by the
Credit Parties, the borrowings and extensions of credit and the guarantees
thereof hereunder and the use thereof (a) will not violate any Requirement of
Law or Contractual Obligation of any Credit Party in any respect that would
reasonably be expected to have a Material Adverse Effect and (b) will not result
in, or require, the creation or imposition of any Lien on any of its properties
or revenues pursuant to any such Requirement of Law or Contractual Obligation
other than Permitted Liens.
6.6 NO MATERIAL LITIGATION.
No litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of any Credit Party,
threatened by or against the Parent Company, or any of its Subsidiaries or
against any of its or their respective properties or revenues which would be
reasonably expected to have a Material Adverse Effect.
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6.7 NO DEFAULT.
Neither the Parent Company nor any of its Subsidiaries is in default under
or with respect to any of its Contractual Obligations in any respect which would
be reasonably expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
6.8 OWNERSHIP OF PROPERTY; LIENS.
Except as would not have a Material Adverse Effect, except for Permitted
Liens or except as set forth in Schedule 6.8 hereto, the Parent Company and each
of its Subsidiaries has good record and sufficient title in fee simple to, or a
valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other property. None of such property is
subject to any Lien, except for Permitted Liens.
6.9 INTELLECTUAL PROPERTY.
The Parent Company and each of its Subsidiaries owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, service
marks, technology, know-how and processes necessary for each of them to conduct
its business as currently conducted (the "Intellectual Property") except for
those the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. Except as provided on Schedule 6.9,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party know
of any such claim, and the use of such Intellectual Property by the Parent
Company and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that in the aggregate, would not be
reasonably expected to have a Material Adverse Effect.
6.10 NO BURDENSOME RESTRICTIONS.
No Requirement of Law as to the Parent Company or any of its Subsidiaries
would be reasonably expected to have a Material Adverse Effect.
6.11 TAXES.
The Parent Company and each of its Subsidiaries that are corporations have
filed or caused to be filed all United States federal income tax returns and all
other material tax returns which, to the knowledge of the Credit Parties, are
required to be filed and the failure to file could reasonably be expected to
have a Material Adverse Effect, and have paid (a) all taxes shown to be due and
payable on said returns and (b) any assessments of which the Parent Company or
any of its Subsidiaries has received notice made against the Parent Company or
any of its Subsidiaries or any of the property of the Parent Company or any of
its Subsidiaries and all other taxes, fees or other charges imposed on the
Parent Company or any of its Subsidiaries or any of
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the property of the Parent Company or any of its Subsidiaries by any
Governmental Authority (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect and (ii) taxes, fees or other charges the amount or validity of
which are currently being contested and with respect to which reserves in
conformity with GAAP have been provided on the books of the Parent Company or
any of such Subsidiaries, as the case may be).
6.12 ERISA.
During the five year period prior to each date as of which this
representation is made, or deemed made (or, with respect to (vi) or (viii)
below, as of the date such representation is made or deemed made), none of the
following events or conditions, either individually or in the aggregate, has
resulted or is reasonably likely to result in a liability to the Parent Company
or any of its Subsidiaries which would be reasonably expected to have a Material
Adverse Effect: (i) a Reportable Event with respect to any Single Employer Plan;
(ii) an "accumulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA) with respect to any Single Employer Plan which
has not been waived; (iii) any material noncompliance with the application of
ERISA or the Code with respect to any Plan; (iv) a termination of a Single
Employer Plan (other than a standard termination pursuant to Section 4041(b) of
ERISA); (v) a Lien in favor of the PBGC with respect to any Single Employer Plan
or a Plan pursuant to Section 4068 or Section 302(f) of ERISA, respectively;
(vi) Underfunding with respect to any Single Employer Plan; (vii) a complete or
partial withdrawal from any Multiemployer Plan by the Parent Company, either
Borrower or any Commonly Controlled Entity; (viii) any liability of the Parent
Company, either Borrower or any Commonly Controlled Entity under ERISA if the
Parent Company, either Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the annual valuation date
most closely preceding the date on which their representation is made or deemed
made; (ix) the Plan Reorganization or Insolvency of any Multiemployer Plan; (x)
the excess of the present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the aggregate liability of the Parent Company, the
Borrowers or any of their Subsidiaries for post-retirement benefits to be
provided to their current and former employees (excluding benefits provided
pursuant to Section 4980B of the Code or Section 601 of ERISA), under Plans
which are welfare benefit plans (as determined in Section 3(1) of ERISA) over
the assets under all such Plans; and (xi) an event or condition with respect to
which the Parent Company, either Borrower or any Commonly Controlled Entity
could incur any liability in respect of a Former Plan.
6.13 INVESTMENT COMPANY ACT; OTHER REGULATIONS.
Neither Borrower is an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. Neither Borrower is subject to regulation under any Federal or
State statute or regulation which limits its ability to incur Indebtedness as
contemplated hereby.
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6.14 SUBSIDIARIES.
Set forth in Schedule 6.14 is a complete and accurate list of all
Subsidiaries of the Parent Company immediately after the consummation of the
transactions contemplated by the Merger Agreement, which list is correct in all
material respects. Information on the attached Schedule, which is correct in all
material respects, includes jurisdiction of incorporation or organization; the
number of shares of each class of capital stock or other equity interest
outstanding; the number and percentage of outstanding shares of each class owned
(directly or indirectly); and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding capital stock of all such corporate Subsidiaries is
validly issued, fully paid and non-assessable and is owned by such Person,
directly or indirectly, free and clear of all Liens other than Permitted Liens.
6.15 PURPOSE OF LOANS.
Extensions of Credit and the proceeds therefrom shall be used to refinance
existing indebtedness of the Borrowers under the Existing Credit Agreements, and
for working capital, capital expenditures and other general corporate purposes
(including, without limitation, the support of commercial paper and acquisitions
permitted by Section 8.3(c)).
6.16 ENVIRONMENTAL MATTERS.
(a) To the knowledge of the Credit Parties, the facilities and
properties owned, leased or operated by the Parent Company or any of its
Subsidiaries (the "Subject Properties") and all operations at the Subject
Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the business
operated by the Parent Company or any of its Subsidiaries (the "Business"),
and there are no conditions relating to the Business or Subject Properties
that would be reasonably likely to give rise to liability under any
applicable Environmental Law, except for any failure so to comply or
violation or condition, or any aggregation thereof, that would not be
reasonably likely to result in the payment of a Material Environmental
Amount.
(b) To the knowledge of the Credit Parties, the Subject Properties do
not contain any Materials of Environmental Concern at, on or under the
Subject Properties in amounts or concentrations that constitute a violation
of, or could reasonably give rise to liability under, Environmental Laws,
except insofar as the presence of any Materials of Environmental Concern is
not reasonably likely to result in the payment of a Material Environmental
Amount.
