EXHIBIT 10.9
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U.S. $500,000,000
CREDIT AGREEMENT
dated as of February 2, 1999
among
MARRIOTT INTERNATIONAL, INC.
THE BANKS NAMED HEREIN
CITIBANK, N.A.,
as Administrative Agent,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
THE CHASE MANHATTAN BANK,
as Documentation Agent
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
and
THE BANK OF NOVA SCOTIA,
as Joint Arrangers and Bookrunners
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TABLE OF CONTENTS
Page
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SECTION 1.01. Certain Defined Terms............................................................. 1
SECTION 1.02. Computation of Time Periods....................................................... 25
SECTION 1.03. Accounting Terms.................................................................. 25
SECTION 2.01. The Revolving Loans............................................................... 25
SECTION 2.02. The Competitive Bid Loans......................................................... 26
SECTION 2.03. The Swing Loans................................................................... 27
SECTION 2.04. Fees.............................................................................. 27
SECTION 2.05. Reductions of the Commitments..................................................... 28
SECTION 2.06. Repayment......................................................................... 28
SECTION 2.07. Interest.......................................................................... 29
SECTION 2.08. Interest Rate Determinations...................................................... 30
SECTION 2.09. Prepayments....................................................................... 31
SECTION 2.10. Payments and Computations......................................................... 33
SECTION 2.11. Taxes............................................................................. 34
SECTION 2.12. Sharing of Payments, Etc.......................................................... 38
SECTION 2.13. Conversion of Revolving Loans..................................................... 38
SECTION 2.14. Extension of Termination Date..................................................... 39
SECTION 2.15. Borrowings by Designated Borrowers................................................ 42
SECTION 3.01. Making the Revolving Loans........................................................ 43
SECTION 3.02. Making the Competitive Bid Loans.................................................. 45
SECTION 3.03. Making the Swing Loans, Etc....................................................... 48
SECTION 3.04. Increased Costs................................................................... 50
SECTION 3.05. Illegality........................................................................ 51
SECTION 3.06. Reasonable Efforts to Mitigate.................................................... 52
SECTION 3.07. Right to Replace Affected Person or Lender........................................ 52
SECTION 3.08. Use of Proceeds................................................................... 52
SECTION 4.01. Conditions Precedent to Initial Borrowing......................................... 53
SECTION 4.02. Conditions Precedent to Each Revolving Loan Borrowing and Swing Loan Borrowing.... 54
SECTION 4.03. Conditions Precedent to Each Competitive Bid Loan Borrowing....................... 54
SECTION 5.01. Representations and Warranties of the Company..................................... 56
SECTION 6.01. Affirmative Covenants............................................................. 58
SECTION 6.02. Negative Covenants................................................................ 61
SECTION 7.01. Events of Default................................................................. 64
SECTION 8.01. Authorization and Action.......................................................... 66
SECTION 8.02. Reliance, Etc..................................................................... 67
SECTION 8.03. Citibank, BNS and Chase and Affiliates............................................ 67
SECTION 8.04. Lender Credit Decision............................................................ 68
SECTION 8.05. Indemnification................................................................... 68
SECTION 8.06. Successor Administrative Agent.................................................... 68
SECTION 9.01. Amendments, Etc................................................................... 69
SECTION 9.02. Notices, Etc...................................................................... 69
SECTION 9.03. No Waiver; Remedies............................................................... 70
SECTION 9.04. Costs and Expenses................................................................ 70
ii
Page
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SECTION 9.05. Right of Set-off.................................................................. 71
SECTION 9.06. Binding Effect.................................................................... 72
SECTION 9.07. Assignments and Participations.................................................... 72
SECTION 9.08. Governing Law..................................................................... 76
SECTION 9.09. Execution in Counterparts......................................................... 76
SECTION 9.10. Confidentiality................................................................... 76
SECTION 9.11. Jurisdiction, Etc................................................................. 77
SECTION 9.12. WAIVER OF JURY TRIAL.............................................................. 77
SECTION 9.13. Judgment Currency................................................................. 78
SECTION 9.14. European Monetary Union........................................................... 78
SECTION 10.01. Guarantee........................................................................ 80
SECTION 10.02. Obligations Unconditional........................................................ 81
SECTION 10.03. Reinstatement.................................................................... 81
SECTION 10.04. Subrogation...................................................................... 81
SECTION 10.05. Remedies......................................................................... 81
SECTION 10.06. Continuing Guarantee............................................................. 82
SCHEDULES
Schedule I - Applicable Lending Offices; Addresses for Notices; Commitments
Schedule II - Existing Liens
EXHIBITS
Exhibit A-1 - Form of Revolving Loan Note
Exhibit A-2 - Form of Competitive Bid Loan Note
Exhibit B-1 - Notice of Revolving Loan Borrowing
Exhibit B-2 - Notice of Competitive Bid Loan Borrowing
Exhibit C-1 - Form of Assignment and Acceptance
Exhibit C-2 - Form of Participation Agreement
Exhibit C-3 - Form of New Commitment Acceptance
Exhibit D - Form of Opinion of the Company's Law Department
Exhibit E - Form of Opinion of Special New York Counsel to the Administrative Agent
Exhibit F-1 - Form of Designation Letter
Exhibit F-2 - Form of Termination Letter
Exhibit G - Form of Effective Date Notification
CREDIT AGREEMENT
AGREEMENT dated as of February 2, 1999, among MARRIOTT INTERNATIONAL,
INC., a Delaware corporation (the "Company"), the banks listed on the signature
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pages hereof under the heading "Banks" (the "Banks"), CITIBANK, N.A., as
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administrative agent (in such capacity, the "Administrative Agent") for the
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Lenders hereunder, THE BANK OF NOVA SCOTIA, as syndication agent (in such
capacity, the "Syndication Agent") and THE CHASE MANHATTAN BANK, as
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documentation agent (in such capacity, the "Documentation Agent").
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The Company has requested the Banks to provide the credit facilities
hereinafter referred to for the general corporate purposes of the Company, and
the Banks are prepared to provide such credit facilities on and subject to the
terms and conditions hereof. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acceptance" means an Assignment and Acceptance or a New Commitment
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Acceptance.
"Adjusted Total Debt" means, as at any date, the sum for the Company
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and its Subsidiaries (determined on a Consolidated basis without duplication in
accordance with GAAP) of:
(a) the aggregate principal amount of Debt for Borrowed Money of the
Company and its Subsidiaries (other than any such Debt for Borrowed Money
constituting Non-Recourse Indebtedness) outstanding on such date plus
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(b) the excess, if any, of (i) the aggregate of all Guarantees by the
Company and its Subsidiaries of Debt for Borrowed Money of others as of
such date over (ii) $400,000,000.
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"Administrative Agent" has the meaning specified in the recital of
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parties to this Agreement.
"Administrative Agent's Account" means, in respect of any Currency,
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such account as the Administrative Agent shall designate in a notice to the
Company and the Lenders.
Credit Agreement
2
"Affected Person" has the meaning specified in Sections 2.11(j),
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3.04(d), 3.05 and 3.07.
"Affiliate" means, as to any Person, any other Person that, directly
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or indirectly, controls, is controlled by or is under common control with such
Person or, unless the reference is to an Affiliate of a Lender, is a Marriott
Family Member or is a partner, member, director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"Alternate Currency" means, at any time, any currency other than
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Dollars, provided that, at such time, (i) such Currency is dealt with in the
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London (or, in the case of Pounds Sterling, Paris) interbank deposit market,
(ii) such Currency is freely transferable and convertible into Dollars in the
London (or, in the case of Pounds Sterling, Paris) foreign exchange market and
(iii) no central bank or other governmental authorization in the jurisdiction of
issue of such currency is required to permit use of such Currency by any Lender
for making any Loan and/or to permit the relevant Borrower to borrow and repay
the principal thereof and to pay the interest thereon (unless such authorization
has been obtained and is in full force and effect).
"Applicable Lending Office" means, with respect to each Lender, and
for each Type and Currency of Loan, such Lender's Domestic Lending Office in the
case of a Base Rate Loan and such Lender's Eurocurrency Lending Office in the
case of a Eurocurrency Rate Loan and, in the case of a Competitive Bid Loan, the
office of such Lender notified by such Lender to the Administrative Agent as its
Applicable Lending Office with respect to such Competitive Bid Loan, or in any
case such other office of such Lender or of an Affiliate of such Lender as such
Lender may from time to time specify to the Administrative Agent and the
Company.
"Applicable Margin" means, subject to the proviso below, as of any
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date, the applicable margin set forth below under the Eurocurrency Rate column
set forth below, based upon the Public Debt Rating in effect on such date:
Credit Agreement
3
Public Debt
Rating Eurocurrency Rate
S&P/▇▇▇▇▇'▇
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Level 1
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A/A2 or higher 0.215%
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▇▇▇▇▇ ▇
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▇-/▇▇ 0.295%
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Level 3
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BBB+/Baa1 0.375%
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Level 4
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BBB/Baa2 0.475%
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Level 5
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BBB-/Baa3 0.675%
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Level 6
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Lower than ▇▇▇▇▇ ▇ 0.900%
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provided that at any time (1) the aggregate outstanding principal amount of all
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Loans (for which purpose the amount of any Loan that is denominated in an
Alternate Currency shall be deemed to be the Dollar Equivalent thereof as of the
date of determination) exceeds (2) an amount equal to 25% of the then Current
Aggregate Commitment, the "Applicable Margin" shall be the applicable margin set
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forth below under the Eurocurrency Rate column set forth below, based upon the
Public Debt Rating in effect on such date:
Credit Agreement
4
Public Debt
Rating Eurocurrency Rate
S&P/▇▇▇▇▇'▇
===========================================================
Level 1
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A/A2 or higher 0.290%
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▇▇▇▇▇ ▇
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▇-/▇▇ 0.395%
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Level 3
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BBB+/Baa1 0.500%
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Level 4
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BBB/Baa2 0.600%
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Level 5
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BBB-/Baa3 0.800%
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Level 6
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Lower than ▇▇▇▇▇ ▇ 1.050%
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"Applicable Percentage" means, as of any date, the applicable percentage set
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forth below under the Facility Fee column based upon the Public Debt Rating in
effect on such date:
Credit Agreement
5
Public Debt
Rating Facility
S&P/▇▇▇▇▇'▇ Fee
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Level 1
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A/A2 or higher 0.085%
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▇▇▇▇▇ ▇
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▇-/▇▇ 0.105%
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Level 3
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BBB+/Baa1 0.125%
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Level 4
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BBB/Baa2 0.150%
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Level 5
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BBB-/Baa3 0.200%
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Level 6
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Lower than ▇▇▇▇▇ ▇ 0.300%
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"Assignment and Acceptance" means an assignment and acceptance entered into by
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a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit C-1
hereto.
"BNS" means The Bank of Nova Scotia and its successors.
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"Banks" has the meaning specified in the recital of parties to this Agreement.
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"Base Rate" means, for any period, a fluctuating interest rate per annum as
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shall be in effect from time to time which rate per annum shall at all times be
equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as its "base rate";
(b) the sum (adjusted to the nearest 1/4 of one percent, or if there
is no nearest 1/4 of one percent, to the next higher 1/4 of one percent) of
(i) 1/2 of one percent per annum, plus (ii) the rate obtained by dividing
(A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit
of major United States money market banks, such three-week moving average
(adjusted to the basis of a year of 365/366 days) being determined weekly
on each Monday (or, if any such date is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of
deposit dealers to and
Credit Agreement
6
published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to 100%
minus the average of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, but
not limited to, any emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar non-personal
time deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates for determining the then
current annual assessment payable by Citibank to the FDIC for insuring U.S.
dollar deposits in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Loan" means a Loan which bears interest as provided in
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Section 2.07(a)(i).
"Base Rate Swing Loan" has the meaning specified in Section 3.03(b).
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"Bondable Lease Obligation" of any Person means the obligation of
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such Person as tenant under an operating lease, upon the occurrence of a
significant underinsured casualty, an under-compensated governmental taking or
the practical inability to operate the premises for an extended period of time
due to force majeure or loss of a material permit, to make a payment to the
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landlord (or to make an irrevocable offer to purchase the landlord's fee
interest to avoid termination of such lease) in an amount that is calculated
with reference to the landlord's leasehold indebtedness.
"Borrowers" means, at any time, collectively, the Company (both as a
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Borrower and as guarantor under Article X of Loans made to the Designated
Borrowers) and each Designated Borrower.
"Borrowing" means a Revolving Loan Borrowing, a Swing Loan Borrowing
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or a Competitive Bid Loan Borrowing.
"Business Day" means a day of the year on which commercial banks are
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not required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurocurrency Rate Loans, on which dealings are
carried on in the London (and, in the case of Pounds Sterling, Paris) interbank
market and, if such day relates to a Borrowing of, a payment or prepayment of
principal of or interest on, or an Interest Period for, any Loan denominated in
an Alternate Currency, or a notice with respect to any such Borrowing, payment,
prepayment or Interest Period, also on which foreign exchange trading is carried
out in the London (and, in the case of Pounds Sterling, Paris) interbank market
and on which banks are open in the place of payment in the country in whose
Currency such Loan is denominated.
Credit Agreeement
7
"Change of Control" means:
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(i) any Person or two or more Persons acting in concert (other than a
Significant Shareholder or group of Significant Shareholders) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Company (or other securities
convertible into such Voting Stock) representing not less than 30% of the
combined voting power of all Voting Stock of the Company; or
(ii) during any period of up to 24 consecutive months, commencing on the
date of this Agreement, individuals who at the beginning of such 24-month period
were directors of the Company (together with any new director whose election by
the board of directors or whose nomination for election by the stockholders of
the Company was approved by a vote of at least two-thirds of the directors then
in office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) shall cease for
any reason (other than solely as a result of (a) death or disability or (b)
voluntary retirement of any individual in the ordinary course and not for
reasons related to an actual or proposed change in control of the Company) to
constitute a majority of the board of directors of the Company; or
(iii) any Person or two or more Persons acting in concert (other than a
Significant Shareholder or group of Significant Shareholders) shall have
acquired the power to exercise, directly or indirectly, effective control for
any purpose over Voting Stock of the Company (or other securities convertible
into such securities) representing not less than 30% of the combined voting
power of all Voting Stock of the Company.
"Chase" means The Chase Manhattan Bank and its successors.
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"Citibank" means Citibank, N.A. and its successors.
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"Code" means the Internal Revenue Code of 1986, as amended from time to time,
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and the regulations promulgated and rulings issued thereunder.
"COLI Debt" means all Indebtedness of the Company or any of its Subsidiaries
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to the insurance company issuing the COLI Policies, if and for so long as:
(a) the aggregate principal amount of such Indebtedness is equal to or
less than the aggregate account value of all COLI Policies at the time such
Indebtedness is incurred by the Company and such Subsidiaries and at all
times thereafter; and
(b) the documentation with respect to such Indebtedness limits the
recourse of the insurance company issuing the COLI Policies, as lender,
against the Company and such
Credit Agreement
8
Subsidiaries for the payment of such Indebtedness directly to the ownership
interest of the Company and its Subsidiaries in the COLI Policies.
"COLI Policies" means all corporate-owned life insurance policies
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purchased and maintained by the Company or any of its Subsidiaries to insure the
lives of certain employees of the Company and its Subsidiaries.
"Commitment" means, as to any Lender, (i) the Dollar amount set forth
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opposite its name on Schedule I hereto or (ii) if such Lender has entered into
one or more Acceptances, the amount set forth for such Lender in the Register,
in each case as the same may be reduced as expressly provided herein (including,
without limitation, pursuant to Sections 2.05, 2.14(c) and 3.07).
"Company" has the meaning specified in the recital of parties to this
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Agreement.
"Competitive Bid Loan" means a loan by a Lender to a Borrower as part
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of a Competitive Bid Loan Borrowing resulting from the auction bidding procedure
described in Section 3.02.
"Competitive Bid Loan Borrowing" means a Borrowing by a Borrower from
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each of the Lenders whose offer to make one or more Competitive Bid Loans as
part of such borrowing has been accepted by the Company under the auction
bidding procedure described in Section 3.02.
"Competitive Bid Loan Note" means a promissory note of a Borrower
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payable to the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of such Borrower to such Lender resulting
from a Competitive Bid Loan made by such Lender.
"Competitive Bid Loan Reduction" has the meaning specified in Section
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2.01.
"Confidential Information" means information that the Company or any
------------------------
of its Subsidiaries or Affiliates furnishes to the Administrative Agent, the
Syndication Agent, the Documentation Agent or any Lender on a confidential basis
by informing the recipient that such information is confidential or marking such
information as such, but does not include any such information that (i) is or
becomes generally available to the public or (ii) is or becomes available to
such Person or Persons from a source other than the Company or any of its
Subsidiaries or Affiliates, unless such Person has actual knowledge that (a)
such source is bound by a confidentiality agreement or (b) such information has
been previously furnished to such Person on a confidential basis.
"Consolidated" refers to the consolidation of accounts of the Company
------------
and its Subsidiaries in accordance with GAAP.
CREDIT AGREEMENT
9
"Conversion", "Convert" and "Converted" each refer to a conversion of
---------- ------- ---------
Revolving Loans of one Type into Revolving Loans of the other Type pursuant to
Section 2.13.
"Currency" means Dollars or any Alternate Currency.
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"Current Aggregate Commitment" means, at any time, the aggregate amount
----------------------------
of the Commitments as then in effect (computed without regard to any Competitive
Bid Loan Reduction or any Swing Loan Reduction).
"Debt for Borrowed Money" of any Person means:
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(i) all indebtedness of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade payables and accruals
incurred in the ordinary course of such Person's business);
(iv) all obligations of such Person as lessee under leases which shall
have been or should be, in accordance with GAAP, recorded as capital
leases; and
(v) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities to the extent that such
obligations support an obligation described in clauses (i) through (iv)
above.
"Default" means any Event of Default or any event that would constitute
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an Event of Default but for the requirement that notice be given or time elapse
or both.
"Designated Borrower" means any Wholly-Owned Subsidiary of the Company,
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as to which a Designation Letter has been delivered to the Administrative Agent
and as to which a Termination Letter has not been delivered to the
Administrative Agent in accordance with Section 2.15.
"Designation Letter" has the meaning specified in Section 2.15(a).
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"Documentation Agent" has the meaning specified in the recital of
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parties to this Agreement.
"Dollar Equivalent" means, with respect to any principal of or interest
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on any Loan denominated in an Alternate Currency, the amount of Dollars that
would be required to purchase the amount of the Alternate Currency of such
principal or interest on the date such Loan is requested (or (x) as otherwise
provided in Section 2.06(d), (y) in the case of any
CREDIT AGREEMENT
10
Competitive Bid Loan, the date of the related Notice of Competitive Bid Loan
Borrowing, and (z) in the case of any redenomination under Section 2.10(e), on
the date of such redenomination), based upon the arithmetic mean (rounded
upwards, if necessary, to the nearest 1/100 of 1%), as determined by the
Administrative Agent, of the spot selling rate at which the Reference Banks
offer to sell such Alternate Currency for Dollars in the London foreign exchange
market at approximately 11:00 a.m. London time for delivery two Business Days
thereafter.
"Dollars" and "$" mean lawful money of the United States of America.
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"Domestic Lending Office" means, with respect to any Lender, the office of
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such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Acceptance pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from time to time specify to
the Company and the Administrative Agent.
"EBITDA" means, for any period, net income (or net loss) plus the sum of (a)
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Interest Expense, (b) income tax expense, (c) depreciation expense, (d)
amortization expense and (e) non-recurring non-cash charges (including the
cumulative effect of accounting changes), in each case determined in accordance
with GAAP for such period.
"Effective Date" has the meaning set forth in Section 4.01.
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"Eligible Assignee" means:
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(i) a Lender and any Affiliate of such Lender;
(ii) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000;
(iii) a savings bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $500,000,000;
(iv) a commercial bank organized under the laws of any other country which
is a member of the OECD or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000; and
(v) a finance company, insurance company or other financial institution or
fund (whether a corporation, partnership or other entity) which is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business, and having total assets in excess of $150,000,000.
"Environmental Law" means any federal, state or local law, rule, regulation,
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order, writ, judgment, injunction, decree, determination or award relating to
the environment, health, safety or hazardous materials, including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water
CREDIT AGREEMENT
11
Act, the Toxic Substances Control Act, the Clean Air Act, the Safe Drinking
Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide and
Rodenticide Act and the Occupational Safety and Health Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of
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ERISA is a member of the Company's controlled group, or under common control
with the Company, within the meaning of Section 414(b) or 414(c) of the Code.
