CONFORMED COPY
$1,250,000,000
364-DAY COMPETITIVE ADVANCE AND
REVOLVING CREDIT AGREEMENT
Dated as of October 2, 1996
among
CENDANT CORPORATION
as Borrower
and
THE LENDERS REFERRED TO HEREIN
and
THE CHASE MANHATTAN BANK, as Administrative Agent
(incorporating the First Amendment, dated as of January 28, 1997,
and the Second Amendment, dated as of September 18, 1997,
and the Assumption Agreement, effective as of December 18, 1997)
TABLE OF CONTENTS
Page
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1. DEFINITIONS.................................................... 1
2. THE LOANS...................................................... 17
SECTION 2.1. Commitments................................ 17
SECTION 2.2. Loans...................................... 18
SECTION 2.3. Use of Proceeds............................ 19
SECTION 2.4. Competitive Bid Procedure.................. 19
SECTION 2.5. Revolving Credit Borrowing Procedure....... 22
SECTION 2.6. Refinancings............................... 23
SECTION 2.7. Fees....................................... 23
SECTION 2.8. Repayment of Loans; Evidence of Debt....... 24
SECTION 2.9. Interest on Loans.......................... 25
SECTION 2.10. Interest on Overdue Amounts................ 26
SECTION 2.11. Alternate Rate of Interest................. 26
SECTION 2.12. Termination and Reduction of
Commitments................................ 27
SECTION 2.13. Prepayment of Loans........................ 27
SECTION 2.14. Eurodollar Reserve Costs................... 28
SECTION 2.15. Reserve Requirements; Change in
Circumstances.............................. 28
SECTION 2.16. Change in Legality......................... 31
SECTION 2.17. Reimbursement of Lenders................... 31
SECTION 2.18. Pro Rata Treatment......................... 33
SECTION 2.19. Right of Setoff............................ 33
SECTION 2.20. Manner of Payments......................... ▇▇
▇▇▇▇▇▇▇ ▇.▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Withholding.................. 34
SECTION 2.22. Certain Pricing Adjustments................ 36
SECTION 2.23. Increase of Commitments.................... 37
SECTION 2.24. Extension of Maturity Date................. 37
3. REPRESENTATIONS AND WARRANTIES OF BORROWER..................... 39
SECTION 3.1. Corporate Existence and Power.............. 39
SECTION 3.2. Corporate Authority, No Violation and
Compliance with Law........................ 39
SECTION 3.3. Governmental and Other Approval and
Consents................................... 40
SECTION 3.4. Financial Statements of Borrower........... 40
SECTION 3.5. No Material Adverse Change................. 41
SECTION 3.6. Subsidiaries............................... 41
SECTION 3.7. Copyrights, Patents and Other Rights....... 41
SECTION 3.8. Title to Properties........................ 41
SECTION 3.9. Litigation................................. 41
SECTION 3.10. Federal Reserve Regulations................ 42
SECTION 3.11. Investment Company Act..................... 42
SECTION 3.12. Enforceability............................. 42
SECTION 3.13. Taxes...................................... 42
SECTION 3.14. Compliance with ERISA...................... 42
SECTION 3.15. Disclosure................................. 43
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SECTION 3.16. Environmental Liabilities.................. 43
4. CONDITIONS OF LENDING.......................................... 43
SECTION 4.1. Conditions Precedent to Initial Loans....... 43
(a) Loan Documents.............................. 43
(b) Corporate Documents for the Borrower........ 44
(c) Financial Statements........................ 44
(d) Opinions of Counsel......................... 44
(e) No Material Adverse Change.................. 44
(f) Payment of Fees............................. 45
(g) Litigation.................................. 45
(h) Existing Credit Agreement................... 45
(i) Officer's Certificate....................... 45
(j) Other Documents............................. 45
SECTION 4.2. Conditions Precedent to Each Loan........... 45
(a) Notice...................................... 45
(b) Representations and Warranties.............. 45
(c) No Event of Default......................... 46
5. AFFIRMATIVE COVENANTS.......................................... 46
SECTION 5.1. Financial Statements, Reports, etc.......... 46
SECTION 5.2. Corporate Existence; Compliance with
Statutes.................................... 48
SECTION 5.3. Insurance................................... 49
SECTION 5.4. Taxes and Charges........................... 49
SECTION 5.5. ERISA Compliance and Reports................ 49
SECTION 5.6. Maintenance of and Access to Books and
Records; Examinations....................... 50
SECTION 5.7. Maintenance of Properties................... 50
SECTION 5.8. Changes in Character of Business............ 51
6. NEGATIVE COVENANTS............................................. 51
SECTION 6.1. Limitation on Indebtedness.................. 51
SECTION 6.2. INTENTIONALLY OMITTED....................... 52
SECTION 6.3. Hotel Subsidiaries.......................... 52
SECTION 6.4. Consolidation, Merger, Sale of Assets....... 52
SECTION 6.5. Limitations on Liens........................ 53
SECTION 6.6. Sale and Leaseback.......................... 54
SECTION 6.7. Leverage.................................... 54
SECTION 6.8. Interest Coverage Ratio..................... 54
SECTION 6.9. Accounting Practices........................ 54
7. EVENTS OF DEFAULT.............................................. 54
8. THE ADMINISTRATIVE AGENT....................................... 57
SECTION 8.1. Administration by Administrative Agent...... 57
SECTION 8.2. Advances and Payments....................... 57
SECTION 8.3. Sharing of Setoffs and Cash Collateral...... 58
SECTION 8.4. Notice to the Lenders....................... 59
SECTION 8.5. Liability of Administrative Agent........... 59
SECTION 8.6. Reimbursement and Indemnification........... 60
SECTION 8.7. Rights of Administrative Agent.............. 60
SECTION 8.8. Independent Investigation by Lenders........ 61
SECTION 8.9. Notice of Transfer.......................... 61
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SECTION 8.10. Successor Administrative Agent............. 61
9. MISCELLANEOUS.................................................. 62
SECTION 9.1. Notices.................................... 62
SECTION 9.2. Survival of Agreement, Representations
and Warranties, etc........................ 62
SECTION 9.3. Successors and Assigns; Syndications;
Loan Sales; Participations................. 63
SECTION 9.4. Expenses; Documentary Taxes................ 67
SECTION 9.5. Indemnity.................................. 67
SECTION 9.6. CHOICE OF LAW.............................. 68
SECTION 9.7. No Waiver.................................. 68
SECTION 9.8. Extension of Maturity...................... 68
SECTION 9.9. Amendments, etc............................ 68
SECTION 9.10. Severability............................... 69
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY
TRIAL...................................... 70
SECTION 9.12. Headings................................... 71
SECTION 9.13. Execution in Counterparts.................. 71
SECTION 9.14. Entire Agreement........................... 71
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SCHEDULES
2.1 Commitments
3.6 Subsidiaries
3.9 Litigation
6.1 Existing Indebtedness
6.5 Existing Liens
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Competitive Note
B-1 Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
B-2 Opinion of General Counsel
C Form of Assignment and Acceptance
D Form of Compliance Certificate
E-1 Form of Competitive Bid Request
E-2 Form of Competitive Bid Invitation
E-3 Form of Competitive Bid
E-4 Form of Competitive Bid Accept/Reject Letter
F Form of Revolving Credit Borrowing Request
G Form of Commitment Increase Supplement
H Form of Extension Request
I Form of Replacement Bank Agreement
364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT
(the "Agreement") dated as of October 2, 1996, among HFS INCORPORATED, a
Delaware corporation (the "Borrower"), the Lenders referred to herein and THE
CHASE MANHATTAN BANK, a New York banking corporation, as agent (the
"Administrative Agent") for the Lenders.
INTRODUCTORY STATEMENT
The Borrower has requested that the Lenders establish a
$500,000,000 committed revolving credit facility pursuant to which Revolving
Credit Loans may be made to the Borrower. In addition, the Borrower has
requested that the Lenders provide a procedure pursuant to which each Lender
may bid on an uncommitted basis on short-term borrowings by the Borrower.
Subject to the terms and conditions set forth herein, the
Administrative Agent is willing to act as agent for the Lenders, and each
Lender is willing to make Loans to the Borrower and to participate in Letters
of Credit.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise
requires, the following terms shall have the meanings indicated, all accounting
terms not otherwise defined herein shall have the respective meanings accorded
to them under GAAP and all terms defined in the New York Uniform Commercial
Code and not otherwise defined herein shall have the respective meanings
accorded to them therein:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Loans.
"ABR Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Alternate Base Rate
in accordance with the provisions of Article 2.
"Affiliate" shall mean any Person which, directly or
indirectly, is in control of, is controlled by, or is under common
control with, the Borrower. For purposes of this definition, a Person
shall be deemed to be "controlled by" another if such latter Person
possesses, directly or indirectly, power either to (i) vote 10% or
more of the securities having ordinary voting power for the election
of directors of such controlled Person or (ii) direct or cause the
direction of the management and policies of such controlled Person
whether by contract or otherwise.
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"Alternate Base Rate" shall mean for any day, a rate per
annum (rounded upwards to the nearest 1/16 of 1% if not already an
integral multiple of 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect for such day, (b) the Federal Funds Effective
Rate in effect for such day plus 1/2 of 1% or (c) the Base CD Rate in
effect for such day plus 1%. For purposes hereof, "Prime Rate" shall
mean the rate per annum publicly announced by the Administrative Agent
from time to time as its prime rate in effect at its principal office
in New York City. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Prime Rate shall be
effective on the date such change in the Prime Rate is announced as
effective. "Federal Funds Effective Rate" shall mean, for any period,
a fluctuating interest rate per annum equal for each day during such
period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it. "Base CD Rate" shall mean the sum of (a) the
product of (i) the Average Weekly Three-Month Secondary CD Rate times
(ii) a fraction of which the numerator is 100% and the denominator is
100% minus the aggregate rates of (A) basic and supplemental reserve
requirements in effect on the date of effectiveness of such Average
Weekly Three-Month Secondary CD Rate, as set forth below, under
Regulation D of the Board applicable to certificates of deposit in
units of $100,000 or more issued by a "member bank" located in a
"reserve city" (as such terms are used in Regulation D) and (B)
marginal reserve requirements in effect on such date of effectiveness
under Regulation D applicable to time deposits of a "member bank" and
(b) the Assessment Rate. "Average Weekly Three-Month Secondary CD
Rate" shall mean the three-month secondary certificate of deposit
("CD") rate for the most recent weekly period covered therein in the
Federal Reserve Statistical release entitled "Weekly Summary of
Lending and Credit Measures (Averages of daily figures)" released in
the week during which occurs the day for which the CD rate is being
determined. The CD rate so reported shall be in effect, for the
purposes of this definition, for each day of the week in which the
release date of such publication occurs. If such publication or a
substitute containing the foregoing rate information is not published
by the Federal Reserve for any week, such average rate shall be
determined by the Administrative Agent on the basis of quotations
received by it from three New York City negotiable certificate of
deposit dealers of recognized standing on the first Business Day of
the week succeeding such week for which such rate information is not
published. If for any
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reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or Federal Funds Effective Rate,
or both, for any reason, including, without limitation, the inability
or failure of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Alternate Base
Rate shall be determined without regard to clause (b) or (c), or both,
until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the Average
Weekly Three-Month Secondary CD Rate shall be effective on the
effective date of such change in the CD Rate. Any change in the
Alternate Base Rate due to a change in the Federal Funds Effective
Rate shall be effective on the effective date of such change in the
Federal Funds Effective Rate.
"Applicable Law" shall mean all provisions of statutes,
rules, regulations and orders of governmental bodies or regulatory
agencies applicable to a Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions in which the Person
in question is a party.
"Assessment Rate" shall mean, for any day, the net annual
assessment rate (rounded upwards, if necessary, to the next higher
Basis Point) as most recently estimated by the Administrative Agent
for determining the then current annual assessment payable by the
Administrative Agent to the Federal Deposit Insurance Corporation (or
any successor) for insurance by such Corporation (or such successor)
of time deposits made in dollars at the Administrative Agent's
domestic offices.
"Assignment and Acceptance" shall mean an agreement in the
form of Exhibit C hereto, executed by the assignor, assignee and the
other parties as contemplated thereby.
"Avis" shall mean HFS Car Rental, Inc., a Delaware
corporation.
"Basis Point" shall mean 1/100th of 1%.
"Board" shall mean the Board of Governors of the
Federal Reserve System.
"Borrowing" shall mean a group of Loans of a single Interest
Rate Type made by the Lenders (or in the case of a Competitive
Borrowing, by the Lender or Lenders whose Competitive Bids have been
accepted pursuant to Section 2.4) on a single date and as to which a
single Interest Period is in effect.
"Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banks in the State of
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New York are permitted to close; provided, however, that when used in
connection with a LIBOR Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in Dollar
deposits on the London Interbank Market.
"Capital Expenditures" shall mean, with respect to any Person
for any period, the aggregate of all expenditures (whether paid in
cash or accrued as a liability) by such Person during that period
which, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected
in the statement of cash flows of such Person.
"Capital Lease" shall mean as applied to any Person, any
lease of any property (whether real, personal or mixed) by that Person
as lessee which, in accordance with GAAP, is or should be accounted
for as a capital lease on the balance sheet of that Person.
"Cash Collateral Account" shall mean a collateral account
established with the Administrative Agent, in the name of the
Administrative Agent and under its sole dominion and control, into
which the Borrower shall from time to time deposit Dollars pursuant to
the express provisions of this Agreement requiring such deposit.
"Change in Control" shall mean (i) the acquisition by any
Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the Merger Effective Date), directly or
indirectly, beneficially or of record, of ownership or control of in
excess of 30% of the voting common stock of the Borrower on a fully
diluted basis at any time or (ii) if at any time, individuals who at
the Merger Effective Date constituted the Board of Directors of the
Borrower (together with any new directors whose election by such Board
of Directors or whose nomination for election by the shareholders of
the Borrower, as the case may be, was approved by a vote of the
majority of the directors then still in office who were either
directors at the Merger Effective Date or whose election or a
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the
Borrower then in office.
"Chase" shall mean The Chase Manhattan Bank, a New York
banking corporation.
"Closing Date" shall mean the date on which the conditions
precedent to the making of the Loans as set forth in Section 4.1 have
been satisfied or waived, which shall in no event be later than
October 31, 1996.
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"Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations issued thereunder, as now and hereafter in
effect, or any successor provision thereto.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender as set forth (i) on Schedule 2.1 hereto,
(ii) any applicable Assignment and Acceptance to which it may be a
party, and/or (iii) any applicable Commitment Increase Supplement,
and/or (iv) any agreement delivered pursuant to Section 2.24(d), as
the case may be, as such Lender's Commitment may be permanently
terminated or reduced from time to time pursuant to Section 2.12 or
2.24 or Article 7 or increased pursuant to Section 2.23. The
Commitments shall automatically and permanently terminate on the
earlier of (a) the Maturity Date or (b) the date of termination in
whole pursuant to Section 2.12 or Article 7.
"Commitment Expiration Date" shall have the meaning assigned
to such term in Section 2.24(a).
"Commitment Increase Supplement" shall mean a Commitment
Increase Supplement, substantially in the form of Exhibit G.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.4 in the form of Exhibit E-3.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by the Borrower pursuant to Section 2.4(d) in the
form of Exhibit E-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.4(b), (a) in the case of a
LIBOR Loan, the Margin and (b) in the case of a Fixed Rate Loan, the
fixed rate of interest offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.4 in the form of Exhibit E-1.
"Competitive Borrowing" shall mean a Borrowing consisting of
a Competitive Loan or concurrent Competitive Loans from the Lender or
Lenders whose Competitive Bids for such Borrowing have been accepted
by the Borrower under the bidding procedure described in Section 2.4.
"Competitive Loan" shall mean a Loan from a Lender to the
Borrower pursuant to the bidding procedure described in Section 2.4.
Each Competitive Loan shall be a LIBOR Competitive Loan or a Fixed
Rate Loan.
"Competitive Note" shall have the meaning assigned to such
term in Section 2.8.
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"Consolidated Assets" shall mean, at any date of
determination, the total assets of the Borrower and its Consolidated
Subsidiaries determined in accordance with GAAP.
"Consolidated EBITDA" shall mean, without duplication, for
any period for which such amount is being determined, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provision
for taxes based on income, (iii) depreciation expense, (iv)
Consolidated Interest Expense, (v) amortization expense, plus (vi)
other non-cash items reducing Consolidated Net Income, all as
determined on a consolidated basis for the Borrower and its
Consolidated Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" shall mean for any period for
which such amount is being determined, total interest expense paid or
payable in cash (including that properly attributable to Capital
Leases in accordance with GAAP but excluding in any event all
capitalized interest and amortization of debt discount and debt
issuance costs) of the Borrower and its Consolidated Subsidiaries on a
consolidated basis including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing and net cash costs (or minus
net profits) under Interest Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period for
which such amount is being determined, the net income (loss) of the
Borrower and its Consolidated Subsidiaries during such period
determined on a consolidated basis for such period taken as a single
accounting period in accordance with GAAP, provided that there shall
be excluded (i) income (or loss) of any Person (other than a
Consolidated Subsidiary of the Borrower) in which the Borrower or any
of its Consolidated Subsidiaries has an equity investment or
comparable interest, except to the extent of the amount of dividends
or other distributions actually paid to the Borrower or of its
Consolidated Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a
Consolidated Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Consolidated Subsidiaries
or the Person's assets are acquired by the Borrower or any of its
Consolidated Subsidiaries, (iii) the income of any Consolidated
Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by that Consolidated
Subsidiary of the income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
that Consolidated Subsidiary, (iv) any extraordinary after-tax
7
gains and (v) any extraordinary pretax losses but only to the extent
attributable to a write-down of financing costs relating to any
existing and future indebtedness.
