================================================================================
$1,250,000,000
364-DAY COMPETITIVE ADVANCE AND
REVOLVING CREDIT AGREEMENT
Dated as of March 4, 1997, as amended
and restated through March 5, 1999
among
PHH CORPORATION
and
PHH VEHICLE MANAGEMENT SERVICES INC.
as Borrowers
and
THE LENDERS REFERRED TO HEREIN
and
THE CHASE MANHATTAN BANK, as Administrative Agent
and
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, as Canadian Agent
================================================================================
CHASE SECURITIES INC., Arranger
TABLE OF CONTENTS
Page
----
1. DEFINITIONS 1
2. THE LOANS 21
SECTION 2.1. Commitments 21
SECTION 2.2. Loans 23
SECTION 2.3. Use of Proceeds 24
SECTION 2.4. Competitive Bid Procedure 25
SECTION 2.5. Revolving Credit Borrowing Procedure 27
SECTION 2.6. Refinancings 28
SECTION 2.7. Fees 29
SECTION 2.8. Repayment of Loans; Evidence of Debt 29
SECTION 2.9. Interest on Loans 31
SECTION 2.10. Interest on Overdue Amounts 33
SECTION 2.11. Alternate Rate of Interest 33
SECTION 2.12. Termination and Reduction of Commitments 33
SECTION 2.13. Prepayment of Loans 34
SECTION 2.14. Eurocurrency Reserve Costs 35
SECTION 2.15. Reserve Requirements; Change in Circumstances 36
SECTION 2.16. Change in Legality 38
SECTION 2.17. Reimbursement of Lenders 39
SECTION 2.18. Pro Rata Treatment 40
SECTION 2.19. Right of Setoff 41
SECTION 2.20. Manner of Payments 41
SECTION 2.21. Withholding Taxes 42
SECTION 2.22. Certain Pricing Adjustments 43
SECTION 2.23. [Intentionally Deleted.] 45
SECTION 2.24. Extension of Maturity Date 45
SECTION 2.25. Bankers' Acceptances 46
SECTION 2.26. Guarantee 48
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 3.1. Corporate Existence and Power 51
SECTION 3.2. Corporate Authority and No Violation 51
SECTION 3.3. Governmental and Other Approval and Consents 51
SECTION 3.4. Financial Statements of Borrower 52
SECTION 3.5. No Material Adverse Change 52
SECTION 3.7. Copyrights, Patents and Other Rights 52
SECTION 3.8. Title to Properties 52
SECTION 3.9. Litigation 52
-i-
SECTION 3.10. Federal Reserve Regulations 53
SECTION 3.11. Investment Company Act 53
SECTION 3.12. Enforceability 53
SECTION 3.13. Taxes 53
SECTION 3.14. Compliance with ERISA 53
SECTION 3.15. Disclosure 54
SECTION 3.16. Environmental Liabilities 54
4. CONDITIONS OF LENDING 54
SECTION 4.1. Conditions Precedent to Effectiveness 54
(a) Loan Documents 54
(b) Corporate Documents for the Borrower 54
(c) Financial Statements 55
(d) Opinions of Counsel 55
(e) No Material Adverse Change 55
(f) Payment of Fees 55
(g) Closing Date Payments 55
(h) Litigation 55
(i) Officer's Certificate 56
SECTION 4.2. Conditions Precedent to Each Loan 56
(a) Notice 56
(b) Representations and Warranties 56
(c) No Event of Default 56
5. AFFIRMATIVE COVENANTS 56
SECTION 5.1. Financial Statements, Reports, etc. 57
SECTION 5.2. Corporate Existence; Compliance with Statutes 58
SECTION 5.3. Insurance 58
SECTION 5.4. Taxes and Charges 58
SECTION 5.5. ERISA Compliance and Reports 59
SECTION 5.6. Maintenance of and Access to Books and Records; Examinations 59
SECTION 5.7. Maintenance of Properties 60
6. NEGATIVE COVENANTS 60
SECTION 6.1. Limitation on Material Subsidiary Indebtedness 60
SECTION 6.2. [Intentionally deleted] 61