"ERISA Event" means, with respect to any Person, (a) the occurrence
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of a reportable event, within the meaning of Section 4043 of ERISA, with respect
to any Plan of such Person or any of its ERISA Affiliates unless the 30-day
notice requirement with respect to such event has been waived by the PBGC; (b)
the provision by the administrator of any Plan of such Person or any of its
ERISA Affiliates of a notice of intent to terminate such Plan pursuant to
Section 4041(a)(2) of ERISA with respect to a termination described in Section
4041(c)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(e) the failure by such Person or any members of its controlled group (within
the meaning of Section 302(f)(6)(B) of ERISA) to make a payment to a Plan
required under Section 302(f)(1)(A) and (B) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or (g) the
institution by the PBGC of proceedings to terminate a Plan of such Person or any
of its ERISA Affiliates, pursuant to Section 4042 of ERISA.
"Eurocurrency Lending Office" means, with respect to any Lender, the
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office of such Lender specified as its "Eurocurrency Lending Office" opposite
its name on Schedule I hereto or in the Acceptance pursuant to which it became a
Lender (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
the Company and the Administrative Agent.
"Eurocurrency Liabilities" has the meaning assigned to that term in
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Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurocurrency Rate" means, for any Interest Period for each
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Eurocurrency Rate Loan in any Currency comprising part of the same Revolving
Loan Borrowing, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of one percent) appearing on the Screen for such Currency as the
London Interbank Offered Rate for deposits in such Currency at approximately
11:00 A.M. London time (or as soon thereafter as practicable) two Business Days
prior to the first day of the Interest Period for such Loan; provided that if
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such rate does not
CREDIT AGREEMENT
12
appear on such Screen (or, if such Screen shall cease to be publicly available
or if the information contained on such Screen, in the Administrative Agent's
reasonable judgment, shall cease accurately to reflect such London Interbank
Offered Rate, as reported by any publicly available source of similar market
data selected by the Administrative Agent that, in the Administrative Agent's
reasonable judgment, accurately reflects such London Interbank Offered Rate),
the "Eurocurrency Rate" for such Interest Period for such Eurocurrency Rate Loan
in such Currency shall be (a) the arithmetic average (rounded to the nearest
1/100 of one percent) of the rates per annum at which deposits in such Currency
are offered by the principal office of each of the Reference Banks in London,
England to prime banks in the London (or, in the case of Pounds Sterling, Paris)
interbank market at approximately 11:00 A.M. (London time) two Business Days
before the first day of the Interest Period for such Loan in an amount
substantially equal to such Reference Bank's Eurocurrency Rate Loan comprising
part of such Revolving Loan Borrowing to be outstanding during such Interest
Period; provided, further, that in the case of each Lender that is subject to
-------- -------
the jurisdiction of the Financial Services Authority of England (or any
successor) (the "FSA"), the Eurocurrency Rate shall be increased for each
---
Interest Period by the associated cost rate (if any) applicable to Loans
denominated for such Interest Period in the lawful currency of England or a
foreign currency pursuant to applicable regulations of the FSA.
The Eurocurrency Rate for any Interest Period for each Eurocurrency
Rate Loan comprising part of the same Revolving Loan Borrowing shall be
determined by the Administrative Agent on the basis of the applicable Screen or
the applicable rates furnished to and received by the Administrative Agent from
the Reference Banks, as the case may be, two Business Days before the first day
of such Interest Period, subject, however, to the provisions of Section 2.08.
------- -------
"Eurocurrency Rate Loan" means a Loan which bears interest as
----------------------
provided in Section 2.07(a)(ii).
"Eurocurrency Rate Reserve Percentage" of any Lender for any
------------------------------------
Interest Period for any Eurocurrency Rate Loan means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning specified in Section 7.01.
-----------------
"Excluded Representations" means the representations and warranties
------------------------
set forth in (i) the last sentence of Section 5.01(b) (to the extent the
representations and warranties set forth in such sentence relate to matters
other than the Loan Documents), (ii) the last sentence of Section 5.01(e) and
(iii) Sections 5.01(g), 5.01(h), 5.01(i), 5.01(j) and 5.01(l).
CREDIT AGREEMENT
13
"FDIC" means the Federal Deposit Insurance Corporation or any
----
successor.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Termination Date" means, at any time, the latest occurring
----------------------
Termination Date in effect at such time.
"Foreclosure Guarantee" means any guarantee of secured
---------------------
Indebtedness the obligations under which guarantee are limited to providing that
following foreclosure (or sale in lieu thereof) on all such security the
guarantor will pay the holder of such Indebtedness the amount (if any) by which
the aggregate proceeds received by such holder from such foreclosure or sale
fall short of a specified amount, provided that such specified amount does not
--------
exceed 25% of the original principal amount of such secured Indebtedness.
"Foreign Currency Equivalent" means, with respect to any amount in
---------------------------
Dollars, the amount of an Alternate Currency that could be purchased with such
amount of Dollars using the reciprocal of foreign exchange rate(s) specified in
the definition of the term "Dollar Equivalent", as determined by the
Administrative Agent.
"GAAP" means generally accepted accounting principles in the
----
United States of America as in effect from time to time, except that, with
respect to the determination of compliance by the Company with the covenant set
forth in Section 6.01(j), "GAAP" shall mean such principles in the United States
----
of America as in effect as of the date of, and used in, the preparation of the
audited financial statements of the Company referred to in Section 5.01(e).
"Guarantee" of any Person means (a) any obligation, contingent or
---------
otherwise, directly or indirectly guaranteeing any Debt for Borrowed Money of
any other Person and (b) any other arrangement having the economic effect of a
Guarantee and the principal purpose of which is to assure a creditor against
loss in respect of Debt for Borrowed Money, in each case other than (i) the
endorsement for collection or deposit in the ordinary course of business, (ii)
any Foreclosure Guarantee and (iii) any Bondable Lease Obligation. The amount of
any Guarantee (other than for purposes of determining the Company's obligations
under Article X) shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guarantee is made, and (b) the maximum amount for which such Person may be
liable pursuant to the instrument embodying such Guarantee, unless such primary
obligation and the maximum amount for which such guaranteeing Person
CREDIT AGREEMENT
14
may be liable are not stated or determinable, in which case the amount of such
Guarantee shall be such Person's maximum reasonably anticipated liability in
respect thereof as determined by the Company in good faith.
"Guaranteed Obligations" has the meaning specified in Section
----------------------
10.01.
"Indebtedness" of any Person means (i) all Debt for Borrowed Money
------------
of such Person, (ii) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person and (iii) all Guarantees of such Person.
"Indemnified Party" has the meaning specified in Section 9.04(b).
-----------------
"Insufficiency" means, with respect to any Plan, the amount, if
-------------
any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Interest Expense" means, for any period, gross interest expense
----------------
plus capitalized interest for such period, in each case determined in accordance
with GAAP.
"Interest Period" means: (a) with respect to each Eurocurrency
---------------
Rate Loan, the period commencing on the date of such Eurocurrency Rate Loan
and ending on the numerically corresponding day in the first, second, third
or sixth (or, if requested by the Company and acceptable to each of the
Lenders, ninth or twelfth) calendar month thereafter, as the Company (on
its own behalf and on behalf of any other Borrower) may, upon notice
received by the Administrative Agent not later than 12:00 noon (New York
City time) on the third Business Day prior to the first day of such
Interest Period, select;
(b) with respect to each Base Rate Loan, the period commencing on
the date of such Base Rate Loan and ending on the first Quarterly Date
thereafter; and
(c) with respect to each Competitive Bid Loan, the period
commencing on the date of such Competitive Bid Loan and ending on the
maturity date thereof determined in accordance with Section 2.02(c);
provided that:
--------
(i) the Company may not select any Interest Period that ends after
the Final Termination Date;
(ii) Interest Periods commencing on the same date for Revolving
Loans comprising part of the same Revolving Loan Borrowing shall be of the
same duration; and
CREDIT AGREEMENT
15
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided in the case of any Interest Period for a Eurocurrency Rate Loan,
--------
that if such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day.
"Lenders" means the Banks listed on the signature pages hereof and each
-------
Eligible Assignee that shall become a party hereto pursuant to Section 9.07.
"Leverage Ratio" means, as at the last day of any fiscal quarter of the
--------------
Company ending on or after the date hereof, the ratio of:
(a) Adjusted Total Debt as of such day, to
(b) Consolidated EBITDA for the period of four fiscal quarters ending
on such day.
"Lien" means any lien, security interest or other charge or encumbrance
----
of any kind, or any other type of preferential arrangement having the practical
effect of any of the foregoing, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of way
or other encumbrance on title to real property.
"Loans" means all Revolving Loans, all Swing Loans and all Competitive
-----
Bid Loans.
"Loan Documents" means this Agreement, the Notes, each Designation
--------------
Letter and each Termination Letter.
"Local Time" means, with respect to any Loan denominated, or any
----------
payment to be made, in Dollars, New York City time, and with respect to any Loan
denominated, or any payment to be made, in an Alternate Currency, the local time
in the Principal Financial Center for such Currency.
"Margin Regulations" means, collectively, Regulations T, U and X, as
------------------
from time to time in effect, and any regulation replacing the same, of the Board
of Governors of the Federal Reserve System, or any successor thereto.
"Marriott Family Member" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇. Marriott, Jr.,
----------------------
▇▇▇▇▇▇▇ ▇. Marriott, any brother or sister of ▇.▇. Marriott, Sr., any children
or grandchildren of any of the foregoing, any spouses of any of the foregoing,
or any trust or other entity established primarily for the benefit of one or
more of the foregoing.
CREDIT AGREEMENT
16
"Material Adverse Change" means any material adverse change in the
-----------------------
business, condition (financial or otherwise), operations or properties of the
Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a)
-----------------------
the business, condition (financial or otherwise), operations or properties of
the Company and its Subsidiaries taken as a whole, (b) the rights and remedies
of the Administrative Agent or any Lender under the Loan Documents or (c) the
ability of the Company to perform its obligations under the Loan Documents.
"Material Subsidiary" means, at any time, a Subsidiary of the
-------------------
Company having (i) at least 10% of the total Consolidated assets of the Company
and its Subsidiaries (determined as of the last day of the most recent fiscal
quarter of the Company) or (ii) at least 10% of the Consolidated revenues of the
Company and its Subsidiaries for the fiscal year of the Company then most
recently ended.
"MICC" means Marriott International Capital Corporation, a
----
Delaware corporation.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
-------
by merger or consolidation to its business.
"Multiemployer Plan" of any Person means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, and which is a defined benefit plan, to
which such Person or any of its ERISA Affiliates is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer
----------------------
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one Person
other than such Person and its ERISA Affiliates or (b) was so maintained and in
respect of which such Person or any of its ERISA Affiliates could have liability
under Section 4064 or Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"MVCI" means Marriott Ownership Resorts, Inc. (d/b/a Marriott
----
Vacation Club International).
"New Commitment Acceptance" means a New Commitment Acceptance
-------------------------
executed and delivered by a New Lender, and accepted by the Administrative
Agent, in accordance with Section 9.07 and in substantially the form of Exhibit
C-3 hereto.
"New Lender" means, for purposes of Sections 2.14(c) and 9.07(c),
----------
an Eligible Assignee (which may be a Lender) approved by the Administrative
Agent (which approval shall
CREDIT AGREEMENT
17
not be unreasonably withheld) that the Company has requested to become a Lender
hereunder pursuant to said Section 2.14(c).
"Non-Recourse Indebtedness" means any Indebtedness of the Company or
-------------------------
any of its Subsidiaries if, and so long as, such Indebtedness meets the
requirements of clause (i), clause (ii), clause (iii) or clause (iv) below:
(i) Such Indebtedness is secured solely by Purchase Money Liens and:
(a) the instruments governing such Indebtedness limit the recourse
(whether direct or indirect) of the holders thereof against the
Company and its Subsidiaries for the payment of such Indebtedness to
the property securing such Indebtedness (with customary exceptions,
including, without limitation, recourse for fraud, waste,
misapplication of insurance or condemnation proceeds, and
environmental liabilities); provided that any partial Guarantee by, or
--------
any other limited recourse for payment of such Indebtedness against,
the Company or its Subsidiaries which is not expressly excluded from
the definition of "Guarantee" in this Section 1.01 shall, to the
extent thereof, constitute a Guarantee for purposes of the calculation
of Adjusted Total Debt but shall not prevent the non-guaranteed and
non-recourse portion of such Indebtedness from constituting Non-
Recourse Indebtedness; and
(b) if such Indebtedness is incurred after the date hereof by the
Company or a Subsidiary of the Company which is organized under the
laws of the United States or any of its political subdivisions,
either:
(x) (1) the holders of such Indebtedness shall have
irrevocably agreed that in the event of any bankruptcy,
insolvency or other similar proceeding with respect to the
obligor of such Indebtedness, such holders will elect (pursuant
to Section 1111(b) of the Federal Bankruptcy Code or otherwise)
to be treated as fully secured by, and as having no recourse
against such obligor or any property of such obligor other than,
the property securing such Indebtedness, and (2) if,
notwithstanding any election pursuant to clause (1) above, such
holders shall have or shall obtain recourse against such obligor
or any property of such obligor other than the property securing
such Indebtedness, such recourse shall be subordinated to the
payment in full in cash of the obligations owing to the Lenders
and the Administrative Agent hereunder and under the Notes; or
(y) the property securing such Indebtedness is not
material to the business, condition (financial or otherwise),
operations or properties of the Company and its Subsidiaries,
taken as a whole, as determined at the time such Indebtedness is
incurred;
CREDIT AGREEMENT
18
(ii) (a) The sole obligor of such Indebtedness (such obligor, a
"Specified Entity") is a corporation or other entity formed solely for the
---------------
purpose of owning (or owning and operating) property which is (or may be)
subject to one or more Purchase Money Liens, (b) such Specified Entity owns
no other material property, (c) the sole collateral security provided by
the Company and its Subsidiaries with respect to such Indebtedness (if any)
consists of property owned by such Specified Entity and/or the capital
stock of (or equivalent ownership interests in) such Specified Entity
(provided that any partial Guarantee by, or any other limited recourse for
--------
payment of such Indebtedness against, the Company or its Subsidiaries which
is not expressly excluded from the definition of "Guarantee" in this
Section 1.01 shall, to the extent thereof, constitute a Guarantee for
purposes of the calculation of Adjusted Total Debt but shall not prevent
the non-guaranteed and non-recourse portion of such Indebtedness from
constituting Non-Recourse Indebtedness), and (d) such Specified Entity
conducts its business and operations separately from that of the Company
and its other Subsidiaries;
(iii) Such Indebtedness is COLI Debt; or
(iv) Such Indebtedness is non-recourse Indebtedness in an aggregate
principal amount not exceeding $53,782,000 owing by Essex House Condominium
Corporation (a Subsidiary of the Company), as Owner Participant under the
Trust Indenture and Security Agreement (Delta 1993-6) dated as of June 1,
1993 with NationsBank of Georgia, N.A., as indenture trustee, which
Indebtedness is secured by a Boeing 767 aircraft leased to Delta Airlines
and by an assignment of such lease.
"Note" means a Revolving Loan Note or a Competitive Bid Loan Note.
----
"Notice of Competitive Bid Loan Borrowing" has the meaning specified
----------------------------------------
in Section 3.02(a).
"Notice of Revolving Loan Borrowing" has the meaning specified in
----------------------------------
Section 3.01(a).
"Notice of Swing Loan Borrowing" has the meaning specified in
------------------------------
Section 3.03(a).
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Operating Agreement" means an agreement between the Company or one
-------------------
of its Subsidiaries and the owner of a lodging or senior living facility
pursuant to which the Company or such Subsidiary operates such lodging or senior
living facility.
"Other Taxes" has the meaning specified in Section 2.11(b).
-----------
CREDIT AGREEMENT
19
"Participation Agreement" means a loan participation agreement in
-----------------------
substantially the form of Exhibit C-2 hereto, with such modifications, if any,
as may be approved by the Company.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor.
----
"Permitted Liens" means any of the following:
---------------
(a) Liens for taxes, assessments and governmental charges or levies
which are not yet due or are payable without penalty or of which the
amount, applicability or validity is being contested by the Company or the
Subsidiary whose property is subject thereto in good faith by appropriate
proceedings as to which adequate reserves are being maintained;
(b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable
without penalty or which are being contested or defended in good faith by
appropriate proceedings, or which are suspended or released by the filing
of ▇▇▇▇ ▇▇▇▇▇, or deposits to obtain the release of such Liens;
(c) pledges, deposits and other Liens made in the ordinary course of
business to secure obligations under worker's compensation laws,
unemployment insurance, social security legislation or similar legislation
or to secure public or statutory obligations;
(d) Liens to secure the performance of bids, tenders, contracts, leases
or statutory obligations, or Liens to secure obligations under the Self-
Insurance Program, or to secure surety, stay or appeal or other similar
types of deposits, Liens or pledges (to the extent such Liens do not secure
obligations for the payment of Debt for Borrowed Money);
(e) attachment or judgment Liens to the extent such Liens are being
contested in good faith and by proper proceedings, as to which adequate
reserves are being maintained (provided that any such Liens as to which
--------
enforcement has been commenced and is unstayed, by reason of pending appeal
or otherwise, for a period of more than thirty consecutive days, do not, in
the aggregate, secure judgments in excess of $25,000,000);
(f) Liens on any property of any Subsidiary of the Company to secure
Indebtedness owing by it to the Company or another Subsidiary of the
Company;
(g) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for
its present purposes;
CREDIT AGREEMENT
20
(h) Liens arising in connection with operating leases incurred in the
ordinary course of business of the Company and its Subsidiaries;
(i) Liens created in connection with the L/C Cash Collateral Account,
as defined in the $1,500,000,000 Credit Agreement dated as of February 19,
1998, among the Company, the lenders parties thereto, The Chase Manhattan
Bank and The First National Bank of Chicago, as managing agents, The Bank
of Nova Scotia, as documentation agent and letter of credit agent, and
Citibank, N.A., as administrative agent, as from time to time amended; or
any similar cash collateral account arrangement in relation to letters of
credit under any credit agreement that replaces said Credit Agreement;
(j) (i) subordination of any Operating Agreement to any ground lease
and/or any mortgage debt of the owner or landlord, and (ii) any agreement
by the Company or any of its Subsidiaries as operator to attorn to the
holder of such mortgage debt, the lessor under such ground lease or any
successor to either; and
(k) additional Liens upon cash and investment securities; provided that
(i) the only obligations secured by such Liens are obligations arising
under Swap Transactions entered into with one or more counterparties who
are not Affiliates of the Company or any of its Subsidiaries and (ii) the
aggregate fair market value of cash and investment securities covered by
such Liens does not at any time exceed the aggregate amount of the
respective termination or liquidation payments that would be payable to
such counterparties upon the occurrence of an event of default or other
similar event as to which the Company or any of its Subsidiaries is the
defaulting or affected party (subject to the application of any customary
and reasonable collateral valuation discount percentages and minimum
collateral transfer thresholds contained in the respective security and
margin agreements).
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association,
limited liability company, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
----
"Pounds Sterling" means the lawful money of England.
---------------
"Principal Financial Center" means, in the case of any Currency, the
--------------------------
principal financial center of the country of issue of such Currency, as
determined by the Administrative Agent.
"property" or "properties" means any right or interest in or to
-------- ----------
property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
CREDIT AGREEMENT
21
"Public Debt Rating" means, as of any date, the lowest rating that has
------------------
been most recently announced by either S&P or ▇▇▇▇▇'▇, as the case may be, for
any class of long-term senior unsecured, non-credit enhanced debt issued by the
Company. For purposes of the foregoing:
(a) if no Public Debt Rating shall be available from either S&P or
▇▇▇▇▇'▇, the Applicable Margin and the Applicable Percentage will be set in
accordance with Level 6 under the definition of "Applicable Margin" or
"Applicable Percentage", as the case may be;
(b) if only one of S&P and ▇▇▇▇▇'▇ shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating;
(c) if the ratings established by S&P and ▇▇▇▇▇'▇ shall fall within
different levels, the Applicable Margin and the Applicable Percentage shall
be based upon the higher rating, provided that if the lower rating falls
--------
more than one level below the higher rating (or in any event if the higher
split rating is Level 5), then the Applicable Margin and the Applicable
Percentage shall be based on the rating set forth in the level under the
definition of "Applicable Margin" or "Applicable Percentage" immediately
above the level for such lower rating; and
(d) if any rating established by S&P or ▇▇▇▇▇'▇ shall be changed, such
change shall be effective as of the date on which such change is first
announced publicly by the rating agency making such change.