(c) Neither the Parent Company nor any of its Subsidiaries has
received any written notice of, or inquiry from any Governmental Authority
regarding, any violation,
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alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Subject Properties or the Business, nor does any
Credit Party have knowledge that any such notice will be received or is
being threatened, except insofar as such notice or threatened notice, or
any aggregation thereof, does not involve a matter or matters that is or
are reasonably likely to result in the payment of a Material Environmental
Amount.
(d) No Credit Party has, nor to the knowledge of any Credit Party have
any other Persons, transported or disposed of Materials of Environmental
Concern from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other
location, in each case by or on behalf of the Parent Company or any of its
Subsidiaries in violation of, or in a manner that would be reasonably
likely to give rise to liability under, any applicable Environmental Law,
except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result
in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of any Credit Party, threatened, under any
Environmental Law to which the Parent Company or any of its Subsidiaries is
named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to the Parent Company or any of its Subsidiaries, the
Subject Properties or the Business, except insofar as such proceeding,
action, decree, order or other requirement, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material Environmental
Amount.
(f) To the knowledge of the Credit Parties, there has been no release
or threat of release of Materials of Environmental Concern at or from the
Subject Properties, or arising from or related to the operations
(including, without limitation, disposal) of the Parent Company or any of
its Subsidiaries in connection with the Subject Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner
that would be reasonably likely to give rise to liability under
Environmental Laws, except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental
Amount.
(g) To the knowledge of the Credit Parties, neither the Parent Company
nor any of its Subsidiaries has voluntarily assumed any liability of any
Person under any Environmental Law that is not subject to indemnification
and is reasonably likely to result in the payment of a Material
Environmental Amount.
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SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that commencing with the
Closing Date and so long as this Credit Agreement is in effect and until the
Credit Party Obligations , together with interest, fees and other obligations
hereunder, have been paid in full and the Commitments hereunder shall have
terminated:
7.1 INFORMATION COVENANTS.
The Parent Company and the Borrowers will furnish, or cause to be
furnished, to the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 100 days after the close of each fiscal year of the Parent
Company, a consolidated balance sheet and income statement of the Parent
Company and its consolidated Subsidiaries (including the Borrowers), as of
the end of such fiscal year, together with related consolidated statements
of operations and retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated figures for the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and audited by Arthur Andersen LLP or other
independent certified public accountants of recognized national standing
and whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP (except for changes with which
such accountants concur) and shall not be limited as to the scope of the
audit or qualified as to the status of the Credit Parties as a going
concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 50 days after the close of each fiscal quarter of the Parent
Company (other than the fourth fiscal quarter, in which case 100 days after
the end thereof) a consolidated balance sheet and income statement of the
Parent Company and its consolidated Subsidiaries (including the Borrowers),
as of the end of such fiscal quarter, together with related consolidated
statements of operations and retained earnings and of cash flows for such
fiscal quarter in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal year, all such
financial information described above to be in reasonable form and detail
and reasonably acceptable to the Agent, and accompanied by a certificate of
the chief financial officer, treasurer or controller of the Parent Company
to the effect that such quarterly financial statements fairly present in
all material respects the financial condition and results of operations of
the Parent Company and its consolidated Subsidiaries (including the
Borrowers), and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
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(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer, treasurer or controller of the Parent
Company substantially in the form of Schedule 7.1(c) attached hereto, (i)
demonstrating compliance with the financial covenants contained in Section
7.11 by calculation thereof as of the end of each such fiscal period and
(ii) stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent thereof
and what action the Parent Company proposes to take with respect thereto.
(d) Accountant's Report. Within the period for delivery of the annual
financial statements provided in Section 7.1(a), a report of the
accountants conducting the annual audit stating that they have reviewed
Section 7.11 and stating further whether, in the course of their audit,
anything came to their attention to cause them to believe that the Parent
Company and its consolidated Subsidiaries were not in compliance with
Section 7.11, in so far as such Section 7.11 relates to accounting matters,
on the date of such statements.
(e) Reports. Promptly upon transmission or receipt thereof, (a) copies
of all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on Forms
10-K, 10-Q and 8-K (or their equivalent) which the Parent Company or any of
its Subsidiaries shall file with the Securities and Exchange Commission, or
any successor agency, (b) if requested by the Agent, copies of all
financial statements, proxy statements, notices and reports as the Parent
Company or any of its Subsidiaries shall send to its shareholders or to a
holder of any Indebtedness with a maximum principal amount exceeding
$75,000,000 owed by the Parent Company or any of its Subsidiaries in its
capacity as such a holder (other than reports of a routine or ministerial
nature which are not material) and (c) upon the request of the Agent, all
reports and written information to and from the United States Environmental
Protection Agency, or any state or local agency responsible for enforcement
of Environmental Laws (other than reports of a routine or ministerial
nature which are not material).
(f) Notices. Upon any Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Agent immediately of (a) the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Credit Party proposes to take with respect thereto, and (b) the occurrence
of any of the following (i) the pendency or commencement of any litigation,
arbitration or governmental proceeding against the Parent Company or any of
its Subsidiaries which is reasonably likely to have a Material Adverse
Effect, (ii) the institution of any proceedings against the Parent Company
or any of its Subsidiaries with respect to, or the receipt of notice by
such Person of potential liability or responsibility for, violation, or
alleged violation of any Environmental Laws, the violation of which would
likely have a Material Adverse Effect, or (iii) any notice or determination
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concerning the imposition of any withdrawal liability by a Multiemployer
Plan against the Parent Company or any of its Subsidiaries or any of
Commonly Controlled Entities of the Parent Company or any of its
Subsidiaries, the determination that a Multiemployer Plan is, or is
expected to be, in a Plan Reorganization or the termination of any Plan in
a distress termination under Section 4041(c) of ERISA.
(g) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Parent Company or any of its Subsidiaries as the
Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted under Section 8.3 or where failure to do so would not
reasonably be expected to have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
The Parent Company will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
The Parent Company will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its property if
noncompliance with any such law, rule, regulation, order or restriction would
have a Material Adverse Effect.
7.5 PAYMENT OF TAXES AND OTHER CLAIMS.
The Parent Company will, and will cause each of its Subsidiaries to, pay
and discharge (i) all material taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before a material penalty begins to accrue and (ii) all lawful
claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties other than Permitted Liens;
provided, however, that there shall be no requirement to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) would give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) would have a Material Adverse Effect.
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7.6 INSURANCE.
The Parent Company will, and will cause each of its Subsidiaries to, at all
times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice.
7.7 MAINTENANCE OF PROPERTY.
The Parent Company will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
excepted, except where failure to do so would not have a Material Adverse Effect
and will make, or cause to be made, in such properties and equipment from time
to time all repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses except where failure to do
so would not have a Material Adverse Effect.
7.8 PERFORMANCE OF OBLIGATIONS.
The Parent Company will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound, except where failure
to do so would not have a Material Adverse Effect.
7.9 USE OF PROCEEDS.
The Extensions of Credit and the proceeds thereof may be used solely for
the purposes provided in Section 6.15.