SECTION 6.3. Limitation on Transactions with Affiliates 61
SECTION 6.4. Consolidation, Merger, Sale of Assets 62
SECTION 6.5. Limitations on Liens 62
SECTION 6.6. Sale and Leaseback 64
SECTION 6.7. Consolidated Net Worth 64
SECTION 6.8. Ratio of Indebtedness To Consolidated Net Worth 64
SECTION 6.9. Accounting Practices64
SECTION 6.10. Restrictions Affecting Subsidiaries 64
-ii-
Section 6.11. Restrictions Regarding Coldwell Banker Securitization Facility 65
SECTION 6.12. Limitation on Mortgage Repurchase Indebtedness 65
7. EVENTS OF DEFAULT 65
8. THE AGENTS 68
SECTION 8.1. Administration by Agents 68
SECTION 8.2. Advances and Payments 68
SECTION 8.3. Sharing of Setoffs and Cash Collateral 69
SECTION 8.4. Notice to the Lenders 69
SECTION 8.5. Liability of Each Agent 70
SECTION 8.6. Reimbursement and Indemnification 70
SECTION 8.7. Rights of Each Agent 71
SECTION 8.8. Independent Investigation by Lenders 71
SECTION 8.9. Notice of Transfer 71
SECTION 8.10. Successor Agents 71
9. MISCELLANEOUS72
SECTION 9.1. Notices 72
SECTION 9.2. Survival of Agreement, Representations and Warranties, etc. 72
SECTION 9.3. Successors and Assigns; Syndications; Loan Sales; Participations 73
SECTION 9.4. Expenses; Documentary Taxes 76
SECTION 9.5. Indemnity 77
SECTION 9.6. CHOICE OF LAW 77
SECTION 9.7. No Waiver 77
SECTION 9.8. Extension of Maturity 78
SECTION 9.9. Amendments, etc. 78
SECTION 9.10. Severability 78
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL 79
SECTION 9.12. Headings 80
SECTION 9.13. Execution in Counterparts 80
SECTION 9.14. Entire Agreement 80
SECTION 9.15. Foreign Currency Judgments 80
SECTION 9.16. Risks of Superior Force 81
SECTION 9.17. Language 81
SECTION 9.18. Acknowledgment and Agreement 81
SECTION 9.19. European Economic And Monetary Union 81
-iii-
SCHEDULES
1.1A Lenders, Addresses and Commitments
1.1B Available Foreign Currencies
2.14 Eurocurrency Reserve Costs For Pounds Sterling Loans
3.6 Material Subsidiaries
3.9 Litigation
6.1 Existing Material Subsidiary Indebtedness
6.5 Existing Liens
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Competitive Note
A-3 Form of Canadian Revolving Credit Note
A-4 Form of Pounds Sterling Note
B-1 Opinion of In-house Counsel
B-2 Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
B-3 Opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
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 Extension Request
H Form of Replacement Bank Agreement
I Form of Bankers' Acceptance
J Form of Notice of Rollover
K Creditor Acknowledgment and Agreement
364-DAY COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT
(the "Agreement"), dated as of March 4, 1997, as amended and restated through
March 5, 1999, among PHH CORPORATION, a Maryland corporation (the "Borrower"),
PHH VEHICLE MANAGEMENT SERVICES INC., a corporation incorporated under the
Canada Business Corporations Act (the "Canadian Borrower"), the Lenders
referred to herein, CHASE SECURITIES INC., as arranger (the "Arranger") for the
Lenders, THE CHASE MANHATTAN BANK, a New York banking corporation, as agent
(the "Administrative Agent") for the US Lenders, and The Chase Manhattan Bank
of Canada, a Canadian chartered bank, as administrative agent for the Canadian
Lenders (in such capacity, the "Canadian Agent").