"Purchase Money Lien" means any Lien on property, real or personal,
-------------------
acquired or constructed by the Company or any Subsidiary of the Company after
December 30, 1994:
(i) to secure the purchase price of such property;
(ii) that was existing on such property at the time of acquisition
thereof by the Company or such Subsidiary and assumed in connection with
such acquisition;
(iii) to secure Indebtedness otherwise incurred to finance the
acquisition or construction of such property (including, without
limitation, Indebtedness incurred to finance the cost of acquisition or
construction of such property within 24 months after such acquisition or
the completion of such construction); or
(iv) to secure any Indebtedness incurred in connection with any
extension, refunding or refinancing of Indebtedness (whether or not secured
and including Indebtedness under this Agreement) incurred, maintained or
assumed in connection with, or otherwise related to, the acquisition or
construction of such property;
CREDIT AGREEMENT
22
provided in each case that (1) such Liens do not extend to or cover or otherwise
--------
encumber any property other than property acquired or constructed by the Company
and its Subsidiaries after December 30, 1994, and (2) such Liens do not cover
current assets of the Company or any of its Subsidiaries other than current
assets that relate solely to other property subject to such Lien.
"Quarterly Dates" means the last Business Day of each March, June, September
---------------
and December, commencing on the first such date to occur after the Effective
Date.
"Quoted Rate Swing Loan" has the meaning specified in Section 3.03(b).
----------------------
"Reference Banks" means Citibank, BNS and Chase.
---------------
"Register" has the meaning specified in Section 9.07(d).
--------
"Required Lenders" means Lenders having at least 51% of the aggregate amount
----------------
of the Commitments or, if the Commitments shall have terminated, Lenders holding
at least 51% of the aggregate unpaid principal amount of the Loans (provided
--------
that, for purposes hereof, neither any Borrower, nor any of its Affiliates, if a
Lender, shall be included in (i) the Lenders holding such amount of the Loans or
having such amount of the Commitments or (ii) determining the aggregate unpaid
principal amount of the Loans or the total Commitments).
"Revolving Loan" means a Loan by a Lender to a Borrower as part of a Revolving
--------------
Loan Borrowing and refers to a Base Rate Loan or a Eurocurrency Rate Loan, each
of which shall be a "Type" of Revolving Loan.
----
"Revolving Loan Borrowing" means a borrowing consisting of simultaneous
------------------------
Revolving Loans of the same Type made by each of the Lenders pursuant to Section
2.01.
"Revolving Loan Note" means a promissory note of a Borrower payable to the
-------------------
order of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing
the aggregate indebtedness of such Borrower to such Lender resulting from the
Revolving Loans made by such Lender to such Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
---
Companies, Inc., or any successor by merger or consolidation to its business.
"Screen" means, with respect to any Currency, the relevant display page as
------
determined by the Administrative Agent of the Dow ▇▇▇▇▇ Markets Service on which
appears the London Interbank Offered Rate for deposits in such Currency.
"Self-Insurance Program" means the self-insurance program (including related
----------------------
self-funded insurance programs) established and maintained by the Company in the
ordinary course of its business.
Credit Agreement
23
"Significant Shareholder" means any Person that:
-----------------------
(i) is either a Marriott Family Member or on the date hereof possesses,
directly or indirectly, and such possession has been publicly disclosed,
the power to vote 5% or more of the outstanding shares of common stock of
the Company,
(ii) is or hereafter becomes a spouse of or any other relative (by
blood, marriage or adoption) of a Person described in clause (i),
(iii) is or becomes a transferee of the interests of any of the
foregoing Person or Persons by descent or by trust or similar arrangement
intended as a method of descent, or
(iv) is (x) an employee benefit or stock ownership plan of the Company
or (y) a grantor trust established for the funding, directly or indirectly,
of the Company's employee benefit plans and programs.
"Single Employer Plan" of any Person means a single employer plan, as defined
--------------------
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of such
Person or any of its ERISA Affiliates and no Person other than such Person and
its ERISA Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"SLS Entity" means any of Marriott Senior Living Services, Inc. and Marriott
----------
Senior Living Services Investment 10, Inc. and each other Subsidiary of the
Company that owns or operates a senior living services facility.
"Subsidiary" of any Person means any corporation, partnership, limited
----------
liability company, joint venture, trust or estate of which more than 50% of (a)
the issued and outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, limited liability
company or joint venture or (c) the beneficial interest in such trust or estate
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Swap Transaction" means (a) any rate, basis, commodity, currency, debt or
----------------
equity swap, (b) any cap, collar or floor agreement, (c) any rate, basis,
commodity, currency, debt or equity exchange or forward agreement, (d) any rate,
basis, commodity, currency, debt or equity option, (e) any other similar
agreement, (f) any option to enter into any of the foregoing, (g) any investment
management, master or other agreement providing for any of the foregoing and (h)
any combination of any of the foregoing.
Credit Agreement
24
"Swing Loan" means a Loan made by (a) a Swing Loan Bank pursuant to Section
----------
3.03 or (b) any Lender pursuant to Section 3.03.
"Swing Loan Bank" means Citibank or such other Lender as shall, with the
---------------
consent of the Administrative Agent and the Company, have agreed to become a
Swing Loan Bank for purposes hereof or, as to any Swing Loan Bank, such other
Lender as shall, with the consent of such Swing Loan Bank, the Administrative
Agent and the Company, have assumed the obligations of such Swing Loan Bank with
respect to any or all of such Swing Loan Bank's Swing Loans (and its ability to
make Swing Loans) hereunder.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan made by a
--------------------
Swing Loan Bank.
"Swing Loan Facility" means, as to any Swing Loan Bank, an aggregate amount
-------------------
not to exceed at any time outstanding such aggregate amount as the Company may
separately agree in writing with such Swing Loan Bank and, as to all Swing Loan
Banks collectively, an aggregate amount not to exceed $50,000,000 at any time
outstanding.
"Swing Loan Rate" has the meaning specified in Section 3.03.
---------------
"Swing Loan Reduction" has the meaning specified in Section 2.01.
--------------------
"Syndication Agent" has the meaning specified in the recital of parties to
-----------------
this Agreement.
"Taxes" has the meaning specified in Section 2.11(a).
-----
"Termination Date" of any Lender means the date five (5) years after the
----------------
Effective Date (as the same may be extended or changed pursuant to Section 2.14
or 9.07(a)(vi)) or, if earlier, the date of termination in whole of the
Commitments pursuant to the second sentence of Section 2.05 or pursuant to
Section 7.01.
"Type" has the meaning specified in the definition of "Revolving Loan".
----
"Unused Commitments" means, at any time, the aggregate amount of the
------------------
Commitments then unused and outstanding after giving effect to the Competitive
Bid Loan Reduction and the Swing Loan Reduction.
"Voting Stock" means capital stock issued by a corporation or equivalent
------------
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the right to
so vote has been suspended by the happening of such contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of ERISA.
------------
Credit Agreement
25
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such Person
-----------------------
100% of the Voting Stock of which (other than directors' qualifying shares or
other shares held to satisfy legal or regulatory requirements) are directly or
indirectly owned by such Person, or by one or more Wholly-Owned Subsidiaries of
such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
Person.
"Withdrawal Liability" has the meaning specified in Part 1 of Subtitle E of
--------------------
Title IV of ERISA.
SECTION 1.02. Computation of Time Periods.
---------------------------
In this Agreement in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms.
----------------
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Revolving Loans.
-------------------
(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Loans to the Company and any
Designated Borrower in Dollars or (in the case of any Eurocurrency Rate
Loan only) in any Alternate Currency from time to time on any Business Day
during the period from the Effective Date until the Termination Date of
such Lender in an aggregate amount as to all Borrowers not to exceed at any
time outstanding the amount of such Lender's Commitment; provided that the
--------
aggregate amount of the Commitments of the Lenders shall be deemed used
from time to time to the extent of (i) the aggregate amount of Competitive
Bid Loans then outstanding and (ii) the aggregate amount of Swing Loans
then outstanding, and such deemed uses of the aggregate amount of the
Commitments shall be applied to the Lenders ratably according to their
respective Commitments as in effect from time to time (such deemed uses of
the aggregate amount of the Commitments with respect to (a) Competitive Bid
Loans being a "Competitive Bid Loan Reduction" and (b) Swing Loans being a
------------------------------
"Swing Loan Reduction").
--------------------
(b) Each Revolving Loan Borrowing shall be in an aggregate amount not
less than $10,000,000 or, in the case of Eurocurrency Rate Loans
denominated in an Alternate Currency, the Foreign Currency Equivalent
thereof (or, if less, an aggregate amount equal to the lesser of (x) the
difference between the aggregate amount of a proposed Competitive Bid Loan
Borrowing requested by the Company and the aggregate amount of Competitive
Bid Loans offered to be made by the Lenders and accepted by the
Credit Agreement
26
Company in respect of such Competitive Bid Loan Borrowing, if such
Competitive Bid Loan Borrowing is made on the same date as such Revolving
Loan Borrowing and (y) the then remaining Unused Commitments of the Lenders
participating in such Borrowing, as applicable) and (subject to Section
2.08(d)) shall consist of Revolving Loans of the same Type in the same
Currency made on the same day by the Lenders ratably according to their
respective Commitments.
(c) Within the limits of each Lender's Commitment, each Borrower may
from time to time borrow, repay pursuant to Section 2.06 or prepay pursuant
to Section 2.09 and reborrow under this Section 2.01.
(d) For purposes of determining (i) whether the amount of any
Borrowing, together with all other Loans then outstanding, would exceed the
aggregate amount of the Commitments, and (ii) whether the aggregate
outstanding principal amount of the Loans is such as to require prepayment
under Section 2.06(d), the outstanding principal amount of any Loan that is
denominated in an Alternate Currency shall be deemed to be the Dollar
Equivalent of the Alternate Currency amount of such Loan.
SECTION 2.02. The Competitive Bid Loans.
-------------------------
(a) The Company may request the making of Competitive Bid Loan
Borrowings to any Borrower in Dollars or in any Alternate Currency from
time to time on any Business Day during the period from the Effective Date
until the date occurring 30 days prior to the Final Termination Date in the
manner set forth in Section 3.02, provided that, following the making of
--------
each Competitive Bid Loan Borrowing, the aggregate amount of the Loans then
outstanding shall not exceed the lesser of (i) the Current Aggregate
Commitment and (ii) the aggregate amount of the Commitments scheduled to be
in effect on the scheduled maturity date of the Competitive Bid Loans to be
made as part of such Borrowing.
(b) Within the limits and on the conditions set forth in this Section
2.02, each Borrower may from time to time borrow under this Section 2.02,
repay or prepay pursuant to subsection (c) below, and reborrow under this
Section 2.02, provided that a Competitive Bid Loan Borrowing shall not be
--------
made within three Business Days of the date of any other Competitive Bid
Loan Borrowing.
(c) Each Borrower shall repay to the Administrative Agent for the
account of each Lender which has made a Competitive Bid Loan to such
Borrower, or each other holder of a Competitive Bid Loan Note of such
Borrower, on the maturity date of each Competitive Bid Loan made to such
Borrower (such maturity date being that specified by the Company for
repayment of such Competitive Bid Loan in the related Notice of Competitive
Bid Loan Borrowing delivered pursuant to Section 3.02 and provided in the
Competitive Bid Loan Note evidencing such Competitive Bid Loan), the then
unpaid
Crdit Agreement
27
principal amount of such Competitive Bid Loan. Unless otherwise
agreed by the relevant Lender in its sole discretion, no Borrower shall
have the right to prepay any principal amount of any Competitive Bid Loan
of such Lender except, and then only on the terms, specified by the Company
for such Competitive Bid Loan in the related Notice of Competitive Bid Loan
Borrowing delivered pursuant to Section 3.02 and set forth in the
Competitive Bid Loan Note evidencing such Competitive Bid Loan.
(d) Each Borrower shall pay interest on the unpaid principal amount of
each Competitive Bid Loan made to such Borrower from the date of such
Competitive Bid Loan to the date the principal amount of such Competitive
Bid Loan is repaid in full, at the rate of interest for such Competitive
Bid Loan specified by the Lender making such Competitive Bid Loan in its
notice with respect thereto delivered pursuant to Section 3.02, payable on
the interest payment date or dates specified by the Company for such
Competitive Bid Loan in the related Notice of Competitive Bid Loan
Borrowing delivered pursuant to Section 3.02, as provided in the
Competitive Bid Loan Note evidencing such Competitive Bid Loan.
(e) The indebtedness of each Borrower resulting from each Competitive
Bid Loan made to such Borrower as part of a Competitive Bid Loan Borrowing
shall be evidenced by a separate Competitive Bid Loan Note of such Borrower
payable to the order of the Lender making such Competitive Bid Loan.
SECTION 2.03. The Swing Loans. The Company may request each Swing Loan Bank to
---------------
make, and each Swing Loan Bank may from time to time, in its sole discretion,
make, on the terms and conditions hereinafter set forth, Swing Loans to any
Borrower in Dollars from time to time on any Business Day during the period from
the date of the initial Borrowing until 60 days before the Final Termination
Date in an aggregate amount as to all Borrowers not to exceed at any time
outstanding the lesser of (i) the Swing Loan Facility and (ii) the then Unused
Commitments of Lenders having Termination Dates falling on or after the proposed
maturity date of such Swing Loan. Each Swing Loan Borrowing shall be in an
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall bear interest at the Base Rate or at the Swing Loan Rate for such Loan as
provided in Section 3.03. Within the limits of the Swing Loan Facility and the
Unused Commitments as aforesaid, each Borrower may borrow under this Section
2.03, repay pursuant to Section 2.06 or prepay pursuant to Section 2.09 and
reborrow under this Section 2.03.
SECTION 2.04. Fees.
----
(a) Facility Fees. The Company agrees to pay to the Administrative
-------------
Agent for the account of each Lender a facility fee on the average daily
amount (whether used or unused) of such Lender's Commitment (computed
without regard to any Competitive Bid Loan Reduction or any Swing Loan
Reduction) from the Effective Date (in the case of each Bank), and from the
effective date specified in the Acceptance pursuant to which it became a
Lender (in the case of each other Lender), until the Termination Date of
such
Credit Agreement
28
Lender, payable in arrears on each Quarterly Date during the term of such
Lender's Commitment, and on the Termination Date of such Lender, at a rate
per annum equal to the Applicable Percentage in effect from time to time.
(b) Up-Front Fees. The Company agrees to pay to the Administrative
-------------
Agent on the date of this Agreement for account of the Banks such fees as
have previously been agreed upon between the Company and the Administrative
Agent.
(c) Competitive Bid Loan Fee. The Company agrees to pay to the
------------------------
Administrative Agent for its own account a fee in the amount of $2,500 for
each request made by the Company for a Competitive Bid Loan Borrowing
pursuant to Section 3.02.
(d) Other Fees. The Company agrees to pay to the Administrative Agent
----------
for its account such fees as from time to time may be separately agreed
between the Company and the Administrative Agent.
SECTION 2.05. Reductions of the Commitments. The Commitment of each Lender
-----------------------------
shall be automatically reduced to zero on the Termination Date of such Lender.
In addition, the Company shall have the right, upon at least three Business
Days' notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the
Lenders, provided that (i) the aggregate amount of the Commitments of the
--------
Lenders shall not be reduced pursuant to this sentence to an amount which is
less than the aggregate principal amount of the Loans then outstanding and (ii)
each partial reduction shall be in an aggregate amount of at least $10,000,000.
Each Commitment reduction pursuant to this Section 2.05 shall be permanent.
SECTION 2.06. Repayment.
---------
(a) Revolving Loans. Each Borrower shall repay the principal amount of
---------------
each Revolving Loan made by each Lender to such Borrower, in the Currency
of such Revolving Loan, and each Revolving Loan made by such Lender shall
mature, on the last day of the Interest Period for such Revolving Loan.
(b) Competitive Bid Loans. Each Borrower shall repay the principal
---------------------
amount of each Competitive Bid Loan made by each Lender to such Borrower,
in the Currency of such Loan, as provided in Section 2.02(c).
(c) Swing Loans. Each Borrower shall repay to each Swing Loan Bank
-----------
(with notice to the Administrative Agent), and to the Administrative Agent
for the account of each other Lender that has made a Swing Loan, the
outstanding principal amount of each Swing Loan to such Borrower made by
each of them on the earlier of the maturity date specified in the
applicable Notice of Swing Loan Borrowing (which maturity shall be no later
than the seventh day after the requested date of such Borrowing) and the
Termination Date of such Lender.
Credit Agreement
28
(d) Certain Prepayments.
-------------------
(i) If at any time (1) the aggregate amount of all Loans (for
which purpose the amount of any Loan that is denominated in an
Alternate Currency shall be deemed to be the Dollar Equivalent thereof
as of the date of determination) exceeds (2) 103% of the then Current
Aggregate Commitment, the Administrative Agent shall use all
reasonable efforts to give prompt written notice thereof to the
Company, specifying the amount to be prepaid under this clause (i),
and the Company shall, within two Business Days of the date of such
notice, prepay the Loans, or cause Loans to be prepaid, in an amount
so that after giving effect thereto the aggregate outstanding
principal amount of the Loans (determined as aforesaid) does not
exceed the aggregate amount of the Commitments; provided that any such
--------
payment shall be accompanied by any amounts payable under Section
9.04(c). The determinations of the Administrative Agent hereunder
shall be conclusive and binding on the Company and the other Borrowers
in the absence of manifest error.
(ii) In addition, if on the last day of any Interest Period the
aggregate outstanding principal amount of the Loans (after giving
effect to any Loans being made to repay Loans maturing on that date)
would exceed 100% of the aggregate amount of the Commitments, the
Administrative Agent shall use all reasonable efforts to give prompt
written notice thereof to the Company, specifying the amount to be
prepaid under this clause (ii), and the Company shall, within two
Business Days of the date of such notice, prepay the Loans, or cause
Loans to be prepaid, or reduce the requested Loans in such amounts
that after giving effect to such action the aggregate outstanding
principal amount of the Loans (after giving effect to any Loans being
made to repay Loans maturing on that date) does not exceed the
aggregate amount of the Commitments; provided that any such payment
--------
shall be accompanied by any amounts payable under Section 9.04(c). The
determinations of the Administrative Agent hereunder shall be
conclusive and binding on the Company and the other Borrowers in the
absence of manifest error.
SECTION 2.07. Interest.
--------
(a) Ordinary Interest. Each Borrower shall pay interest on the unpaid
-----------------
principal amount of each Loan made by each Lender to such Borrower, in the
Currency of such Loan, from the date of such Loan until such principal
amount shall be paid in full, at the following rates per annum:
(i) Base Rate Loans and Swing Loans. If such Loan is a Revolving
-------------------------------
Loan or a Swing Loan (other than a Quoted Rate Swing Loan) which bears
interest at the Base Rate, a rate per annum equal at all times to the
Base Rate in effect from
Credit Agreement
30
time to time, payable on each Quarterly Date while such Revolving Loan
or Swing Loan is outstanding and on the date such Revolving Loan or
Swing Loan shall be paid in full.
(ii) Eurocurrency Rate Loans. If such Revolving Loan is a
Eurocurrency Rate Loan, a rate per annum equal at all times during
each Interest Period for such Revolving Loan to the sum of the
Eurocurrency Rate for such Interest Period plus the Applicable Margin,
----
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, at three-month
intervals following the first day of such Interest Period.
(b) Default Interest. Notwithstanding the foregoing, each Borrower
----------------
shall pay interest on (x) the unpaid principal amount of each Loan made by
each Lender to such Borrower that is not paid when due, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per
annum equal at all times to two percentage points (2%) per annum above the
rate per annum required to be paid on such Loan pursuant to said clause
(a)(i) or (a)(ii) and (y) the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on
the date such amount shall be paid in full and on demand, at a rate per
annum equal at all times to two percentage points (2%) per annum above the
rate per annum required to be paid on Base Rate Loans pursuant to clause
(a)(i) above.