7.10 AUDITS/INSPECTIONS.
Upon reasonable prior notice, with reasonable frequency and during normal
business hours, the Parent Company will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Agent, including, without
limitation, independent accountants, agents, attorneys, and appraisers to visit
and inspect its property, including its books and records, their accounts
receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers of the Parent
Company and its Subsidiaries.
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7.11 FINANCIAL COVENANTS.
(a) Consolidated Net Worth. There shall be maintained at all times
Consolidated Net Worth of at least $1,000,000,000; provided, however, that
the minimum Consolidated Net Worth required hereunder shall be increased on
the last day of each fiscal year to occur from the Closing Date (other than
the fiscal year ending December 31, 1997) by an amount equal to 25% of
Consolidated Net Income for the fiscal year then ended (or if Consolidated
Net Income is a deficit, then zero).
(b) Leverage Ratio. The Leverage Ratio, as determined at the end of
each fiscal quarter for the four consecutive fiscal quarter period then
ended, shall not at any time exceed 3.75 to 1.0.
7.12 FEDERAL REGULATIONS.
No part of the proceeds of any Loans will be used in any manner which might
cause the Loans or the application of such proceeds to violate Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. If requested by any Lender or the Agent, the Credit
Parties will furnish to the Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that commencing with the
Closing Date and so long as this Credit Agreement is in effect and until the
Credit Party Obligations, together with interest, fees and other obligations
hereunder, have been paid in full and the Commitments hereunder shall have
terminated:
8.1 LIENS.
The Parent Company will not, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.2 NATURE OF BUSINESS.
No Credit Party will substantively alter the character or conduct of the
business conducted by it as of the Closing Date other than to enter into other
related businesses.
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8.3 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS.
The Parent Company will not, nor will it permit any of its Subsidiaries to:
(a) dissolve, liquidate or wind up its affairs, or enter into any
transaction of merger or consolidation; provided, however, the Parent
Company and its Subsidiaries shall be entitled to consummate the
transactions contemplated by the Merger Agreement; provided further that,
so long as no Default or Event of Default then exists or would be directly
or indirectly caused as a result thereof,
(i) any Subsidiary of the Parent Company (other than either
Borrower or Old PHC) may merge or consolidate with any other Person;
(ii) either Borrower may merge or consolidate with the other
Borrower, the Parent Company, Old PHC or any other Person provided
that (A) in the case of the merger or consolidation of either Borrower
with the Parent Company or Old PHC in which such Borrower is not the
surviving corporation, the Parent Company or Old PHC (as the case may
be) shall execute any and all documentation reasonably requested by
the Agent for the purpose of evidencing the Parent Company's or Old
PHC's (as the case may be) obligation to assume the indebtedness,
liabilities and obligations of such Borrower under the Credit
Documents and (B) in the case of the merger or consolidation of either
Borrower with any other Person: (1) such Borrower is the surviving
corporation; and (2) in the case of any individual transaction (or
series of related transactions) where the acquisition price for such
transaction (whether a single transaction or a series of related
transactions) exceeds $200,000,000, then the Borrowers must first
demonstrate compliance with the financial covenants under Section 7.11
on a Pro Forma Basis after giving effect to such transaction,
(iii) any Subsidiary of the Parent Company (other than either
Borrower) may dissolve, liquidate or wind up its affairs at any time;
and
(iv) Old PHC may merge with the Parent Company, Doubletree or
PHI;
(b) sell, transfer or otherwise dispose of any of its Property
(including without limitation pursuant to any sale and leaseback
transaction) except that the following shall be permitted: (i) the sale of
inventory for fair value in the ordinary course of business, (ii) the sale
or disposition of machinery and equipment no longer useful in the conduct
of such Person's business, (iii) transfers of Property by and among the
Parent Company and its Subsidiaries or between Subsidiaries of the Parent
Company, (iv) transfers of Property to Affiliates of the Parent Company and
its Subsidiaries so long as such transfers are permitted by Section 8.5
hereof, (v) transfers of Property in order to consummate the transactions
contemplated by the Merger Agreement, (vi) sales, transfers or other
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dispositions of Red Lion hotels or former Red Lion hotels and (vii) other
sales, transfers or dispositions of Property to the extent that the
aggregate net book value of such Property sold, transferred or otherwise
disposed of after the Closing Date shall not exceed 50% of the net book
value of Consolidated Assets as of the date of any such sale, transfer or
other disposition on a cumulative basis; provided, however, that if any
such sales, transfers or other dispositions (other than any sale, transfer
or other disposition of Red Lion hotels or former Red Lion hotels) are of,
or relate to, any of the Credit Parties' material servicemarks, trademarks,
tradenames, tradedress or any license thereof or the goodwill associated
with the use of, and/or symbolized by, any such intellectual property
assets of the Borrowers, then the Borrowers shall first demonstrate
compliance with the financial covenants under Section 7.11 on a Pro Forma
Basis after giving effect to such transaction;
(c) purchase or otherwise acquire (in a single transaction or a series
of related transactions) all or substantially all of the Property of any
other Person except where (i) no Default or Event of Default then exists or
would exist after giving effect thereto, (ii) the purchase or acquisition
does not require the solicitation of the consent of the shareholders or
other equity owners of the Person which is the subject thereof against the
recommendation of management, the board of directors or other managing
entity of such Person, (iii) the Person, division, operations or Property
which is the subject of the acquisition is in a related line of business to
that of the Parent Company and the Borrowers, and (iv) if the acquisition
price for such transaction (whether a single transaction or a series of
related transactions) shall exceed $200,000,000, the Borrowers first
demonstrate compliance with the financial covenants under Section 7.11 on a
Pro Forma Basis after giving effect to such transaction.
8.4 INVESTMENTS.
The Parent Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, (i) make Investments in unrelated lines of business
or (ii) make Investments that are recorded on the Parent Company's balance sheet
as "investments in joint ventures and partnerships" if the aggregate amount of
such Investments at any one time exceeds 30% of Consolidated Assets.
8.5 TRANSACTIONS WITH AFFILIATES.
The Parent Company will not, nor will it permit any of its Subsidiaries to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate of the Parent Company or any of its Subsidiaries other than on terms
and conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director,
shareholder or Affiliate, except that the restriction contained in this Section
8.5 shall not apply to (i) transactions and transfers among and between the
Parent Company and its Subsidiaries or between its
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Subsidiaries and (ii) the payment of reasonable compensation and benefits and
reimbursement of reasonable expenses of officers and directors.
8.6 FISCAL YEAR.
The Parent Company will not, nor will it permit any of its material
Subsidiaries to, change its fiscal year.