INTRODUCTORY STATEMENT
The Borrower, certain of the Lenders, the Administrative
Agent and the Canadian Agent are parties to the 364-Day Competitive Advance and
Revolving Credit Agreement, dated as of March 4, 1997, as amended through the
Closing Date referred to below (the "Existing Credit Agreement"), pursuant to
which the Lenders established a $1,250,000,000 committed revolving credit
facility under which Revolving Credit Loans may be made to the Borrowers (as
defined below). In addition, pursuant to the Existing Credit Agreement, the
Lenders provided to the Borrowers (i) a procedure pursuant to which Lenders may
bid on an uncommitted basis on short-term borrowings by the Borrower and (ii) a
multi-currency credit facility in an amount equal to $500,000,000, of which up
to the equivalent of $200,000,000 will be made available by the Canadian
Lenders (as defined below) to the Canadian Borrower as a separate Canadian
Dollar tranche guaranteed by the Borrower.
The Borrower has requested that the Maturity Date (as defined
below) be extended to March 3, 2000 and has requested certain other amendments
to the Existing Credit Agreement.
The Borrower, the Lenders, the Administrative Agent and the
Canadian Agent desire to amend and restate the Existing Credit Agreement
pursuant to this Agreement and to continue the Borrower's payment and
performance obligations under the Existing Credit Agreement, as amended hereby.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise
requires, the following terms shall have the meanings indicated, all accounting
terms not otherwise defined herein shall have the respective meanings accorded
to them under GAAP and all terms defined in the New York Uniform Commercial
Code and not otherwise defined herein shall have the respective meanings
accorded to them therein:
2
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Alternate Base Rate
in accordance with the provisions of Article 2.
"Acceptance Fee" shall mean a fee payable in C$ by the
Canadian Borrower to a Canadian Lender with respect to the acceptance
of a B/A, calculated on the face amount of the B/A at the rate per
annum equal to the B/A Spread on the basis of the number of days in
the applicable Contract Period and a year of 365 days.
"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.
"Agents" shall mean, collectively, the Administrative Agent
and the Canadian Agent.
"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 greater of (a) the Prime
Rate in effect for such day and (b) the Federal Funds Effective Rate
in effect for such day plus 1/2 of 1%. "Prime Rate" shall mean the
rate per annum publicly announced by the entity which is 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 next 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. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate, 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)
until the circumstances giving rise to such inability no longer exist.
Any change in the Alternate Base Rate due to a change in the
3
Federal Funds Effective Rate shall be effective on the effective date
of such change in the Federal Funds Effective Rate.
"Applicable Agent" shall mean, (i) with respect to US Loans
or the Borrower, the Administrative Agent, and (ii) with respect to
Canadian Loans or the Canadian Borrower, the Canadian Agent.
"Applicable Borrower" shall mean (i) with respect to US
Loans, the Borrower, and (ii) with respect to Canadian Loans, the
Canadian Borrower.
"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 reasonably estimated by the
Administrative Agent for determining the then current annual
assessment payable by the entity which is 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 such entity's domestic offices.
"Asset Securitization Subsidiary" shall mean (i) any
Subsidiary engaged solely in the business of effecting asset
securitization transactions permitted by this Agreement and activities
incidental thereto or (ii) any Subsidiary whose primary purpose is to
hold title or ownership interests in vehicles, mortgages, relocation
assets and related assets under management.
"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.
"Available Foreign Currencies" shall mean the currencies set
forth on Schedule 1.1B, and any other available and freely-convertible
non-Dollar currency selected by the Borrower and approved (which
approval shall not be unreasonably withheld) in writing by the
Administrative Agent.
"Bankers' Acceptance" and "B/A" shall mean a ▇▇▇▇ of exchange
denominated in C$, drawn by the Canadian Borrower and accepted by a
Canadian Lender or a Participant in accordance with this Agreement.
"B/A Borrowing" shall mean a Borrowing comprised of Bankers'
Acceptances.