"Consolidated Net Worth" shall mean, as of any date of
determination, all items which in conformity with GAAP would be
included under shareholders' equity on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date.
"Consolidated Subsidiaries" shall mean all Subsidiaries of
the Borrower that are required to be consolidated with the Borrower
for financial reporting purposes in accordance with GAAP.
"Consolidated Total Indebtedness" shall mean the total amount
of Indebtedness of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis using GAAP principles of
consolidation, but without regard to whether or not any such
Indebtedness would be required to be shown on a consolidated balance
sheet prepared in accordance with GAAP; provided that Consolidated
Total Indebtedness shall be deemed to include, at the time of any
computation thereof, the aggregate amount of any outstanding loans to,
any investment in the capital stock of, any purchase price in excess
of the fair market value of assets of, and any other investments by
the Borrower and its Subsidiaries (other than Avis and its
Subsidiaries and PHH and its Subsidiaries) in, Avis and its
Subsidiaries and PHH and its Subsidiaries (other than the purchase
price paid by the Borrower to acquire Avis and PHH). The amount of any
such investment at any time shall equal the original cost thereof plus
any additions thereto (in each case without giving effect to any
appreciation or depreciation in the value thereof) net of any returns
thereon actually received by the Borrower or any of its Subsidiaries
(other than Avis and its Subsidiaries and PHH and its Subsidiaries).
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental
Authority regulating, relating to or imposing liability or standards
of conduct concerning, any Hazardous Material or environmental
protection or health and safety, as now or may at any time hereafter
be in effect, including without limitation, the Clean Water Act also
known as the Federal Water Pollution Control Act ("FWPCA") 33 U.S.C.
8
ss. 1251 et seq., the Clean Air Act ("CAA"), 42 U.S.C. ▇▇.▇▇. 7401 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act
("FIFRA"), 7 U.S.C. ▇▇.▇▇. 136 et seq., the Surface Mining Control and
Reclamation Act ("SMCRA"), 30 U.S.C. ▇▇.▇▇. 1201 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. ss. 9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986 ("▇▇▇▇"), Public Law 99-499, 100 Stat.
1613, the Emergency Planning and Community Right to Know Act
("ECPCRKA"), 42 U.S.C. ss. 11001 et seq., the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901 et seq., the
Occupational Safety and Health Act as amended ("OSHA"), 29 U.S.C. ss.
655 and ss. 657, together, in each case, with any amendment thereto,
and the regulations adopted and publications promulgated thereunder
and all substitutions thereof.
"Environmental Liabilities" shall mean any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as such Act may be amended, and the regulations
promulgated thereunder.
"Existing Credit Agreement" shall have the meaning assigned
to such term in Section 4.1(h).
"Extension Request" means each request by the Borrower made
pursuant to Section 2.24 for the Lenders to extend the Maturity Date,
which shall contain the information in respect of such extension
specified in Exhibit H and shall be delivered to the Administrative
Agent in writing.
"Event of Default" shall have the meaning given such term in
Article 7 hereof.
"Facility Fee" shall have the meaning given such term in
Section 2.7 hereof.
"Fixed Rate Borrowing" shall mean a Borrowing comprised
of Fixed Rate Loans.
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"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form
of a decimal to no more than four decimal places) specified by the
Lender making such Loan in its Competitive Bid.
"Five Year Credit Agreement" shall mean the Five Year
Competitive Advance and Revolving Credit Agreement, dated as of the
date hereof, among the Borrower, the lenders referred to therein and
Chase, as administrative agent.
"Fundamental Documents" shall mean this Agreement, any
Revolving Credit Notes, any Competitive Notes and any other ancillary
documentation which is required to be, or is otherwise, executed by
the Borrower and delivered to the Administrative Agent in connection
with this Agreement.
"GAAP" shall mean generally accepted accounting principles
consistently applied (except for accounting changes in response to
FASB releases or other authoritative pronouncements) provided,
however, that all calculations made pursuant to Sections 6.7 and 6.8
and the related definitions shall have been computed based on such
generally accepted accounting principles as are in effect on the
Merger Effective Date.
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, or any court, in each case whether of the
United States or foreign.
"Guaranty" shall mean, as to any Person, any direct or
indirect obligation of such Person guaranteeing or intended to
guarantee any Indebtedness, Capital Lease, dividend or other monetary
obligation ("primary obligation") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property,
securities or services, in each case, primarily for the purpose of
assuring the owner of any such primary obligation of the repayment of
such primary obligation or (d) as a general partner of a partnership
or a joint venturer of a joint venture in respect of indebtedness of
such partnership or such joint venture which is treated as a general
partnership for purposes of Applicable Law. The amount of any Guaranty
shall be deemed to be an amount equal to the stated or determinable
amount (or portion thereof) of the primary
10
obligation in respect of which such Guaranty is made or, if not stated
or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform
thereunder); provided, however, that the amount of any Guaranty shall
be limited to the extent necessary so that such amount does not exceed
the value of the assets of such Person (as reflected on a consolidated
balance sheet of such Person prepared in accordance with GAAP) to
which any creditor or beneficiary of such Guaranty would have
recourse. Notwithstanding the foregoing definition, the term
"Guaranty" shall not include any direct or indirect obligation of a
Person as a general partner of a general partnership or a joint
venturer of a joint venture in respect of Indebtedness of such general
partnership or joint venture, to the extent such Indebtedness is
contractually non-recourse to the assets of such Person as a general
partner or joint venturer (other than assets comprising the capital of
such general partnership or joint venture).
"Hazardous Materials" shall mean any flammable materials,
explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, or similar materials defined as
such in any Environmental Law.
"Hotel Subsidiary" shall mean any Subsidiary of the Borrower
which (a) is engaged as its principal activity, in the hotel
franchising business or related activities or (b) owns or licenses
from a Person other than the Borrower or another Subsidiary, any
Proprietary Right related to the hotel franchising business.
"Indebtedness" shall mean (without double counting), at any
time and with respect to any Person, (i) indebtedness of such Person
for borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of property or services
purchased (other than amounts constituting trade payables arising in
the ordinary course and payable within 180 days); (ii) indebtedness of
others which such Person has directly or indirectly assumed or
guaranteed (but only to the extent so assumed or guaranteed) or
otherwise provided credit support therefor, including without
limitation, Guaranties; (iii) indebtedness of others secured by a Lien
on assets of such Person, whether or not such Person shall have
assumed such indebtedness (but only to the extent of the fair market
value of such assets); (iv) obligations of such Person in respect of
letters of credit, acceptance facilities, or drafts or similar
instruments issued or accepted by banks and other financial
institutions for the account of such Person (other than trade payables
arising in the ordinary course and payable within 180 days); or (v)
obligations of such Person under Capital Leases.
11
"Interest Coverage Ratio" shall mean, for each period for
which it is to be determined, the ratio of (i) Consolidated EBITDA
minus the amount of Restricted Payments and Capital Expenditures of
the Borrower and its Consolidated Subsidiaries (determined on a
consolidated basis, in accordance with GAAP) to the extent paid in
cash (including cash payments during such period to liquidate any such
item previously accrued as a liability) to (ii) Consolidated Interest
Expense.
"Interest Payment Date" shall mean, with respect to any
Borrowing, the last day of the Interest Period applicable thereto and,
in the case of a LIBOR Borrowing with an Interest Period of more than
three months' duration or a Fixed Rate Borrowing with an Interest
Period of more than 90 days' duration, each day that would have been
an Interest Payment Date had successive Interest Periods of three
months, duration or 90 days' duration, as the case may be, been
applicable to such Borrowing, and, in addition, the date of any
refinancing or conversion of a Borrowing with, or to, a Borrowing of a
different Interest Rate Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing,
the period commencing on the date of such Borrowing, and ending on the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1,
2, 3, 6 or, subject to each Lender's approval, 12 months thereafter,
as the Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December
31, commencing December 31, 1996, (ii) the Maturity Date and (iii) the
date such Borrowing is refinanced with a Borrowing of a different
Interest Rate Type in accordance with Section 2.6 or is prepaid in
accordance with Section 2.13, (c) as to any Fixed Rate Borrowing, the
period commencing on the date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer to make the Fixed
Rate Loans comprising such Borrowing were extended, which shall not be
earlier than seven days after the date of such Borrowing or later than
360 days after the date of such Borrowing and (d) with respect to
Loans made by an Objecting Lender, no Interest Period with respect to
such Objecting Lender's Loans shall end after such Objecting Lender's
Commitment Expiration Date; provided, however, that (i) if any
Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless, in the case of LIBOR Loans only, such next succeeding Business
Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) no
Interest Period with respect to any LIBOR Borrowing or Fixed Rate
Borrowing may be selected which would result in the
12
aggregate amount of LIBOR Loans and Fixed Rate Loans having Interest
Periods ending after any day on which a Commitment reduction is
scheduled to occur being in excess of the Total Commitment scheduled
to be in effect after such date. Interest shall accrue from, and
including, the first day of an Interest Period to, but excluding, the
last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement or other similar
financial agreement or arrangement.
"Interest Rate Type" when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which interest on
such Loan or on the Loans comprising such Borrowing is determined. For
purposes hereof, "Rate" shall include LIBOR, the Alternate Base Rate
and the Fixed Rate.
"Issuing Lender" shall mean Chase or its Affiliates, and/or
such other of the Lenders as may be designated in writing by the
Borrower and which agrees in writing to act as such in accordance with
the terms hereof.
"Lender and "Lenders" shall mean the financial institutions
whose names appear at the foot hereof and any assignee of a Lender
pursuant to Section 9.3(b).
"Lending Office" shall mean, with respect to any of the
Lenders, the branch or branches (or affiliate or affiliates) from
which any such Lender's LIBOR Loans, Fixed Rate Loans or ABR Loans, as
the case may be, are made or maintained and for the account of which
all payments of principal of, and interest on, such Lender's LIBOR
Loans, Fixed Rate Loans or ABR Loans are made, as notified to the
Administrative Agent from time to time.
"LIBOR" shall mean, with respect to any LIBOR Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next Basis Point) equal to the rate at which Dollar
deposits approximately equal in principal amount to (a) in the case of
a Revolving Credit Borrowing, Chase's portion of such LIBOR Borrowing
and (b) in the case of a Competitive Borrowing, a principal amount
that would have been Chase's portion of such Competitive Borrowing had
such Competitive Borrowing been a Revolving Credit Borrowing, and for
a maturity comparable to such Interest Period, are offered to the
principal London office of Chase in immediately available funds in the
London Interbank Market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"LIBOR Borrowing" shall mean a Borrowing comprised of
LIBOR Loans.
13
"LIBOR Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to LIBOR in
accordance with the provisions of Article 2.
"LIBOR Loan" shall mean any LIBOR Competitive Loan or LIBOR
Revolving Credit Loan.
"LIBOR Revolving Credit Loan" shall mean any Revolving Credit
Loan bearing interest at a rate determined by reference to LIBOR in
accordance with the provisions of Article 2.
"LIBOR Spread" shall mean, at any date or any period of
determination, the LIBOR Spread that would be in effect on such date
or during such period pursuant to the chart set forth in Section 2.22
based on the rating of the Borrower's senior unsecured long-term debt.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the
nature thereof or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction).
"Loan" shall mean a Competitive Loan or a Revolving Credit
Loan, whether made as a LIBOR Loan, an ABR Loan or a Fixed Rate Loan,
as permitted hereby.
"Margin" shall mean, as to any LIBOR Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a
decimal to four decimal places) to be added to, or subtracted from,
LIBOR in order to determine the interest rate applicable to such Loan,
as specified in the Competitive Bid relating to such Loan.
"Margin Stock" shall be as defined in Regulation U of
the Board.
"Material Adverse Effect" shall mean a material adverse
effect on the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean (i) any Subsidiary of the
Borrower which, together with its Subsidiaries at the time of
determination hold, or, solely with respect to Sections 7(f) and 7(g),
any group of Subsidiaries which, if merged into each other at the time
of determination would hold, assets constituting 10% or more of
Consolidated Assets or accounts for 10% or more of Consolidated EBITDA
for the Rolling Period immediately preceding the date of determination
or (ii) any Subsidiary of the Borrower which
14
holds material trademarks, tradenames or other intellectual
property rights.
"Maturity Date" shall mean September 30, 1998, or such later
date as shall be determined pursuant to the provisions of Section 2.24
with respect to non-Objecting Lenders.
"Merger" shall mean the merger of HFS Incorporated into CUC
International Inc.
"Merger Effective Date" shall have the meaning set forth in
the Second Amendment, dated as of September 18, 1997, to this
Agreement.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in
Section 3(37) of ERISA.
"Notes" shall mean the Competitive Notes and the
Revolving Credit Notes.
"non-Objecting Lender" shall mean any Lender that is
not an Objecting Lender.
"Obligations" shall mean the obligation of the Borrower to
make due and punctual payment of principal of, and interest on, the
Loans, the Facility Fee, reimbursement obligations in respect of
Letters of Credit and all other monetary obligations of the Borrower
to the Administrative Agent, any Issuing Lender or any Lender under
this Agreement, the Notes or the Fundamental Documents or with respect
to any Interest Rate Protection Agreements entered into between the
Borrower and any Lender.
"Objecting Lender" shall mean any Lender that does not
consent to the extension of the Maturity Date pursuant to Section
2.24.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any successor thereto.
"Permitted Encumbrances" shall mean Liens permitted
under Section 6.5 hereof.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, trust, joint venture, association,
company, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"PHH" shall mean PHH Corporation, a Maryland
corporation.
15
"Plan" shall mean an employee pension benefit plan described
in Section 3(2) of ERISA, other than a Multiemployer Plan.
"Pro Forma Basis" shall mean in connection with any
transaction for which a determination on a Pro Forma Basis is required
to be made hereunder, that such determination shall be made (i) after
giving effect to any issuance of Indebtedness, any acquisition, any
disposition or any other transaction (as applicable) and (ii) assuming
that the issuance of Indebtedness, acquisition, disposition or other
transaction and, if applicable, the application of any proceeds
therefrom, occurred at the beginning of the most recent Rolling Period
ending at least thirty (30) days prior to the date on which such
issuance of Indebtedness, acquisition, disposition or other
transaction occurred.
"Receivables Facility" shall mean the Coldwell Banker
Relocation Services, Inc. receivables facility evidenced by the
Amended and Restated Investor Funding Agreement, dated as of October
5, 1994 among Coldwell Banker Funding Corporation, Bankers Trust
Company, the Investors party thereto, Citicorp North America Inc. and
Bank of America Illinois, The Homeowner Employee Asset Receivable
Trust Amended and Restated Pooling and Servicing Agreement, dated as
October 5, 1994 among Coldwell Banker Funding Corporation, Coldwell
Banker Relocation Services, Inc., Citicorp North America, Inc. and
Bankers Trust Company and the Amended and Restated Purchase Agreement,
dated as of October 5, 1994 by and between Coldwell Banker Relocation
Services, Inc. and Coldwell Banker Funding Corporation, as each of the
foregoing may from time to time be amended, modified or supplemented
and any replacement or refinancing thereof whether or not with the
same parties.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA, other than a reportable event as to which
provision for 30-day notice to the PBGC would be waived under
applicable regulations had the regulations in effect on the Closing
Date been in effect on the date of occurrence of such reportable
event.
"Required Lenders" shall mean at any time, Lenders holding
Commitments representing 51% of the Total Commitment, except that (i)
for purposes of determining the Lenders entitled to declare the
principal of and the interest on the Loans and the Notes and all other
amounts payable hereunder or thereunder to be forthwith due and
payable pursuant to Article 7 and (ii) at all times after the
termination of the Total Commitment in its entirety, "Required
Lenders" shall mean Lenders holding 51% of the aggregate principal
amount of the Loans at the time outstanding.
16
"Restricted Payment" shall mean (i) any distribution,
dividend or other direct or indirect payment on account of shares of
any class of stock of the Borrower or any Subsidiary now or hereafter
outstanding except for distributions, dividends or other payments
solely in shares of capital stock of a Subsidiary which are
distributed pro rata to its stockholders or solely in shares of
capital stock of the Borrower, (ii) any redemption or other
acquisition or re-acquisition by the Borrower or a Subsidiary of any
class of its own stock or other equity interest of the Borrower, a
Subsidiary or an Affiliate now or hereafter outstanding, and (iii) any
payment made to retire, or obtain the surrender of any outstanding
warrants or options or other rights to purchase or acquire shares of
any class of stock of the Borrower or a Subsidiary now or hereafter
outstanding; provided, however, that the term "Restricted Payment" as
used herein, shall not include any distribution, dividend, redemption
or other payment made to the Borrower by any of its Consolidated
Subsidiaries, or to any of the Borrower's Consolidated Subsidiaries by
the Borrower or any of its other Consolidated Subsidiaries.