8.7 NO DIVIDEND RESTRICTIONS.
No material Subsidiary of either Borrower or Guarantor shall agree to or
permit to exist, any restrictions or limitations on the declaration or payment
of Dividends.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or the payment of any guaranty obligations in respect
thereof;
(ii) default, and such default shall continue for five (5) or
more days, in the payment when due of any interest on the Loans or the
payment of any guaranty obligations in respect thereof; or
(iii) default, and such default shall continue for five (5) or
more days after notice from the Agent, in the payment when due of any
amounts hereunder or under any of the other Credit Documents other
than as provided in subsections (i) and (ii) above, or the payment of
any guaranty obligations in respect thereof; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
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(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Section 7.11, 8.1, 8.2, 8.3, 8.4,
8.6 or 8.7; or
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(g) or 7.10 and such
default shall continue unremedied for a period of at least 5 days
except for information requests where more than 5 days are reasonably
required to comply; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement or any of the other Credit Documents and such
default shall continue unremedied for a period of at least 30 days
after notice thereof by the Agent; or
(d) Other Credit Documents. Any Credit Document shall fail to be in
full force and effect in all material respects or to give the Agent and/or
the Lenders the material liens, rights, powers and privileges purported to
be created thereby; or
(e) Guaranties. The guaranty given by the Credit Parties hereunder or
any material provision thereof shall cease to be in full force and effect,
or any guarantor thereunder or any Person acting by or on behalf of such
guarantor shall deny or disaffirm such guarantor's obligations under such
guaranty, or any guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Credit Party shall commence a voluntary case
concerning itself under the Bankruptcy Code; or an involuntary case is
commenced against any Credit Party under the Bankruptcy Code and the
petition is not dismissed within 60 days, after commencement of the case;
or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of all or substantially all of the property of any Credit
Party; or any Credit Party commences any other proceeding under any
reorganization, arrangement, adjustment of the debt, relief of creditors,
dissolution, insolvency or similar law of any jurisdiction whether now or
hereafter in effect relating to any Credit Party; or there is commenced
against any Credit Party any such proceeding which remains undismissed for
a period of 60 days; or any Credit Party is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Credit Party suffers appointment of any
custodian or the like for it or for any substantial part of its property to
continue unchanged or unstayed for a period of 90 days; or any Credit Party
makes a general assignment for the benefit of creditors; or any corporate
action is taken by any Credit Party for the purpose of effecting any of the
foregoing; or
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(g) Defaults under Other Agreements. With respect to any Indebtedness
(other than Non-Recourse Indebtedness and Indebtedness outstanding under
this Credit Agreement) for which there is recourse against the Parent
Company and its Subsidiaries in excess of $30,000,000 in the aggregate, (i)
the Parent Company or any of its Subsidiaries shall (A) default in any
payment (beyond the applicable grace period with respect thereto, if any)
with respect to any such Indebtedness, or (B) default in the observance or
performance of any covenant relating to such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on behalf of
such holders) to cause, any such Indebtedness to become due prior to its
stated maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against the Parent Company or any of their Subsidiaries involving a
liability of $25,000,000 or more in the aggregate (to the extent not paid
or covered by insurance) and any such judgments or decrees shall not have
been vacated, discharged, satisfied or stayed or bonded pending appeal
within the greater of 30 days or the time permitted by law from the entry
thereof; or
(i) ERISA. The Parent Company or any of its Subsidiaries shall engage
in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), which has not been
waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan pursuant to Section 4068 or Section 302(f) of ERISA,
respectively, shall arise on the assets of the Parent Company, either
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence by the PBGC to have a
trustee appointed, or a trustee shall be appointed by the PBGC, to
administer or terminate, any Single Employer Plan, which Reportable Event
or commencement of proceedings or appointment of a trustee is reasonably
likely to result in the termination of such Plan for purposes of Title IV
of ERISA (other than a standard termination pursuant to Section 4041(b) of
ERISA), (iv) any Single Employer Plan shall terminate for purposes of Title
IV of ERISA in a distress termination under Section 4041(c), (v) the Parent
Company, either Borrower or any Commonly Controlled Entity shall, or is
reasonably likely to, incur any liability in connection with a withdrawal
by the Parent Company, either Borrower or any Commonly Controlled Entity
from, or the Insolvency or Reorganization of, a Multiemployer Plan, or (vi)
the occurrence or expected occurrence of any event or condition which
results or is reasonably likely to result in the Parent Company's, either
Borrower's or any Commonly Controlled Entity's becoming responsible for any
liability in respect of a Former Plan;
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and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, would
be reasonably expected to result in liability which could have a Material
Adverse Effect; provided, however, that the fact that a Plan is underfunded
shall not by itself constitute an Event of Default unless and until another
event or condition described in clause (i) through (vi) affecting such
underfunded Plan occurs and has a Material Adverse Effect; or
(j) Change of Control. Either (i) a "person" or a "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended) hereafter becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more
than 25% of the then outstanding voting stock of the Parent Company or (ii)
a majority of the Board of Directors of the Parent Company shall consist of
individuals who are not Continuing Directors; "Continuing Director" means,
as of any date of determination, (A) an individual who on the Closing Date
or the date two years prior to the date of determination (if such date of
determination is more than two years after the Closing Date) was a member
of the Parent Company's Board of Directors and (B) any new director whose
nomination for election by the Parent Company's shareholders was approved
by a vote of a majority of the directors then still in office who either
were directors on the Closing Date or the date two years prior to such date
of determination (if such date of determination is more than two years
after the Closing Date).
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the Required Lenders
or cured to the satisfaction of the Required Lenders (pursuant to the voting
procedures in Section 11.6), the Agent shall, upon the request and direction of
the Required Lenders, by written notice to the Borrowers, take any of the
following actions without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Credit Parties, except as otherwise specifically
provided for herein:
(i) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(ii) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other indebtedness
or obligations of any and every kind owing by the Borrowers to any of the
Lenders hereunder to be due whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers.
(iii) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents and all rights of set-off.
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Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Agent or the Lenders and the Credit Parties will be required to
pay on the guaranty hereunder.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity hereunder, the "Agent") of such Lender to
act as specified herein and the other Credit Documents, and each such Lender
hereby authorizes the Agent, as the agent for such Lender, to take such action
on its behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Agent shall not have any duties or responsibilities, except those expressly
set forth herein and therein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
Documents, or shall otherwise exist against the Agent. The provisions of this
Section (other than Section 10.9) are solely for the benefit of the Agent and
the Lenders, and the Borrowers and the other Credit Parties shall not have any
rights as a third party beneficiary of the provisions hereof. In performing its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or relationship of agency or trust
with or for either Borrower or any other Credit Party.
10.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties hereunder or under the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
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10.3 EXCULPATORY PROVISIONS.
Neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection herewith or in connection with the other Credit Documents, or
for any failure of the Borrowers to perform their obligations hereunder or
thereunder. The Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrowers or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties.
10.4 RELIANCE ON COMMUNICATIONS.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers or any of the other Credit Parties,
independent accountants and other experts selected by the Agent with reasonable
care). The Agent may deem and treat the Lenders as the owner of their respective
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent in
accordance with Section 11.3(b) hereof. The Agent (solely in its capacity as the
Agent) shall be fully justified in failing or refusing to take any action under
this Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders)
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and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders (including their successors and assigns).