"B/A Spread" shall mean, at any date or for any period of
determination, the B/A Spread that would be in effect on such date or
during such period pursuant to the table set
4
forth in Section 2.22 based on the rating of the Borrower's senior
unsecured long-term debt.
"Basis Point" shall mean 1/100th of 1%.
"Board" shall mean the Board of Governors of the Federal
Reserve System.
"Borrowers" shall mean, collectively, the Borrower and the
Canadian Borrower.
"Borrowing" shall mean a group of Loans of a single Interest
Rate Type made by certain 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.
"Borrowing Date" shall mean any Business Day specified in a
notice pursuant to Section 2.5(b) as a date on which the Canadian
Borrower requests the Canadian Lenders to make Canadian Revolving
Credit Loans hereunder.
"Branch of Account" shall mean, for each Canadian Lender, the
branch or office of such Canadian Lender at the address set out
opposite that Canadian Lender's name or such other branch or office as
such Canadian Lender may advise the Canadian Borrower and the Canadian
Agent in writing.
"Business Day" shall mean, (i) with respect to any Loan other
than a Canadian Loan, any day other than a Saturday, Sunday or other
day on which banks in the State of New York are permitted or required
by law to close; provided 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 deposits in Dollars or the
applicable Available Foreign Currency on the London Interbank Market
(or such other interbank eurocurrency market where the foreign
currency and exchange operations in respect of Dollars or the
applicable Available Foreign Currency, as the case may be, are then
being conducted for delivery on the first day of such Interest Period)
and (ii) with respect to any Canadian Loan, any day other than a
Saturday, Sunday or other day on which banks in Toronto, Ontario or
New York City are permitted or required by law to close.
"C$ Prime Rate" shall mean, on any day, the annual rate of
interest (rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the greater of:
(a) the annual rate of interest determined by The Bank
of Nova Scotia as the annual rates of interest
announced from time to time by The Bank of Nova
Scotia as its prime rate in effect at its principal
office in Toronto on such day for determining
interest rates on C$ denominated commercial loans in
Canada; and
5
(b) the annual rate of interest equal to the sum of (A)
the CDOR Rate in effect on such day and (B) 1%.
"C$ Prime Rate Borrowing" shall mean a Borrowing comprised of
C$ Prime Rate Loans.
"C$ Prime Rate Loan" shall mean a Canadian Revolving Credit
Loan denominated in C$ which bears interest at a rate based upon the
C$ Prime Rate.
"Canadian Agent" shall have the meaning assigned to such term
in the preamble hereto.
"Canadian Borrower" shall have the meaning assigned to such
term in the preamble hereto.
"Canadian Borrowing" shall mean a Borrowing consisting of
simultaneous Canadian Revolving Credit Loans from the Canadian
Lenders.
"Canadian Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Canadian Revolving
Credit Loans to the Canadian Borrower pursuant to Section 2.1(b), in
an aggregate amount not to exceed at any time the amount set forth
opposite such Lender's name under the heading "Canadian Commitment" on
or in (i) Schedule 1.1A hereto, (ii) any applicable Assignment and
Acceptance to which it may be a party, and/or (iii) any agreement
delivered pursuant to Section 2.24(d), as the case may be, as such
Lender's Canadian Commitment may be permanently terminated or reduced
from time to time pursuant to Section 2.12 or 2.24 or Article 7 or
changed pursuant to Section 9.3. The Canadian 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.
"Canadian Dollars" and "C$" shall mean the lawful currency of
Canada.
"Canadian Lender" shall mean each Lender which has a Canadian
Commitment or which has extended a Canadian Loan.
"Canadian Loan" shall mean any loan made by any Canadian
Lender pursuant to this Agreement to the Canadian Borrower.
"Canadian Obligations" shall mean the obligation of the
Canadian Borrower to make due and punctual payment of principal of,
and interest on (including post-petition interest, whether or not
allowed), the Canadian Loans and all other monetary obligations of the
Canadian Borrower to the Canadian Agent or any Canadian Lender under
this Agreement, the Canadian Revolving Credit Notes or with respect to
any Interest Rate Protection Agreement entered into between the
Canadian Borrower or any of its Subsidiaries and any Canadian Lender.