"Revolving Credit Borrowing" shall mean a Borrowing
consisting of simultaneous Revolving Credit Loans from each of the
Lenders.
"Revolving Credit Borrowing Request" shall mean a request
made pursuant to Section 2.5 in the form of Exhibit F.
"Revolving Credit Loans" shall mean the Loans made by the
Lenders to the Borrower pursuant to a notice given by the Borrower
under Section 2.5. Each Revolving Credit Loan shall be a LIBOR
Revolving Credit Loan or an ABR Loan.
"Revolving Credit Note" shall have the meaning assigned to
such term in Section 2.8.
"Rolling Period" shall mean with respect to any fiscal
quarter, such fiscal quarter and the three immediately preceding
fiscal quarters considered as a single accounting period.
"S&P" shall mean Standard & Poor's Ratings Services.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum reserve
percentages (including any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board
and any other banking authority to which the Administrative Agent or
any Lender is subject, for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall
17
include those imposed under Regulation D. LIBOR Loans shall be deemed
to constitute Eurocurrency Liabilities and as such shall be deemed to
be subject to such reserve requirements without benefit of or credit
for proration, exceptions or offsets which may be available from time
to time to any Lender under Regulation D. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change
in any reserve percentage.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business
entity (whether now existing or hereafter organized) of which at least
a majority of the voting stock or other ownership interests having
ordinary voting power for the election of directors (or the
equivalent) is, at the time as of which any determination is being
made, owned or controlled by such Person or one or more Subsidiaries
of such Person or by such Person and one or more Subsidiaries of such
Person; provided that for purposes of Sections 6.1, 6.5, 6.6, 6.7 and
6.8 hereof, Avis and its Subsidiaries and PHH and its Subsidiaries
shall be deemed not to be Subsidiaries of the Borrower.
"Supermajority Lenders" means Lenders (a) which are not
Objecting Lenders with respect to any previous Extension Request and
(b) which have Commitments representing at least 75% of the aggregate
Commitment Percentages of such non-Objecting Lenders.
"Total Commitment" shall mean, at any time, the aggregate
amount of the Lenders' Commitments as in effect at such time.
2. THE LOANS
SECTION 2.1. Commitments.
(a) Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, to make Revolving Credit Loans to the Borrower, at
any time and from time to time on and after the Closing Date and until the
earlier of the Maturity Date and the termination of the Commitment of such
Lender, in an aggregate principal amount at any time outstanding not to exceed
such Lender's Commitment minus the sum of such Lender's pro rata share of the
amount by which the Competitive Loans outstanding at such time shall be deemed
to have used such Lender's Commitment pursuant to Section 2.18 subject,
however, to the conditions that (a) at no time shall (i) the sum of (A) the
outstanding aggregate principal amount of all Revolving Credit Loans made by
all Lenders plus (B) the outstanding aggregate principal amount of all
Competitive Loans made by all Lenders exceed (ii) the Total Commitment and (b)
at all times the outstanding aggregate principal amount of all Revolving Credit
18
Loans made by each Lender shall equal the product of (i) the percentage that
its Commitment represents of the Total Commitment times (ii) the outstanding
aggregate principal amount of all Revolving Credit Loans made pursuant to a
notice given by the Borrower under Section 2.5. The Commitments of the Lenders
may be terminated or reduced from time to time pursuant to Section 2.12 or
Article 7.
(b) Within the foregoing limits, the Borrower may borrow, pay
or repay and reborrow hereunder, on and after the Closing Date and prior to the
Maturity Date, upon the terms and subject to the conditions and limitations set
forth herein.
SECTION 2.2. Loans.
(a) Each Revolving Credit Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments; provided, however, that the failure of any Lender to make
any Revolving Credit Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Each Competitive Loan shall be made
in accordance with the procedures set forth in Section 2.4. The Revolving
Credit Loans or Competitive Loans comprising any Borrowing shall be (i) in the
case of Competitive Loans and LIBOR Loans, in an aggregate principal amount
that is an integral multiple of $5,000,000 and not less than $10,000,000 and
(ii) in the case of ABR Loans, in an aggregate principal amount that is an
integral multiple of $500,000 and not less than $5,000,000 (or if less, an
aggregate principal amount equal to the remaining balance of the available
Total Commitment).
(b) Each Competitive Borrowing shall be comprised entirely of
LIBOR Competitive Loans or Fixed Rate Loans, and each Revolving Credit
Borrowing shall be comprised entirely of LIBOR Revolving Credit Loans or ABR
Loans, as the Borrower may request pursuant to Section 2.4 or 2.5, as
applicable. Each Lender may at its option make any LIBOR Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan,
provided that any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this Agreement
and the applicable Note. Borrowings of more than one Interest Rate Type may be
outstanding at the same time; provided, however, that the Borrower shall not be
entitled to request any Borrowing that, if made, would result in an aggregate
of more than 9 separate Revolving Credit Loans of any Lender being outstanding
hereunder at any one time. For purposes of the calculation required by the
immediately preceding sentence, LIBOR Revolving Credit Loans having different
Interest Periods, regardless of whether they commence on the same date, shall
be considered separate Loans and all Loans of a single Interest Rate Type made
on a single date shall be considered a single Loan if such Loans have a common
Interest Period.
19
(c) Subject to Section 2.6, each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by making funds
available at the offices of the Administrative. Agent's Agent Bank Services
Department, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, for credit to HFS Incorporated Clearing Account, Account No. 144812905
(Reference: HFS Incorporated Credit Agreement dated as of October 2, 1996) no
later than 1:00 P.M. New York City time in Federal or other immediately
available funds. Upon receipt of the funds to be made available by the Lenders
to fund any Borrowing hereunder, the Administrative Agent shall disburse such
funds by depositing them into an account of the Borrower maintained with the
Administrative Agent. Competitive Loans shall be made by the Lender or Lenders
whose Competitive Bids therefor are accepted pursuant to Section 2.4 in the
amounts so accepted and Revolving Credit Loans shall be made by all the Lenders
pro rata in accordance with Section 2.1 and this Section 2.2.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.3. Use of Proceeds.
The proceeds of the Loans shall be used for working capital
and general corporate purposes of the Company and its Subsidiaries, including,
without limitation, for acquisitions, support of the Borrower's commercial
paper program and refinancing of the Borrower's indebtedness under the Existing
Credit Agreement.
SECTION 2.4. Competitive Bid Procedure.
(a) In order to request Competitive Bids, the Borrower shall
hand deliver or telecopy to the Administrative Agent a duly completed
Competitive Bid Request in the form of Exhibit E-1, to be received by the
Administrative Agent (i) in the case of a LIBOR Competitive Borrowing, not
later than 10:00 a.m., New York City time, four Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 10:00 a.m., New York City time, one Business Day before a proposed
Competitive Borrowing. No ABR Loan shall be requested in, or made pursuant to,
a Competitive Bid Request. A Competitive Bid Request that does not conform
substantially to the format of Exhibit E-1 may be rejected in the
Administrative Agent's sole discretion, and the Administrative Agent shall
promptly notify the Borrower of such rejection by telecopier. Such request for
Competitive Bids shall in each case refer to this Agreement and specify (i)
whether the Borrowing then being requested is to be a LIBOR Borrowing or a
Fixed Rate Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day) and the aggregate principal amount thereof, which shall be in a
20
minimum principal amount of $10,000,000 and in an integral multiple of
$5,000,000, and (iii) the Interest Period with respect thereto (which may not
end after the Maturity Date). Promptly after its receipt of a Competitive Bid
Request that is not rejected as aforesaid, the Administrative Agent shall
invite by telecopier (in the form set forth in Exhibit E-2) the Lenders to bid,
on the terms and subject to the conditions of this Agreement, to make
Competitive Loans pursuant to the Competitive Bid Request.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Administrative Agent via
telecopier, in the form of Exhibit E-3, (i) in the case of a LIBOR Competitive
Borrowing, not later than 9:30 a.m., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform substantially to the
format of Exhibit E-3 may be rejected by the Administrative Agent after
conferring with, and upon the instruction of, the Borrower, and the
Administrative Agent shall notify the Lender making such nonconforming bid of
such rejection as soon as practicable. Each Competitive Bid shall refer to this
Agreement and specify (i) the principal amount (which shall be in a minimum
principal amount of $10,000,000 and in an integral multiple of $5,000,000 and
which may equal the entire principal amount of the Competitive Borrowing
requested by the Borrower) of the Competitive Loan or Loans that the Lender is
willing to make to the Borrower, (ii) the Competitive Bid Rate or Rates at
which the Lender is prepared to make the Competitive Loan or Loans and (iii)
the Interest Period or Interest Periods with respect thereto. If any Lender
shall elect not to make a Competitive Bid, such Lender shall so notify the
Administrative Agent via telecopier (i) in the case of LIBOR Competitive Loans,
not later than 9:30 a.m., New York City time, three Business Days before a
proposed Competitive Borrowing and (ii) in the case of Fixed Rate Loans, not
later than 9:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Loan as
part of such proposed Competitive Borrowing. A Competitive Bid submitted by a
Lender pursuant to this paragraph (b) shall be irrevocable.
(c) The Administrative Agent shall promptly notify the
Borrower by telecopier of all the Competitive Bids made, the Competitive Bid
Rate or Rates and the principal amount of each Competitive Loan in respect of
which a Competitive Bid was made and the identity of the Lender that made each
bid. The Administrative Agent shall send a copy of all Competitive Bids to the
Borrower for its records as soon as practicable after completion of the bidding
process set forth in this Section 2.4.
21
(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (c) above. The Borrower shall notify
the Administrative Agent by telephone, promptly confirmed by telecopier in the
form of a Competitive Bid Accept/Reject Letter whether and to what extent it
has decided to accept or reject any or all of the bids referred to in paragraph
(c) above, (i) in the case of a LIBOR Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 10:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that (A) the failure by the Borrower to give such
notice shall be deemed to be a rejection of all the bids referred to in
paragraph (c) above, (B) the Borrower shall not accept a bid made at a
particular Competitive Bid Rate if the Borrower has decided to reject a bid
made at a lower Competitive Bid Rate, (C) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal amount
specified in the Competitive Bid Request, (D) if the Borrower shall accept a
bid or bids made at a particular Competitive Bid Rate but the amount of such
bid or bids shall cause the total amount of bids to be accepted by the Borrower
to exceed the amount specified in the Competitive Bid Request, then the
Borrower shall accept a portion of such bid or bids in an amount equal to the
amount specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted at lower Competitive Bid Rates with respect to such
Competitive Bid Request (it being understood that acceptance in the case of
multiple bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such bid at such Competitive Bid Rate) and
(E) except pursuant to clause (D) above, no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $10,000,000 and an integral multiple of $5,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $10,000,000
because of the provisions of clause (D) above, such Competitive Loan shall be
in a minimum principal amount of $1,000,000 or any integral multiple thereof,
and in calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to clause (D), the
amounts shall be rounded to integral multiples of $1,000,000 in a manner that
shall be in the discretion of the Borrower. A notice given by the Borrower
pursuant to this paragraph (d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender whether its Competitive Bid has been accepted (and if so, in
what amount and at what Competitive Bid Rate) by telecopy sent by the
Administrative Agent, and each successful bidder will thereupon become bound,
subject to the other applicable conditions hereof, to make the Competitive Loan
in respect of which its bid has been accepted.
22
(f) A Competitive Bid Request shall not be made within four
Business Days after the date of any previous Competitive Bid Request, or such
shorter period as may be agreed upon by the Borrower and the Administrative
Agent.
(g) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such bid directly
to the Borrower one quarter of an hour earlier than the latest time at which
the other Lenders are required to submit their bids to the Administrative Agent
pursuant to paragraph (b) above.
(h) All notices required by this Section 2.4 shall be given
in accordance with Section 9.1.
(i) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Competitive Loans unless at
the time the Borrower has a senior unsecured long-term debt rating of BBB- or
better from S&P or Baa3 or better from ▇▇▇▇▇'▇.
SECTION 2.5. Revolving Credit Borrowing Procedure.
In order to effect a Revolving Credit Borrowing, the Borrower
shall hand deliver or telecopy to the Administrative Agent a Borrowing notice
in the form of Exhibit F (a) in the case of a LIBOR Borrowing, not later than
12:00 (noon), New York City time, three Business Days before a proposed
Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00
(noon), New York City time, on the day of a proposed Borrowing. No Fixed Rate
Loan shall be requested or made pursuant to a Revolving Credit Borrowing
Request. Such notice shall be irrevocable and shall in each case specify (a)
whether the Borrowing then being requested is to be a LIBOR Borrowing or an ABR
Borrowing, (b) the date of such Revolving Credit Borrowing (which shall be a
Business Day) and the amount thereof and (c) if such Borrowing is to be a LIBOR
Borrowing, the Interest Period with respect thereto. If no election as to the
Interest Rate Type of a Revolving Credit Borrowing is specified in any such
notice, then the requested Revolving Credit Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any LIBOR Borrowing is
specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. If the Borrower shall not
have given notice in accordance with this Section 2.5 of its election to
refinance a Revolving Credit Borrowing prior to the end of the Interest Period
in effect for such Borrowing, then the Borrower shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of an
election to refinance such Borrowing with an ABR Borrowing. The Administrative
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.5 and of each Lender's portion of the requested Borrowing.
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SECTION 2.6. Refinancings.
The Borrower may refinance all or any part of any Borrowing
with a Borrowing of the same or a different Interest Rate Type made pursuant to
Section 2.4 or pursuant to a notice under Section 2.5, subject to the
conditions and limitations set forth herein and elsewhere in this Agreement,
including refinancings of Competitive Borrowings with Revolving Credit
Borrowings and Revolving Credit Borrowings with Competitive Borrowings;
provided, however, that at any time after the occurrence, and during the
continuation, of a Default or an Event of Default, a Revolving Credit Borrowing
or portion thereof may only be refinanced with an ABR Borrowing. Any Borrowing
or part thereof so refinanced shall be deemed to be repaid in accordance with
Section 2.8 with the proceeds of a new Borrowing hereunder and the proceeds of
the new Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the Lenders to the
Administrative Agent or by the Administrative Agent to the Borrower pursuant to
Section 2.2(c); provided, however, that (a) if the principal amount extended by
a Lender in a refinancing is greater than the principal amount extended by such
Lender in the Borrowing being refinanced, then such Lender shall pay such
difference to the Administrative Agent for distribution to the Borrower or any
Lenders described in clause (b) below, as applicable, (b) if the principal
amount extended by a Lender in the Borrowing being refinanced is greater than
the principal amount being extended by such Lender in the refinancing, the
Administrative Agent shall return the difference to such Lender out of amounts
received pursuant to clause (a) above, and (c) to the extent any Lender fails
to pay the Administrative Agent amounts due from it pursuant to clause (a)
above, any Loan or portion thereof being refinanced with such amounts shall not
be deemed repaid in accordance with Section 2.6 and, to the extent of such
failure, the Borrower shall pay such amount to the Administrative Agent as
required by Section 2.10; and (d) to the extent the Borrower fails to pay to
the Administrative Agent any amounts due in accordance with Section 2.10 as a
result of the failure of a Lender to pay the Administrative Agent any amounts
due as described in clause (c) above, the portion of any refinanced Loan deemed
not repaid shall be deemed to be outstanding solely to the Lender which has
failed to pay the Administrative Agent amounts due from it pursuant to clause
(a) above to the full extent of such Lender's portion of such Loan.
SECTION 2.7. Fees.
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31,
commencing December 31, 1996, and on the date on which the Commitment of such
Lender shall be terminated as provided herein, a facility fee (a "Facility
Fee",) at the rate per annum from time to time in effect in accordance with
Section 2.22, on the amount of the Commitment of such Lender, whether
24
used or unused, during the preceding quarter (or shorter period commencing with
the Closing Date, or ending with the Maturity Date or any date on which the
Commitment of such Lender shall be terminated). All Facility Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Facility Fee due to each Lender shall commence to accrue on the
Closing Date, shall be payable in arrears and shall cease to accrue on the
earlier of the Maturity Date and the termination of the Commitment of such
Lender as provided herein.
(b) The Borrower agrees to pay the Administrative Agent, for
its own account, the fees at the times and in the amounts provided for in the
letter agreement dated August 28, 1996 among the Borrower, Chase and Chase
Securities Inc.
(c) All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the fees shall be refundable
under any circumstances.
SECTION 2.8. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Credit Loan of such Lender on the Maturity
Date (or such earlier date on which the Revolving Credit Loans become due and
payable pursuant to Article 7); provided, that the Revolving Credit Loans made
by Objecting Lenders shall be repaid as provided in Section 2.24. The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Revolving Credit Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.9.
(b) The Borrower unconditionally promises to pay to the
Administrative Agent, for the account of each Lender that makes a Competitive
Loan, on the last day of the Interest Period applicable to such Competitive
Loan, the principal amount of such Competitive Loan. The Borrower further
unconditionally promises to pay interest on each such Competitive Loan for the
period from and including the date of Borrowing of such Competitive Loan on the
unpaid principal amount thereof from time to time outstanding at the applicable
rate per annum determined as provided in, and payable as specified in, Section
2.9.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Revolving Credit Loan and Competitive Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
25
(d) The Administrative Agent shall maintain the Register
pursuant to Section 9.3(e), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Revolving Credit Loan and Competitive
Loan made hereunder, the Interest Rate Type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(e) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Revolving
Credit Loans and Competitive Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.