10.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless the Agent has received
notice from a Lender or a Credit Party referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a notice, the
Agent shall give prompt notice thereof to the Lenders. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereafter taken, including any review of the affairs of the
Borrowers, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrowers
and made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the 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 analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrowers which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the Agent in its capacity as such (to the
extent not reimbursed by the Borrowers or another Credit Party and without
limiting the obligation of the Borrowers or another Credit Party to do so),
ratably according to their respective Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
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judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including without limitation at any time following the payment
of the Credit Party Obligations ) be imposed on, incurred by or asserted against
the Agent in its capacities as such in any way relating to or arising out of
this Credit Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section shall
survive the payment of the Credit Party Obligations and all other amounts
payable hereunder and under the other Credit Documents.
10.8 AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers or any other Credit
Party as though the Agent were not Agent hereunder. With respect to the Loans
made and all Credit Party Obligations owing to it, the Agent shall have the same
rights and powers under this Credit Agreement as any Lender and may exercise the
same as though they were not Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
10.9 SUCCESSOR AGENT.
(a) The Agent may resign from the performance of all its functions and
duties hereunder at any time by giving fifteen (15) Business Day's prior
written notice to the Borrowers and the Lenders. Such resignation shall
take effect upon the appointment of a successor Agent pursuant to clause
(b) or (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Borrowers shall appoint a
successor Agent hereunder who shall be a commercial bank or trust company
reasonably acceptable to the Required Lenders (it being understood and
agreed that any Lender is deemed to be acceptable to the Required Lenders),
provided that if a Default or an Event of Default exists at the time of
such resignation, the Required Lenders shall appoint such successor Agent.
(c) If a successor Agent shall not have been so appointed within such
fifteen (15) Business Day period, the Agent, with the consent of the
Borrowers, shall then appoint a successor Agent who shall serve as the
Agent hereunder until such time, if any, as the Borrowers or Required
Lenders, as the case may be, appoint a successor Agent as provided above.
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(d) Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent, and the resigning Agent shall be discharged from its duties and
obligations as Agent, as appropriate, under this Credit Agreement and the
other Credit Documents and the provisions of this Section 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it
was Agent under this Credit Agreement.
10.10 CO AGENTS.
The Co-Agents, in such capacity, shall have no duties, liabilities,
obligations or rights under this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower and the Agent, set forth below, and in
the case of the Lenders, set forth on Schedule 11.1, or at such other address as
such party may specify by written notice to the other parties hereto:
if to the Credit Parties:
c/o Promus Hotels, Inc.
755 Crossover Lane
Memphis, Tennessee 38117
Attn: Carol G. Champion
Telephone: (901) 374-5380
Telecopy: (901) 374-5379
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if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
101 N. Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 386-9368
Telecopy: (704) 386-9923
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Lender (including, without limitation, branches,
agencies or affiliates of such Lender which are at least 50% owned by such
Lender or its parent company wherever located) to or for the credit or the
account of either Borrower against obligations and liabilities of such Borrower
to such Lender hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether such Lender shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
The Borrowers hereby agree that any Person purchasing a participation in the
Loans and Commitments hereunder pursuant to Section 11.3(c) or Section 3.12 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that the Borrowers may not assign
or transfer any of their interests without prior written consent of the
Lenders; provided further that the rights of each Lender to transfer,
assign or grant participations in its rights and/or obligations hereunder
shall be limited as set forth in this Section 11.3, provided, however, that
nothing herein shall prevent or prohibit any Lender from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank and (ii) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to its
parent company and/or to any affiliate of such Lender
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which is at least fifty percent (50%) owned by such Lender or its parent
company. To the extent required in connection with a pledge of Loans by any
Lender to a Federal Reserve Bank, the Borrowers agree that, upon request of
any such Lender, it will promptly provide such Lender a promissory note
evidencing the repayment obligations of the Borrowers with respect to the
principal of and interest on the Loans of such Lender arising under Section
2.1, 2.2, 2.3 and/or 2.4, as applicable, such promissory note to be in a
form reasonably satisfactory to the Borrowers and the applicable Lender.
(b) Assignments by Lenders. Each Lender may assign all or a portion of
its rights and obligations hereunder and under the Tranche A Credit
Agreement pursuant to an assignment agreement substantially in the form of
Schedule 11.3(b) to one or more Eligible Assignees, provided that any such
assignment shall be in a minimum aggregate amount of $10,000,000 (or, if
less, an amount equal to 100% of the Commitment held by such Lender) of the
Commitment, together with the portion of the commitment under the Tranche A
Credit Agreement being assigned, and in integral multiples of $1,000,000
above such amount, and that each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's rights and
obligations under this Credit Agreement and under the Tranche A Credit
Agreement; provided, however, that so long as NationsBank, N.A. is the
Agent hereunder, NationsBank, N.A. and its affiliates which are at least
50% owned by NationsBank, N.A., or its parent company, as a group, shall
continue to hold Commitments hereunder and under the Tranche A Credit
Agreement in a minimum aggregate amount of $40,000,000 at all times. Any
assignment hereunder shall be effective upon delivery to the Agent of
written notice of the assignment together with a transfer fee of $3,500
payable to the Agent for its own account; provided that no such transfer
fee shall be payable in connection with an assignment by any Lender to its
affiliates which are at least 50% owned by such Lender or its parent
company. The assigning Lender will give prompt notice to the Agent and the
Borrowers of any such assignment. Upon the effectiveness of any such
assignment (and after notice to the Borrowers as provided herein), the
assignee shall become a "Lender" for all purposes of this Credit Agreement
and the other Credit Documents and, to the extent of such assignment, the
assigning Lender shall be relieved of its obligations hereunder to the
extent of the Loans and Commitment components being assigned. By executing
and delivering an assignment agreement in accordance with this Section
11.3(b), the assigning Lender thereunder and the assignee thereunder shall
be deemed to confirm to and agree with each other and the other parties
hereto as follows: (i) such assigning Lender warrants that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim; (ii) except as set forth in clause (i) above, such
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 Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant
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hereto or thereto or the financial condition of any Credit Party or the
performance or observance by any Credit Party of any of its obligations
under this Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such
assignee represents and warrants that it is legally authorized to enter
into such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents and
such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment
agreement; (v) such assignee will independently and without reliance upon
the Agent, such assigning Lender 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 Credit Agreement and the other Credit Documents; (vi) such
assignee appoints and authorizes the Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit Agreement
and the other Credit Documents are required to be performed by it as a
Lender.