6
"Canadian Revolving Credit Loan" shall have the meaning
assigned to such term in Section 2.1(b).
"Canadian Revolving Credit Note" shall have the meaning
assigned to such term in Section 2.8.
"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 Equivalents" shall mean (i) investments in commercial
paper maturing in not more than 270 days from the date of issuance
which at the time of acquisition is rated at least A-1 or the
equivalent thereof by S&P, or P-1 or the equivalent thereof by
▇▇▇▇▇'▇, (ii) investments in direct obligations or obligations which
are guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having a maturity of
not more than three years from the date of acquisition, (iii)
investments in certificates of deposit maturing not more than one year
from the date of origin issued by a bank or trust company organized or
licensed under the laws of the United States or any state or territory
thereof having capital, surplus and undivided profits aggregating at
least $500,000,000 and A rated or better by S&P or ▇▇▇▇▇'▇, (iv) money
market mutual funds having assets in excess of $2,000,000,000, (v)
investments in asset-backed or mortgage-backed securities, including
investments in collateralized, adjustable rate mortgage securities and
those mortgage-backed securities which are rated at least AA by S&P or
Aa by ▇▇▇▇▇'▇ or are of comparable quality at the time of investment,
and (vi) banker's acceptances maturing not more than one year from the
date of origin issued by a bank or trust company organized or licensed
under the laws of the United States or any state or territory thereof
and having a capital, surplus and undivided profits aggregating at
least $500,000,000, and rated A or better by S&P or ▇▇▇▇▇'▇.
"CDOR Rate" shall mean, on any date, the annual rate of
interest which is the rate based on an average rate applicable to C$
bankers' acceptances for a term of 30 days (in the case of the
definition of "C$ Prime Rate") appearing on the "Reuters Screen CDOR
Page" (as defined in the International Swaps and Derivatives
Association, Inc. definitions, as modified and amended from time to
time) at approximately 10:00 a.m. (Toronto time), on such date, or if
such date is not a Business Day, then on the immediately preceding
Business Day; provided, that if such rate does not appear on the
Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any
date shall be calculated as the arithmetic mean of the rates for the
term referred to above applicable to C$ bankers' acceptances quoted by
The Bank of Nova Scotia as of 10:00 a.m. (Toronto time), on such date,
or if such date is not a Business Day, then on the immediately
preceding Business Day.
7
"Change in Control" shall mean, (i) the acquisition by any
Person or group (within the meaning of the Securities Exchange Act of
1934, as amended, and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), directly or
indirectly, beneficially or of record, of ownership or control of in
excess of 50% of the voting common stock of Cendant Corporation on a
fully diluted basis at any time or (ii) at any time, individuals who
constituted the Board of Directors of Cendant Corporation on the
Closing Date (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of Cendant Corporation, 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 date hereof or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of Cendant
Corporation or (iii) Cendant Corporation shall cease to own, directly
or through wholly-owned Subsidiaries, all of the capital stock of the
Borrower, free and clear of any direct or indirect Liens.
"Chase" shall mean The Chase Manhattan Bank, a New York
banking corporation.
"Chase Canada" shall mean The Chase Manhattan Bank of Canada,
a Canadian chartered bank.
"Closing Date" shall mean the date on which the conditions
precedent to the effectiveness of this Agreement as set forth in
Section 4.1 have been satisfied or waived, which shall in no event be
later than March 8, 1999.
"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.
"commencement of the third stage of EMU" shall mean the date
of commencement of the third stage of EMU or the date on which
circumstances arise which (in the opinion of the Administrative Agent)
have substantially the same effect and result in substantially the
same consequences as commencement of the third stage of EMU as
contemplated by the Treaty on European Union.
"Commitment" shall mean, (i) with respect to each Primary
Lender, its Primary Commitment, (ii) with respect to each Pounds
Sterling Lender, its Pounds Sterling Commitment and (iii) with respect
to each Canadian Lender, its Canadian Commitment.