(f) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate
insertions as to date and principal amount (a "Revolving Credit Note").
(g) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Competitive Loans
of such Lender, substantially in the form of Exhibit A-2 with appropriate
insertions as to date and principal amount (a "Competitive Note").
SECTION 2.9. Interest on Loans.
(a) Subject to the provisions of Section 2.10, the Loans
comprising each LIBOR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 360 days) at a rate per annum
equal to (i) in the case of each LIBOR Revolving Credit Loan, LIBOR for the
Interest Period in effect for such Borrowing plus the applicable LIBOR Spread
from time to time in effect and (ii) in the case of each LIBOR Competitive
Loan, LIBOR for the Interest Period in effect for such Borrowing plus the
Margin offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.5. Interest on each LIBOR Borrowing shall be payable on
each applicable Interest Payment Date.
26
(b) Subject to the provisions of Section 2.10, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, when determined by reference to the Prime Rate and over a year of 360 days
at all other times) at a rate per annum equal to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.10, each Fixed
Rate Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.4.
(d) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan. The LIBOR or the Alternate Base
Rate for each Interest Period or day within an Interest Period shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.10. Interest on Overdue Amounts.
If the Borrower shall default in the payment of the principal
of, or interest on, any Loan or any other amount becoming due hereunder, the
Borrower shall on demand from time to time pay interest, to the extent
permitted by Applicable Law, on such defaulted amount up to (but not including)
the date of actual payment (after as well as before judgment) at a rate per
annum computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as applicable, in the case of amounts bearing interest
determined by reference to the Prime Rate and a year of 360 days in all other
cases, equal to (a) in the case of the remainder of the then current Interest
Period for any LIBOR Loan or Fixed Rate Loan, the rate applicable to such Loan
under Section 2.9 plus 2% per annum and (b) in the case of any other amount,
the rate that would at the time be applicable to an ABR Loan under Section 2.9
plus 2% per annum.
SECTION 2.11. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two
Business Days prior to the commencement of any Interest Period for a LIBOR
Loan, the Administrative Agent shall have determined that Dollar deposits in
the amount of the requested principal amount of such LIBOR are not generally
available in the London Interbank Market, or that the rate at which such Dollar
deposits are being offered will not adequately and fairly reflect the cost to
any Lender of making or maintaining its portion of such LIBOR Loans during such
Interest Period, or that reasonable means do not exist for ascertaining LIBOR,
the Administrative Agent shall, as soon as practicable thereafter, give written
or telecopier notice of such determination to the Borrower and the Lenders. In
the event of any such determination, until the Administrative
27
Agent shall have determined that circumstances giving rise to such notice no
longer exist, (a) any request by the Borrower for a LIBOR Competitive Borrowing
pursuant to Section 2.4 shall be of no force and effect and shall be denied by
the Administrative Agent and (b) any request by the Borrower for a LIBOR
Borrowing pursuant to Section 2.5 shall be deemed to be a request for an ABR
Loan. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.12. Termination and Reduction of
Commitments.
(a) The Commitments of all of the Lenders shall be
automatically terminated on the earlier of (a) the Maturity Date or (b) October
31, 1996 if the Closing Date has not occurred on or prior to such date.
(b) Subject to Section 2.13(b), upon at least three Business
Days, prior irrevocable written or telecopy notice to the Administrative Agent,
the Borrower may at any time in whole permanently terminate, or from time to
time in part permanently reduce, the Total Commitment; provided, however, that
(i) each partial reduction of the Total Commitment shall be in an integral
multiple of $5,000,000 and in a minimum principal amount of $10,000,000 and
(ii) the Borrower shall not be entitled to make any such termination or
reduction that would reduce the Total Commitment to an amount less than the sum
of the aggregate outstanding principal amount of the Loans.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Borrower shall pay to the Administrative Agent for the account of the
Lenders on the date of each termination or reduction in the Total Commitment,
the Facility Fees on the amount of the Total Commitment so terminated or
reduced accrued to the date of such termination or reduction.
SECTION 2.13. Prepayment of Loans.
(a) Prior to the Maturity Date, the Borrower shall have the
right at any time to prepay any Revolving Credit Borrowing, in whole or in
part, subject to the requirements of Section 2.17 but otherwise without premium
or penalty, upon prior written or telecopy notice to the Administrative Agent
before 12:00 noon New York City time at least one Business Day in the case of
an ABR Loan and at least three Business Days in the case of a LIBOR Loan;
provided, however, that each such partial prepayment shall be in an integral
multiple of $5,000,000 and in a minimum aggregate principal amount of
$10,000,000. The Borrower shall not have the right to prepay any Competitive
Borrowing without the consent of the relevant lender.
(b) On any date when the sum of the aggregate outstanding
Loans (after giving effect to any Borrowings effected
28
on such date) exceeds the Total Commitment, the Borrower shall make a mandatory
prepayment of the Revolving Credit Loans in such amount as may be necessary so
that the aggregate amount of outstanding Loans after giving effect to such
prepayment does not exceed the Total Commitment then in effect. Any prepayments
required by this paragraph shall be applied to outstanding ABR Loans up to the
full amount thereof before they are applied to outstanding LIBOR Revolving
Credit Loans.
(c) Each notice of prepayment pursuant to Section 2.13(a)
shall specify the specific Borrowing(s), the prepayment date and the aggregate
principal amount of each Borrowing to be prepaid, shall be irrevocable and
shall commit the Borrower to prepay such Borrowing(s) by the amount stated
therein. All prepayments under this Section 2.13 shall be accompanied by
accrued interest on the principal amount being prepaid, to the date of
prepayment.
SECTION 2.14. Eurodollar Reserve Costs.
The Borrower shall pay to the Administrative Agent for the
account of each Lender, so long as such Lender shall be required under
regulations of the Board to maintain reserves with respect to liabilities or
assets consisting of, or including, Eurocurrency Liabilities (as defined in
Regulation D of the Board), additional interest on the unpaid principal amount
of each LIBOR Loan made to the Borrower by such Lender, from the date of such
Loan until such Loan is paid in full, at an interest rate per annum equal at
all times during the Interest Period for such Loan to the remainder obtained by
subtracting (i) LIBOR for such Interest Period from (ii) the rate obtained by
multiplying LIBOR as referred to in clause (i) above by the Statutory Reserves
of such Lender for such Interest Period. Such additional interest shall be
determined by such Lender and notified to the Borrower (with a copy to the
Administrative Agent) not later than five Business Days before the next
Interest Payment Date for such Loan, and such additional interest so notified
to the Borrower by any Lender shall be payable to the Administrative Agent for
the account of such Lender on each Interest Payment Date for such Loan.
SECTION 2.15. Reserve Requirements; Change in
Circumstances.
(a) Notwithstanding any other provision herein, if after the
date of this Agreement any change in Applicable Law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) (i) shall subject any Lender to, or increase the net amount of,
any tax, levy, impost, duty, charge, fee, deduction or withholding with respect
to any LIBOR Loan or Fixed Rate Loan, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on any LIBOR Loan or
Fixed Rate Loan
29
made by such Lender or any other fees or amounts payable hereunder (other than
(x) taxes imposed on the overall net income of such Lender by the jurisdiction
in which such Lender has its principal office or its applicable Lending Office
or by any political subdivision or taxing authority therein (or any tax which
is enacted or adopted by such jurisdiction, political subdivision or taxing
authority as a direct substitute for any such taxes) or (y) any tax,
assessment, or other governmental charge that would not have been imposed but
for the failure of any Lender to comply with any certification, information,
documentation or other reporting requirement), (ii) shall impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender, or (iii) shall impose on any Lender or the London Interbank Market any
other condition affecting this Agreement or any LIBOR Loan or Fixed Rate Loan
made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any LIBOR Loan or
Fixed Rate Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) in respect
thereof by an amount deemed in good faith by such Lender to be material, then
the Borrower shall pay such additional amount or amounts as will compensate
such Lender for such increase or reduction to such Lender upon demand by such
Lender.
(b) If, after the date of this Agreement, any Lender shall
have determined in good faith that the adoption after the date hereof of any
applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or any Lending Office of such Lender) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender's capital or on the
capital of the Lender's holding company, if any, as a consequence of its
obligations hereunder to a level below that which such Lender (or its holding
company) could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's policies or the policies of
its holding company, as the case may be, with respect to capital adequacy) by
an amount deemed by such Lender to be material, then, from time to time, the
Borrower shall pay to the Administrative Agent for the account of such Lender
such additional amount or amounts as will compensate such Lender for such
reduction upon demand by such Lender.
(c) A certificate of a Lender setting forth in reasonable
detail (i) such amount or amounts as shall be necessary to compensate such
Lender as specified in paragraph (a) or (b) above, as the case may be, and (ii)
the calculation of
30
such amount or amounts referred to in the preceding clause (i), shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay the Administrative Agent for the account of such Lender the
amount shown as due on any such certificate within 10 Business Days after its
receipt of the same.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period shall not
constitute a waiver of such Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to such Interest Period or any other Interest
Period. The protection of this Section 2.14 shall be available to each Lender
regardless of any possible contention of invalidity or inapplicability of the
law, regulation or condition which shall have been imposed.
(e) Each Lender agrees that, as promptly as practicable after
it becomes aware of the occurrence of an event or the existence of a condition
that (i) would cause it to incur any increased cost under this Section 2.15,
Section 2.16 or Section 2.21 or (ii) would require the Borrower to pay an
increased amount under this Section 2.15, Section 2.16 or Section 2.21, it will
use reasonable efforts to notify the Borrower of such event or condition and,
to the extent not inconsistent with such Lender's internal policies, will use
its reasonable efforts to make, fund or maintain the affected Loans of such
Lender, or, if applicable to participate in Letters of Credit, through another
Lending Office of such Lender if as a result thereof the additional monies
which would otherwise be required to be paid or the reduction of amounts
receivable by such Lender thereunder in respect of such Loans or Letters of
Credit would be materially reduced, or any inability to perform would cease to
exist, or the increased costs which would otherwise be required to be paid in
respect of such Loans or Letters of Credit pursuant to this Section 2.15,
Section 2.16 or Section 2.21 would be materially reduced or the taxes or other
amounts otherwise payable under this Section 2.15, Section 2.16 or Section 2.21
would be materially reduced, and if, as determined by such Lender, in its sole
discretion, the making, funding or maintaining of such Loans or Letters of
Credit through such other Lending Office would not otherwise materially
adversely affect such Loans or Letters of Credit or such Lender.
(f) In the event any Lender shall have delivered to the
Borrower a notice that LIBOR Loans are no longer available from such Lender
pursuant to Section 2.16, that amounts are due to such Lender pursuant to
paragraph (c) hereof or that any of the events designated in paragraph (e)
hereof have occurred, the Borrower may (but subject in any such case to the
payments required by Section 2.17), provided that there shall exist no Default
or Event of Default, upon at least five Business Days'
31
prior written or telecopier notice to such Lender and the Administrative Agent,
but not more than 30 days after receipt of notice from such Lender, identify to
the Administrative Agent a lending institution reasonably acceptable to the
Administrative Agent which will purchase the Commitment, the amount of
outstanding Loans and any participations in Letters of Credit from the Lender
providing such notice and such Lender shall thereupon assign its Commitment,
any Loans owing to such Lender and any participations in Letters of Credit and
the Notes held by such Lender to such replacement lending institution pursuant
to Section 9.3. Such notice shall specify an effective date for such assignment
and at the time thereof, the Borrower shall pay all accrued interest, Facility
Fees and all other amounts (including without limitation all amounts payable
under this Section) owing hereunder to such Lender as at such effective date
for such assignment.
SECTION 2.16. Change in Legality.
(a) Notwithstanding anything to the contrary herein
contained, if any change in any law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any Lender to make or
maintain any LIBOR Loan or to give effect to its obligations as contemplated
hereby, then, by written notice to the Borrower and to the Administrative
Agent, such Lender may:
(i) declare that LIBOR Loans will not thereafter be made
by such Lender hereunder, whereupon such Lender shall not submit a
Competitive Bid in response to a request for LIBOR Competitive Loans
and the Borrower shall be prohibited from requesting LIBOR Revolving
Credit Loans from such Lender hereunder unless such declaration is
subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by it
be converted to ABR Loans, in which event (A) all such LIBOR Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in Section 2.16(b) and (B) all payments and
prepayments of principal which would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the
ABR Loans resulting from the conversion of such LIBOR Loans.
(b) For purposes of this Section 2.16, a notice to the
Borrower by any Lender pursuant to Section 2.16(a) shall be effective on the
date of receipt thereof by the Borrower.
SECTION 2.17. Reimbursement of Lenders.
(a) The Borrower shall reimburse each Lender on demand for
any loss incurred or to be incurred by it in the reemployment of the funds
released (i) by any prepayment (for any reason) of
32
any LIBOR or Fixed Rate Loan if such Loan is repaid other than on the last day
of the applicable Interest Period for such Loan or (ii) in the event that after
the Borrower delivers a notice of borrowing under Section 2.5 in respect of
LIBOR Revolving Credit Loans or a Competitive Bid Accept/Reject Letter under
Section 2.4(d), pursuant to which it has accepted bids of one or more of the
Lenders, the applicable Loan is not made on the first day of the Interest
Period specified by the Borrower for any reason other than (I) a suspension or
limitation under Section 2.16 of the right of the Borrower to select a LIBOR
Loan or (II) a breach by a Lender of its obligations hereunder. In the case of
such failure to borrow, such loss shall be the amount as reasonably determined
by such Lender as the excess, if any of (A) the amount of interest which would
have accrued to such Lender on the amount not borrowed, at a rate of interest
equal to the interest rate applicable to such Loan pursuant to Section 2.9, for
the period from the date of such failure to borrow, to the last day of the
Interest Period for such Loan which would have commenced on the date of such
failure to borrow, over (B) the amount realized by such Lender in reemploying
the funds not advanced during the period referred to above. In the case of a
payment other than on the last day of the Interest Period for a Loan, such loss
shall be the amount as reasonably determined by the Administrative Agent as the
excess, if any, of (A) the amount of interest which would have accrued on the
amount so paid at a rate of interest equal to the interest rate applicable to
such Loan pursuant to Section 2.9, for the period from the date of such payment
to the last day of the then current daily Interest Period for such Loan, over
(B) the amount equal to the product of (x) the amount of the Loan so paid times
(y) the current daily yield on U.S. Treasury Securities (at such date of
determination) with maturities approximately equal to the remaining Interest
Period for such Loan times (z) the number of days remaining in the Interest
Period for such Loan. Each Lender shall deliver to the Borrower from time to
time one or more certificates setting forth the amount of such loss (and in
reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error. The
Borrower shall pay to the Administrative Agent for the account of each Lender
the amount shown as due on any certificate within thirty (30) days after its
receipt of the same.
(b) In the event the Borrower fails to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section 2.13(a),
the Borrower on demand by any Lender shall pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Each Lender shall
deliver to the Borrower and the Administrative Agent from time to time one or
more certificates setting forth the amount of such loss (and
33
in reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error.
SECTION 2.18. Pro Rata Treatment.
Except as permitted under Sections 2.14, 2.15(c), 2.16, 2.17,
2.23 and 2.24, (i) each Revolving Credit Borrowing, each payment or prepayment
of principal of any Revolving Credit Borrowing, each payment of interest on the
Revolving Credit Loans, each payment of the Facility Fees, each reduction of
the Total Commitment and each refinancing of any Borrowing with, or conversion
of any Borrowing to, a Revolving Credit Borrowing, or continuation of any
Borrowing as a Revolving Credit Borrowing, shall be allocated pro rata among
the Lenders in accordance with their respective Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amount of their outstanding Revolving Credit Loans). Each
payment of principal of any Competitive Borrowing shall be allocated pro rata
among the Lenders participating in such Borrowing in accordance with the
respective principal amounts of their outstanding Competitive Loans comprising
such Borrowing. Each payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders that shall not have made
Loans as part of such Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender's percentage of such Borrowing computed in
accordance with Section 2.1, to the next higher or lower whole dollar amount.
SECTION 2.19. Right of Setoff.
If any Event of Default shall have occurred and be continuing
and any Lender shall have requested the Administrative Agent to declare the
Loans immediately due and payable pursuant to Article 7, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by Applicable Law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by such Lender
and any other indebtedness at any time owing by such Lender to, or for the
credit or the account of, the Borrower, against any of and all the obligations
now or hereafter existing under this Agreement and the Loans held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such Loans and although such Obligations may be
unmatured. Each Lender agrees promptly to
34
notify the Borrower after any such setoff and application made by such Lender,
but the failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Lender under this Section 2.19 are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 2.20. Manner of Payments.
All payments by the Borrower hereunder and under the Notes
shall be made in Dollars in Federal or other immediately available funds at the
office of the Administrative Agent's Agent Bank Services Department, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, for credit to
HFS Incorporated Clearing Account, Account No. 144812905 (Reference: HFS
Incorporated Credit Agreement dated October 2, 1996) no later than 12:00 noon,
New York City time, on the date on which such payment shall be due. Interest in
respect of any Loan hereunder shall accrue from and including the date of such
Loan to, but excluding, the date on which such Loan is paid or refinanced with
a Loan of a different Interest Rate Type.