SECTION 2.08. Interest Rate Determinations.
----------------------------
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Eurocurrency Rate.
If any one or more of the Reference Banks shall not furnish such timely
information to the Administrative Agent for the purpose of determining any
such interest rate, the Administrative Agent shall determine such interest
rate on the basis of timely information furnished by the remaining
Reference Banks.
(b) The Administrative Agent shall give prompt notice to the Company
and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.07(a)(i) or (ii), and the
applicable rate, if any, displayed on the relevant Screen or furnished by
each Reference Bank, as the case may be, for the purpose of determining the
applicable interest rate under Section 2.07(a)(ii).
(c) If prior to 10:00 A.M. (New York City time) on any date on which an
interest rate is to be determined pursuant to the proviso to the definition
of "Eurocurrency Rate", the Administrative Agent receives notice from two
or more of the Reference Banks that deposits in the relevant Currency are
not being offered by such Reference Bank or Banks to prime banks in the
London (or, in the case of Pounds Sterling, Paris) interbank market for the
applicable Interest Period or in the applicable amounts, the Administrative
Agent
Credit Agreement
31
shall so notify the Company of such circumstances, whereupon the right of
the Company to select Eurocurrency Rate Loans in such Currency for any
requested Revolving Loan Borrowing or any subsequent Revolving Loan
Borrowing shall be suspended until the first date on which the
circumstances causing such suspension cease to exist. If the Company shall
not, in turn, before 11:00 a.m. (New York City time) on such date notify
the Administrative Agent that its Notice of Revolving Loan Borrowing with
respect to which such Eurocurrency Rate was to be determined shall be
converted to a Notice of Revolving Loan Borrowing for Eurocurrency Rate
Loan in a different Currency or a Base Rate Loan, such Notice of Revolving
Loan Borrowing shall be deemed to be canceled and of no force or effect,
and Company shall not be liable to the Administrative Agent or any Lender
with respect thereto except as set forth in Section 3.01(c). In the event
of such a suspension, the Administrative Agent shall review the
circumstances giving rise to such suspension at least weekly and shall
notify the Company and the Lenders promptly of the end of such suspension,
and thereafter the Borrowers shall be entitled, on the terms and subject to
the conditions set forth herein, to borrow Eurocurrency Rate Loans in such
Currency.
(d) Notwithstanding anything in this Agreement to the contrary, no
Lender whose Termination Date falls prior to the last day of any Interest
Period for any Eurocurrency Rate Loan (a "Relevant Lender") shall
---------------
participate in such Loan. Without limiting the generality of the foregoing,
no Relevant Lender shall (i) participate in a Borrowing of any Eurocurrency
Rate Loan having an initial Interest Period ending after such Lender's
Termination Date, (ii) have any outstanding Eurocurrency Rate Loan
continued for a subsequent Interest Period if such subsequent Interest
Period would end after such Lender's Termination Date or (iii) have any
outstanding Base Rate Loan Converted into a Eurocurrency Rate Loan if such
Eurocurrency Rate Loan would have an initial Interest Period ending after
such Lender's Termination Date. If any Relevant Lender has outstanding a
Eurocurrency Rate Loan that cannot be continued for a subsequent Interest
Period pursuant to clause (ii) above or has outstanding a Base Rate Loan
that cannot be Converted into a Eurocurrency Rate Loan pursuant to clause
(iii) above, such Lender's ratable share of such Eurocurrency Rate Loan (in
the case of said clause (ii)) shall be repaid by the relevant Borrower on
the last day of its then current Interest Period and such Lender's ratable
share of such Base Rate Loan (in the case of said clause (iii)) shall be
repaid by the relevant Borrower on the day on which the Loans of Lenders
unaffected by said clause (iii) are so Converted. Subject to the terms and
conditions of this Agreement, the Borrowers may fund the repayment of the
Relevant Lenders' ratable shares of such Eurocurrency Rate Loans and Base
Rate Loans by borrowing from Lenders hereunder that are not Relevant
Lenders.
SECTION 2.09. Prepayments.
-----------
(a) The Borrowers shall have no right to prepay any principal amount of
any Revolving Loan or Swing Loan other than as provided in subsection (b)
below.
Credit Agreement
32
(b) Each Borrower may, (i) upon at least the number of Business Days'
prior notice specified in the first sentence of Section 3.01(a) with
respect to any Revolving Loan of the same Type, or (ii) upon notice by no
later than 11:00 A.M. (New York time) on the date of prepayment of any
Swing Loan, in either case given to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given, such Borrower shall, prepay the outstanding principal
amounts of the Loans made to such Borrower comprising part of the same
Revolving Loan Borrowing or Swing Loan Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial
-----------------
prepayment shall be in an aggregate principal amount not less than
$10,000,000 (or $5,000,000 in the case of Swing Loans) or an integral
multiple of $1,000,000 in excess thereof (or the Foreign Currency
Equivalent of such respective amounts) and (y) if any prepayment of any
Eurocurrency Rate Loans shall be made on a date which is not the last day
of an Interest Period for such Loans (or on a date which is not the
maturity date of such Swing Loans), such Borrower shall also pay any
amounts owing to each Lender pursuant to Section 9.04(c) so long as such
Lender makes written demand upon such Borrower therefor (with a copy of
such demand to the Administrative Agent) within 20 Business Days after such
prepayment.
(c) Upon the occurrence of a Change of Control, if so requested in
writing by the Required Lenders through the Administrative Agent within
sixty (60) days after the Company notifies the Administrative Agent of the
occurrence of such Change of Control, (i) the Company shall, on a day not
later than five Business Days after the date of such request, prepay and/or
cause to be prepaid the full principal of and interest on the Loans and the
Notes and all other amounts whatsoever payable under this Agreement
(including without limitation amounts payable under Section 9.04(c) as a
result of such prepayment) and (ii) the Commitments shall, on the date of
such request, forthwith terminate.
(d) If (i) the obligations of the Company under Article X with respect
to any outstanding Guaranteed Obligations owing by any Designated Borrower
(herein, the "Affected Borrower") shall for any reason (x) be terminated,
-----------------
(y) cease to be in full force and effect or (z) not be the legal, valid and
binding obligations of the Company enforceable against the Company in
accordance with its terms, and (ii) such condition continues unremedied for
15 days after written notice thereof shall have been given to the Company
by the Administrative Agent or any Lender, then the Affected Borrower
shall, no later than the 15th day after the date of such notice, prepay
(and the Company shall cause to be prepaid) the full principal of and
interest on the Loans owing by, and the Notes payable by, such Affected
Borrower and all other amounts whatsoever payable hereunder by such
Affected Borrower (including, without limitation, all amounts payable under
Section 9.04(c) as a result of such prepayment).
Credit Agreement
33
SECTION 2.10. Payments and Computations.
-------------------------
(a) (i) Except to the extent otherwise provided herein, all payments of
principal of and interest on Loans made in Dollars, and all other amounts
(other than the principal of and interest on any Loan denominated in an
Alternate Currency) payable by a Borrower under this Agreement and the
Notes, shall be made in Dollars, and all payments of principal of and
interest on Loans denominated in an Alternate Currency shall (subject to
Section 2.10(e)) be made in such Alternate Currency, in each case in
immediately available funds, without deduction, setoff or counterclaim, to
the Administrative Agent's Account for the relevant Currency, not later
than 11:00 A.M. (New York City time) (in the case of Loans denominated in
Dollars and other amounts payable in Dollars) or 11:00 A.M. Local Time in
the location of the Administrative Agent's Account (in the case of Loans
denominated in an Alternate Currency), on the day when due, provided
--------
that if a new Loan is to be made by any Lender to any Borrower on a ate on
which such Borrower is to repay any principal of an outstanding Loan of
such Lender in the same Currency, such Lender shall apply the proceeds of
such new Loan to the payment of the principal to be repaid and only an
amount equal to the difference between the principal to be borrowed and the
principal to be repaid shall be made available by such Lender to the
Administrative Agent as provided in Article III or paid by such Borrower to
the Administrative Agent pursuant to this Section 2.10, as the case may be.
(ii) The Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.02,
2.08(d), 2.11, 2.14(c) or 3.04) to the Lenders entitled thereto for the
account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement.
(iii) Upon its acceptance of an Acceptance and recording of the
information contained therein in the Register pursuant to Section 9.07(d),
from and after the effective date specified in such Acceptance the
Administrative Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned or assumed thereby to the Lender
assignee or New Lender thereunder (as the case may be). The parties to each
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between
themselves.
(b) All computations of interest based on the Base Rate and of fees shall
be made by the Administrative Agent on the basis of a year of 365 or 366 days,
as the case may be, and all computations of interest based on the Eurocurrency
Rate or the Federal Funds
Credit Agreement
34
Rate shall be made by the Administrative Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or facility fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, if such extension would cause payment of interest on
-----------------
or principal of Eurocurrency Rate Loans to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from a
Borrower prior to the date on which any payment is due to the Lenders hereunder
that such Borrower will not make such payment in full, the Administrative Agent
may assume that such Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent that such
Borrower shall not have so made such payment in full to the Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal Funds
Rate.
(e) Anything in Sections 2.06 or 2.07 to the contrary notwithstanding, and
without prejudice to Sections 2.07(b) or 7.01(a), if any Borrower shall fail to
pay any principal or interest denominated in an Alternate Currency within one
Business Day after the due date therefor in the case of principal and three
Business Days after the due date therefor in the case of interest (without
giving effect to any acceleration of maturity under Article VII), the amount so
in default shall automatically be redenominated in Dollars on the day one
Business Day after the due date therefor in the case of a principal payment and
three Business Days after the due date therefor in the case of an interest
payment in an amount equal to the Dollar Equivalent of such principal or
interest.
SECTION 2.11. Taxes.
-----
(a) Any and all payments by each Borrower hereunder or under the Notes shall
be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
---------
the case of each Lender, the Syndication Agent, the Documentation Agent and the
Administrative Agent, taxes imposed on or
Credit Agreement
35
measured by its net income (including alternative minimum taxable income), and
franchise taxes imposed on it, by any jurisdiction under the laws of which such
Person is organized or in which such Person is resident or doing business, or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If any Borrower shall be required by law to deduct any Taxes from
-----
or in respect of any sum payable hereunder or under any Notes to any such
Person, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.11) such Person receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Notes or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes or the other Loan Documents (hereinafter referred to as
"Other Taxes").
-----------
(c) Each Borrower will indemnify each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.11) paid in good faith by such Lender or the Administrative Agent (as
the case may be) and any liability (including, without limitation, penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted; provided, however, that (i) no Borrower shall be liable to any Person
-----------------
for any liability arising from or with respect to Taxes or Other Taxes, which
results from the gross negligence or willful misconduct of the Administrative
Agent or such Lender, (ii) so long as no Event of Default has occurred and is
continuing, the Administrative Agent or such Lender, as applicable, shall use
its reasonable best efforts to cooperate with each Borrower in contesting any
Taxes or Other Taxes which such Borrower reasonably deems to be not correctly or
legally asserted or otherwise not due and owing and (iii) no Borrower shall be
liable to the Administrative Agent or such Lender (as the case may be) for any
such liability arising prior to the date 120 days prior to the date on which
such Person first makes written demand upon such Borrower for indemnification
therefor. This indemnification shall be made within 30 days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes by a Borrower,
such Borrower will furnish to the Administrative Agent, at its address referred
to in Section 9.02, the original or a certified copy of a receipt evidencing
payment thereof.
Credit Agreement
36
(e) (i) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank and on the date of
the Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, on or before the date that such form expires or
becomes obsolete or after the occurrence of any event within the
control of such Lender (including a change in Applicable Lending
Office but not including a change in law) requiring a change in the
most recent form so delivered by it, and from time to time thereafter
if requested in writing by the Company (but only so long thereafter as
such Lender remains lawfully able to do so), shall provide the Company
with Internal Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the
rate of withholding tax on payments of interest by any Borrower that
is organized under the laws of the United States or any State thereof
(a "U.S. Borrower") or certifying that the income receivable pursuant
-------------
to this Agreement from any U.S. Borrower is effectively connected with
the conduct of a trade or business in the United States. If the form
provided by a Lender at the time such Lender first becomes a party to
this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 2.11(a) unless and until
such Lender provides the appropriate form certifying that a lesser
rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form;
provided, however, that, if at the date of the Assignment and
-------- -------
Acceptance pursuant to which a Lender assignee becomes a party to this
Agreement, the Lender assignor was in compliance with the provisions
of Section 9.07(h) and was entitled to payments under Section 2.11(a)
in respect of United States withholding tax with respect to interest
paid at such date, then, to such extent, the term "Taxes" shall
-----
include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States
interest withholding tax, if any, applicable with respect to the
Lender assignee on such date. If any form or document referred to in
this Section 2.11(e) requires the disclosure of information, other
than information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service form 1001 or
4224, that the relevant Lender considers to be confidential, such
Lender shall give notice thereof to the Company and shall not be
obligated to include in such form or document such confidential
information.
(ii) In addition, upon the reasonable request of the Company
(through the Administrative Agent) on behalf of any Borrower that is
not a U.S. Borrower, each Lender will use all reasonable efforts to
provide to such Borrower (if it can do so without material cost to
such Lender) such forms or other documentation as may be requested by
such Borrower in order to cause interest on Loans to such Borrower, to
the fullest extent permitted by applicable law, to be subject to a
Credit Agreement
37
reduced rate of withholding under the laws of the jurisdiction of
organization of such Borrower; and if any such form or document
requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the
date hereof, that the relevant Lender considers to be confidential,
such Lender shall give notice thereof to the Company and shall not be
obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Person that is required
pursuant to Section 2.11(e) to provide a Borrower with any documentation
described therein but has failed to provide a Borrower with such
documentation or notice that it cannot provide such form or other
documentation (other than if such failure is due to a change in law
----------
occurring subsequent to the date on which a form or other documentation
originally was required to be provided, or if such form or other
documentation otherwise is not required under the first sentence of
subsection (e) above), such Person shall not be entitled to indemnification
under Section 2.11(a) with respect to Taxes; provided, however, that should
-----------------
a Lender become subject to Taxes because of its failure to deliver a form
or other documentation required hereunder, the relevant Borrower shall take
such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.11 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.
(h) Notwithstanding any contrary provisions of this Agreement, in the
event that a Lender that originally provided such form or other
documentation as may be required under Section 2.11(e) thereafter ceases to
qualify for complete exemption from withholding tax, such Lender may assign
its interest under this Agreement to any Eligible Assignee and such
assignee shall be entitled to the same benefits under this Section 2.11 as
the assignor provided that the rate of withholding tax applicable to such
assignee shall not exceed the rate then applicable to the assignor.
(i) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.11 shall survive the payment in full of
principal and interest hereunder and under the Notes and the termination of
the Commitments.
(j) If a Borrower is required to pay any Lender any Taxes under Section
2.11(c), such Lender shall be an "Affected Person", and the Company shall
---------------
have the rights set forth in Section 3.07 to replace such Affected Person.
Credit Agreement
38
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain any payment
------------------------
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Revolving Loans or the Swing Loans made by it
(other than pursuant to Section 2.08(d), 2.11, 2.14(c), 3.04, 3.07 or 9.04(c))
in excess of its ratable share of payments on account of the Revolving Loans or
the Swing Loans obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Revolving Loans or
the Swing Loans made by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them, provided, however,
------------------
that, if all or any portion of such exces s payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.12
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
SECTION 2.13. Conversion of Revolving Loans.
-----------------------------
(a) Optional. Each Borrower may on any Business Day, upon notice given
--------
to the Administrative Agent not later than 12:00 noon (New York City time)
on (x) the third (or the fourth, in the case of Eurocurrency Rate Loans
denominated in an Alternate Currency) Business Day prior to the date of the
proposed Conversion into Eurocurrency Rate Loans and (y) the first Business
Day prior to the date of the proposed Conversion into Base Rate Loans, and,
in each case, subject to the provisions of Section 3.04, Convert all or any
portion of the Revolving Loans of one Type in the same Currency comprising
the same Revolving Loan Borrowing into Revolving Loans of the other Type in
the same Currency; provided, however, that any Conversion of Eurocurrency
-------- -------
Rate Loans into Base Rate Loans shall be made only on the last day of an
Interest Period for such Eurocurrency Rate Loans and any Conversion of Base
Rate Loans into Eurocurrency Rate Loans shall be in an amount not less than
the minimum amount specified in Section 3.01(b). Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Revolving Loans to be Converted and (iii)
if such Conversion is into Eurocurrency Rate Loans, the duration of the
initial Interest Period for such Revolving Loans. Each notice of
Conversion shall be irrevocable and binding on the Borrowers.
(b) Mandatory. If the Company shall fail to select the duration of any
---------
Interest Period for any Eurocurrency Rate Loans in accordance with the
provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Company and the
Lenders, whereupon each such Eurocurrency
Credit Agreement
39
Rate Loan will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Loan.
(c) Conversions Generally. Each Borrower and the Lenders hereby
---------------------
acknowledge that Conversions pursuant to this Section 2.13 do not
constitute Borrowings and, accordingly, do not result in the remaking of
any of the Company's representations and warranties pursuant to Section
4.02 or Section 4.03.
SECTION 2.14. Extension of Termination Date.
-----------------------------
(a) The Company may, by notice to the Administrative Agent (which shall
promptly notify the Lenders) not less than 45 days and not more than 60
days prior to each anniversary (each such anniversary, an "Anniversary
-----------
Date") of the Effective Date, request that each Lender extend such Lender's
Termination Date to the date (the "New Termination Date") that is one year
--------------------
after the then Final Termination Date. Each Lender, acting in its sole
discretion, shall, by written notice to the Administrative Agent given no
later than the date (the "Consent Date") that is the earlier of (i) 15 days
------------
after the date of the notice referred to in the preceding sentence and (ii)
30 days prior to the Anniversary Date (provided that, if such earlier date
--------
is not a Business Day, the Consent Date shall be the next succeeding
Business Day), advise the Administrative Agent as to:
(1) whether or not such Lender agrees to such extension of its
Termination Date (each Lender so agreeing to such extension being an
"Extending Lender"); and
-----------------
(2) only if such Lender is an Extending Lender, whether or not
such Lender also irrevocably offers to increase the amount of its
Commitment (each Lender so offering to increase its Commitment being
an "Increasing Lender" as well as an Extending Lender) and, if so, the
-----------------
amount of the additional Commitment such Lender so irrevocably offers
to assume hereunder (such Lender's "Proposed Additional Commitment").
------------------------------
Each Lender that determines not to extend its Termination Date (a "Non-Extending
-------------
Lender") shall notify the Administrative Agent (which shall notify the Lenders)
------
of such fact promptly after such determination but in any event no later than
the Consent Date, and any Lender that does not advise the Administrative Agent
in writing on or before the Consent Date shall be deemed to be a Non-Extending
Lender. The election of any Lender to agree to such extension shall not obligate
any other Lender to so agree. The Administrative Agent shall notify the Company
of each Lender's determination under this Section 2.14(a) no later than the date
25 days prior to the Anniversary Date (or, if such date is not a Business Day,
on the next preceding Business Day).
(b) (i) If all of the Lenders are Extending Lenders, then, effective
as of the Consent Date, the Termination Date of each Lender shall be
extended to the New
Credit Agreement
40
Termination Date, and the respective Commitments of the Lenders will
not be subject to change at such Consent Date pursuant to this Section
2.14.
(ii) If and only if the sum of (x) the aggregate amount of the
Commitments of the Extending Lenders plus (y) the aggregate amount of
----
the Proposed Additional Commitments of the Increasing Lenders (such
sum, the "Extending Commitments") shall be equal to at least 80% of
---------------------
the then Current Aggregate Commitment, then:
(1) effective as of the Consent Date, the Termination Date
of each Extending Lender shall be extended to the New Termination
Date; and
(2) the Company shall (so long as no Default shall have
occurred and be continuing) have the right, but not the
obligation, to take either of the following actions with respect
to each Non-Extending Lender during the period commencing on the
Consent Date and ending on the immediately succeeding Anniversary
Date:
(X) the Company may elect by notice to the
Administrative Agent and such Non-Extending Lender that the
Termination Date of such Non-Extending Lender be changed to
a date (which date shall be specified in such notice) on or
prior to the Anniversary Date (and, upon the giving of such
notice, the Termination Date of such Non-Extending Lender
shall be so changed); or
(Y) the Company may replace such Non-Extending Lender
as a party to this Agreement in accordance with Section
2.14(c).