(c) Participations. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests and
obligations hereunder to one or more Eligible Participants; provided that
(i) such selling Lender shall remain a "Lender" for all purposes under this
Credit Agreement and the other Credit Documents (such selling Lender's
obligations under this Credit Agreement remaining unchanged) and the
participant shall not constitute a Lender hereunder, (ii) no such
participant shall have, or be granted, rights to approve any amendment or
waiver relating to this Credit Agreement or any of the other Credit
Documents except with respect to any such amendment or waiver which would,
under the terms of Section 11.6, require the consent of all of the Lenders,
and (iii) any such participations (including subparticipations) shall be in
a minimum aggregate amount of $5,000,000 of the Commitments and in integral
multiples of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under this Credit
Agreement or under any of the other Credit Documents (the participant's
rights against the selling Lender in respect of such participation to be
those set forth in the participation agreement with such Lender creating
such participation) and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation,
provided, however, that such participant shall be entitled to receive
additional amounts under Sections 3.5 and 3.8 on the same basis as if it
were a Lender (limited to the extent that the selling Lender would be able
to receive additional amounts under Sections 3.5 and 3.8); provided,
further, in the event such participant exercises any rights under Sections
3.5 or 3.8, the Borrowers shall be permitted to exercise their rights
pursuant to Section 3.15 with respect to the selling Lender.
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(d) Disclosure of Confidential Information. (i) Any Lender may, in
connection with any assignment pursuant to paragraph (b) above or a
participation pursuant to paragraph (c) above, disclose to the assignee or
the proposed assignee or the participant or the proposed participant any
information relating to the Credit Parties in connection with this Credit
Agreement, provided that, prior to any such disclosure each such assignee
or proposed assignee or participant or proposed participant shall execute
an agreement containing substantially the terms of all then existing
confidentiality agreements entered into by the assigning or selling Lender
with respect to the Parent Company, Old PHC, the Borrowers and their
Subsidiaries in connection with this Credit Agreement, in each case whereby
such assignee or proposed assignee or participant or proposed participant
shall agree to preserve the confidentiality of any non-public, confidential
or proprietary information relating to the Credit Parties.
(e) Designated Lender. Any Lender may at any time designate not more
than one Designated Lender to fund Committed Revolving Loans and/or
Competitive Loans on behalf of such Lender subject to the terms of this
Section 11.3(e) and the provisions of Section 11.3(b) hereof shall not
apply to such designation; provided that each Designated Lender which is a
non-U.S. Lender shall comply with all of the provisions of Section 3.9
hereof. No Lender may have more than one Designated Lender at any time.
Such designation may occur either by the execution of the signature pages
hereof by such Lender and Designated Lender next to the appropriate
"Designating Lender" and "Designated Lender" captions, or by execution by
such parties of a Designation Agreement subsequent to the date hereof;
provided, that any Lender and its Designated Lender executing the signature
pages hereof as "Designating Lender" and "Designated Lender," respectively,
on the date hereof shall be deemed to have executed a Designation
Agreement, and shall be bound by the respective representations, warranties
and covenants contained therein, and such designation shall be conclusively
deemed to be accepted by the Borrowers and the Agent. The parties to each
such designation occurring subsequent to the execution date hereof shall
execute and deliver to the Agent and the Borrowers for their acceptance a
Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender and consented to by the
Borrowers, the Agent will accept such Designation Agreement and will give
prompt notice thereof to the Borrowers and the other Lenders, whereupon,
(i) from and after the effective date specified in the Designation
Agreement, the Designated Lender shall become a party to this Credit
Agreement with a right to make Committed Revolving Loans and Competitive
Loans on behalf of its Designating Lender pursuant to Sections 2.1 and 2.4,
respectively, (ii) if so requested by such Designated Lender, the Borrowers
shall execute and deliver to such Designated Lender a promissory note in
accordance with the terms hereof, and (iii) the Designated Lender shall not
be required to make payments with respect to any obligations and
liabilities in this Credit Agreement except to the extent of excess cash
flow of such Designated Lender which is not otherwise required to repay
obligations of such Designated Lender which are then due and payable;
provided, however, that
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regardless of such designation and assumption by the Designated Lender, the
Designating Lender shall be and remain obligated to the Borrowers, the
Agent and the Lenders for each and every of the obligations of the
Designating Lender and its related Designated Lender with respect to this
Credit Agreement, including, without limitation, any actions taken by the
Designated Lender with respect to this Credit Agreement, any
indemnification obligations hereunder and any sums otherwise payable to the
Borrowers by the Designated Lender. Each Designating Lender, or a specified
branch or affiliate thereof, shall serve as the administrative agent of its
Designated Lender and shall on behalf of its Designated Lender: (i) receive
any and all payments made for the benefit of such Designated Lender and
(ii) give and receive all communications and notices and take all actions
hereunder, including, without limitation, votes, approvals, waivers,
consents and amendments under or relating to this Credit Agreement and the
other Credit Documents. No designation of a Designated Lender hereunder
shall have the effect of restricting the exercise of voting rights
hereunder. Any such notice, communication, vote, approval, waiver, consent
or amendment shall be signed by a Designating Lender, or specified branch
or affiliate thereof, as administrative agent for its Designated Lender and
need not be signed by such Designated Lender on its own behalf. The
Borrowers, the Agent and the Lenders may rely thereon without any
requirement that the Designated Lender sign or acknowledge the same. No
Designated Lender may assign or transfer all or any portion of its interest
hereunder or under any other Credit Document, other than via an assignment
to its Designating Lender, or otherwise in accordance with the provisions
of Section 11.3(b) or 11.3(c) hereof. All amounts payable by the Borrowers
hereunder shall be determined as if the Designating Lender had not
designated a Designated Lender; provided, however, that the Designated
Lender shall be entitled to receive additional amounts under Sections 3.5
and 3.8 on the same basis as if it were the Designating Lender (limited to
the extent that the Designating Lender would be able to receive additional
amounts under Sections 3.5 and 3.8); provided, further, that in the event
the Designated Lender exercises any rights under Sections 3.5 or 3.8, the
Borrowers shall be permitted to exercise their rights pursuant to Section
3.15 with respect to the Designating Lender.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between any Credit Party and the Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which the Agent or
any Lender would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights
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of the Agent or the Lenders to any other or further action in any circumstances
without notice or demand.
11.5 PAYMENT OF EXPENSES, ETC.
The Borrowers agree to: (i) pay all reasonable out-of-pocket costs and
expenses of the Agent in connection with the negotiation, preparation, execution
and delivery and administration (but as to administration, only administration
of the credit as among the Agent, the Borrowers, the other Credit Parties and
the Lenders and not as to any internal administration within the Agent) of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of Moore & Van Allen, special counsel to the Agent) and any
amendment, waiver or consent relating hereto and thereto requested or required
by the Borrowers including, but not limited to, any such amendments, waivers or
consents resulting from or related to any work-out, renegotiation or restructure
relating to the performance by the Borrowers under this Credit Agreement and of
the Agent and the Lenders in connection with enforcement of the Credit Documents
and the documents and instruments referred to therein (including, without
limitation, in connection with any such enforcement, the reasonable fees and
disbursements of counsel for the Agent and each of the Lenders) provided, that
for the purposes of this Credit Agreement, "reasonable attorneys' fees" shall be
limited by the actual attorneys' fees incurred by a party without application of
N.C. Gen. Stat. Section 6-21.2 and without any presumption that such reasonable
attorneys' fees shall be a fixed percentage of the Commitments; (ii) pay and
hold each of the Lenders harmless from and against any and all present and
future stamp, documentary and mortgage recording taxes and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iii) indemnify each Lender, its officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses incurred by any of them as
a result of, or arising out of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross negligence
or willful misconduct on the part of the Person to be indemnified).