SECTION 2.21. United States Withholding.
(a) Prior to the date of the initial Loans hereunder, and
from time to time thereafter if requested by the Borrower or the Administrative
Agent or required because, as a result of a change in Applicable Law or a
change in circumstances or otherwise, a previously delivered form or statement
becomes incomplete or incorrect in any material respect, each Lender organized
under the laws of a jurisdiction outside the United States shall provide, if
applicable, the Administrative Agent and the Borrower with complete, accurate
and duly executed forms or other statements prescribed by the Internal Revenue
Service of the United States certifying such Lender's exemption from, or
entitlement to a reduced rate of, United States withholding taxes (including
backup withholding taxes) with respect to all payments to be made to such
Lender hereunder and under the Notes.
(b) The Borrower and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future taxes or
withholdings, and all liabilities with respect thereto, from payments hereunder
or under the Notes, if and to the extent that the Borrower or the
Administrative Agent in good faith determines that such deduction or
withholding is required by the law of the United States, including, without
limitation, any applicable treaty of the United States. In the event the
Borrower or the Administrative Agent shall so determine that deduction or
withholding of taxes is required, it shall advise the affected Lender as to the
basis of such determination prior to actually deducting and withholding such
taxes. In the event the Borrower or the Administrative Agent shall so deduct or
withhold taxes from amounts payable hereunder, it (i) shall pay to or deposit
with the appropriate taxing authority in a timely
35
manner the full amount of taxes it has deducted or withheld; (ii) shall provide
evidence of payment of such taxes to, or the deposit thereof with, the
appropriate taxing authority and a statement setting forth the amount of taxes
deducted or withheld, the applicable rate, and any other information or
documentation reasonably requested by the Lenders from whom the taxes were
deducted or withheld; and (iii) shall forward to such Lenders any receipt for
such payment or deposit of the deducted or withheld taxes as may be issued from
time to time by the appropriate taxing authority. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory to
them indicating that payments hereunder or under the Notes are not subject to
United States withholding tax or are subject to such tax at a rate reduced by
an applicable tax treaty, the Borrower or the Administrative Agent may withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Lender organized under the laws of a jurisdiction
outside the United States.
(c) Each Lender agrees (i) that as between it and the
Borrower or the Administrative Agent, it shall be the Person to deduct and
withhold taxes, and to the extent required by law it shall deduct and withhold
taxes, on amounts that such Lender may remit to any other Person(s) by reason
of any undisclosed transfer or assignment of an interest in this Agreement to
such other Person(s) pursuant to paragraph (g) of Section 9.3 and (ii) to
indemnify the Borrower and the Administrative Agent and any officers,
directors, agents, or employees of the Borrower or the Administrative Agent
against, and to hold them harmless from, any tax, interest, additions to tax,
penalties, reasonable counsel and accountants' fees, disbursements or payments
arising from the assertion by any appropriate taxing authority of any claim
against them relating to a failure to withhold taxes as required by Applicable
Law with respect to amounts described in clause (i) of this paragraph (c).
(d) Each assignee of a Lender's interest in this Agreement in
conformity with Section 9.3 shall be bound by this Section 2.21, so that such
assignee will have all of the obligations and provide all of the forms and
statements and all indemnities, representations and warranties required to be
given under this Section 2.21.
(e) In the event that any withholding taxes shall become
payable solely as a result of any change in any statute, treaty, ruling,
determination or regulation occurring after the Initial Date in respect of any
sum payable hereunder or under any other Fundamental Document to any Lender or
the Administrative Agent (i) the sum payable by the Borrower shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.21) such
Lender or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower
36
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with Applicable Law. For purposes of this Section 2.21, the term "Initial Date"
shall mean (i) in the case of the Administrative Agent, the date hereof, (ii)
in the case of each Lender as of the date hereof, the date hereof and (iii) in
the case of any other Lender, the effective date of the Assignment and
Acceptance pursuant to which it became a Lender.
SECTION 2.22. Certain Pricing Adjustments.
The Facility Fee and the applicable LIBOR Spread in effect
from time to time shall be determined in accordance with the following table:
S&P/▇▇▇▇▇'▇
Rating Equivalent Applicable
of the Borrower's Facility Fee LIBOR Spread
senior unsecured (in Basis (in Basis
long-term debt Points) Points)
------------------ ------------ ------------
AA-/Aa3 or better 4.0 14.75
A+/A1 5.0 15.00
A/A2 6.0 16.50
A-/A3 7.0 18.00
BBB+/Baa1 8.0 22.00
BBB/Baa2 10.0 25.00
BBB-/Baa3 12.5 37.50
BB+/Bal or worse 17.5 45.00
In the event the S&P rating on the Borrower's senior
unsecured long-term debt is not equivalent to the ▇▇▇▇▇'▇ rating on such debt,
the higher rating will determine the Facility Fee and applicable LIBOR Spread,
unless the S&P and ▇▇▇▇▇'▇ ratings are more than one level apart, in which case
the rating one level below the higher rating will be determinative. In the
event that the Borrower's senior unsecured long-term debt is rated by only one
of S&P and ▇▇▇▇▇'▇, then that single rating shall be determinative. In the
event that the Borrower's senior unsecured long-term debt is not rated by
either S&P or ▇▇▇▇▇'▇, then the Facility Fee and the applicable LIBOR Spread
shall be deemed to be calculated as if the lowest rating category set forth
above applied. Any increase in the Facility Fee or the applicable LIBOR Spread
determined in accordance with the foregoing table shall become effective on the
date of announcement or publication by the Borrower or either such rating
agency of a reduction in such rating or, in the absence of such announcement or
publication, on the effective date of such decreased rating, or on the date of
any request by the Borrower to either of such rating agencies not to rate its
senior unsecured long-term debt
37
or on the date either of such rating agencies announces it shall no longer rate
the Borrower's senior unsecured long-term debt. Any decrease in the Facility
Fee or applicable LIBOR Spread shall be effective on the date of announcement
or publication by either of such rating agencies of an increase in rating or in
the absence of announcement or publication on the effective date of such
increase in rating.
SECTION 2.23. Increase of Commitments. (a) At the request of
the Borrower to the Administrative Agent, the aggregate Commitments hereunder
may be increased on the Merger Effective Date by not more than $500,000,000
provided that (i) each Lender whose Commitment is increased consents, (ii) the
increase is in a multiple of $25,000,000 and (iii) the consent of the
Administrative Agent is obtained.
(b) In the event that the Borrower and one or more of the
Lenders (or other financial institutions which may elect to participate with
the consent of the Administrative Agent) shall agree, in accordance with
Section 2.23(a), upon such an increase in the aggregate Commitments, the
Borrower, the Administrative Agent and each financial institution in question
shall enter into a Commitment Increase Supplement setting forth the amounts of
the increase in Commitments and providing that the additional financial
institutions participating shall be deemed to be included as Lenders for all
purposes of this Agreement. Upon the execution and delivery of such Commitment
Increase Supplement as provided above, and upon satisfaction of such other
conditions as the Administrative Agent may specify (including the delivery of
certificates and legal opinions on behalf of the Borrower relating to the
amendment and, if requested, new Notes), this Agreement shall be deemed to be
amended accordingly.
(c) No Lender shall have any obligation to increase its
Commitment in the event of such a request by the Borrower hereunder.
SECTION 2.24. Extension of Maturity Date. (a) Not less
than 60 days and not more than 90 days prior to the Maturity Date then in
effect, provided that no Event of Default shall have occurred and be
continuing, the Borrower may request an extension of such Maturity Date by
submitting to the Administrative Agent an Extension Request containing the
information in respect of such extension specified in Exhibit H, which the
Administrative Agent shall promptly furnish to each Lender. Each Lender shall,
not less than 30 days and not more than 60 days prior to the Maturity Date then
in effect, notify the Borrower and the Administrative Agent of its election to
extend or not extend the Maturity Date as requested in such Extension Request.
Notwithstanding any provision of this Agreement to the contrary, any notice by
any Lender of its willingness to extend the Maturity Date shall be revocable by
such Lender in its sole and absolute discretion at any time prior to the date
which is 30 days prior to the Maturity Date then in effect. If the
38
Supermajority Lenders shall approve in writing the extension of the Maturity
Date requested in such Extension Request, the Maturity Date shall automatically
and without any further action by any Person be extended for the period
specified in such Extension Request; provided that (i) each extension pursuant
to this Section 2.24 shall be for a maximum of 364 days and (ii) the Commitment
of any Lender which does not consent in writing to such extension not less than
30 days and not more than 60 days prior to the Maturity Date then in effect (an
"Objecting Lender") shall, unless earlier terminated in accordance with this
Agreement, expire on the Maturity Date in effect on the date of such Extension
Request (such Maturity Date, if any, referred to as the "Commitment Expiration
Date" with respect to such Objecting Lender). If not less than 30 days and not
more than 60 days prior to the Maturity Date then in effect, the Supermajority
Lenders shall not approve in writing the extension of the Maturity Date
requested in an Extension Request, the Maturity Date shall not be extended
pursuant to such Extension Request. The Administrative Agent shall promptly
notify (y) the Lenders and the Borrower of any extension of the Maturity Date
pursuant to this Section 2.24 and (z) the Borrower and any other Lender of any
Lender which becomes an Objecting Lender.
(b) Revolving Credit Loans owing to any Objecting Lender on
the Commitment Expiration Date with respect to such Lender shall be repaid in
full on or before such Commitment Expiration Date.
(c) The Borrower shall have the right, so long as no Event of
Default has occurred and is then continuing, upon giving notice to the
Administrative Agent and the Objecting Lender in accordance with Section 2.13,
to prepay in full the Revolving Credit Loans of the Objecting Lenders, together
with accrued interest thereon, any amounts payable pursuant to Sections 2.9,
2.10, 2.14, 2.15, 2.17, 2.21, and 9.4 and any accrued and unpaid Facility Fee
or other amounts payable to it hereunder and/or, upon giving not less than
three Business Days' notice to the Objecting Lenders and the Administrative
Agent, to cancel the whole or part of the Commitments of the Objecting Lenders.
(d) The Borrower may, with the consent of the Administrative
Agent, designate one or more financial institutions to act as a Lender
hereunder in place of any Objecting Lender, and upon the execution of an
agreement substantially in the form of Exhibit I by each such Objecting Lender
(who hereby agrees to execute such agreement), such replacement financial
institution and the Administrative Agent, such replacement financial
institution shall become and be a Lender hereunder with all the rights and
obligations it would have had if it had been named on the signature pages
hereof, and having for all such financial institutions aggregate Commitments of
no greater than the whole of the Commitment of the Objecting Lender in place of
which such financial institutions were designated; provided, that the Facility
Fees, interest and other
39
payments to the Lenders due hereunder shall accrue for the account of each such
financial institution from the date of replacement pursuant to such agreement.
The Administrative Agent shall notify the Lenders of the execution of any such
agreement, the name of the financial institution executing such agreement and
the amount of such financial institution's Commitment.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement
and to make the Loans and participate in the Letters of Credit provided for
herein, the Borrower makes the following representations and warranties to the
Administrative Agent and the Lenders, all of which shall survive the execution
and delivery of this Agreement, the issuance of the Notes and the making of the
Loans and issuance of the Letters of Credit:
SECTION 3.1. Corporate Existence and Power.
The Borrower and its Subsidiaries have been duly organized
and are validly existing in good standing under the laws of their respective
jurisdictions of incorporation and are in good standing or have applied for
authority to operate as a foreign corporation in all jurisdictions where the
nature of their properties or business so requires it and where a failure to be
in good standing as a foreign corporation would have a Material Adverse Effect.
The Borrower has the corporate power to execute, deliver and perform its
obligations under this Agreement and the other Fundamental Documents and other
documents contemplated hereby and to borrow hereunder.
SECTION 3.2. Corporate Authority, No Violation and
Compliance with Law.
The execution, delivery and performance of this Agreement and
the other Fundamental Documents and the borrowings hereunder (a) have been duly
authorized by all necessary corporate action on the part of the Borrower, (b)
will not violate any provision of any Applicable Law (including any laws
related to franchising) applicable to the Borrower or any of its Subsidiaries
or any of their respective properties or assets, (c) will not violate any
provision of the Certificate of Incorporation or By-Laws of the Borrower or any
of its Subsidiaries, or any indenture, any agreement for borrowed money, any
bond, note or other similar instrument or any other material agreement to which
the Borrower or any of its Subsidiaries is a party or by which the Borrower or
any of its Subsidiaries or any of their respective properties or assets are
bound, (d) will not be in conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under, any material
indenture, agreement, bond, note or instrument and (e) will not result in the
creation or imposition of any Lien upon any property or assets of the Borrower
or any of its Subsidiaries
40
other than pursuant to this Agreement or any other Fundamental
Document.
SECTION 3.3. Governmental and Other Approval and
Consents.
No action, consent or approval of, or registration or filing
with, or any other action by, any governmental agency, bureau, commission or
court is required in connection with the execution, delivery and performance by
the Borrower of this Agreement or the other Fundamental Documents.
SECTION 3.4. Financial Statements of Borrower.
(i) The (a) audited consolidated balance sheets of HFS
Incorporated and its Consolidated Subsidiaries as of December 31, 1995 and
December 31, 1996, and (b) unaudited consolidated balance sheets of HFS
Incorporated and its Consolidated Subsidiaries as of March 31, 1997 and June
30, 1997, together with the related unaudited statements of income,
shareholders' equity and cash flows for such periods, fairly present the
financial condition of HFS Incorporated and its Consolidated Subsidiaries as at
the dates indicated and the results of operations and cash flows for the
periods indicated in conformity with GAAP subject to normal year-end
adjustments in the case of the March 31, 1997 and June 30, 1997 financial
statements.
(ii) The (a) audited consolidated balance sheets of CUC
International Inc. and its consolidated Subsidiaries as of January 31, 1996 and
January 31, 1997 and (b) unaudited consolidated balance sheets of CUC
International Inc. and its consolidated Subsidiaries as of April 30, 1997,
together with the related unaudited statements of income, shareholders' equity
and cash flows for such periods, fairly present the financial condition of CUC
International Inc. and its consolidated Subsidiaries as at the dates indicated
and the results of operations and cash flows for the periods indicated in
conformity with GAAP subject to normal year-end adjustments in the case of the
April 30, 1997 financial statements.
(iii) The pro forma combined balance sheets of CUC
International Inc. dated April 30, 1997, and of HFS Incorporated, dated March
31, 1997, as set forth in the unaudited pro forma combining financial
statements for the Merger set forth in the joint proxy statement prospectus
filed by CUC International Inc. and HFS Incorporated dated August 28, 1997,
fairly present the consolidated financial condition of the surviving company of
the Merger and its consolidated Subsidiaries as at the dates indicated.
41
SECTION 3.5. No Material Adverse Change.
Since December 31, 1996 and January 31, 1997, respectively,
there has been no material adverse change in the business, assets, operations,
or condition, financial or otherwise, of HFS Incorporated and its Subsidiaries
taken as a whole or of CUC International Inc. and its Subsidiaries taken as a
whole; provided, however, that the foregoing representation is made solely as
of the Merger Effective Date.
SECTION 3.6. Subsidiaries.
Annexed hereto as Schedule 3.6 is a correct and complete list
as of the Merger Effective Date of all Material Subsidiaries of the Borrower
showing, as to each Material Subsidiary, its name, the jurisdiction of its
incorporation, its authorized capitalization and the ownership of the capital
stock of such Material Subsidiary.
SECTION 3.7. Copyrights, Patents and Other Rights.
Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.8. Title to Properties.
Each of the Borrower and its Material Subsidiaries will have
at the Merger Effective Date good title or valid leasehold interests to each of
the properties and assets reflected on the balance sheets referred to in
Section 3.4, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes, and all such properties and assets will
be free and clear of Liens, except Permitted Encumbrances.
SECTION 3.9. Litigation.
Except as set forth on Schedule 3.9, there are no lawsuits or
other proceedings pending (including, but not limited to, matters relating to
environmental liability), or, to the knowledge of the Borrower, threatened,
against or affecting the Borrower or any of its Subsidiaries or any of their
respective properties, by or before any Governmental Authority or arbitrator,
which could reasonably be expected to have a Material Adverse Effect. Neither
the Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, decree, rule or regulation of any Governmental
Authority, which default would have a Material Adverse Effect.
42
SECTION 3.10. Federal Reserve Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans will be used, whether immediately,
incidentally or ultimately, for any purpose violative of or inconsistent with
any of the provisions of Regulation G, T, U or X of the Board.
SECTION 3.11. Investment Company Act.
The Borrower is not, and will not during the term of this
Agreement be, (x) an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (y) subject to regulation under the Public
Utility Holding Company Act of 1935 or the Federal Power Act.
SECTION 3.12. Enforceability.
This Agreement and the other Fundamental Documents when
executed will constitute legal, valid and enforceable obligations (as
applicable) of the Borrower (subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity).
SECTION 3.13. Taxes.
The Borrower and each of its Subsidiaries has filed or caused
to be filed all federal, state and local tax returns which are required to be
filed, and has paid or has caused to be paid all taxes as shown on said returns
or on any assessment received by them in writing, to the extent that such taxes
have become due, except (a) as permitted by Section 5.4 hereof or (b) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.14. Compliance with ERISA.