(iii) If neither of the conditions specified in clause (i) or
clause (ii) of this Section 2.14(b) is satisfied, then neither the
Termination Date nor the Commitment of any Lender will change pursuant
to this Section 2.14 on such Consent Date, and the Company will not
have the right to take any of the actions specified in Section
2.14(b)(ii)(2).
(c) Replacement by the Company of Non-Extending Lenders pursuant to
Section 2.14(b)(ii)(2)(Y) shall be effected as follows (certain terms being
used in this Section 2.14(c) having the meanings assigned to them in
Section 2.14(d)) on the relevant Assignment Date:
(1) the Assignors shall severally assign and transfer to the
Assignees, and the Assignees shall severally purchase and assume from
the Assignors, all of the Assignors' rights and obligations
(including, without limitation, the Assignors' respective Commitments)
hereunder and under the Notes;
Credit Agreement
41
(2) each Assignee shall pay to the Administrative Agent, for
account of the Assignors, an amount equal to such Assignee's Share of
the aggregate outstanding principal amount of the Loans then held by
the Assignors;
(3) the Company shall pay to the Administrative Agent, for
account of the Assignors, all interest, fees and other amounts (other
than principal of outstanding Loans) then due and owing to the
Assignors by the Company hereunder (including, without limitation,
payments due such Assignors, if any, under Sections 2.11, 3.04 and
9.04(c)); and
(4) the Company shall pay to the Administrative Agent for account
of the Administrative Agent the $2,500 processing and recordation fee
for each assignment effected pursuant to this Section 2.14(c).
The assignments provided for in this Section 2.14(c) shall be effected on the
relevant Assignment Date in accordance with Section 9.07 and pursuant to one or
more Assignments and Acceptances. After giving effect to such assignments, each
Assignee shall have a Commitment hereunder (which, if such Assignee was a Lender
hereunder immediately prior to giving effect to such assignment, shall be in
addition to such Assignee's existing Commitment) in an amount equal to the
amount of its Assumed Commitment.
(d) For purposes of this Section 2.14 the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Assigned Commitments" means the Commitments of Non-Extending Lenders to be
--------------------
replaced pursuant to Section 2.14(b)(ii)(2)(Y).
"Assignees" means, at any time, Increasing Lenders and, if the Assigned
---------
Commitments exceed the aggregate amount of the Proposed Additional
Commitments, one or more New Lenders.
"Assignment Date" means the Anniversary Date or such earlier date as shall
---------------
be acceptable to the Company, the relevant Assignors, the relevant
Assignees and the Administrative Agent.
"Assignors" means, at any time, the Lenders to be replaced by the Company
---------
pursuant to Section 2.14(b)(ii)(2)(Y).
Credit Agreement
42
The "Assumed Commitment" of each Assignee shall be determined as
------------------
follows:
-------
(a) If the aggregate amount of the Proposed Additional
Commitments of all of the Increasing Lenders shall exceed the
aggregate amount of the Assigned Commitments, then (i) the amount
of the Assumed Commitment of each Increasing Lender shall be
equal to (x) the aggregate amount of the Assigned Commitments
multiplied by (y) a fraction, the numerator of which is equal to
-------------
such Increasing Lender's Commitment as then in effect and the
denominator of which is the aggregate amount of the Commitments
of all Increasing Lenders as then in effect; and (ii) no New
Lender shall be entitled to become a Lender hereunder pursuant to
Section 2.14(c) (and, accordingly, each New Lender shall have an
Assumed Commitment of zero).
(b) If the aggregate amount of the Proposed Additional
Commitments of all of the Increasing Lenders shall be less than
or equal to the aggregate amount of the Assigned Commitments,
then: (i) the amount of the Assumed Commitment of each Increasing
Lender shall be equal to such Increasing Lender's Proposed
Additional Commitment; and (ii) the excess, if any, of the
aggregate amount of the Assigned Commitments over the aggregate
----
amount of the Proposed Additional Commitments shall be allocated
among New Lenders in such a manner as the Company and the
Administrative Agent may agree.
"Share" means, as to any Assignee, a fraction the numerator of which is
-----
equal to such Assignee's Assumed Commitment and the denominator of which is the
aggregate amount of the Assumed Commitments of all the Assignees.
SECTION 2.15. Borrowings by Designated Borrowers.
----------------------------------
(a) The Company may, at any time or from time to time, designate
one or more Wholly-Owned Subsidiaries as Borrowers hereunder by
furnishing to the Administrative Agent a letter (a "Designation
-----------
Letter") in duplicate, in substantially the form of Exhibit F-1, duly
------
completed and executed by the Company and such Subsidiary. Upon any
such designation of a Subsidiary, such Subsidiary shall be a
Designated Borrower and a Borrower entitled to borrow Revolving Loans
and Competitive Bid Loans on and subject to the terms and conditions
of this Agreement.
(b) So long as all principal of and interest on all Loans made to
any Designated Borrower have been paid in full, the Company may
terminate the status of such Borrower as a Borrower hereunder by
furnishing to the Administrative Agent a letter (a "Termination
Letter") in substantially the form of Exhibit F-2, duly completed and
CREDIT AGREEMENT
43
executed by the Company. Any Termination Letter furnished hereunder shall
be effective upon receipt by the Administrative Agent, which shall promptly
notify the Lenders, whereupon the Lenders shall promptly deliver to the
Company (through the Administrative Agent) the Notes, if any, of such
former Borrower. Notwithstanding the foregoing, the delivery of a
Termination Letter with respect to any Borrower shall not terminate (i) any
obligation of such Borrower that remains unpaid at the time of such
delivery (including without limitation any obligation arising thereafter in
respect of such Borrower under Section 2.11 or 3.04) or (ii) the
obligations of the Company under Article X with respect to any such unpaid
obligations.
ARTICLE III
MAKING THE LOANS
SECTION 3.01. Making the Revolving Loans.
--------------------------
(a) Each Revolving Loan Borrowing shall be made on notice, given
not later than (x) 12:00 noon (New York City (or, in the case of a
Borrowing in an Alternate Currency, London) time) on the third (or, in
the case of a Borrowing to be denominated in an Alternate Currency,
fourth) Business Day prior to the date of a Eurocurrency Rate Loan
Borrowing, and (y) 11:00 A.M. (New York City time) on the day of a
Base Rate Loan Borrowing, by the Company (on its own behalf and on
behalf of any Designated Borrower) to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier, telex
or cable. Each such notice of a Revolving Loan Borrowing (a "Notice of
---------
Revolving Loan Borrowing") shall be made in writing, or orally and
------------------------
confirmed immediately in writing, by telecopier, telex or cable, in
substantially the form of Exhibit B-1 hereto, specifying therein the
requested (i) date of such Revolving Loan Borrowing (which shall be a
Business Day), (ii) Currency and Type of Revolving Loan comprising
such Revolving Loan Borrowing, (iii) aggregate amount of such
Revolving Loan Borrowing, (iv) in the case of a Revolving Loan
Borrowing comprised of Eurocurrency Rate Loans, the Interest Period
for each such Revolving Loan and (v) the name of the Borrower (which
shall be the Company or a Designated Borrower). Each Lender shall (A)
before 11:00 A.M. Local Time on the date of such Borrowing (in the
case of a Eurocurrency Rate Loan Borrowing) and (B) before 1:00 P.M.
(New York City time) on the date of such Borrowing (in the case of a
Base Rate Loan Borrowing), make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account for the relevant Currency in same day
funds, such Lender's ratable portion of such Revolving Loan Borrowing;
provided that, with respect to Borrowings of Eurocurrency Rate Loans,
--------
no Lender having a Termination Date prior to the last day of the
initial Interest Period for such Eurocurrency Rate Loans shall
participate in such Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article IV, the Administrative Agent will make
such funds available to the relevant Borrower in such manner as the
Administrative Agent and the Company may agree; provided, however,
-------- -------
CREDIT AGREEMENT
44
that the Administrative Agent shall first make a portion of such funds
equal to the aggregate principal amount of any Swing Loan as to which a
Borrower has received timely notice made by the Swing Loan Bank, and by any
other Lender and outstanding on the date of such Revolving Loan Borrowing,
plus interest accrued and unpaid thereon to and as of such date, available
to the Swing Loan Bank, and such other Lenders for repayment of such Swing
Loans.
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Company may not select Eurocurrency Rate Loans for any Revolving Loan
Borrowing if the aggregate amount of such Revolving Loan Borrowing is less
than $10,000,000 or the Foreign Currency Equivalent thereof.
(c) Subject to Sections 2.08(c) and 3.05, each Notice of Revolving
Loan Borrowing shall be irrevocable and binding on the Company and the
relevant Borrower. In the case of any Revolving Loan Borrowing by a
Borrower which the related Notice of Revolving Loan Borrowing specifies is
to be comprised of Eurocurrency Rate Loans, such Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in such
Notice of Revolving Loan Borrowing for such Revolving Loan Borrowing the
applicable conditions set forth in Article IV, including, without
limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such Lender to fund the Revolving Loan to be
made by such Lender as part of such Revolving Loan Borrowing when such
Revolving Loan, as a result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the time any Revolving Loan Borrowing is required to be
made that such Lender will not make available to the Administrative Agent
such Lender's ratable portion of such Revolving Loan Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Revolving Loan
Borrowing in accordance with subsection (a) of this Section 3.01 and the
Administrative Agent may, in reliance upon such assumption, make available
to the relevant Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and the relevant
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to such Borrower until the
date such amount is repaid to the Administrative Agent, at (i) in the case
of such Borrower, the interest rate applicable at the time to Revolving
Loans comprising such Revolving Loan Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate, provided that such Borrower retains its
--------
rights against such Lender with respect to any damages it may incur as a
result of such Lender's failure to fund, and notwithstanding anything
herein to the contrary, in no event shall such Borrower be liable to such
Lender or any other Person for the interest payable by such Lender to the
Administrative Agent
CREDIT AGREEMENT
45
pursuant to this sentence. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute
such Lender's Revolving Loan as part of such Revolving Loan Borrowing for
purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Loan to be made by
it as part of any Revolving Loan Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Revolving Loan on
the date of such Revolving Loan Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Loan
to be made by such other Lender on the date of any Revolving Loan
Borrowing.
SECTION 3.02. Making the Competitive Bid Loans.
--------------------------------
(a) The Company (on its own behalf and on behalf of any Designated
Borrower) may request a Competitive Bid Loan Borrowing under this Section 3.02
by delivering to the Administrative Agent a notice (made in writing, or orally
and confirmed immediately in writing, by telecopier, telex or cable) of a
Competitive Bid Loan Borrowing (a "Notice of Competitive Bid Loan Borrowing"),
----------------------------------------
in substantially the form of Exhibit B-2 hereto, specifying the date (which
shall be a Business Day) and aggregate amount of the proposed Competitive Bid
Loan Borrowing, the Currency thereof, the maturity date for repayment of each
Competitive Bid Loan to be made as part of such Competitive Bid Loan Borrowing
(which maturity date may not be later than 180 days or six months, as
applicable, after the date of such Competitive Bid Loan Borrowing (or, if
earlier, the Final Termination Date)), the interest payment date or dates
relating thereto, the name of the Borrower (which shall be the Company or a
Designated Borrower), and any other terms to be applicable to such Competitive
Bid Loan Borrowing, not later than (i) 10:00 A.M. New York (or, in the case of a
Borrowing in an Alternate Currency, London) time at least one Business Day prior
to the date of the proposed Competitive Bid Loan Borrowing, if the Company shall
specify in the Notice of Competitive Bid Loan Borrowing that the rates of
interest to be offered by the Lenders shall be fixed rates per annum and (ii)
12:00 noon New York (or, in the case of a Borrowing in an Alternate Currency,
London) time at least four Business Days prior to the date of the proposed
Competitive Bid Loan Borrowing, if the Company shall instead specify in the
Notice of Competitive Bid Loan Borrowing the basis to be used by the Lenders in
determining the rates of interest to be offered by them. The Administrative
Agent shall in turn promptly notify each Lender of each request for a
Competitive Bid Loan Borrowing received by it from the Company by sending such
Lender a copy of the related Notice of Competitive Bid Loan Borrowing.
(b) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Loans to a Borrower as
part of such proposed Competitive Bid Loan Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to the Company),
before 10:00 A.M. New York (or, in the case of a Borrowing in
CREDIT AGREEMENT
46
an Alternate Currency, London) time (i) on the date of such proposed Competitive
Bid Loan Borrowing, in the case of a Notice of Competitive Bid Loan Borrowing
delivered pursuant to clause (i) of paragraph (a) above and (ii) three Business
Days before the date of such proposed Competitive Bid Loan Borrowing, in the
case of a Notice of Competitive Bid Loan Borrowing delivered pursuant to clause
(ii) of paragraph (a) above, of the minimum amount and maximum amount of each
Competitive Bid Loan which such Lender would be willing to make as part of such
proposed Competitive Bid Loan Borrowing (which amounts may, subject to the
proviso to the first sentence of Section 2.02(a), exceed such Lender's
Commitment), the rate or rates of interest therefor and such Lender's Applicable
Lending Office with respect to such Competitive Bid Loan; provided that if the
--------
Administrative Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Company of such offer before
9:00 A.M. New York (or, in the case of a Borrowing in an Alternate Currency,
London) time on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect not to make
such an offer, such Lender shall so notify the Administrative Agent, before
10:00 A.M. New York (or, in the case of a Borrowing in an Alternate Currency,
London) time on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders, and such Lender shall not be
obligated to, and shall not, make any Competitive Bid Loan as part of such
Competitive Bid Borrowing; provided that the failure by any Lender to give such
--------
notice shall not cause such Lender to be obligated to make any Competitive Bid
Loan as part of such proposed Competitive Bid Loan Borrowing.
(c) The Company shall, in turn, (i) before 11:30 A.M. New York (or, in the
case of a Borrowing in an Alternate Currency, London) time on the date of such
proposed Competitive Bid Loan Borrowing, in the case of a Notice of Competitive
Bid Loan Borrowing delivered pursuant to clause (i) of paragraph (a) above and
(ii) before 1:00 P.M. New York (or, in the case of a Borrowing in an Alternate
Currency, London) time three Business Days before the date of such proposed
Competitive Bid Loan Borrowing, in the case of a Notice of Competitive Bid Loan
Borrowing delivered pursuant to clause (ii) of paragraph (b) above, either:
(A) cancel such Competitive Bid Loan Borrowing by giving the
Administrative Agent notice to that effect, or
(B) accept one or more of the offers made by any Lender or Lenders
pursuant to paragraph (b) above, in its sole discretion, by giving notice
to the Administrative Agent of the amount of each Competitive Bid Loan
(which amount shall be equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified to the Company by the
Administrative Agent on behalf of such Lender for such Competitive Bid Loan
pursuant to paragraph (b) above) to be made by each Lender as part of such
Competitive Bid Loan Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (b) above by giving the Administrative Agent
notice to that effect.
CREDIT AGREEMENT
47
(d) If the Company notifies the Administrative Agent that such
Competitive Bid Loan Borrowing is canceled pursuant to paragraph (c)(A)
above, the Administrative Agent shall give prompt notice thereof to the
Lenders and such Competitive Bid Loan Borrowing shall not be made.
(e) If the Company accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (c)(B) above, the Administrative
Agent shall in turn promptly notify (i) each Lender that has made an offer
as described in paragraph (b) above, of the date and aggregate amount of
such Competitive Bid Loan Borrowing and whether or not any offer or offers
made by such Lender pursuant to paragraph (b) above have been accepted by
the Company, (ii) each Lender that is to make a Competitive Bid Loan as
part of such Competitive Bid Loan Borrowing, of the amount of each
Competitive Bid Loan to be made by such Lender as part of such Competitive
Bid Loan Borrowing, and (iii) each Lender that is to make a Competitive Bid
Loan as part of such Competitive Bid Loan Borrowing, upon receipt, that the
Administrative Agent has received forms of documents appearing to fulfill
the applicable conditions set forth in Article IV. Each Lender that is to
make a Competitive Bid Loan as part of such Competitive Bid Loan Borrowing
shall, before 1:00 P.M. New York (or, in the case of a Borrowing in an
Alternate Currency, London) time on the date of such Competitive Bid Loan
Borrowing specified in the notice received from the Administrative Agent
pursuant to clause (i) of the preceding sentence or any later time when
such Lender shall have received notice from the Administrative Agent
pursuant to clause (iii) of the preceding sentence, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account for the relevant Currency such Lender's
portion of such Competitive Bid Loan Borrowing, in same day funds. Upon
fulfillment of the applicable conditions set forth in Article IV and after
receipt by the Administrative Agent of such funds, the Administrative Agent
will make such funds available to the relevant Borrower at the
Administrative Agent's aforesaid address. Promptly after each Competitive
Bid Loan Borrowing the Administrative Agent will notify each Lender of the
amount of the Competitive Bid Loan Borrowing, the consequent Competitive
Bid Loan Reduction and the dates upon which such Competitive Bid Loan
Reduction commenced and will terminate.
(f) Following the making of each Competitive Bid Loan Borrowing, the
Company shall be in compliance with the limitation set forth in the proviso
to the first sentence of Section 2.02(a).
(g) Notwithstanding anything to the contrary in Section 2.02 or in the
foregoing provisions of this Section 3.02, no Lender whose Termination Date
occurs prior to the maturity date for any Competitive Bid Loan requested in
a Notice of Competitive Bid Loan Borrowing shall be entitled to receive or
to make a quote pursuant to such Notice of Competitive Bid Loan Borrowing
or otherwise to participate in such Competitive Bid Loan Borrowing.
CREDIT AGREEMENT
48
SECTION 3.03. Making the Swing Loans, Etc.
----------------------------
(a) The Company (on its own behalf and on behalf of any Designated
Borrower) may request a Swing Loan Borrowing from a Swing Loan Bank under
this Section 3.03 by delivering to the Administrative Agent and such Swing
Loan Bank, no later than 2:00 p.m. (New York City time) on the date of the
proposed Swing Loan Borrowing, a notice of a Swing Loan Borrowing (a
"Notice of Swing Loan Borrowing"), which shall be made in writing, or
-------------------------------
orally and confirmed immediately in writing, by telecopier, telex or cable,
and shall specify therein (i) the Borrower (which shall be the Company or a
Designated Borrower), (ii) the requested Swing Loan Bank, (iii) the date of
such Borrowing (which shall be a Business Day), (iv) the amount of such
Borrowing, (v) the maturity of such Borrowing (which maturity shall be no
later than the seventh day after the requested date of such Borrowing) and
(vi) the account of the relevant Borrower to which the proceeds of such
Borrowing are to be made available.
(b) The relevant Swing Loan Bank may, if, in its sole discretion, it
elects to do so, irrevocably offer to make such Swing Loan to the relevant
Borrower by telephonic notice, such notice specifying whether such Swing
Loan will bear interest (i) at the rate of interest specified in Section
2.07(a)(i) (such Swing Loan, a "Base Rate Swing Loan") or (ii) at a
--------------------
different rate of interest specified in such notice by such Swing Loan Bank
in its sole discretion (such Swing Loan, a "Quoted Rate Swing Loan"). If
----------------------
such Swing Loan Bank shall elect not to make such an offer, such Swing Loan
Bank shall so notify the Administrative Agent and the Company; provided
--------
that the failure by such Swing Loan Bank to give such notice shall not
cause such Swing Loan Bank to be obligated to make such Swing Loan.
(c) If such Swing Loan Bank shall have offered to make a Swing Loan as
provided in paragraph (b) above, the Company shall, in turn, before the
earlier of one hour after its receipt of such offer and 2:30 P.M. (New York
City time) on the date of the proposed Swing Loan Borrowing either (A)
cancel such Swing Loan Borrowing or (B) accept such offer, in each case by
giving notice to such effect to the Administrative Agent and such Swing
Loan Bank.