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
(a) Neither this Credit Agreement nor any other Credit Document nor
any of the terms hereof or thereof may be amended, changed, waived,
discharged or terminated unless such amendment, change, waiver, discharge
or termination is in writing signed by
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the Required Lenders, provided that no such amendment, change, waiver,
discharge or termination shall, without the consent of each Lender
affected, (i) extend the Termination Date (except in accordance with the
provisions hereof) or reduce the rate or extend the time of payment of
interest or principal (other than as a result of waiving the applicability
of any post-default increase in interest rates) on any Loan or portion
thereof or fees hereunder or reduce the principal amount thereof, or
increase the Commitment of any such Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any condition for
an Extension of Credit, Default or Event of Default or of a mandatory
reduction in the total commitments shall not constitute a change in the
terms of any Commitment of any Lender and any increase in Commitment made
pursuant to Section 2.1(f) hereof shall not require the consent of any
Lender other than the increasing Lender or Lenders), (ii) release any
Guarantor from its guaranty obligations hereunder except in accordance with
the provisions of Section 8.3 hereof, (iii) amend, modify or waive any
provision of this Section or of Section 3.3(c) (provided that any Lender to
be terminated pursuant to Section 3.3(c) shall not be required to consent
to any such amendment, modification or waiver of Section 3.3(c) necessary
to effect such termination), (iv) reduce any percentage specified in, or
otherwise modify, the definition of Required Lenders, or (v) consent to the
assignment or transfer by any Credit Party of any of its rights and
obligations under (or in respect of) this Credit Agreement or other Credit
Documents except as permitted hereunder. No provision of Section 10 may be
amended without the consent of the Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
subclauses (i) through (iv), inclusive, of clause (a) above, the consent of
the Required Lenders is obtained but the consent of one or more of such
other Lenders whose consent is required is not obtained, the Borrowers
shall have the right (so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses
(A) or (B) below) to either (A) replace each such non-consenting Lender or
Lenders with one or more Replacement Lenders pursuant to Section 3.15 so
long as at the time of such replacement, each such Replacement Lender
consents to the proposed change, waiver, discharge or termination or (B)
terminate such non-consenting Lender's Commitment and repay all outstanding
Loans of such Lender in accordance with Sections 3.3(c) and 3.3(f),
provided that, unless the Commitments terminated and Loans repaid pursuant
to the preceding clause (B) are immediately replaced in full at such time
through the addition of new Lenders or the increase of the Commitments
and/or outstanding Loans of existing Lenders (who in each case must
specifically consent to any such increase), then in the case of any action
pursuant to the preceding clause (B), subject to the following proviso, the
Required Lenders (determined before giving effect to the proposed action)
shall specifically consent to such termination of Commitment and repayment
of Loans, provided further, notwithstanding the foregoing proviso, each of
the Lenders (other than the Lender whose Commitment is being terminated)
shall specifically consent to such termination of Commitment and repayment
of Loans if the aggregate amount of
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Commitments terminated pursuant to this Section 11.6(b) (including the
proposed termination) plus the aggregate amount of Commitments terminated
pursuant to Section 2.1(a) plus the aggregate amount of Commitments
terminated pursuant to Section 3.17 shall exceed $35,000,000, provided
further, that in any event the Borrowers shall not have the right to
replace a Lender, terminate its Commitment or repay its Loans solely as a
result of the withholding of any required consent by such Lender to any
increase in the Commitment of such Lender.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL OF INDEMNIFICATION.
All indemnities set forth herein, including, without limitation, in
Sections 3.5, 3.8, 3.9, 3.10, 3.14, 10.7 and 11.5 shall survive the execution
and delivery of this Credit Agreement, and the making of the Loans, the
repayment of the Credit Party Obligations and other obligations and the
termination of the Commitment hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA. Any legal action or proceeding with respect to
this Credit Agreement or any other Credit Document may be brought in the
courts of the State of North Carolina in Mecklenburg County, or of the
United States for the Western District of North Carolina, and, by execution
and delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of such courts. Each of the Credit
Parties further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to it at the address set out for notices pursuant to Section
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11.1, such service to become effective 30 days after such mailing. Nothing
herein shall affect the right of the Agent to serve process in any other
manner permitted by law or to commence legal proceedings or to otherwise
proceed against the Borrower in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) hereof and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) EACH OF THE AGENTS, EACH OF THE LENDERS AND EACH OF THE CREDIT
PARTIES HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by the Borrowers herein shall
survive delivery of the Notes and the making of the Loans hereunder.
11.14 KNOWLEDGE STANDARD.
As used herein, the phrase "to the knowledge of any Credit Party" or any
similar phrase shall mean the knowledge of any of the following persons (with
such persons' titles following
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the Closing Date): Raymond E. Schultz, CEO and Chairman; Richard M. Kelleher,
President and COO; William L. Perocchi, Executive V.P. and CFO; Ralph B. Lake,
Executive V.P., General Counsel and Secretary; Thomas L. Keltner, Executive V.P.
and Chief Development Officer; and Carol G. Champion, Vice President and
Treasurer; or any other person succeeding to the responsibilities of any such
individual.
11.15 CONFIDENTIALITY.
Each Lender agrees that it will use its best efforts not to disclose
without the prior consent of the Borrowers (other than to its employees,
auditors or counsel) any information with respect to the Parent Company or any
of its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document and which is designated by the Parent
Company or any of its Subsidiaries as confidential, provided that any Lender may
disclose any such information (a) as has become generally available to the
public, (b) as may be required in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender (including bank examiners) or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required in respect to any summons or subpoena or in connection
with any investigation by a Governmental Authority or litigation, (d) in order
to comply with any law, order, regulation or ruling applicable to such Lender,
and (e) to any prospective or actual transferee or participant of any rights and
interests hereunder provided such prospective transferee or participant executes
an agreement containing provisions substantially identical to those contained in
this Section.
11.16 AGENT'S AND LENDER'S COVENANT.
The Agent and each Lender hereby covenants that neither any Extension of
Credit nor any part of any Extension of Credit constitutes assets of an
"employment benefit plan" within the meaning of Section 3(3) of ERISA or a
"plan" within the meaning of Section 4975(e)(1) of the Code.
11.17 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by
the Lenders under this Credit Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability
for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrower with respect to the
payment and performance of all of the Credit Party Obligations, it being
the intention of the parties hereto that all the Credit
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Party Obligations shall be the joint and several obligations of each of
the Borrowers without preferences or distinction between them.