"Commitment Expiration Date" shall have the meaning assigned
to such term in Section 2.24(a).
"Commitment Period" shall mean the period from and including
the Closing Date to but not including the Maturity Date or such
earlier date on which the Commitments shall have been terminated in
accordance with the terms hereof.
8
"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.
"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 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) 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 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 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 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 gains and (v) any extraordinary
pretax losses but only to the extent
9
attributable to a write-down of financing costs relating to any
existing and future indebtedness.
"Consolidated Net Worth" shall mean, at any date of
determination, all amounts which would be included on a balance sheet
of the Borrower and its Consolidated Subsidiaries under stockholders'
equity as of such date in accordance with GAAP.
"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.
"Contract Period" shall mean the term of a B/A selected by
the Canadian Borrower in accordance with Section 2.25 commencing on
the Borrowing Date, Rollover Date or date of refinancing pursuant to
Section 2.6, as applicable, of such B/A and expiring on a Business Day
which shall be either 30 days, 60 days, 90 days, 120 days or 180 days
thereafter, provided that no Contract Period shall extend beyond the
Maturity Date.
"Contractual Obligation" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement,
instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Creditor Acknowledgment and Agreement" shall have the
meaning specified in Section 9.18.
"Currency" or "Currencies" shall mean the collective
reference to Dollars and Available Foreign Currencies.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Discount Proceeds" shall mean, for any B/A, an amount
(rounded to the nearest whole cent, and with one-half of one cent
being rounded up) calculated on the applicable Borrowing Date or
Rollover Date by multiplying:
(i) the face amount of the B/A; by
(ii) the quotient of one divided by the sum of
one plus the product of:
1. the Discount Rate (expressed as a decimal)
applicable to such B/A, and
2. a fraction, the numerator of which is the Contract
Period of the B/A and the denominator of which is
365, being the number of days in the applicable
year,
10
with such quotient being rounded up or down to the fifth decimal place
and .000005 being rounded up.
"Discount Rate" shall mean, with respect to any Canadian
Lender, as applicable to a B/A being purchased by such Canadian Lender
on any day, the average (as determined by the Canadian Agent) of the
respective percentage discount rates (expressed to two decimal places
and rounded upward, if necessary, to the nearest 0.01%) quoted to The
Bank of Nova Scotia as the percentage discount rate at which The Bank
of Nova Scotia would, in accordance with its normal practices, at or
about 10:00 a.m., Toronto time, on such day, be prepared to purchase
Bankers' Acceptances accepted by The Bank of Nova Scotia having a face
amount and term comparable to the face amount and term of such B/A.
"Dollar Equivalent Amount" shall mean with respect to (i) any
amount of any Available Foreign Currency on any date, the equivalent
amount in Dollars of such amount of Available Foreign Currency, as
determined by the Administrative Agent using the applicable Exchange
Rate and (ii) any amount in Dollars, such amount.
"Dollars" and "$" and "US$" shall mean lawful currency of the
United States.
"Domestic Obligations" shall mean the obligation of the
Borrower to make due and punctual payment of principal of, and
interest on (including post-petition interest, whether or not
allowed), the Loans, the Facility Fee, guarantee obligations in
respect of the Canadian Obligations and all other monetary obligations
of the Borrower to the Administrative Agent 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 or any of its Subsidiaries and any Lender.
"EMU" shall mean economic and monetary union as contemplated
in the Treaty on European Union.
"EMU legislation" shall mean legislative measures of the
European Council for the introduction of, changeover to or operation
of a single or unified European currency (whether known as the euro or
otherwise), being in part the implementation of the third stage of
EMU.