(d) If the Company cancels such Swing Loan Borrowing pursuant to
paragraph (c)(A) above, such Swing Loan Borrowing shall not be made. If the
Company accepts such offer pursuant to paragraph (c)(B) above, the relevant
Swing Loan Bank will (subject to the applicable conditions set forth in
Article IV) make the amount of such Swing Loan available to the relevant
Borrower at the account specified in the relevant Notice of Swing Loan
Borrowing. In the case of any Borrowing of Quoted Rate Swing Loans, the
Company shall indemnify the relevant Swing Loan Bank against any loss, cost
or expense incurred by such Swing Loan Bank as a result of any failure to
fulfill on or before the date of such Swing Loan the applicable conditions
set forth in Article IV, including, without limitation, any loss (excluding
loss of anticipated profits), cost or
CREDIT AGREEMENT
49
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such Swing Loan Bank to fund the Quoted Rate
Swing Loan to be made by such Swing Loan Bank as part of such Borrowing
when such Quoted Rate Swing Loan, as a result of such failure, is not made
on such date.
(e) If the Company accepts an offer by a Swing Loan Bank for a Quoted
Rate Swing Loan as provided above, such Swing Loan Bank will provide the
Company and the Administrative Agent with written confirmation (a "Swing
-----
Loan Rate Confirmation") of the agreed interest rate (the "Swing Loan
---------------------- ----------
Rate") for such Quoted Rate Swing Loan by the Business Day next succeeding
----
the date on which the related Notice of Swing Loan Borrowing was given, and
the rate specified in such Swing Loan Rate Confirmation shall for all
purposes be the interest rate payable in respect of such Quoted Rate Swing
Loan notwithstanding any disagreement by the Company with the contents of
such written confirmation.
(f) Upon demand by a Swing Loan Bank through the Administrative Agent,
each other Lender having a Termination Date on or after the scheduled
maturity date of such Swing Loan shall purchase from such Swing Loan Bank,
and such Swing Loan Bank shall sell and assign to each other Lender, such
other Lender's pro rata share (determined based on the aggregate
Commitments of all Lenders having Termination Dates on or after the
scheduled maturity date of such Swing Loan) of each outstanding Base Rate
Swing Loan made by such Swing Loan Bank (and related claims for accrued and
unpaid interest), by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of such Swing
Loan Bank by deposit to the Administrative Agent at its aforesaid address,
in same day funds, an amount equal to the sum of (x) the portion of the
outstanding principal amount of such Base Rate Swing Loans to be purchased
by such Lender plus (y) interest accrued and unpaid to and as of such date
----
on such portion of the outstanding principal amount of such Base Rate Swing
Loans (it being understood that this sentence shall not apply to any Quoted
Rate Swing Loan). Each Lender's obligations to make such payments to the
Administrative Agent for account of the Swing Loan Banks under this
paragraph (f), and each Swing Loan Bank's right to receive the same, shall
be absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the failure of any other Lender
to make its payment under this paragraph (f), the financial condition of
the Company (or any other Person), the existence of any Default, the
failure of any of the conditions set forth in Article IV to be satisfied,
or the termination of the Commitments. Each such payment to a Swing Loan
Bank shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender agrees to purchase its pro rata share of such
outstanding Base Rate Swing Loans on (i) the Business Day on which demand
therefor is made by such Swing Loan Bank, provided that notice of such
--------
demand is given not later than 11:00 a.m. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment
by a Swing Loan Bank to any other Lender of a portion of such Swing Loan
Bank's Base Rate Swing Loans, such Swing Loan Bank represents
CREDIT AGREEMENT
50
and warrants to such other Lender that such Swing Loan Bank is the legal
and beneficial owner of such interest being assigned by it, but makes no
other representation or warranty and assumes no responsibility with respect
to such Swing Loan, the Loan Documents or any party thereto. If and to the
extent that any Lender shall not have so made the amount of such Swing Loan
available to the Administrative Agent, such Lender agrees to pay to the
Administrative Agent for the account of such Swing Loan Bank forthwith on
demand such amount together with interest thereon, for each day from the
date of demand by such Swing Loan Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such amount for the account of such
Swing Loan Bank, such amount so paid in respect of principal shall
constitute a Swing Loan by such Lender for purposes of this Agreement, and
the outstanding principal amount of the Swing Loans made by such Swing Loan
Bank shall be reduced by such amount.
SECTION 3.04. Increased Costs.
---------------
(a) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
included in the Eurocurrency Rate Reserve Percentage, in each case as of
the date of determination thereof) in or in the interpretation of any law
or regulation, in each case as of the date hereof or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) which implements any
introduction or change specified in clause (i) above, there shall be any
increase in the cost to any Lender of agreeing to make or making, funding
or maintaining Eurocurrency Rate Loans, then the Company shall from time to
time, within ten Business Days after written demand by such Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost incurred during the 90-day
period prior to the date of such demand. A certificate as to the amount of
such increased cost, submitted to the Company and the Administrative Agent
by such Lender and showing in reasonable detail the basis for the
calculation thereof, shall be prima facie evidence of such costs.
----- -----
(b) If any Lender determines that compliance with (i) the introduction
of or any change in or in the interpretation of, any law or regulation, in
each case after the date hereof, or (ii) any guideline or request from any
central bank or other governmental authority (whether or not having the
force of law) which implements any introduction or change specified in
clause (i) above, affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling
such Lender and that the amount of such capital is increased by or based
upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, within ten Business Days after written
demand by such Lender (with a copy of such demand to the Administrative
Agent), the Company shall from time to time pay to the
CREDIT AGREEMENT
51
Administrative Agent for the account of such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light of
such circumstances incurred during the 90-day period prior to the date of
such demand, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
commitment to lend hereunder. A certificate as to such amounts submitted to
the Company and the Administrative Agent by such Lender and showing in
reasonable detail the basis for the calculation thereof shall be prima
-----
facie evidence of such costs.
-----
(c) Without limiting the effect of the foregoing, the Company shall
pay to each Lender on the last day of each Interest Period so long as such
Lender is maintaining reserves against Eurocurrency Liabilities (or so long
as such Lender is maintaining reserves against any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurocurrency Rate Loans is determined as provided in this Agreement or
against any category of extensions of credit or other assets of such Lender
that includes any Eurocurrency Rate Loans) an additional amount (determined
by such Lender and notified to the Company through the Administrative
Agent) equal to the product of the following for each Eurocurrency Rate
Loan for each day during such Interest Period:
(i) the principal amount of such Eurocurrency Rate Loan
outstanding on such day; and
(ii) the remainder of (x) a fraction the numerator of which is
the rate (expressed as a decimal) at which interest accrues on such
Eurocurrency Rate Loan for such Interest Period as provided in this
Agreement (less the Applicable Margin) and the denominator of which is
one minus the Eurocurrency Rate Reserve Percentage in effect on such
-----
day minus (y) such numerator; and
-----
(iii) 1/360.
(d) If the Company is required to pay any Lender any amounts under
this Section 3.04, the applicable Lender shall be an "Affected Person", and
---------------
the Company shall have the rights set forth in Section 3.07 to replace such
Affected Person.
SECTION 3.05. Illegality. Notwithstanding any other provision of this
----------
Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender or its Eurocurrency
Lending Office to perform its obligations hereunder to make Eurocurrency Rate
Loans or to fund or maintain Eurocurrency Rate Loans hereunder, then, subject to
the provisions of Section 3.07, (i) the obligation of such Lender to make
Eurocurrency Rate Loans hereunder shall be suspended until the first date on
which the circumstances causing such suspension cease to exist, (ii) any
Eurocurrency Rate Loans made or to be made by such Lender shall be converted
automatically to Base Rate Loans and (iii) such Lender shall be an "Affected
--------
Person", and the Company shall
------
CREDIT AGREEMENT
52
have the right set forth in Section 3.07 to replace such Affected Person. In the
event of such a suspension, such Lender shall review the circumstances giving
rise to such suspension at least weekly and shall notify the Company, the
Administrative Agent and the Lenders promptly of the end of such suspension, and
thereafter the Company shall be entitled to borrow Eurocurrency Rate Loans from
such Lender.
SECTION 3.06. Reasonable Efforts to Mitigate. Each Lender shall use
------------------------------
its reasonable best efforts (consistent with its internal policy and legal and
regulatory restrictions) to minimize any amounts payable by the Company under
Section 3.04 and to minimize any period of illegality described in Section 3.05.
Without limiting the generality of the foregoing, each Lender agrees that, to
the extent reasonably possible to such Lender, it will change its Eurocurrency
Lending Office if such change would eliminate or reduce amounts payable to it
under Section 3.04 or eliminate any illegality of the type described in Section
3.05, as the case may be. Each Lender further agrees to notify the Company
promptly, but in any event within five Business Days, after such Lender learns
of the circumstances giving rise to such a right to payment or such illegality
have changed such that such right to payment or such illegality, as the case may
be, no longer exists.
SECTION 3.07. Right to Replace Affected Person or Lender. In the
------------------------------------------
event the Company is required to pay any Taxes with respect to an Affected
Person pursuant to Section 2.11(c) or any amounts with respect to an Affected
Person pursuant to Section 3.04, or receives a notice from an Affected Person
pursuant to Section 3.05, or is required to make a payment to any Lender (which
Lender shall be deemed to be an "Affected Person" for purposes of this Section
---------------
3.07) under Section 9.14, the Company may elect, if such amounts continue to be
charged or such notice is still effective, to replace such Affected Person as a
party to this Agreement, provided that, concurrently therewith, (i) another
--------
financial institution which is an Eligible Assignee and is reasonably
satisfactory to the Company and the Administrative Agent (or if the Lender then
serving as Administrative Agent is the Person to be replaced and the
Administrative Agent has resigned its position, the Lender becoming the
successor Administrative Agent) shall agree, as of such date, to purchase for
cash and at par the Loans of the Affected Person, pursuant to an Assignment and
Acceptance and to become a Lender for all purposes under this Agreement and to
assume all obligations (including all outstanding Loans) of the Affected Person
to be terminated as of such date and to comply with the requirements of Section
9.07 applicable to assignments (other than clause (a)(iv) thereof), and (ii) the
Company shall pay to such Affected Person in same day funds on the day of such
replacement all interest, fees and other amounts then due and owing to such
Affected Person by the Company hereunder to and including the date of
termination, including without limitation payments due such Affected Person
under Section 2.11, costs incurred under Section 3.04 or Section 9.14 and
payments owing under Section 9.04(c).
SECTION 3.08. Use of Proceeds. The proceeds of the Loans shall be
---------------
available (and each Borrower agrees that it shall use such proceeds) for general
corporate purposes (including, without limitation, repurchases of shares of the
Company, commercial paper backup and to finance acquisitions) of the Company and
its Subsidiaries; provided that neither any
--------
CREDIT AGREEMENT
53
Lender, the Syndication Agent, the Documentation Agent nor the Administrative
Agent shall have any responsibility for the use of any of the proceeds of Loans.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Borrowing. The
-----------------------------------------
obligation of each Lender to make a Loan on the occasion of the initial
Borrowing shall be subject to the conditions precedent that, on a date (the
"Effective Date") not later than February 16, 1999, the Administrative Agent
--------------
shall have received each of the following:
(a) Each of the following documents, which shall be in form and
substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Lender:
(i) The Revolving Loan Notes payable by the Company and any
Designated Borrower to the order of the Lenders, respectively.
(ii) Certified copies of (x) the charter and by-laws of the
Company, (y) the resolutions of the Board of Directors of the Company
authorizing and approving this Agreement and the Notes, and (z) all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers
of the Company authorized to sign this Agreement and the Notes and the
other documents to be delivered hereunder.
(iv) A favorable opinion of the Company's Law Department,
substantially in the form of Exhibit D and covering such other matters
relating hereto as any Lender, through the Administrative Agent, may
reasonably request.
(v) A favorable opinion of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
special New York counsel to the Administrative Agent, substantially in
the form of Exhibit E.
(vi) A certificate of a senior officer of the Company to the
effect that (x) the representations and warranties contained in
Section 5.01 are correct (other than any such representations or
warranties which, by their terms, refer to a prior date) and (y) no
event has occurred and is continuing which constitutes a Default.
CREDIT AGREEMENT
54
(b) Confirmation that the Company has paid all accrued fees and
expenses of the Administrative Agent and the fees of the Syndication Agent,
the Documentation Agent and the Lenders hereunder (including the fees and
expenses of counsel to the Administrative Agent to the extent then
payable), to the extent the same have been invoiced to the Company at least
two (2) Business Days prior to the Effective Date.
SECTION 4.02. Conditions Precedent to Each Revolving Loan Borrowing
-----------------------------------------------------
and Swing Loan Borrowing. The obligation of each Lender to make a Loan (other
------------------------
than a Swing Loan made by a Lender pursuant to Section 3.03 or a Competitive Bid
Loan) on the occasion of each Borrowing (including the initial Borrowing), and
the right of the Company to request a Swing Loan Borrowing, shall be subject to
the further conditions precedent that:
(i) in the case of the first Borrowing by a Designated Borrower
the Company shall have furnished to the Administrative Agent such Revolving
Loan Notes, corporate documents, resolutions and legal opinions relating to
such Designated Borrower as the Administrative Agent may reasonably
require, and
(ii) on the date of such Borrowing following statements shall be
true (and the acceptance by a Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Company and such
Borrower that on the date of such Borrowing or issuance such statements are
true):
(a) The representations and warranties contained in Section 5.01
(except the Excluded Representations) are correct on and as of the
date of such Borrowing or issuance, before and after giving effect to
such Borrowing or issuance and to the application of the proceeds
therefrom, as though made on and as of such date other than any such
representations or warranties that, by their terms, refer to a date
other than the date of such Borrowing or issuance; and
(b) No event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, which constitutes a Default;
provided that the conditions set forth in clause (ii) of this Section 4.02 shall
--------
not be applicable to a Borrowing if, as a result of and immediately after giving
effect to such Borrowing and to the application of proceeds thereof, the
aggregate outstanding principal amount of the Revolving Loans and Swing Loans is
not increased thereby.
SECTION 4.03. Conditions Precedent to Each Competitive Bid Loan
-------------------------------------------------
Borrowing. The obligation of each Lender which is to make a Competitive Bid
---------
Loan on the occasion of a Competitive Bid Loan Borrowing (including the initial
Competitive Bid Loan Borrowing) to make such Competitive Bid Loan as part of
such Competitive Bid Loan Borrowing is subject to the conditions precedent that:
CREDIT AGREEMENT
55
(a) the Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Loan Borrowing with respect thereto;
(b) on or before the date of such Competitive Bid Loan Borrowing, but
prior to such Competitive Bid Loan Borrowing, the Administrative Agent
shall have received a Competitive Bid Loan Note payable to the order of
such Lender for each of the one or more Competitive Bid Loans to be made by
such Lender as part of such Competitive Bid Loan Borrowing, in a principal
amount equal to the principal amount of the Competitive Bid Loan to be
evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Loan in accordance with Sections 2.02 and 3.02; and
(c) on the date of such Competitive Bid Loan Borrowing the following
statements shall be true (and the acceptance by the Company of the proceeds
of such Competitive Bid Loan Borrowing shall constitute a representation
and warranty by the Company that on the date of such Competitive Bid Loan
Borrowing such statements are true):
(i) The representations and warranties contained in Section 5.01
(except the Excluded Representations) are correct on and as of the
date of such Competitive Bid Loan Borrowing, before and after giving
effect to such Competitive Bid Loan Borrowing and to the application
of the proceeds therefrom, as though made on and as of such date other
than any such representations or warranties which, by their terms,
refer to a date other than the date of such Competitive Bid Loan
Borrowing;
(ii) No event has occurred and is continuing, or would result
from such Competitive Bid Loan Borrowing or from the application of
the proceeds therefrom, which constitutes a Default; and
(iii) No event has occurred and no circumstance exists as a
result of which the information concerning the Company that has been
provided to the Administrative Agent and each Lender by the Company in
connection herewith would include an untrue statement of a material
fact or omit to state any material fact or any fact necessary to make
the statements contained therein taken as a whole, in the light of the
time and circumstances under which they were made, not misleading.
CREDIT AGREEMENT
56
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants as follows:
(a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not
have a Material Adverse Effect and (iii) has all the requisite corporate
power and authority to own or lease and operate its properties and to carry
on its business as now conducted except where the failure to do so would
not have a Material Adverse Effect.
(b) The execution, delivery and performance by the Company of the Loan
Documents, and the consummation of the transactions contemplated hereby,
are within the Company's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the Company's
certificate of incorporation or by-laws, (ii) violate any law, rule or
regulation (including, without limitation, the Securities Act of 1933 and
the Securities Exchange Act of 1934 and the regulations thereunder, and
Regulations U and X issued by the Board of Governors of the Federal Reserve
System, each as amended from time to time), or order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument
binding on or affecting the Company or any of its Subsidiaries or any of
their properties, except if such conflict, breach or default would not have
a Material Adverse Effect, or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Company or its Subsidiaries. The Company is not in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, except for
such violation or breach which would not have a Material Adverse Effect.
(c) Except as have been obtained, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for the
due execution, delivery and performance by the Company of the Loan
Documents, or for consummation of the transactions contemplated hereby,
except and to the extent that any failure to obtain such authorization,
approval or other action would not have a Material Adverse Effect.
CREDIT AGREEMENT
57
(d) Each of the Loan Documents is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms.
(e) (i) The Company has heretofore furnished to each of the Lenders
unaudited consolidated balance sheets of the Company and its Subsidiaries
as at September 11, 1998 and the related unaudited consolidated statements
of income, retained earnings and cash flows of the Company and its
Subsidiaries for the period of 36 weeks ended on said date, and
consolidated balance sheets of the Company and its Subsidiaries as at
January 3, 1998 and the related consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the fiscal
year ended January 3, 1998, with the opinion thereon (in the case of said
consolidated balance sheet and statements for the fiscal year ended January
3, 1998) of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. All such financial statements are complete
and correct and fairly present the consolidated financial condition of the
Company and its Subsidiaries as at said respective dates and the
consolidated results of their operations for the respective periods so
presented all in accordance with GAAP. Since September 11, 1998, there has
been no Material Adverse Change.
(f) No information, exhibit or report furnished by or on behalf of the
Company to the Administrative Agent or any Lender in connection with the
execution of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein taken as a whole, in the light of the time and
circumstances under and the time at which they were made, not misleading.
(g) There is no pending or threatened action or proceeding affecting
the Company or any of its Subsidiaries before any court, governmental
agency or arbitrator which (i) is reasonably likely to have a Material
Adverse Effect or (ii) purports to affect this Agreement or the
transactions contemplated hereby.
(h) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted or could reasonably be expected
to result in a liability to the Company or its ERISA Affiliates in excess
of $5,000,000.
(i) Neither the Company nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that it has incurred any
Withdrawal Liability, and neither the Company nor any of its ERISA
Affiliates, to the best of the Company's knowledge and belief, is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan, in each case other than any Withdrawal Liability that would not have
a Material Adverse Effect.
(j) Neither the Company nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has
CREDIT AGREEMENT
58
been terminated, within the meaning of Title IV of ERISA, except where such
reorganization or termination would not have a Material Adverse Effect.
(k) The Company and each of its Subsidiaries have filed, have caused
to be filed or have been included in all tax returns (federal, state, local
and foreign) required to be filed and have paid (or have accrued any taxes
shown that are not due with the filing of such returns) all taxes shown
thereon to be due, together with applicable interest and penalties, except
in any case where the failure to file any such return or pay any such tax
is not in any respect material to the Company or the Company and its
Subsidiaries taken as a whole.
(l) The Company and its Subsidiaries have implemented measures to have
all critical business systems of the Company and its Subsidiaries "Year
2000 Compliant" (that is, such business systems will be able to recognize
and perform properly date-sensitive functions involving certain dates prior
to, in and following year 2000) on or before September 30, 1999, and the
advent of the year 2000 and its impact on such business systems is not
expected to have a Material Adverse Effect.
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01 Affirmative Covenants. So long as any obligations under
---------------------
this Agreement or any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Company will, unless the Required Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
--------------------------
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA, the Securities Act of 1933 and all
Environmental Laws, except, in each case, any non-compliance which would
not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
---------------------
Subsidiaries to pay and discharge, before the same shall become delinquent,
all taxes, assessments, claims and governmental charges or levies imposed
upon it or upon its property, except to the extent that any failure to do
so would not have a Material Adverse Effect; provided, however, that
-------- -------
neither the Company nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, claim or charge that is being contested
in good faith and by proper proceedings and as to which appropriate
reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Subsidiaries to maintain, appropriate and adequate insurance with
responsible and reputable insurance companies or associations or with self-
insurance programs to the extent consistent with
CREDIT AGREEMENT
59
prudent practices of the Company and its Subsidiaries or otherwise
customary in their respective industries in such amounts and covering such
risks as is customary in the industries in which the Company or such
Subsidiary operates.