Each of the Borrower and its Subsidiaries is in compliance in
all material respects with the provisions of ERISA and the Code applicable to
Plans, and the regulations and published interpretations thereunder, if any,
which are applicable to it. Neither the Borrower nor any of its Subsidiaries
has, with respect to any Plan established or maintained by it, engaged in a
prohibited transaction which would subject it to a material tax or penalty on
prohibited transactions imposed by ERISA or Section 4975 of the Code. No
liability to the PBGC that is material to the Borrower and its Subsidiaries
taken as a whole has been, or to the Borrower's best knowledge is reasonably
expected to be, incurred with respect to the Plans and there has been no
Reportable Event and no other event or condition that presents a material risk
of termination
43
of a Plan by the PBGC. Neither the Borrower nor any of its Subsidiaries has
engaged in a transaction which would result in the incurrence of a material
liability under Section 4069 of ERISA. As of the Merger Effective Date, neither
the Borrower nor any of its Subsidiaries contributes to a Multiemployer Plan,
and has not incurred any liability that would be material to the Borrower and
its Subsidiaries taken as a whole on account of a partial or complete
withdrawal (as defined in Sections 4203 and 4205 of ERISA, respectively) with
respect to any Multiemployer Plan.
SECTION 3.15. Disclosure.
As of the Merger Effective Date, neither this Agreement nor
the Confidential Information Memorandum dated September 1996, at the time it
was furnished, contained any untrue statement of a material fact or omitted to
state a material fact, under the circumstances under which it was made,
necessary in order to make the statements contained herein or therein not
misleading. At the Merger Effective Date, there is no fact known to the
Borrower which, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect. The Borrower has delivered to the
Administrative Agent certain projections relating to the Borrower and its
Consolidated Subsidiaries. Such projections are based on good faith estimates
and assumptions believed to be reasonable at the time made, provided, however,
that the Borrower makes no representation or warranty that such assumptions
will prove in the future to be accurate or that the Borrower and its
Consolidated Subsidiaries will achieve the financial results reflected in such
projections.
SECTION 3.16. Environmental Liabilities.
Except with respect to any matters, that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
except as set forth on Schedule 3.16, has become subject to any Environmental
Liability, (iii) except as set forth on Schedule 3.16, has received notice of
any claim with respect to any Environmental Liability or (iv) except as set
forth on Schedule 3.16, knows of any basis for any Environmental Liability.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Initial Loans.
The obligation of each Lender to make its initial Loan is
subject to the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall
have received this Agreement and each of the other
44
Fundamental Documents, each executed and delivered by a duly
authorized officer of the Borrower.
(b) Corporate Documents for the Borrower. The Administrative
Agent shall have received, with copies for each of the Lenders, a
certificate of the Secretary or Assistant Secretary of the Borrower
dated the date of the initial Loans and certifying (A) that attached
thereto is a true and complete copy of the certificate of
incorporation and by-laws of the Borrower as in effect on the date of
such certification; (B) that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of the Borrower
authorizing the borrowings hereunder and the execution, delivery and
performance in accordance with their respective terms of this
Agreement and any other documents required or contemplated hereunder;
and (C) as to the incumbency and specimen signature of each officer of
the Borrower executing this Agreement or any other document delivered
by it in connection herewith (such certificate to contain a
certification by another officer of the Borrower as to the incumbency
and signature of the officer signing the certificate referred to in
this paragraph (b)).
(c) Financial Statements. The Lenders shall have received the
(a) audited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1994 and December 31,
1995, (b) unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of March 31, 1996 and June 30, 1996, and
(c) the unaudited consolidating balance sheets of the Borrower and its
Consolidated Subsidiaries as of December 31, 1995, together with the
related unaudited statements of income, shareholders' equity and cash
flows for such periods prepared in conformity with GAAP, subject to
normal year-end adjustments.
(d) Opinions of Counsel. The Administrative Agent shall have
received the favorable written opinions, dated the date of the initial
Loans and addressed to the Administrative Agent and the Lenders, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel to the Borrower and of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President and General Counsel of the
Borrower, substantially in the form of Exhibits B-1 and B-2 hereto,
respectively.
(e) No Material Adverse Change. The Administrative Agent
shall be satisfied that no material adverse change shall have occurred
with respect to the business, assets, operations or condition,
financial or otherwise, of the Borrower and its Consolidated
Subsidiaries, taken as a whole, since December 31, 1995.
45
(f) Payment of Fees. The Administrative Agent shall be
satisfied that all amounts payable to the Administrative Agent and the
other Lenders pursuant hereto or with regard to the transactions
contemplated hereby have been or are simultaneously being paid.
(g) Litigation. No litigation shall be pending or threatened
which would be likely to have a Material Adverse Effect, or which
could reasonably be expected to materially adversely affect the
ability of the Borrower to fulfill its obligations hereunder or to
otherwise materially impair the interests of the Lenders.
(h) Existing Credit Agreement. Simultaneously with the making
of the initial Loans, all obligations of the Borrower under the
Competitive Advance and Revolving Credit Agreement, dated as of
December 16, 1993, as amended, among the Borrower, the lenders named
therein and The Chase Manhattan Bank, as administrative agent (the
"Existing Credit Agreement") shall have been paid in full and the
commitments of the lenders pursuant to the Existing Credit Agreement
shall have been terminated.
(i) Officer's Certificate. The Administrative Agent shall
have received a certificate of the Borrower's chief executive officer
or chief financial officer certifying, as of the date of the making of
the initial Loans and issuance of the initial Letters of Credit,
compliance with the conditions set forth in paragraphs (b) and (c) of
Section 4.2.
(j) Other Documents. The Administrative Agent shall
have received such other documents as the Administrative
Agent may reasonably require.
SECTION 4.2. Conditions Precedent to Each Loan.
The obligation of the Lenders to make each Loan, including
the initial Loan hereunder, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a
notice with respect to such Borrowing as required by Article 2 hereof.
(b) Representations and Warranties. The representations and
warranties set forth in Article 3 hereof (other than those set forth
in Section 3.5, which shall be deemed made only on the Closing Date)
and in the other Fundamental Documents shall be true and correct in
all material respects on and as of the date of each Borrowing
hereunder (except to the extent that such representations and
warranties expressly relate to an earlier date) with the same effect
as if made on and as of such date; provided,
46
however, that this condition shall not apply to a Revolving Credit
Borrowing which is solely refinancing outstanding Revolving Credit
Loans and which, after giving effect thereto, has not increased the
aggregate amount of outstanding Revolving Credit Loans.
(c) No Event of Default. On the date of each Borrowing
hereunder, the Borrower shall be in material compliance with all of
the terms and provisions set forth herein to be observed or performed
and no Event of Default or Default shall have occurred and be
continuing; provided, however, that this condition shall not apply to
a Revolving Credit Borrowing which is solely refinancing outstanding
Revolving Credit Loans and which, after giving effect thereto, has not
increased the aggregate amount of outstanding Revolving Credit Loans.
Each Borrowing shall be deemed to be a representation and warranty by the
Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section.
5. AFFIRMATIVE COVENANTS
From the date of the initial Loan and for so long as the
Commitments shall be in effect or any amount shall remain outstanding under any
Note or unpaid under this Agreement, the Borrower agrees that, unless the
Required Lenders shall otherwise consent in writing, it will, and will cause
each of its Subsidiaries to:
SECTION 5.1. Financial Statements, Reports, etc.
Deliver to each Lender:
(a) As soon as is practicable, but in any event within 100
days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at the end of, and the related consolidated statements
of income, shareholders' equity and cash flows for such year, and the
corresponding figures as at the end of, and for, the preceding fiscal
year, accompanied by an opinion of Deloitte & Touche LLP or such other
independent certified public accountants of recognized standing as
shall be retained by the Borrower and satisfactory to the
Administrative Agent, which report and opinion shall be prepared in
accordance with generally accepted auditing standards relating to
reporting and which report and opinion shall (A) be unqualified as to
going concern and scope of audit and shall state that such financial
statements fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries, as at the dates indicated and the
results of the operations and cash flows for the periods indicated and
(B) contain no material exceptions or qualifications except for
qualifications
47
relating to accounting changes (with which such independent public
accountants concur) in response to FASB releases or other
authoritative pronouncements;
(b) Commencing with the quarter ending September 30, 1996 and
as soon as is practicable, but in any event within 55 days after the
end of each of the first three fiscal quarters of each fiscal year,
the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, as at the end of, and the related unaudited
statements of income (or changes in financial position) for such
quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter and the corresponding
figures as at the end of, and for, the corresponding period in the
preceding fiscal year, together with a certificate signed by the chief
financial officer or a vice president responsible for financial
administration of the Borrower to the effect that such financial
statements, while not examined by independent public accountants,
reflect, in his opinion and in the opinion of the Borrower, all
adjustments necessary to present fairly the financial position of the
Borrower and its Consolidated Subsidiaries, as the case may be, as at
the end of the fiscal quarter and the results of their operations for
the quarter then ended in conformity with GAAP consistently applied,
subject only to year-end and audit adjustments and to the absence of
footnote disclosure;
(c) Together with the delivery of the statements referred to
in paragraphs (a) and (b) of this Section 5.1, a certificate of the
chief financial officer or a vice president responsible for financial
administration of the Borrower, substantially in the form of Exhibit D
hereto (i) stating whether or not the signer has knowledge of any
Default or Event of Default and, if so, specifying each such Default
or Event of Default of which the signer has knowledge, the nature
thereof and any action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event and (ii)
demonstrating in reasonable detail compliance with the provisions of
Sections 6.7 and 6.8 hereof;
(d) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available by the Borrower or any of its Subsidiaries to its
shareholders generally, of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any of them
with any securities exchange or with the Securities and Exchange
Commission, or any comparable foreign bodies, and of all press
releases and other statements made available generally by any of them
to the public concerning material developments in the business of the
Borrower or any of its Subsidiaries;
48
(e) Promptly upon any executive officer of the Borrower or
any of its Subsidiaries obtaining knowledge of the occurrence of any
Default or Event of Default, a certificate of the president or chief
financial officer of the Borrower specifying the nature and period of
existence of such Default or Event of Default and what action the
Borrower has taken, is taking and proposes to take with respect
thereto;
(f) Promptly upon any executive officer of the Borrower or
any of its Subsidiaries obtaining knowledge of (i) the institution of
any action, suit, proceeding, investigation or arbitration by any
Governmental Authority or other Person against or affecting the
Borrower or any of its Subsidiaries or any of their assets, or (ii)
any material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to
the Lenders), which, in each case might reasonably be expected to have
a Material Adverse Effect, the Borrower shall promptly give notice
thereof to the Lenders and provide such other information as may be
reasonably available to it (without waiver of any applicable
evidentiary privilege) to enable the Lenders to evaluate such matters;
(g) With reasonable promptness, such other information and
data with respect to the Borrower and its Subsidiaries as from time to
time may be reasonably requested by any of the Lenders; and
(h) Together with each set of financial statements required
by paragraph (a) above, a certificate of the independent certified
public accountants rendering the report and opinion thereon (which
certificate may be limited to the extent required by accounting rules
or otherwise) (i) stating whether, in connection with their audit, any
Default or Event of Default has come to their attention, and if such a
Default or Event of Default has come to their attention, specifying
the nature and period of existence thereof, and (ii) stating that
based on their audit nothing has come to their attention which causes
them to believe that the matters specified in paragraph (c)(ii) above
for the applicable fiscal year are not stated in accordance with the
terms of this Agreement.
SECTION 5.2. Corporate Existence; Compliance with
Statutes.
Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its corporate existence, material
rights, licenses, permits and franchises and comply, except where failure to
comply, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, with all provisions of
Applicable Law,
49
and all applicable restrictions imposed by, any Governmental Authority,
including without limitation, the Federal Trade Commission's "Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures" as amended from time to time (16 C.F.R. ▇▇.▇▇. 436.1 et seq.) and all
state laws and regulations of similar import; provided, however, that mergers,
dissolutions and liquidations permitted under Section 6.4 shall be permitted.
SECTION 5.3. Insurance.
Maintain with financially sound and reputable insurers
insurance in such amounts and against such risks as are customarily insured
against by companies in similar businesses; provided however, that (a)
workmen's compensation insurance or similar coverage may be effected with
respect to its operations in any particular state or other jurisdiction through
an insurance fund operated by such state or jurisdiction and (b) such insurance
may contain self-insurance retention and deductible levels consistent with
normal industry practices.
SECTION 5.4. Taxes and Charges.
Duly pay and discharge, or cause to be paid and discharged,
before the same shall become delinquent, all federal, state or local taxes,
assessments, levies and other governmental charges, imposed upon the Borrower
or any of its Subsidiaries or their respective properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies which if unpaid could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower shall have set aside on its books
reserves (the presentation of which is segregated to the extent required by
GAAP) adequate with respect thereto if reserves shall be deemed necessary by
the Borrower in accordance with GAAP; and provided, further, that the Borrower
will pay all such taxes, assessments, levies or other governmental charges
forthwith upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor (unless the same is fully bonded or
otherwise effectively stayed).
SECTION 5.5. ERISA Compliance and Reports.
Furnish to the Administrative Agent (a) as soon as possible,
and in any event within 30 days after any executive officer (as defined in
Regulation C under the Securities Act of 1933) of the Borrower knows that (i)
any Reportable Event with respect to any Plan has occurred, a statement of the
chief financial officer of the Borrower, setting forth details as to such
Reportable Event and the action which it proposes to take with respect thereto,
together with a copy of the notice, if any,
50
required to be filed by the Borrower or any of its Subsidiaries of such
Reportable Event with the PBGC or (ii) an accumulated funding deficiency has
been incurred or an application has been made to the Secretary of the Treasury
for a waiver or modification of the minimum funding standard or an extension of
any amortization period under Section 412 of the Code with respect to a Plan, a
Plan has been or is proposed to be terminated in a "distress termination" (as
defined in Section 4041(c) of ERISA), proceedings have been instituted to
terminate a Plan or a Multiemployer Plan, a proceeding has been instituted to
collect a delinquent contribution to a Plan or a Multiemployer Plan, or either
the Borrower or any of its Subsidiaries will incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Sections 4062, 4063, 4064 of ERISA or the
withdrawal or partial withdrawal from a Multiemployer Plan under Sections 4201
or 4204 of ERISA, a statement of the chief financial officer of the Borrower,
setting forth details an to such event and the action it proposes to take with
respect thereto, (b) promptly upon the reasonable request of the Administrative
Agent, copies of each annual and other report with respect to each Plan and (c)
promptly after receipt thereof, a copy of any notice the Borrower or any of its
Subsidiaries may receive from the PBGC relating to the PBGC's intention to
terminate any Plan or to appoint a trustee to administer any Plan; provided
that the Borrower shall not be required to notify the Administrative Agent of
the occurrence of any of the events set forth in the preceding clauses (a) and
(c) unless such event, individually or in the aggregate, could reasonably be
expected to result in a material liability to the Borrower and its Subsidiaries
taken as a whole.
SECTION 5.6. Maintenance of and Access to Books and
Records; Examinations.
Maintain or cause to be maintained at all times true and
complete books and records of its financial operations (in accordance with
GAAP) and provide the Administrative Agent and its representatives access to
all such books and records and to any of their properties or assets during
regular business hours, in order that the Administrative Agent may make such
audits and examinations and make abstracts from such books, accounts and
records and may discuss the affairs, finances and accounts with, and be advised
as to the same by, officers and independent accountants, all as the
Administrative Agent may deem appropriate for the purpose of verifying the
various reports delivered pursuant to this Agreement or for otherwise
ascertaining compliance with this Agreement.
SECTION 5.7. Maintenance of Properties.
Keep its properties which are material to its business in
good repair, working order and condition consistent with industry practice.
51
SECTION 5.8. Changes in Character of Business.
Cause the Borrower and its Subsidiaries taken as a whole to
be primarily engaged in the franchising and services businesses.
6. NEGATIVE COVENANTS
From the date of the initial Loan and for so long as the
Commitments shall be in effect or any amount shall remain outstanding under any
Note or unpaid under this Agreement, unless the Required Lenders shall
otherwise consent in writing, the Borrower agrees that it will not, nor will it
permit any of its Subsidiaries to, directly or indirectly:
SECTION 6.1. Limitation on Indebtedness.