"Environmental Laws" shall mean any and all federal,
provincial, 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 at any
time hereafter in effect, including without limitation, the Clean
Water Act also known as the Federal Water Pollution Control Act, 33
U.S.C. ▇▇.▇▇. 1251 et seq., the Clean Air Act, 42 U.S.C. ▇▇.▇▇. 7401
et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. ▇▇.▇▇. 136 et seq., the Surface Mining Control and Reclamation
Act, 30 U.S.C. ▇▇.▇▇. 1201 et seq., the Comprehensive
11
Environmental Response, Compensation and Liability Act, 42 U.S.C.
▇▇.▇▇. 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, 42 U.S.C. ▇▇.▇▇. 11001 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. ▇▇.▇▇. 6901 et seq.,
the Occupational Safety and Health Act as amended, 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.
"euro" shall mean the single currency of participating member
states of the European Union.
"euro unit" shall mean the currency unit of the euro.
"Event of Default" shall have the meaning given such term in
Article 7.
"Exchange Rate" shall mean, (i) with respect to any Available
Foreign Currency other than Canadian Dollars on any date, the rate at
which such Available Foreign Currency may be exchanged into Dollars,
as set forth on such date on the relevant Reuters currency page at or
about 11:00 A.M. New York City time on such date and (ii) with respect
to Canadian Dollars, the spot rate at which Canadian Dollars may be
exchanged into U.S. Dollars, as quoted by The Bank of Canada at
approximately 12:00 noon, Toronto time, as set forth on the Reuters
"BOFC" page. In the event that such rate does not appear on any such
Reuters page, the "Exchange Rate" with respect to such Available
Foreign Currency shall be determined by reference to such other
publicly available service for displaying exchange rates as may be
agreed upon by the Administrative Agent and the Borrower or, in the
absence of such agreement, such "Exchange Rate" shall instead be the
Administrative Agent's spot rate of exchange in the interbank market
where its foreign currency exchange operations in respect of such
Available Foreign Currency are then being conducted, at or about 10:00
A.M., local time, at such date for the purchase of Dollars with such
Available Foreign Currency, for delivery two Business Days later;
provided that if at the time of any such determination, no such spot
rate can reasonably be quoted, the Administrative Agent may use any
reasonable method (including obtaining quotes from three or more
market makers for such Available Foreign Currency) as it
12
deems applicable to determine such rate, and such determination shall
be conclusive absent manifest error (without prejudice to the
determination of the reasonableness of such method).
"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 G and shall be delivered to the Administrative
Agent in writing.
"Facility Fee" shall have the meaning given such term in
Section 2.7.
"Five Year Credit Agreement" shall mean the Five Year
Competitive Advance and Revolving Credit Agreement, dated as of March
4, 1997, as amended or waived from time to time, among the Borrower,
the lenders referred to therein, and Chase, as Administrative Agent.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form
of a decimal to no more than four decimal places) specified by the
Lender making such Loan in its Competitive Bid.
"Fundamental Documents" shall mean this Agreement, any
Revolving Credit Notes, any Competitive Notes, any Canadian Revolving
Credit Notes, any Pounds Sterling Notes and any other ancillary
documentation which is required to be, or is otherwise, executed by
the Borrowers 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 date
hereof.
"Governmental Authority" shall mean any federal, provincial,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, or any court, in each case, whether
of the United States or Canada 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
13
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services, in each
case, primarily for the purpose of assuring the owner of any such
primary obligation of the repayment of such primary obligation or (d)
as a general partner of a partnership or a joint venturer of a joint
venture in respect of indebtedness of such partnership or such joint
venture which is treated as a general partnership for purposes of
Applicable Law. The amount of any Guaranty shall be deemed to be an
amount equal to the stated or determinable amount (or portion thereof)
of the primary obligation in respect of which such Guaranty is made
or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder); provided 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.