(d) Payment of Welfare Plans. Pay, and cause each of its Material
------------------------
Subsidiaries to pay, the aggregate annualized cost (including, without
limitation, the cost of insurance premiums) with respect to post-retirement
benefits under Welfare Plans for which the Company and its Material
Subsidiaries are liable.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
-----------------------------------------
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory) and franchises;
provided, however, that (i) the Company and its Material Subsidiaries may
-----------------
consummate any transaction permitted under Section 6.02(b) and (ii) neither
the Company nor such Subsidiary shall be required to preserve any right or
franchise (other than the corporate existence of each Borrower) when, in
the good faith business judgment of the Company, such preservation or
maintenance is neither necessary nor appropriate for the prudent management
of the business of the Company.
(f) Visitation Rights. At any reasonable time during normal business
-----------------
hours and upon reasonable prior notice and from time to time, permit the
Administrative Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Company and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and any of its Subsidiaries with any of their officers or directors
and with their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
----------------
keep, proper books of record and account as are necessary to prepare
Consolidated financial statements in accordance with GAAP, in which full
and correct entries shall be made of all financial transactions and the
assets and business of the Company and each such Subsidiary in accordance
with GAAP.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
------------------------------
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted, except where failure
to do so would not have a Material Adverse Effect.
(i) Reporting Requirements. Furnish to the Lenders:
----------------------
(i) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Company, quarterly condensed and consolidated balance sheets and
consolidated statement of cash flows of the Company as of the end of
such quarter and statements of income of the Company for the period
commencing at the end of the previous fiscal year and
CREDIT AGREEMENT
60
ending with the end of such quarter, certified by the chief accounting
officer of the Company (or another appropriate officer of the Company
designated by said chief accounting officer) and certificates as to
compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance
with Section 6.01(j), provided that in the event of any change in GAAP
--------
used in prepara tion of such financial statements, the Company shall
also provide, if necessary for the determination of compliance with
Section 6.01(j), a statement of reconciliation conforming any
information in such certificates with GAAP;
(ii) as soon as available and in any event within 105 days after
the end of each fiscal year of the Company commencing with fiscal year
1998 of the Company, certificates as to compliance with the terms of
this Agreement which are otherwise provided under clause (i) above at
the end of each fiscal quarter other than the last fiscal quarter of
the fiscal year and a copy of the annual report for such year for the
Company, containing audited financial statements for such year
certified by (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, (b) any other "Big Six"
accounting firm or (c) other independent public accountants acceptable
to the Required Lenders;
(iii) as soon as possible and in any event within five days after
the Company obtains notice of the occurrence of each Event of Default
and each Default continuing on the date of such statement, a statement
of the chief accounting officer of the Company setting forth details
of such Event of Default or Default and the action which the Company
has taken and proposes to take with respect thereto;
(iv) promptly after request therefor, copies of all regular and
periodic financial and/or other reports which the Company may from
time to time make available to any of its public security holders or
bond holders;
(v) promptly after the commencement thereof, notice of any action
or proceeding of the kind referred to in Section 5.01(g);
(vi) promptly and in any event within 15 days after the Company
or any ERISA Affiliate knows or should reasonably know that any ERISA
Event has occurred with respect to which the liability or potential
liability of the Company or any of its ERISA Affiliates exceeds or
could reasonably be expected to exceed $10,000,000, a statement of a
principal financial officer of the Company describing such ERISA Event
and the action, if any, which the Company or such ERISA Affiliate
proposes to take with respect thereto;
(vii) promptly and in any event within 10 Business Days after
receipt thereof by the Company or any ERISA Affiliate, copies of each
notice from the
CREDIT AGREEMENT
61
PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan where such action would have a
Material Adverse Effect;
(viii) with respect to liabilities or potential liabilities of
the Company or any of its ERISA Affiliates of $10,000,000 or more,
promptly and in any event within 20 Business Days after receipt
thereof by the Company or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Company or
any ERISA Affiliate concerning (1) the imposition of Withdrawal
Liability by a Multiemployer Plan, (2) the reorganization or
termination, within the meaning of Title IV of ERISA, of any
Multiemployer Plan or (3) the amount of liability incurred, or which
may be incurred, by the Company or any ERISA Affiliate in connection
with any event described in clause (1) or (2) above;
(ix) forthwith upon the occurrence of a Change of Control, notice
thereof with a reasonable description thereof; and
(x) promptly after request therefor, such other business and
financial information respecting the condition or operations,
financial or otherwise, of the Company or any of its Subsidiaries that
any Lender through the Administrative Agent may from time to time
reasonably request.
(j) Leverage Ratio. Maintain, as at the last day of each fiscal
--------------
quarter of the Company, a Leverage Ratio of not greater than 4.0 to 1.0.
SECTION 6.02 Negative Covenants. So long as any obligations under
------------------
this Agreement or any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Company, unless the Required Lenders shall otherwise
consent in writing:
(a) Liens, Etc. Will not create, incur, assume or suffer to exist, or
----------
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien on or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign,
any right to receive income, other than:
(i) Permitted Liens;
(ii) Liens outstanding on the Effective Date and described on
Schedule II as of the Effective Date ("Existing Liens"), and any
--------------
renewal, extension or replacement (or successive renewals, extensions
or replacements) thereof which does not encumber any property of the
Company or its Subsidiaries other than (1) the property encumbered by
the Lien being renewed, extended or replaced, (2) property acquired by
the Company or its Subsidiaries in the ordinary course of business to
replace property covered by Existing Liens, and (3) de minimis other
property incidental to the property referred to in clause (1) or (2)
above;
CREDIT AGREEMENT
62
(iii) Purchase Money Liens;
(iv) Liens on properties of (X) MVCI, any SLS Entity or any of
their respective Subsidiaries, and (Y) MICC and any other Subsidiary
of the Company principally engaged in the business of finance,
banking, credit, leasing, insurance or other similar operations;
(v) Liens on properties of Subsidiaries of the Company, which
properties are located outside the United States of America;
(vi) Liens securing COLI Debt; and
(vii) other Liens securing an aggregate principal amount of
Indebtedness or other obligations not to exceed $300,000,000 at any
time outstanding.
(b) Restrictions on Fundamental Changes. Will not, and will not permit
-----------------------------------
any of its Material Subsidiaries to:
(i) merge or consolidate with or into, or
(ii) convey, transfer, lease or otherwise dispose of (whether in
one transaction or a series of transactions) all or substantially all
of the property (whether now owned or hereafter acquired) of the
Company and its Subsidiaries, taken as a whole, to, or
(iii) convey, transfer, lease or otherwise dispose of (whether in
one transaction or a series of transactions, and whether by or
pursuant to merger, consolidation or any other arrangement), any
property (whether now owned or hereafter acquired) essential to the
conduct of the lodging group of the Company and its Subsidiaries,
taken as a whole, to, or
(iv) enter into any partnership, joint venture, syndicate, pool
or other combination with,
any Person, in each case unless:
(w) no Default shall have occurred and then be continuing or
would result therefrom, and
(x) in the case of a merger or consolidation of the Company, (1)
the Company is the surviving entity or (2) the surviving entity
expressly assumes by an amendment to this Agreement duly executed by
such surviving entity all of the
CREDIT AGREEMENT
63
Company's obligations hereunder and under the other the Loan Documents
in a manner satisfactory to the Administrative Agent and the Required
Lenders.
(c) Transactions with Affiliates. Will not enter into, or permit any of
----------------------------
its Subsidiaries to enter into, any transaction with an Affiliate of the
Company (other than the Company's Subsidiaries) that would be material in
relation to the Company and its Subsidiaries, taken as a whole, even if
otherwise permitted under this Agreement, except on terms that are fair and
reasonable to the Company and its Subsidiaries and on terms no less
favorable to the Company or such Subsidiary (considered as a whole in
conjunction with all other existing arrangements and relationships with
such Affiliate) than the Company or such Subsidiary would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
(d) Dividends, Etc. Will not declare or make any dividend payment or
--------------
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of capital stock of the
Company, or purchase, redeem or otherwise acquire for value (or permit any
of its Subsidiaries to do so) any shares of any class of capital stock of
the Company or any warrants, rights or options to acquire any such shares,
now or hereafter outstanding, in each case if, at the time thereof or after
giving effect thereto, an Event of Default has occurred and is continuing.
(e) Change in Nature of Business. Will not engage in, or permit any of
----------------------------
its Subsidiaries to engage in, any business that is material to the Company
and its Subsidiaries, taken as a whole, that is not carried on by the
Company or its Subsidiaries as of the Effective Date (or directly related
to a business carried on as of such date) and which would have a Material
Adverse Effect.
(f) Accounting Changes. Will not make or permit, or permit any of its
------------------
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.
(g) Margin Stock. Will not directly or indirectly use, or permit any
------------
other Borrower or any Subsidiary to use, any of the proceeds of any Loan in
a manner that violates or contravenes the Margin Regulations. Without
limiting the foregoing, the Company (i) will promptly notify the
Administrative Agent if at any time more than 20% of the value of the
assets of the Company and its Subsidiaries (as determined in good faith by
the Company) that are subject to Section 6.02(a) or Section 6.02(b) consist
of or are represented by margin stock within the meaning of the Margin
Regulations, and (ii) will give the Administrative Agent at least 15
Business Days' prior written notice of any direct or indirect use of any of
the proceeds of any Loan to buy or carry margin stock within the meaning of
the Margin Regulations if, after giving effect thereto, more than 20% of
the value of the assets of the Company and its Subsidiaries (as determined
in good faith by the Company) that are subject to Section 6.02(a) or
Section 6.02(b) consist of or are represented by margin stock within the
meaning of the Margin Regulations, and
CREDIT AGREEMENT
64
will, if requested by the Administrative Agent, provide to the
Administrative Agent prior to the making of such Loan a legal opinion of
counsel reasonably acceptable to the Administrative Agent confirming that
such use of proceeds will not contravene this Section 6.02(g) together with
appropriately executed and completed purpose statements on Form FR U-1;
provided that in lieu of such legal opinion and purpose statements, the
--------
Company may provide to the Administrative Agent, together with such written
notice, a certificate of the Company stating that at the date of such
certificate and after applying the proceeds of such Loan not more than 25%
of the value of the assets of the Company and its Subsidiaries (as
determined in good faith by the Company) that are subject to Section
6.02(a) or Section 6.02(b) consist of or are represented by margin stock
within the meaning of the Margin Regulations. Each Lender hereby confirms
to the Company and to the Administrative Agent that in extending or
maintaining credit hereunder it has not relied upon such margin stock as
collateral.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
-----------------
(a) (i) Any Borrower shall fail to pay any principal of any Loan when
the same becomes due and payable; or (ii) any Borrower shall fail to pay
any interest on any Loan, or any other payment under any Loan Document, for
a period of three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by any Borrower herein or by
any Borrower (or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material respect when
made; or
(c) The Company shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 6.01(j) or in Section 6.02(b),
(c), (d), (e) or (g), or (ii) any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed if the
failure to perform or observe such other term, covenant or agreement shall
remain unremedied for 30 days after written notice thereof shall have been
given to the Company by the Administrative Agent or the Required Lenders;
or
(d) The Company or any of its Material Subsidiaries shall fail to pay
any principal of or premium or interest on any Indebtedness which is
outstanding in a principal amount of at least $50,000,000 in the aggregate
(but excluding Indebtedness evidenced by the Notes and Non-Recourse
Indebtedness) of the Company or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement
CREDIT AGREEMENT
65
or instrument relating to such Indebtedness; or any such Indebtedness shall
be declared to be due and payable, or required to be prepaid (other than by
a regularly scheduled required prepayment, including, without limitation, a
prepayment required in connection with the sale of the sole asset or all
assets securing such Indebtedness), redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof;
provided, however, that if there is acceleration of any Indebtedness which
-------- -------
is included under this clause (d) solely because of a Guarantee by the
Company or one of its Material Subsidiaries, an Event of Default will not
exist under this clause (d) so long as the Company or such Material
Subsidiary, as the case may be, fully performs its obligations in a timely
manner under such Guarantee upon demand therefor by the beneficiary
thereof; or
(e) The Company or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Company or any of its Material Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or the Company or any of its Material Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection
(e); or
(f) Any judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Company or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(g) Any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of the Company or any ERISA Affiliate related to such ERISA
Event) exceeds $20,000,000; or
CREDIT AGREEMENT
66
(h) The Company or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan in an amount which, when aggregated with all
other amounts required to be paid to Multiemployer Plans by the Company and
its ERISA Affiliates as Withdrawal Liability (determined as of the date of
such notification), exceeds $20,000,000 or requires payments exceeding
$10,000,000 per annum; or
(i) The Company or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Company and its ERISA Affiliates to all
Multiemployer Plans which are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of such Multiemployer
Plans immediately preceding the plan year in which the reorganization or
termination occurs by an amount exceeding $20,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the express consent, of the Required Lenders, by notice to the
Company, declare the obligation of each Lender to make Loans to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the express consent, of the Required Lenders, by notice to the Company,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Borrower;
provided, however, that in the event of an actual or deemed entry of an order
-------- -------
for relief with respect to the Company or any of its Material Subsidiaries under
the Federal Bankruptcy Code, (A) the obligation of each Lender to make Loans
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT, THE SYNDICATION
AGENT AND THE DOCUMENTATION AGENT
SECTION 8.01. Authorization and Action. Each Lender hereby appoints
------------------------
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully
CREDIT AGREEMENT
67
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lenders and
all holders of Notes; provided that the Administrative Agent shall not be
--------
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by any Borrower pursuant to the terms of this Agreement.
SECTION 8.02. Reliance, Etc.
--------------
(a) None of the Administrative Agent, the Syndication Agent, the
Documentation Agent or any of their respective directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by
it or them under or in connection with the Loan Documents, except for its
or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Administrative Agent: (i) may treat
the payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the
Lender which is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 9.07; (ii) may consult with
legal counsel (including counsel for any Borrower), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (iii) makes no
warranty or representation to any Lender and shall not be responsible to
any Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement; (iv) shall
not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement
on the part of any Borrower or to inspect the property (including the books
and records) of any Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telecopier, telegram, cable
or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
(b) The Syndication Agent, as such, and the Documentation Agent, as
such, shall have no duties or obligations whatsoever with respect to this
Agreement, the Notes or any other document or any matter related thereto.
SECTION 8.03. Citibank, BNS and Chase and Affiliates. With respect
--------------------------------------
to its respective Commitment, the Loans made by it and the Notes issued to it,
each of Citibank, BNS and Chase shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent, the Syndication Agent or the Documentation Agent, as
the case may be; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include each of Citibank, BNS and Chase in its individual
capacity. Citibank, BNS and Chase and their respective affiliates may accept
deposits from, lend
CREDIT AGREEMENT
68
money to, act as trustee under indentures of, and generally engage in any kind
of business with, any Borrower, any of its Subsidiaries and any Person who may
do business with or own securities of any Borrower or any such Subsidiary, all
as if each of Citibank, BNS and Chase were not the Administrative Agent, the
Syndication Agent or the Documentation Agent, as the case may be, and without
any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that
----------------------
it has, independently and without reliance upon the Administrative Agent, the
Syndication Agent, the Documentation Agent or any other Lender and based on the
financial statements referred to in Section 5.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the
Syndication Agent, the Documentation Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 8.05. Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent, the Syndication Agent and the Documentation Agent (in each
case to the extent not reimbursed by the Company), ratably according to their
respective pro rata share, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent, the Syndication
Agent or the Documentation Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Administrative Agent, the
Syndication Agent or the Documentation Agent under this Agreement in their
respective capacities as an agent hereunder, provided that no Lender shall be
--------
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's, the Syndication Agent's or the Documentation
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent, the
Syndication Agent and the Documentation Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees but
excluding normal administrative expenses expressly excluded under Section
9.04(a)) incurred by the Administrative Agent, the Syndication Agent or the
Documentation Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the
Administrative Agent, the Syndication Agent or the Documentation Agent is not
reimbursed for such expenses by the Company as required under Section 9.04(a).
SECTION 8.06. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign at any time by giving written notice thereof to the Lenders and
the Company and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent with the consent of the
Company, which consent shall not be unreasonably
CREDIT AGREEMENT
69
withheld. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be an Eligible Assignee and a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
----------------
provision of this Agreement or the Revolving Loan Notes, nor consent to any
departure by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
-------- -------
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 4.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Loan
Notes or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Loan Notes
or any fees or other amounts payable hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Revolving Loan
Notes, or the number of Lenders, which shall be required for the Lenders or any
of them to take any action hereunder, (f) release the guarantee set forth in
Section 10.01 or (g) amend this Section 9.01; and provided further that (1) no
-------- -------
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent, the Documentation Agent, the Syndication Agent or a Swing
Loan Bank, as the case may be, in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent, the
Documentation Agent, the Syndication Agent or such Swing Loan Bank, as the case
may be, under this Agreement or any Note and (2) no amendment, waiver or consent
shall, unless in writing and signed by a Lender that has made a Competitive Bid
Loan, in addition to the Lenders required above to take such action, affect the
rights or duties of such Lender in respect of such Competitive Bid Loan.
SECTION 9.02. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing (including telecopy, telegraphic,
telex or cable communication)
CREDIT AGREEMENT
70
and mailed, telegraphed, telecopied, telexed, cabled or delivered, if to any
Borrower, to the Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Assistant Treasurer, Dept. 52/924.11, with a copy to the same
address, Attention: Assistant General Counsel - Corporate Finance, Dept. 52/923;
if to any Bank, to its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, to its Domestic Lending Office
specified in the Acceptance pursuant to which it became a Lender; if to the
Syndication Agent or the Documentation Agent, to its address specified on the
signature pages hereto; and if to the Administrative Agent, at its address at ▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Savas Divan,
telephone no. ▇▇▇-▇▇▇-▇▇▇▇, telecopier no. ▇▇▇-▇▇▇-▇▇▇▇, with copies to ▇▇▇▇▇▇
▇▇▇, telephone no. ▇▇▇-▇▇▇-▇▇▇▇, telecopier no. ▇▇▇-▇▇▇-▇▇▇▇; or to the Company
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, to each other party, at
such other address as shall be designated by such party in a written notice to
the Company and the Administrative Agent. All such notices and communications
shall, (a) when mailed, be effective three Business Days after the same is
deposited in the mails, (b) when mailed for next day delivery by a reputable
freight company or reputable overnight courier service, be effective one
Business Day thereafter, and (c) when sent by telegraph, telecopy, telex or
cable, be effective when the same is telegraphed, telecopied and receipt thereof
is confirmed by telephone or return telecopy, confirmed by telex answerback or
delivered to the cable company, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II, III or VIII
shall not be effective until received by the Administrative Agent.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
-------------------
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses.
------------------
(a) The Company agrees to pay, whether or not any of the transactions
contemplated hereby are consummated, on demand (x) all reasonable costs and
expenses in connection with the preparation (excluding normal travel and
related expenses incurred by the personnel of the Administrative Agent),
execution, delivery, administration (excluding those which are customarily
borne by the Administrative Agent), modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder, and
(y) the reasonable fees and expenses of counsel to the Administrative Agent
and with respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement. The Company further agrees to pay on
demand all reasonable expenses of the Lenders (including, without
limitation, reasonable counsel (including, without duplication, internal
counsel) fees and expenses) in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement,
the Notes and the other documents to be delivered hereunder, including,
CREDIT AGREEMENT
71
without limitation, reasonable counsel fees and expenses in connection with
the enforcement of rights under this Section 9.04(a).
(b) The Company agrees to indemnify and hold harmless the
Administrative Agent, the Syndication Agent, the Documentation Agent, each
Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and
-----------------
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel)
that may be incurred by or asserted or awarded against any Indemnified
Party in its agent or lending capacity under, or otherwise in connection
with, the Loan Documents, in each case arising out of or in connection with
or by reason of, or in connection with the preparation for a defense of,
any investigation, litigation or proceeding arising out of, related to or
in connection with the Loan Documents, the proposed or actual use of the
proceeds therefrom or any of the other transactions contemplated hereby,
whether or not such investigation, litigation or proceeding is brought by
the Company, its shareholders or creditors or an Indemnified Party or any
other person or an Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct.