(c) If and to the extent that either of the Borrowers shall fail to
make any payment with respect to any of the Credit Party Obligations as and
when due or to perform any of the Credit Party Obligations in accordance
with the terms thereof, then in each such event, the other Borrower will
make such payment with respect to, or perform, such Credit Party
Obligation.
(d) The obligations of each Borrower under the provisions of this
Section 11.17 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein or required by
applicable law, each Borrower hereby waives notice of acceptance of its
joint and several liability, notice of the other Borrower's request for any
Loan under this Credit Agreement, notice of any Loan made under this Credit
Agreement, notice of occurrence of any Event of Default, or of any demand
for any payment under this Credit Agreement, notice of any action at any
time taken or omitted by any Lender under or in respect of any of the
Credit Party Obligations, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with
this Credit Agreement. Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Credit Party Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by any Lender at any
time or times in respect of any default by either Borrower in the
performance or satisfaction of any term, covenant, condition or provision
of this Credit Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Credit Party Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Credit Party Obligations or the
addition, substitution or release, in whole or in part, of either Borrower.
Without limiting the generality of the foregoing, each Borrower assents to
any other action or delay in acting or failure to act on the part of any
Lender, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy which might, but for the
provisions of this Section 11.17, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of
its obligations under this Section 11.17, it being the intention of each
Borrower that, so long as any of the Credit Party Obligations remain
unsatisfied, the obligations of such Borrower under this Section 11.17
shall not be discharged except by performance and then only to the extent
of such performance. The Credit Party Obligations of each Borrower under
this Section 11.17 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to either Borrower or any Lender. The joint
and several liability of the Borrowers hereunder shall continue in full
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force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, membership, constitution or place
of formation of either Borrower or any Lender.
(f) The provisions of this Section 11.17 are made for the benefit of
the Lenders and their respective successors and assigns, and may be
enforced by any such Person from time to time against either of the
Borrowers as often as occasion therefor may arise and without requirement
on the part of any Lender first to marshal any of its claims or to exercise
any of its rights against the other Borrower or to exhaust any remedies
available to it against the other Borrower or to resort to any other source
or means of obtaining payment of any of the Credit Party Obligations or to
elect any other remedy. The provisions of this Section 11.17 shall remain
in effect until all the Credit Party Obligations shall have been paid in
full or otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Credit Party Obligations, is
rescinded or must otherwise be restored or returned by any Lender upon the
insolvency, bankruptcy or reorganization of either of the Borrowers, or
otherwise, the provisions of this Section 11.17 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the joint obligations
of either Borrower shall be adjudicated to be invalid or unenforceable for
any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Borrower hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the federal Bankruptcy Code).
(h) The Borrowers hereby agree, as among themselves, that if either
Borrower shall become an Excess Funding Borrower (as defined below), the
other Borrower shall, on demand of such Excess Funding Borrower (but
subject to the next sentence hereof and to subsection (B) below), pay to
such Excess Funding Borrower an amount equal to such Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference
to the properties, assets, liabilities and debts of such Excess Funding
Borrower) of such Excess Payment (as defined below). The payment obligation
of either Borrower to any Excess Funding Borrower under this Section
11.17(h) shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Borrower under the other
provisions of this Credit Agreement, and such Excess Funding Borrower shall
not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such obligations. For purposes hereof,
(i) "Excess Funding Borrower" shall mean, in respect of any Credit Party
Obligations arising under the other provisions of this Credit Agreement
(hereafter, the "Joint Obligations"), either Borrower that has paid an
amount in excess of its Pro Rata Share of the Joint Obligations; (ii)
"Excess Payment" shall mean, in respect of any Joint Obligations, the
amount paid by
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an Excess Funding Borrower in excess of its Pro Rata Share of such Joint
Obligations; and (iii) "Pro Rata Share", for the purposes of this Section
11.17(h), shall mean, for either Borrower, the ratio (expressed as a
percentage) of (A) the amount by which the aggregate present fair saleable
value of all of its assets and properties exceeds the amount of all debts
and liabilities of such Borrower (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of
such Borrower hereunder) to (B) the amount by which the aggregate present
fair saleable value of all assets and other properties of such Borrower and
the other Borrower exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Borrower and the other
Borrower hereunder) of such Borrower and the other Borrower, all as of the
Closing Date.
11.18 NO BANKRUPTCY PROCEEDINGS.
Each of the Company, the Borrower, the Guarantors and the Agent agrees that
it will not institute against any Designated Lender or join any other Person in
instituting against any Designated Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the payment in full of
the latest maturing commercial paper note issued by such Designated Lender.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Tranche B Credit Agreement to be duly executed and delivered as of the
date first above written.
BORROWERS:
PROMUS HOTELS, INC.,
a Delaware corporation
By
------------------------------------
Title
--------------------------------
DOUBLETREE CORPORATION,
a Delaware corporation
By
------------------------------------
Title
--------------------------------
GUARANTORS: PROMUS HOTEL CORPORATION
(f/k/a Parent Holding Corp.),
a Delaware corporation
By
------------------------------------
Title
--------------------------------
PROMUS OPERATING COMPANY, INC.
(f/k/a Promus Acquisition Corp. f/k/a Promus Hotel
Corporation), a Delaware corporation
By
------------------------------------
Title
--------------------------------
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LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:
------------------------------------
Title:
--------------------------------
BANKERS TRUST COMPANY,
individually in its capacity as a
Lender and in its capacity as a Co-Agent
By:
------------------------------------
Title:
--------------------------------
THE BANK OF NOVA SCOTIA,
individually in its capacity as a
Lender and in its capacity as a Co-Agent
By:
------------------------------------
Title:
--------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE,
individually in its capacity as a
Lender and in its capacity as a Co-Agent
By:
------------------------------------
Title:
--------------------------------
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THE BANK OF NEW YORK
By:
------------------------------------
Title:
--------------------------------
THE CHASE MANHATTAN BANK
By:
------------------------------------
Title:
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CREDIT LYONNAIS NEW YORK BRANCH
By:
------------------------------------
Title:
--------------------------------
FIRST UNION NATIONAL BANK
By:
------------------------------------
Title:
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SOCIETE GENERALE, SOUTHWEST AGENCY
By:
------------------------------------
Title:
--------------------------------
91
WACHOVIA BANK, N.A.
By:
------------------------------------
Title:
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WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
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Title:
--------------------------------
By:
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Title:
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SUNTRUST BANK, NASHVILLE, N.A.
By:
------------------------------------
Title:
--------------------------------
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
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Title:
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DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLANDS BRANCH
By:
------------------------------------
Title:
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FIRST AMERICAN NATIONAL BANK
By:
------------------------------------
Title:
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FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By:
------------------------------------
Title:
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KEYBANK NATIONAL ASSOCIATION
By:
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Title:
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KREDIETBANK N.V., GRAND CAYMAN BRANCH
By:
------------------------------------
Title:
--------------------------------
By:
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Title:
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WELLS FARGO BANK, N.A.
By:
------------------------------------
Title:
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THE FIFTH THIRD BANK
By:
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Title:
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