Incur, assume or suffer to exist any Indebtedness of any
Material Subsidiary except:
(a) Indebtedness in existence on the date hereof, or required
to be incurred pursuant to a contractual obligation in existence on
the date hereof, which in either case, is listed on Schedule 6.1
hereto, but not any extensions or renewals thereof, unless effected on
substantially the same terms or on terms not more adverse to the
Lenders;
(b) purchase money Indebtedness (including Capital
Leases) to the extent permitted under Section 6.5(b);
(c) Guaranties;
(d) Indebtedness owing by any Material Subsidiary to the
Borrower or any other Subsidiary arising in the ordinary course of
business for normal business purposes;
(e) Indebtedness of any Material Subsidiary of the Borrower
issued and outstanding prior to the date on which such Subsidiary
became a Subsidiary of the Borrower (other than Indebtedness issued in
connection with, or in anticipation of, such Subsidiary becoming a
Subsidiary of the Borrower); provided that immediately prior and on a
Pro Forma Basis after giving effect to, such Person becoming a
Subsidiary of the Borrower, no Default or Event of Default shall occur
or then be continuing and the aggregate principal amount of such
Indebtedness, when added to the aggregate outstanding principal amount
of Indebtedness permitted by paragraphs (f) and (g) below, shall not
exceed $400,000,000;
(f) any renewal, extension or modification of Indebtedness
under paragraph (e) above so long (i) as such renewal, extension or
modification is effected on substantially the same terms or on terms
which, in the
52
aggregate, are not more adverse to the Lenders and (ii) the
principal amount of such Indebtedness is not increased;
(g) other Indebtedness of any Material Subsidiary in an
aggregate principal amounts which, when added to the aggregate
outstanding principal amount of Indebtedness permitted by paragraphs
(e) and (f) above, does not exceed $400,000,000; and
(h) in addition to the Indebtedness permitted by paragraphs
(a)-(g) above, Indebtedness of PHH Corporation and its Subsidiaries so
long as, after giving effect to the incurrence of such Indebtedness
and the use of the proceeds thereof, the ratio of Indebtedness of PHH
and its Subsidiaries to consolidated shareholders' equity of PHH is
less than 10 to 1.
SECTION 6.2. INTENTIONALLY OMITTED.
SECTION 6.3. Hotel Subsidiaries.
No Hotel Subsidiary shall incur or suffer to exist any
obligation to advance money to purchase securities from, or otherwise make any
investment in, any Person engaged in the gaming business.
SECTION 6.4. Consolidation, Merger, Sale of Assets.
(a) Neither the Borrower nor any of its Material Subsidiaries
(in one transaction or series of transactions) will wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
except any merger, consolidation, dissolution or liquidation (i) in which the
Borrower is the surviving entity or if the Borrower is not a party to such
transaction then a Subsidiary is the surviving entity or the successor to the
Borrower has unconditionally assumed in writing all of the payment and
performance obligations of the Borrower under this Agreement and the other
Fundamental Documents, (ii) in which the surviving entity becomes a Subsidiary
of the Borrower immediately upon the effectiveness of such merger,
consolidation, dissolution or liquidation, (iii) involving a Subsidiary in
connection with a transaction permitted by Section 6.4(b) or (iv) the Merger;
provided, however, that immediately prior to and on a Pro Forma Basis after
giving effect to any such transaction described in any of the preceding clauses
(i), (ii) and (iii) no Default or Event of Default has occurred and is
continuing.
(b) The Borrower and its Subsidiaries (either individually or
collectively and whether in one transaction or series of related transactions)
will not sell or otherwise dispose of all or substantially all of the assets of
the Borrower and its Subsidiaries, taken as a whole.
53
SECTION 6.5. Limitations on Liens.
Suffer any Lien on the property of the Borrower or any of the
Material Subsidiaries, except:
(a) deposits under worker's compensation, unemployment
insurance and social security laws or to secure statutory obligations
or surety or appeal bonds or performance or other similar bonds in the
ordinary course of business, or statutory Liens of landlords,
carriers, warehousemen, mechanics and material men and other similar
Liens, in respect of liabilities which are not yet due or which are
being contested in good faith, Liens for taxes not yet due and
payable, and Liens for taxes due and payable, the validity or amount
of which is currently being contested in good faith by appropriate
proceedings and as to which foreclosure and other enforcement
proceedings shall not have been commenced (unless fully bonded or
otherwise effectively stayed);
(b) purchase money Liens granted to the vendor or Person
financing the acquisition of property, plant or equipment if (i)
limited to the specific assets acquired and, in the case of tangible
assets, other property which is an improvement to or is acquired for
specific use in connection with such acquired property or which is
real property being improved by such acquired property; (ii) the debt
secured by the Lien is the unpaid balance of the acquisition cost of
the specific assets on which the Lien is granted; and (iii) such
transaction does not otherwise violate this Agreement;
(c) Liens upon real and/or personal property, which property
was acquired after the date of this Agreement (by purchase,
construction or otherwise) by the Borrower or any of its Material
Subsidiaries, each of which Liens existed on such property before the
time of its acquisition and was not created in anticipation thereof;
provided, however, that no such Lien shall extend to or cover any
property of the Borrower or such Material Subsidiary other than the
respective property so acquired and improvements thereon;
(d) Liens arising out of attachments, judgments or awards as
to which an appeal or other appropriate proceedings for contest or
review are promptly commenced (and as to which foreclosure and other
enforcement proceedings (i) shall not have been commenced (unless
fully bonded or otherwise effectively stayed) or (ii) in any event
shall be promptly fully bonded or otherwise effectively stayed);
(e) Liens created under any Fundamental Document;
54
(f) Existing Liens listed on Schedule 6.5 and any
extensions or renewals thereof;
(g) Liens in connection with the Receivables Facility;
and
(h) other Liens securing obligations having an aggregate
principal amount not to exceed 15% of Consolidated Net Worth.
SECTION 6.6. Sale and Leaseback.
Enter into any arrangement with any Person or Persons,
whereby in contemporaneous transactions the Borrower or any of its Subsidiaries
sells essentially all of its right, title and interest in a material asset and
the Borrower or any of its Subsidiaries acquires or leases back the right to
use such property except that the Borrower may enter into sale-leaseback
transactions relating to assets not in excess of $200,000,000 in the aggregate
on a cumulative basis.
SECTION 6.7. Leverage.
Permit the ratio of Consolidated Total Indebtedness on the
last day of any fiscal quarter to Consolidated EBITDA for the Rolling Period
ended on such day to be more than 3.5 to 1.0.
SECTION 6.8. Interest Coverage Ratio.
Permit the Interest Coverage Ratio for any Rolling Period to
be less than 3.0 to 1.0.
SECTION 6.9. Accounting Practices.
Establish a fiscal year ending on other than December 31, or
modify or change accounting treatments or reporting practices except as
otherwise required or permitted by GAAP.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of
any of the following events (herein called "Events of Default"):
(a) any representation or warranty made by the Borrower in
this Agreement or any other Fundamental Document or in connection with
this Agreement or with the execution and delivery of the Notes or the
Borrowings hereunder, or any statement or representation made in any
report, financial statement, certificate or other document furnished
by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender under or in connection with this
Agreement, shall prove to have been
55
false or misleading in any material respect when made or
delivered;
(b) default shall be made in the payment of any principal of
or interest on the Notes or of any fees or other amounts payable by
the Borrower hereunder, when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise, and in the
case of payments of interest, such default shall continue unremedied
for five days, and in the case of payments other than of any principal
amount of or interest on the Notes, such default shall continue
unremedied for five days after receipt by the Borrower of an invoice
therefor;
(c) default shall be made in the due observance or
performance of any covenant, condition or agreement contained in
Section 5.1(e) (with respect to notice of Default or Events of
Default), 5.8 or Article 6 of this Agreement;
(d) default shall be made by the Borrower in the due
observance or performance of any other covenant, condition or
agreement to be observed or performed pursuant to the terms of this
Agreement, or any other Fundamental Document and such default shall
continue unremedied for thirty (30) days after the Borrower obtains
knowledge of such occurrence;
(e) (i) default in payment shall be made with respect to any
Indebtedness of the Borrower or any of its Subsidiaries where the
amount or amounts of such Indebtedness exceeds $50,000,000 in the
aggregate; or (ii) default in payment or performance shall be made
with respect to any Indebtedness of the Borrower or any of its
Subsidiaries where the amount or amounts of such Indebtedness exceeds
$50,000,000 in the aggregate, if the effect of such default is to
result in the acceleration of the maturity of such Indebtedness; or
(iii) any other circumstance shall arise (other than the mere passage
of time) by reason of which the Borrower or any Subsidiary of the
Borrower is required to redeem or repurchase, or offer to holders the
opportunity to have redeemed or repurchased, any such Indebtedness
where the amount or amounts of such Indebtedness exceeds $50,000,000
in the aggregate; provided that clause (iii) shall not apply to
secured Indebtedness that becomes due as a result of a voluntary sale
of the property or assets securing such Indebtedness and provided,
further clauses (ii) and (iii) shall not apply to any Indebtedness of
any Subsidiary issued and outstanding prior to the date such
Subsidiary became a Subsidiary of the Borrower (other than
Indebtedness issued in connection with, or in anticipation of, such
Subsidiary becoming a Subsidiary of the Borrower) if such default or
circumstance arises
56
solely as a result of a "change of control" provision applicable to
such Indebtedness which becomes operative as a result of the
acquisition of such Subsidiary by the Borrower or any of its
Subsidiaries;
(f) the Borrower or any of its Material Subsidiaries shall
generally not pay its debts as they become due or shall admit in
writing its inability to pay its debts, or shall make a general
assignment for the benefit of creditors; or the Borrower or any of its
Material Subsidiaries shall commence any case, proceeding or other
action seeking to have an order for relief entered on its behalf as
debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors or seeking appointment
of a receiver, trustee, custodian or other similar official for it or
for all or any substantial part of its property or shall file an
answer or other pleading in any such case, proceeding or other action
admitting the material allegations of any petition, complaint or
similar pleading filed against it or consenting to the relief sought
therein; or the Borrower or any Material Subsidiary thereof shall take
any action to authorize any of the foregoing;
(g) any involuntary case, proceeding or other action against
the Borrower or any of its Material Subsidiaries shall be commenced
seeking to have an order for relief entered against it as debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its property, and such case, proceeding
or other action (i) results in the entry of any order for relief
against it or (ii) shall remain undismissed for a period of sixty (60)
days;
(h) the occurrence of a Change in Control;
(i) final judgment(s) for the payment of money in excess of
$50,000,000 shall be rendered against the Borrower or any of its
Subsidiaries which within thirty (30) days from the entry of such
judgment shall not have been discharged or stayed pending appeal or
which shall not have been discharged within thirty (30) days from the
entry of a final order of affirmance on appeal; or
(j) a Reportable Event relating to a failure to meet minimum
funding standards or an Inability to pay benefits when due shall have
occurred with respect to any Plan under the control of the Borrower or
any of its Subsidiaries and
57
shall not have been remedied within 45 days after the occurrence of
such Reportable Event, if the occurrence thereof could reasonably be
expected to have a Material Adverse Effect;
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may or shall, if directed by the Required
Lenders, take either or both of the following actions, at the same or different
times: terminate forthwith the Commitments and/or declare the principal of and
the interest on the Loans and the Notes and all other amounts payable hereunder
or thereunder to be forthwith due and payable, whereupon the same shall become
and be forthwith due and payable, without presentment, demand, protest, notice
of acceleration, notice of intent to accelerate or other notice of any kind,
all of which are hereby expressly waived, anything in this Agreement or in the
Notes to the contrary notwithstanding. If an Event of Default specified in
paragraphs (f) or (g) above shall have occurred, the principal of and interest
on the Loans and the Notes and all other amounts payable hereunder or
thereunder shall thereupon and concurrently become due and payable without
presentment, demand, protest, notice of acceleration, notice of intent to
accelerate or other notice of any kind, all of which are hereby expressly
waived, anything in this Agreement or the Notes to the contrary notwithstanding
and the Commitments of the Lenders shall thereupon forthwith terminate.
8. THE ADMINISTRATIVE AGENT
SECTION 8.1. Administration by Administrative Agent.
The general administration of the Fundamental Documents and
any other documents contemplated by this Agreement shall be by the
Administrative Agent or its designees. Each of the Lenders hereby irrevocably
authorizes the Administrative Agent, at its discretion, to take or refrain from
taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Fundamental Documents, the Notes and any other
documents contemplated by this Agreement as are delegated by the terms hereof
or thereof, as appropriates together with all powers reasonably incidental
thereto. The Administrative Agent shall have no duties or responsibilities
except as set forth in the Fundamental Documents. Any Lender which is a
co-agent (as indicated on the signature pages hereto) for the credit facility
hereunder shall not have any duties or responsibilities except as a Lender
hereunder.
SECTION 8.2. Advances and Payments.
(a) On the date of each Loan, the Administrative Agent shall
be authorized (but not obligated) to advance, for the account of each of the
Lenders, the amount of the Loan to be made by it in accordance with this
Agreement. Each of the Lenders hereby authorizes and requests the
Administrative Agent to
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advance for its account, pursuant to the terms hereof, the amount of the Loan
to be made by it, unless with respect to any Lender, such Lender has
theretofore specifically notified the Administrative Agent that such Lender
does not intend to fund that particular Loan. Each of the Lenders agrees
forthwith to reimburse the Administrative Agent in immediately available funds
for the amount so advanced on its behalf by the Administrative Agent pursuant
to the immediately preceding sentence. If any such reimbursement is not made in
immediately available funds on the same day on which the Administrative Agent
shall have made any such amount available on behalf of any Lender in accordance
with this Section 8.2, such Lender shall pay interest to the Administrative
Agent at a rate per annum equal to the Administrative Agent's cost of obtaining
overnight funds in the New York Federal Funds Market. Notwithstanding the
preceding sentence, if such reimbursement is not made by the second Business
Day following the day on which the Administrative Agent shall have made any
such amount available on behalf of any Lender or such Lender has indicated that
it does not intend to reimburse the Administrative Agent, the Borrower shall
immediately pay such unreimbursed advance amount (plus any accrued, but unpaid
interest at the rate applicable to ABR Loans) to the Administrative Agent.
(b) Any amounts received by the Administrative Agent in
connection with this Agreement or the Notes the application of which is not
otherwise provided for shall be applied, in accordance with each of the
Lenders' pro rata interest therein, first, to pay accrued but unpaid Facility
Fees, second, to pay accrued but unpaid interest on the Notes, third, the
principal balance outstanding on the Notes and fourth, to pay other amounts
payable to the Administrative Agent and/or the Lenders. All amounts to be paid
to any of the Lenders by the Administrative Agent shall be credited to the
Lenders, after collection by the Administrative Agent, in immediately available
funds either by wire transfer or deposit in such Lender's correspondent account
with the Administrative Agent, or as such Lender and the Administrative Agent
shall from time to time agree.
SECTION 8.3. Sharing of Setoffs and Cash Collateral.
Each of the Lenders agrees that if it shall, through the
operation of Section 2.19 hereof or the exercise of a right of bank's lien,
setoff or counterclaim against the Borrower, including, but not limited to, a
secured claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim and
received by such Lender under any applicable bankruptcy, insolvency or other
similar law, or otherwise, obtain payment in respect of its Loans as a result
of which the unpaid portion of its Loans is proportionately less than the
unpaid portion of any of the other Lenders (a) it shall promptly purchase at
par (and shall be deemed to have thereupon purchased) from such other Lenders a
participation in the Loans of such other Lenders, so
59
that the aggregate unpaid principal amount of each of the Lenders' Loans and
its participation in Loans of the other Lenders shall be in the same proportion
to the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to the obtaining of such payment was to the
principal amount of all Loans outstanding prior to the obtaining of such
payment and (b) such other adjustments shall be made from time to time as shall
be equitable to ensure that the Lenders share such payment pro rata.
SECTION 8.4. Notice to the Lenders.
Upon receipt by the Administrative Agent from the Borrower of
any communication calling for an action on the part of the Lenders, or upon
notice to the Administrative Agent of any Event of Default, the Administrative
Agent will in turn immediately inform the other Lenders in writing (which shall
include telegraphic communications) of the nature of such communication or of
the Event of Default, as the case may be.
SECTION 8.5. Liability of Administrative Agent.
(a) The Administrative Agent or any Issuing Lender, when
acting on behalf of the Lenders may execute any of its duties under this
Agreement by or through its officers, agents, or employees and neither the
Administrative Agent, the Issuing Lenders nor their respective directors,
officers, agents, or employees shall be liable to the Lenders or any of them
for any action taken or omitted to be taken in good faith, or be responsible to
the Lenders or to any of them for the consequences of any oversight or error of
judgment, or for any loss, unless the same shall happen through its gross
negligence or willful misconduct. The Administrative Agent, the Issuing Lenders
and their respective directors, officers, agents, and employees shall in no
event be liable to the Lenders or to any of them for any action taken or
omitted to be taken by it pursuant to instructions received by it from the
Required Lenders or in reliance upon the advice of counsel selected by it.
Without limiting the foregoing, neither the Administrative Agent, the Issuing
Lenders nor any of their respective directors, officers, employees, or agents
shall be responsible to any of the Lenders for the due execution, validity,
genuineness, effectiveness, sufficiency, or enforceability of, or for any
statement, warranty, or representation in, or for the perfection of any
security interest contemplated by, this Agreement or any related agreement,
document or order, or for the designation or failure to designate this
transaction as a "Highly Leveraged Transaction" for regulatory purposes, or
shall be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower of any of the terms, conditions,
covenants, or agreements of this Agreement or any related agreement or
document.
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(b) Neither the Administrative Agent, the Issuing Lenders,
nor any of their respective directors, officers, employees, or agents shall
have any responsibility to the Borrower on account of the failure or delay in
performance or breach by any of the Lenders or the Borrower of any of their
respective obligations under this Agreement or the Notes or any related
agreement or document or in connection herewith or therewith.
(c) The Administrative Agent, and the Issuing Lenders, in
such capacities hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by it to be genuine or correct and
to have been signed or sent by a Person or Persons believed by it to be the
proper Person or Persons, and it shall be entitled to rely on advice of legal
counsel, independent public accountants, and other professional advisers and
experts selected by it.