(c) If (i) any payment of principal of any Eurocurrency Rate Loan is
made other than on the last day of the Interest Period for such Loan (or
any payment of principal of any Quoted Rate Swing Loan is made other than
on the maturity date of such Swing Loan), as a result of a payment pursuant
to Section 2.14(c) or 3.04 or acceleration of the maturity of the Notes
pursuant to Section 7.01 or for any other reason, or (ii) the Company gives
notice of a Loan conversion pursuant to Section 2.08(c), then the Company
shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a
result of such payment, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Loan.
SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during the
----------------
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held (other than deposits at any account with respect to which such
account states that the Company is acting in a fiduciary capacity) and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Company against any and all of the obligations of the Company now
or
CREDIT AGREEMENT
72
hereafter existing under this Agreement and any Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Company after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
--------
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by the Company, the Syndication Agent, the
Documentation Agent and the Administrative Agent and when the Administrative
Agent shall have been notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrowers, the
Administrative Agent, the Syndication Agent, the Documentation Agent and each
Lender and their respective successors and assigns, except that no Borrower
shall have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
SECTION 9.07. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Loans owing to it
and the Note or Notes held by it); provided, however, that:
-------- -------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement (other than
any Competitive Bid Loans or Competitive Bid Loan Notes),
(ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment other than an assignment to
another Lender (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $10,000,000
and shall be an integral multiple of $1,000,000 in excess thereof,
(iii) each such assignment shall be to an Eligible Assignee, and
(unless such assignment shall be to a Subsidiary of the assigning Lender or
to a Subsidiary of the bank holding company of which the assigning Lender
is a Subsidiary) the Company and the Administrative Agent shall have
consented to such assignment (which consents shall not be unreasonably
withheld or delayed),
(iv) after giving effect to such assignment, the assigning Lender
(together with all Affiliates of such Lender) shall continue to hold no
less than 25% of its original Commitment hereunder and of the Loans owing
to it, unless the Company shall otherwise agree,
CREDIT AGREEMENT
73
(v) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with any Note or Notes subject to
such assignment and a processing and recordation fee of $2,500, and
(vi) unless the Company and the Administrative Agent otherwise agree,
the Termination Date of the assignee under each such assignment shall be
deemed to be the then Final Termination Date.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall relinquish its rights and be released from its
obligations under this Agreement, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, 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 Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, the Syndication Agent, the Documentation
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 Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
CREDIT AGREEMENT
74
(c) Each New Lender shall execute and deliver to the Administrative Agent
(for its acceptance and recording in the Register) a New Commitment Acceptance
in accordance with the provisions of this Section 9.07, together with a
processing and recordation fee of $2,500. Upon the execution, delivery,
acceptance and recording of a New Commitment Acceptance, from and after the date
thereof such New Lender shall be a party hereto and have the rights and
obligations of a Lender hereunder having the Commitment specified therein (or
such lesser Commitment as shall be allocated to such New Lender in accordance
with Section 2.14(d)). By executing and delivering a New Commitment Acceptance,
the New Lender thereunder confirms to and agrees with the other parties hereto
as follows: (i) such New Lender hereby agrees that no Lender has made any
representation or warranty, or assumes any responsibility with respect to, (x)
any statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto or (y) the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (ii)
such New Lender confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 5.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such New Commitment Acceptance; (iii)
such New Lender will, independently and without reliance upon the Administrative
Agent, any Syndication Agent, the Documentation Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (iv) such New Lender confirms that it is an Eligible
Assignee; (v) such New Lender appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) such
New Lender agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) The Administrative Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance and each New Commitment
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and principal
amount of the Revolving Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
---------
all purposes, absent manifest error, and each Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable time and
from time to time upon reasonable prior notice. The Administrative Agent shall
provide the Company with a copy of the Register upon request.
(e) (i) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Revolving Loan Note or Notes subject to such
assignment, the Administrative
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75
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C-1 hereto, (1) accept such Assignment
and Acceptance, (2) record the information contained therein in the
Register and (3) give prompt notice thereof to the Company. Within five
Business Days after its receipt of such notice, the relevant Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Revolving Loan Note or Notes a new Revolving
Loan Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and a
new Revolving Loan Note to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Such new Revolving Loan
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Revolving Loan Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A-l hereto. Such
surrendered Revolving Note or Notes shall be marked "canceled" and shall be
returned promptly to the Company.
(ii) Upon its receipt of a New Commitment Acceptance executed by a New
Lender representing that it is an Eligible Assignee, the Administrative
Agent shall, if such New Commitment Acceptance has been completed and is in
substantially the form of Exhibit C-3 hereto, (1) accept such New
Commitment Acceptance, (2) record the information contained therein in the
Register and (3) give prompt notice thereof to the Company. Within five
Business Days after its receipt of such notice, the relevant Borrower, at
its own expense, shall execute and deliver to the Administrative Agent a
new Revolving Loan Note to the order of such New Lender in an amount equal
to the Commitment assumed by it pursuant to such New Commitment Acceptance.
Such new Revolving Loan Note shall be dated the date of the New Commitment
Acceptance and shall otherwise be in substantially the form of Exhibit A-l
hereto.
(f) Each Lender may sell participations to one or more banks or other
entities in or to a portion of its rights and obligations under this Agreement
(including, without limitation, a portion of its Commitment, the Loans owing to
it and the Note or Notes held by it); provided, however, that (i) such Lender's
-------- -------
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrowers, the Administrative Agent, the Syndication
Agent, the Documentation Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) except in the case of a participation
involving a Lender and one of its Affiliates (and this exception shall apply
only so long as the participant remains an Affiliate of such Lender), the
parties to each such participation shall execute a participation agreement in
substantially the form of the Participation Agreement, and (vi) no participant
under any such participation shall have any right to approve any amendment to or
waiver of any provision of any Loan Document, or any consent to any departure by
any Borrower therefrom, except to the extent that such amendment, waiver or
consent would alter the
Credit Agreement
76
principal of, or interest on, the Loan or Loans in which such participant is
participating or any fees or other amounts payable to the Lenders hereunder, or
postpone any date fixed for any payment of principal of, or interest on, the
Loans or any fees or other amounts payable hereunder. Each Lender shall provide
the Company with a list of entities party to all Participation Agreements with
such Lender upon request.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.07, disclose to
the assignee or participant or proposed assignee or participant, any
information, including Confidential Information, relating to the Borrowers
furnished to such Lender by or on behalf of the Borrowers; provided that, prior
--------
to any such disclosure of Confidential Information, the assignee or participant
or proposed assignee or participant shall be informed of the confidential nature
of such Confidential Information and shall agree to (i) preserve the
confidentiality of any Confidential Information relating to the Borrowers
received by it from such Lender and (ii) be bound by the provisions of Section
9.10.
(h) Notwithstanding any other provision in this Section 9.07, no Lender may
assign its interest to an Eligible Assignee if, as of the effective date of such
assignment, such assignment would increase the amount of Taxes, Other Taxes or
increased costs payable under Sections 2.11 or 3.04, respectively.
(i) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time and without the consent of the Administrative Agent or
any Borrower create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Loans owing to it and
the Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
SECTION 9.08. Governing Law. This Agreement and the Notes shall be governed
-------------
by, and construed in accordance with, the laws of the State of New York.
SECTION 9.09. Execution in Counterparts. This Agreement may be executed in any
-------------------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 9.10. Confidentiality. None of the Administrative Agent, the
---------------
Syndication Agent, the Documentation Agent or any Lender shall disclose any
Confidential Information to any Person without the consent of the Company, other
than (a) to such Person's Affiliates and their officers, directors, employees,
agents, counsel, auditors and advisors of such Person or such Person's
Affiliates, (b) to a proposed assignee or to a proposed participant; provided
--------
that prior to any such disclosure, the proposed assignee or the participant
shall deliver to the Company a written agreement to preserve the confidentiality
of any Confidential Information to the extent required by this Agreement, and
then only on a confidential basis, (c)
Credit Agreement
77
as required by any law, rule or regulation or judicial process, (d) in
connection with any litigation to which any Lender or the Administrative Agent
is a party or in connection with the exercise of any remedy hereunder or under
any Note (provided that, in the case of this clause (d), such Lender or the
---------
Administrative Agent, as the case may be, uses reasonable efforts under the
circumstances to obtain reasonable assurances that confidential treatment will
be accorded to such information in connection with such litigation or exercise)
and (e) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking or any aspects of any Lender's activities.
SECTION 9.11. Jurisdiction, Etc.
------------------
(a) Each of the parties hereto (and each Designated Borrower, by its
acceptance of the proceeds of Loans made to it) hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto and each Designated Borrower hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State or, to the
extent permitted by law, in such federal court. Each of the parties hereto and
each Designated Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents in
the courts of any jurisdiction.
(b) Each of the parties hereto and each Designated Borrower irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or federal court. Each of the
parties hereto and each Designated Borrower hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 9.12. WAIVER OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT,
--------------------
THE SYNDICATION AGENT, THE DOCUMENTATION AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOANS OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Credit Agreement
78
SECTION 9.13. Judgment Currency. This is an international loan transaction in
-----------------
which the specification of Dollars or an Alternate Currency, as the case may be
(the "Specified Currency"), any payment in New York City or the country of the
------------------
Specified Currency, as the case may be (the "Specified Place"), is of the
---------------
essence, and the Specified Currency shall be the currency of account in all
events relating to Loans denominated in the Specified Currency. The payment
obligations of the Borrowers under this Agreement and the Notes shall not be
discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to the Specified Currency and transfer to the Specified Place under
normal banking procedures does not yield the amount of the Specified Currency at
the Specified Place due hereunder. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder in the Specified
Currency into another currency (the "Second Currency"), the rate of exchange
---------------
which shall be applied shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase the Specified Currency with
the Second Currency on the Business Day next preceding that on which such
judgment is rendered. The obligation of each Borrower in respect of any such sum
due from it to the Administrative Agent or any Lender hereunder (an "Entitled
--------
Person") shall, notwithstanding the rate of exchange actually applied in
------
rendering such judgment, be discharged only to the extent that on the Business
Day following receipt by such Entitled Person of any sum adjudged to be due
hereunder or under the Notes in the Second Currency such Entitled Person may in
accordance with normal banking procedures purchase and transfer to the Specified
Place the Specified Currency with the amount of the Second Currency so adjudged
to be due; and each Borrower hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand in the Specified Currency,
any difference between the sum originally due to such Entitled Person in the
Specified Currency and the amount of the Specified Currency so purchased and
transferred.
SECTION 9.14. European Monetary Union. (a) If, as a result of the
-----------------------
implementation of European monetary union, (i) any European Currency ceases to
be lawful currency of the nation issuing the same and is replaced by a European
common currency (the "Euro"), or (ii) any European Currency and the Euro are at
----
the same time recognized by the governmental authority which is responsible for
issuance or regulation of the relevant European Currency in the nation issuing
such European Currency as lawful currency of such nation and the Administrative
Agent or the Required Lenders shall so request in a notice delivered to the
Company, then any amount payable hereunder by any party hereto in such European
Currency shall instead be payable in the Euro or, to the extent then permitted
by applicable law, in the Euro or such European Currency at the election of the
Company, and the amount so payable shall, if payable in the Euro, be determined
by translating the amount payable in such European Currency to the Euro at the
exchange rate recognized by the European Central Bank for the purpose of
implementing European monetary union. Prior to the occurrence of the event or
events described in clause (i) or (ii) of the preceding sentence, each amount
payable hereunder in any European Currency will, except as otherwise provided
herein, continue to be payable only in that European Currency.
Credit Agreement
79
(b) The Company agrees, at the request of any Lender, to compensate such
Lender for any loss, cost, expense or reduction in return, incurred or suffered
by such Lender upon or after any of the occurrence of any of the events referred
to in clauses (i) or (ii) of the first sentence of Section 9.14(a), that such
Lender shall reasonably determine shall be incurred or sustained by such Lender
as a result of the implementation of European monetary union and that would not
have been incurred or sustained but for the transactions provided for herein,
and that was incurred or sustained during the 90-day period prior to the date of
demand therefor by such Lender. A certificate of a Lender setting forth in
reasonable detail such Lender's calculation of the amount or amounts necessary
to compensate such Lender shall be delivered to the Company and shall be
conclusive absent manifest error so long as such determination is made on a
reasonable basis. The Company shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(c) The parties hereto agree, at the time of or at any time following the
implementation of European monetary union, to use reasonable efforts to enter
into an agreement amending this Agreement in order to reflect the implementation
of such monetary union, to permit (if feasible) the Euro to qualify as an
Alternate Currency under the terms and conditions of the definition of such term
and to place the parties hereto in the position with respect to the settlement
of payments of the Euro as they would have been with respect to the settlement
of the Currencies it replaced.
(d) Each Lender shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory restrictions) to minimize any amounts
payable by the Company under this Section 9.14.
(e) With respect to the payment of any amount denominated in the Euro or in a
National Currency, as defined below, the Administrative Agent shall not be
liable to any Borrower or any of the Lenders, and, if any Borrower shall have
made timely payment to the Administrative Agent in the manner specified
hereunder, such Borrower shall not be liable to the Lenders, in any way
whatsoever for any delay, or the consequences of any delay, in the crediting to
any account of any amount required by this Agreement to be paid by the
Administrative Agent if the Administrative Agent shall have taken all relevant
steps to achieve, on the date required by this Agreement, the payment of such
amount in immediately available, freely transferable, cleared funds (in the Euro
or, as the case may be, in a National Currency) to the account of any Lender in
the Principal Financial Center which such Borrower or, as the case may be, such
Lender shall have specified for such purpose. In this paragraph (d), "all
relevant steps" means all such steps as may be prescribed from time to time by
the regulations or operating procedures of such clearing or settlement system as
the Administrative Agent may from time to time reasonably determine for the
purpose of clearing or settling payments of the Euro. For purposes hereof,
"National Currency" means any Alternate Currency (other than the Euro) of a
------------------
state described as a "Participating Member State" in any legislative measures of
the European Council for the introduction of, changeover to or operation of the
Euro (as so described, a "Participating Member State").
--------------------------
Credit Agreement
80
(f) For the purposes of determining the date on which the Eurocurrency Rate
is determined under this Agreement for any Loan denominated in the Euro (or in
any National Currency) for any Interest Period therefor, references in this
Agreement to Business Days shall be deemed to be references to Target Operating
Days, as defined below. In addition, if the Administrative Agent determines
that there is no Eurocurrency Rate displayed on the Screen for deposits
denominated in the National Currency in which any Loans are denominated, the
Eurocurrency Rate for such Advances shall be based upon the rate displayed on
the Screen for the offering of deposits denominated in the Euro. For purposes
hereof, "Target Operating Days" means any day that is not (i) a Saturday or
---------------------
Sunday, (ii) Christmas Day or New Year's Day (which shall include any day
designated as a public holiday in respect of such day) or (iii) any other day on
which the Trans-European Real-Time Gross Settlement Operating System (or any
successor settlement system) is not operating (as determined by the
Administrative Agent).
(g) If the basis of accrual of interest or fees expressed in this Agreement
with respect to the Currency of any state that becomes a Participating Member
State shall be inconsistent with any convention or practice in the London (or,
in the case of Pounds Sterling, Paris) interbank deposit market for the basis of
accrual of interest or fees in respect of the Euro, such convention or practice
in respect of the Euro shall replace such expressed basis effective as of and
from the date on which such state becomes a Participating Member State,
provided, that if any Loan in the Currency of such state is outstanding
--------
immediately prior to such date, such replacement shall take effect, with respect
to such Loan, at the end of the then current Interest Period.
ARTICLE X
GUARANTEE
SECTION 10.01. Guarantee. The Company hereby guarantees to each Lender and the
---------
Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration, by
optional prepayment or otherwise) of the principal of and interest on the Loans
made by the Lender to, and the Notes held by each Lender of, each Designated
Borrower and all other amounts from time to time owing to the Lenders or the
Administrative Agent by any Designated Borrower under this Agreement pursuant to
its Designation Letter and under the Notes, in each case strictly in accordance
with the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Company hereby further agrees that if any
----------------------
Designated Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration, by optional prepayment or otherwise) any of the
Guaranteed Obligations, the Company will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
Credit Agreement
81
SECTION 10.02. Obligations Unconditional.
-------------------------
(a) The obligations of the Company hereunder are unconditional
irrespective of (i) the value, genuineness, validity, regularity or
enforceability of any of the Guaranteed Obligations, (ii) any modification,
amendment or variation in or addition to the terms of any of the Guaranteed
Obligations or any covenants in respect thereof or any security therefor,
(iii) any extension of time for performance or waiver of performance of any
covenant of any Designated Borrower or any failure or omission to enforce
any right with regard to any of the Guaranteed Obligations, (iv) any
exchange, surrender, release of any other guaranty of or security for any
of the Guaranteed Obligations, or (v) any other circumstance with regard to
any of the Guaranteed Obligations which may or might in any manner
constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent hereof that the obligations of the Company
hereunder shall be absolute and unconditional under any and all
circumstances.
(b) The Company hereby expressly waives diligence, presentment,
demand, protest, and all notices whatsoever with regard to any of the
Guaranteed Obligations and any requirement that the Administrative Agent or
any Lender exhaust any right, power or remedy or proceed against any
Designated Borrower hereunder or under the Designation Letter of such
Designated Borrower or any Note of such Designated Borrower or any other
guarantor of or any security for any of the Guaranteed Obligations.
SECTION 10.03. Reinstatement. The guarantee in this Article X shall be
-------------
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Designated Borrower in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder(s) of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
SECTION 10.04. Subrogation. Until the termination of the Commitments and the
-----------
payment in full of the principal of and interest on the Loans and all other
amounts payable to the Administrative Agent or any Lender hereunder, the Company
hereby irrevocably waives all rights of subrogation or contribution, whether
arising by operation of law (including, without limitation, any such right
arising under the Federal Bankruptcy Code) or otherwise, by reason of any
payment by it pursuant to the provisions of this Article X.
SECTION 10.05. Remedies. The Company agrees that, as between the Company on
--------
the one hand and the Lenders and the Administrative Agent on the other hand, the
obligations of any Designated Borrower guaranteed under this Agreement may be
declared to be forthwith due and payable, or may be deemed automatically to have
been accelerated, as provided in Article VII, for purposes of Section 10.01
hereof notwithstanding any stay, injunction or other prohibition (whether in a
bankruptcy proceeding affecting such Designated Borrower or otherwise)
preventing such declaration as against such Designated Borrower and that, in the
event of such declaration or automatic acceleration such obligations (whether or
not due and
Credit Agreement
82
payable by such Designated Borrower) shall forthwith become due and payable by
the Company for purposes of said Section 10.01.
SECTION 10.06. Continuing Guarantee. The guarantee in this Article X is a
--------------------
continuing guarantee and shall apply to all Guaranteed Obligations whenever
arising.
Credit Agreement
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
The Borrower
------------
MARRIOTT INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President & Treasurer
The Administrative Agent
------------------------
CITIBANK, N.A.,
as Administrative Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Attorney-in-Fact
The Syndication Agent
---------------------
THE BANK OF NOVA SCOTIA,
as Syndication Agent
By /s/ J.R. ▇▇▇▇▇▇▇
--------------------
Name: J.R. ▇▇▇▇▇▇▇
Title: Senior Relationship Manager
Address for Notices:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: ▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Credit Agreement
84
The Documentation Agent
-----------------------
THE CHASE MANHATTAN BANK,
as Documentation Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
BANKS
-----
CITIBANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J.R. Trimble
-------------------
Name: J.R. Trimble
Title: Senior Relationship Manager
Credit Agreement
85
THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Credit Agreement
86
FIRST UNION NATIONAL BANK
By /s/ ▇▇▇▇▇▇▇ ▇. Angel
----------------------
Name: ▇▇▇▇▇▇▇ ▇. Angel
Title: Vice President
MELLON BANK, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
NATIONSBANK, N.A.
By /s/ M. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: M. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
BANCA COMMERCIALE ITALIANA-NEW
YORK BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Credit Agreement
87
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
WACHOVIA BANK, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE FIRST NATIONAL BANK OF
MARYLAND, A DIVISION OF FMB BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
Credit Agreement
88
FIRST HAWAIIAN BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
THE NORTHERN TRUST COMPANY
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Credit Agreement
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