SECTION 8.6. Reimbursement and Indemnification.
Each of the Lenders severally and not jointly agrees (i) to
reimburse the Administrative Agent, in the amount of its proportionate share,
for any expenses and fees incurred for the benefit of the Lenders under the
Fundamental Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of
the Lenders, and any other expense incurred in connection with the
administration or enforcement thereof not reimbursed by the Borrower or one of
its Subsidiaries, and (ii) to indemnify and hold harmless the Administrative
Agent and any of its directors, officers, employees, or agents, on demand, in
the amount of its proportionate share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against it or any of them in any
way relating to or arising out of the Fundamental Documents or any action taken
or omitted by it or any of them under the Fundamental Documents to the extent
not reimbursed by the Borrower or one of its Subsidiaries (except such as shall
result from the gross negligence or willful misconduct of the Person seeking
indemnification); and (iii) to indemnify and hold harmless the Issuing Lenders
and any of their respective directors, officers, employees, or agents or demand
in the amount of its proportionate share from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs expenses or disbursements of any kind or nature whatever which may
be imposed or incurred by or asserted against it relating to or arising out of
the issuance of any Letters of Credit (except such as shall result from the
gross negligence or willful misconduct of the Person seeking indemnification).
SECTION 8.7. Rights of Administrative Agent.
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It is understood and agreed that Chase shall have the same
rights and powers hereunder (including the right to give such instructions) as
the other Lenders and may exercise such rights and powers, as well as its
rights and powers under other agreements and instruments to which it is or may
be party, and engage in other transactions with the Borrower as though it were
not the Administrative Agent on behalf of the Lenders under this Agreement.
SECTION 8.8. Independent Investigation by Lenders.
Each of the Lenders acknowledges that it has decided to enter
into this Agreement and to make the Loans and participate in the Letters of
Credit hereunder based on its own analysis of the transactions contemplated
hereby and of the creditworthiness of the Borrower and agrees that neither the
Administrative Agent nor any Issuing Lender shall bear responsibility therefor.
SECTION 8.9. Notice of Transfer.
The Administrative Agent and the Issuing Lenders may deem and
treat any Lender which is a party to this Agreement as the owners of such
Lender's respective portions of the Loans for all purposes, unless and until a
written notice of the assignment or transfer thereof executed by any such
Lender shall have been received by the Administrative Agent and become
effective pursuant to Section 9.3.
SECTION 8.10. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent from among the Lenders. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation, the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent, which with
the consent of the Borrower, which will not be unreasonably withheld, shall be
a commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Article 8
shall inure to its benefit as to any actions taken
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or omitted to be taken by it while it was Administrative Agent
under this Agreement.
9. MISCELLANEOUS
SECTION 9.1. Notices.
Notices and other communications provided for herein shall be
in writing and shall be delivered or mailed (or in the case of telegraphic
communication, if by telegram, delivered to the telegraph company and, if by
telex, telecopy, graphic scanning or other telegraphic communications equipment
of the sending party hereto, delivered by such equipment) addressed, if to the
Administrative Agent or Chase, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, or if to the
Borrower, to it at ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Vice Chairman and Chief Financial Officer and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior
Executive Vice President and General Counsel, with a copy to Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇
▇▇▇▇▇▇▇, or if to a Lender, to it at its address set forth on the signature
page (or in its Assignment and Acceptance, Commitment Increase Supplement or
other agreement pursuant to which it became a Lender hereunder), or such other
address as such party may from time to time designate by giving written notice
to the other parties hereunder. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the fifth Business Day after the date when sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail, or when delivered to the telegraph company, charges prepaid, if by
telegram, or when receipt is acknowledged, if by any telecopier or telegraphic
communications equipment of the sender, in each case addressed to such party as
provided in this Section 9.1 or in accordance with the latest unrevoked written
direction from such party.
SECTION 9.2. Survival of Agreement, Representations
and Warranties, etc.
All warranties, representations and covenants made by the
Borrower herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Agreement shall be considered to have been
relied upon by the Administrative Agent and the Lenders and shall survive the
making of the Loans herein contemplated and the issuance and delivery to the
Administrative Agent of the Notes regardless of any investigation made by the
Administrative Agent or the Lenders or on their behalf and shall continue in
full force and effect so long as any amount due or to become due hereunder is
outstanding and unpaid and so long as the Commitment has not been terminated.
All statements in any such certificate or other instrument shall constitute
representations and warranties by the Borrower hereunder.
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SECTION 9.3. Successors and Assigns; Syndications;
Loan Sales; Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided, however, that the Borrower may not assign its
rights hereunder without the prior written consent of all the Lenders), and all
covenants, promises and agreements by, or on behalf of, the Borrower which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Administrative Agent, the Issuing Lenders and the Borrower,
which consents shall not be unreasonably withheld or delayed) assign to one or
more banks or other entities either (i) all or a portion of its interests,
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment and the same portion of the Loans at the time
owing to it and the Notes held by it) (a "Ratable Assignment") or (ii) all or a
portion of its rights and obligations under and in respect of (A) its
Commitment under this Agreement and the same portion of the Revolving Credit
Loans at the time owing to it or (B) the Competitive Loans at the time owing to
it (including, without limitation, in the case of any such type of Loan, the
same portion of the associated Note) (a "Non-Ratable Assignment"); provided,
however, that (1) each Non-Ratable Assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations in
respect of the Loans and the Commitment (if applicable) which are the subject
of such assignment, (2) each Ratable Assignment shall be of a constant, and not
a varying, percentage of the assigning Lender's rights and obligations under
this Agreement, (3) the amount of the Commitment or Competitive Loans, as the
case may be, of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Lender) shall be in a minimum principal amount
of $10,000,000 unless otherwise agreed by the Borrower and the Administrative
Agent and (4) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with any Note or Notes
subject to such assignment (if required hereunder) and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, and from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be not earlier than five Business
Days after the date of acceptance and recording by the Administrative Agent,
(x) the assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement
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(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of the assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto).
(c) Notwithstanding the other provisions of this Section 9.3,
each Lender may at any time make a Ratable Assignment or a Non-Ratable
Assignment of its interests, rights and obligations under this Agreement to (i)
any Affiliate of such Lender or (ii) any other Lender hereunder.
(d) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in, or in connection with, this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Fundamental
Documents or any other instrument or document furnished pursuant hereto or
thereto; (ii) such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Fundamental Documents; (iii) such assignee confirms that
it has received a copy of this Agreement, together with copies of the most
recent financial statements delivered pursuant to Sections 5.1(a) and 5.1(b)
(or if none of such financial statements shall have then been delivered, then
copies of the financial statements referred to in Section 3.4 hereof) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the assigning
Lender, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers under
the Fundamental Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (vi) such assignee agrees that it will be bound by the provisions of this
Agreement and will perform in accordance with its terms all of the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender.
(e) The Administrative Agent, on behalf of the Borrower,
shall maintain at its address at which notices are to be given to it pursuant
to Section 9.1, a copy of each Assignment
65
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent, the Issuing Lenders and the Lenders may
(and, in the case of any Loan or other obligation hereunder not evidenced by a
Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Fundamental Documents, notwithstanding
any notice to the contrary. Any assignment of any Loan or other obligation
hereunder not evidenced by a Note shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, any Notes subject to such assignment
(if required hereunder) and the processing and recordation fee, the
Administrative Agent (subject to the right, if any, of the Borrower to require
its consent thereto) shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt written notice thereof to the Borrower. If a portion of
the Commitment has been assigned by an assigning Lender, then such Lender shall
deliver its Revolving Credit Note, if any, at the same time it delivers the
applicable Assignment and Acceptance to the Administrative Agent. If only
Competitive Loans have been assigned by the assigning Lender, such Lender shall
not be required to deliver its Competitive Note to the Administrative Agent,
unless such Lender no longer holds a Commitment under this Agreement, in which
event such assigning Lender shall deliver its Competitive Note, if any, at the
same time it delivers the applicable Assignment and Acceptance to the
Administrative Agent. Within five Business Days after receipt of the notice,
the Borrower, at its own expense, shall execute and deliver to the applicable
Lenders at their request, either (A) a new Revolving Credit Note to the order
of such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and a Competitive Note to the order of such
assignee in an amount equal to the Total Commitment hereunder, and a new
Revolving Credit Note to the order of the assigning Lender in an amount equal
to the Commitment retained by it hereunder, or (B) if Competitive Loans only
have been assigned and the assigning Lender holds a Commitment under this
Agreement, then a new Competitive Note to the order of the assignee Lender in
an amount equal to the outstanding principal amount of the Competitive Loan(s)
purchased by it pursuant to the Assignment and Acceptance, or (C) if
Competitive Loans only have been assigned
66
and the assigning Lender does not hold a Commitment under this Agreement, a new
Competitive Note to the order of such assignee in an amount equal to the
outstanding principal amount of the Competitive Loans(s) purchased by it
pursuant to such Assignment and Acceptance and, a new Competitive Note to the
order of the assigning Lender in an amount equal to the outstanding principal
amount of the Competitive Loans retained by it hereunder. Any new Revolving
Credit Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of the Commitments of the respective Lenders. All new Notes
shall be dated the date hereof and shall otherwise be in substantially the
forms of Exhibits A-1 and A-2 hereto, as the case may be.
(g) Each of the Lenders may without the consent of the
Borrower, the Administrative Agent or any Issuing Lender sell participations to
one or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and the Loans owing to it and the Note or Notes held
by it); provided, however, that (i) any such Lender's obligations under this
Agreement shall remain unchanged, (ii) such participant shall not be granted
any voting rights under this Agreement, except with respect to matters
requiring the consent of each of the Lenders hereunder, (iii) any such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iv) the participating banks or other entities shall be
entitled to the cost protection provisions contained in Sections 2.14, 2.15 and
2.17 hereof but a participant shall not be entitled to receive pursuant to such
provisions an amount larger than its share of the amount to which the Lender
granting such participation would have been entitled to receive, and (v) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to the
Administrative Agent by or on behalf of the Borrower; provided that prior to
any such disclosure, each such assignee or participant or proposed assignee or
participant shall agree, by executing a confidentiality letter in form and
substance equivalent to the confidentiality letter executed by the Lenders in
connection with information received by such Lenders relating to this
transaction to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
(i) Each Lender hereby represents that it is a commercial
lender or financial institution which makes loans in the ordinary course of its
business and that it will make the Loans hereunder for its own account in the
ordinary course of
67
such business; provided, however, that, subject to preceding clauses (a)
through (h), the disposition of the Notes or other evidence of Indebtedness
held by that Lender shall at all times be within its exclusive control.
(j) The Borrower consents that any Lender may at any time and
from time to time pledge, or otherwise grant a security interest in, any Loan
or any Note evidencing such Loan (or any part thereof), including any such
pledge or grant to any Federal Reserve Bank, and this Section shall not apply
to any such pledge or grant; provided that no such pledge or grant shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
SECTION 9.4. Expenses; Documentary Taxes.
Whether or not the transactions hereby contemplated shall be
consummated, the Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent in connection with the syndication,
preparation, execution, delivery and administration of this Agreement, the
Notes and the making of the Loans, including but not limited to any internally
allocated audit costs, the reasonable fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, counsel to the Administrative Agent, as well as all reasonable
out-of-pocket expenses incurred by the Lenders in connection with any
restructuring or workout of this Agreement, or the Notes or in connection with
the enforcement or protection of the rights of the Lenders in connection with
this Agreement or the Notes or any other Fundamental Document, and with respect
to any action which may be instituted by any Person against any Lender or any
Issuing Lender in respect of the foregoing, or as a result of any transaction,
action or nonaction arising from the foregoing, including but not limited to
the fees and disbursements of any counsel for the Lenders or any Issuing
Lender. Such payments shall be made on the date of execution of this Agreement
and thereafter on demand. The Borrower agrees that it shall indemnify the
Administrative Agent, the Lenders and the Issuing Lenders from, and hold them
harmless against, any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this
Agreement or the Notes or any other Fundamental Document. The obligations of
the Borrower under this Section shall survive the termination of this Agreement
and/or the payment of the Loans.
SECTION 9.5. Indemnity.
Further, by the execution hereof, the Borrower agrees to
indemnify and hold harmless the Administrative Agent and the Lenders and the
Issuing Lenders and their respective directors, officers, employees and agents
(each, an "Indemnified Party") from and against any and all expenses (including
reasonable fees and disbursements of counsel), losses, claims, damages and
liabilities arising out of any claim, litigation, investigation
68
or proceeding (regardless of whether any such Indemnified Party is a party
thereto) in any way relating to the transactions contemplated hereby, but
excluding therefrom all expenses, losses, claims, damages, and liabilities
arising out of or resulting from the gross negligence or willful misconduct of
the Indemnified Party seeking indemnification, provided, however, that the
Borrower shall not be liable for the fees and expenses of more than one
separate firm for all such Indemnified Parties in connection with any one such
action or any separate but substantially similar or related actions in the same
jurisdiction, nor shall the Borrower be liable for any settlement of any
proceeding effected without the Borrower's written consent, and provided
further, however, that this Section 9.5 shall not be construed to expand the
scope of the Borrower's reimbursement obligations specified in Section 9.4. The
obligations of the Borrower under this Section 9.5 shall survive the
termination of this Agreement and/or payment of the Loans.
SECTION 9.6. CHOICE OF LAW.
THIS AGREEMENT AND THE NOTES HAVE BEEN EXECUTED AND DELIVERED
IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED WHOLLY WITHIN SUCH STATE AND, IN THE CASE OF PROVISIONS
RELATING TO INTEREST RATES, ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
SECTION 9.7. No Waiver.
No failure on the part of the Administrative Agent, any
Lender or any Issuing Lender to exercise, and no delay in exercising, any
right, power or remedy hereunder or under the Notes or with regards to the
Letters of Credit shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 9.8. Extension of Maturity.
Except as otherwise specifically provided in Article 8
hereof, should any payment of principal of or interest on the Notes or any
other amount due hereunder become due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, in the case of principal, interest shall be payable thereon
at the rate herein specified during such extension.
SECTION 9.9. Amendments, etc.
No modification, amendment or waiver of any provision
of this Agreement, and no consent to any departure by the
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Borrower herefrom or therefrom, shall in any event be effective unless the same
shall be in writing and signed or consented to in writing by the Required
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given; provided, however, that
no such modification or amendment shall without the written consent of each
Lender affected thereby (x) increase the Commitment of a Lender or postpone or
waive any scheduled reduction in the Commitments, or (y) alter the stated
maturity or principal amount of any installment of any Loan, or decrease the
rate of interest payable thereon, or the rate at which the Facility Fees accrue
or (z) waive a default under Section 7(b) hereof with respect to a scheduled
principal installment of any Loan; and provided, further that no such
modification or amendment shall without the written consent of all of the
Lenders (i) amend or modify any provision of this Agreement which provides for
the unanimous consent or approval of the Lenders, or (ii) amend this Section
9.9 or the definition of Required Lenders or Supermajority Lenders; and
provided, further that no such modification or amendment shall decrease the
Commitment of any Lender without the written consent of such Lender. No such
amendment or modification may adversely affect the rights and obligations of
the Administrative Agent or any Issuing Lender hereunder without its prior
written consent; and provided, further that the consent of the Lenders shall
not be required with respect to any amendment to this Agreement pursuant to
Section 2.23. No notice to or demand on the Borrower shall entitle the Borrower
to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by any holder of a Note shall bind any Person
subsequently acquiring a Note, whether or not a Note is so marked.
SECTION 9.10. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY
TRIAL.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT OR A LENDER. THE BORROWER TO THE
EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR
IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY
NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY WAIVES THE RIGHT TO ASSERT
IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS EXCEPT
COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME SUBJECT
MATTER. THE BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT ITS
ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION 9.1 HEREOF. THE
BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF
PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT AND
THE LENDERS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
(A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF
WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF INDEBTEDNESS
OR LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN ANY OTHER
MANNER PROVIDED BY, OR PURSUANT TO, THE LAWS OF SUCH OTHER JURISDICTION,
PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT, A LENDER OR AN ISSUING LENDER
MAY AT IS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST
THE BORROWER OR ANY OF ITS ASSETS IN ANY ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ OR OF ANY COUNTRY OR PLACE WHERE THE BORROWER OR SUCH ASSETS MAY BE
FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL
BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN
CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN
INFORMED THAT THE PROVISIONS OF THIS SECTION 9.11(b) CONSTITUTE A MATERIAL
INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY
IN ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 9.11(b) WITH ANY
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COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF
ITS RIGHTS TO TRIAL BY JURY.
SECTION 9.12. Headings.
Section headings used herein are for convenience only and are
not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 9.13. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.14. Entire Agreement.
This Agreement represents the entire agreement of the parties
with regard to the subject matter hereof and the terms of any letters and other
documentation entered into among the Borrower, the Administrative Agent or any
Lender (other than the provisions of the letter agreement dated August 28,
1996, among the Borrower, Chase and Chase Securities Inc., relating to fees and
expenses and syndication issues) prior to the execution of this Agreement which
relate to Loans to be made shall be replaced by the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first above written.
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