"Indebtedness" shall mean (i) all indebtedness, obligations
and other liabilities of the Borrower and its Subsidiaries which are,
at the date as of which Indebtedness is to be determined, includable
as liabilities in a consolidated balance sheet of the Borrower and its
Subsidiaries, other than (x) accounts payable and accrued expenses,
(y) advances from clients obtained in the ordinary course of the
relocation management services business of the Borrower and its
Subsidiaries and (z) current and deferred income taxes and other
similar liabilities, plus (ii) without duplicating any items included
in Indebtedness pursuant to the foregoing clause (i), the maximum
aggregate amount of all liabilities of the Borrower or any of its
Subsidiaries under any Guaranty, indemnity or similar undertaking
given or assumed of, or in respect of, the indebtedness, obligations
or other liabilities, assets, revenues, income or dividends of any
Person other than the Borrower or one of its Subsidiaries and (iii)
all other obligations or liabilities of the Borrower or any of its
Subsidiaries in relation to the discharge of the obligations of any
Person other than the Borrower or one of it Subsidiaries.
"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'
14
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, (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 C$ Prime Rate Loan, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the last
Business Day of the calendar month, (ii) the Maturity Date and (iii)
the date such Borrowing is refinanced with a Borrowing of a different
Interest Rate Type in accordance with Section 2.6 or is prepaid in
accordance with Section 2.13, and (d) as to any Fixed Rate Borrowing,
the period commencing on the date of such Borrowing and ending on the
date specified in the Competitive Bids in which the offer to make the
Fixed Rate Loans comprising such Borrowing were extended, which shall
not be earlier than seven days after the date of such Borrowing or
later than 360 days after the date of such Borrowing; provided that
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; and provided, further,
that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of LIBOR Loans only, such
next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding
Business Day and (ii) no Interest Period with respect to any LIBOR
Borrowing or Fixed Rate Borrowing may be selected which would result
in the aggregate amount of LIBOR Loans and Fixed Rate Loans having
Interest Periods ending after any day on which a Commitment reduction
is scheduled to occur being in excess of the Total Commitment
scheduled to be in effect after such date. Interest shall accrue from,
and including, the first day of an Interest Period to, but excluding,
the last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement or other similar
financial agreement or arrangement.
"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 of US Loans, "Rate" shall include LIBOR, the Alternate Base
Rate and the Fixed Rate, and for purposes of Canadian Revolving Credit
Loans, shall include the C$ Prime Rate and the rate implicit in the
Discount Rate.
15
"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 or
C$ Prime Rate Loans or Bankers' Acceptances, 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 or C$ Prime Rate Loans or Bankers' Acceptances are
made, as notified to the Administrative Agent and the Canadian 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
deposits in Dollars or the applicable Available Foreign Currency, as
the case may be, 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 (or such other
interbank eurocurrency market where the foreign currency and exchange
operations in respect of Dollars or such applicable Available Foreign
Currency, as the case may be, are then being conducted for delivery on
the first day of such Interest Period) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such
Interest Period (or, in the case of U.K. Pounds Sterling, on the first
day of such Interest Period).
"LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR
Loans.
"LIBOR Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to LIBOR in
accordance with the provisions of Article 2.
"LIBOR Loan" shall mean any LIBOR Competitive Loan or LIBOR
Revolving Credit Loan.
"LIBOR Revolving Credit Loan" shall mean any Loan (other than
a Competitive 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.
16
"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, or a Canadian Revolving Credit Loan, whether made
as a C$ Prime Rate Loan or a B/A, 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 any Subsidiary of the
Borrower which together with its Subsidiaries at the time of
determination had assets constituting 10% or more of Consolidated
Assets, accounts for 10% or more of Consolidated Net Worth, or
accounts for 10% or more of the revenues of the Borrower and its
Consolidated Subsidiaries for the Rolling Period immediately preceding
the date of determination.
"Maturity Date" shall mean March __, 2000 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. with CUC International Inc. as the surviving entity
and changing its name to Cendant Corporation.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in Section
3(37) of ERISA.
"national currency unit " shall mean the unit of currency
(other than a euro unit) of a participating member state.
"non-Objecting Lender" shall mean any Lender that is not an
Objecting Lender.
17
"Notes" shall mean the Competitive Notes and the Revolving
Credit Notes and the Canadian Revolving Credit Notes and the Pounds
Sterling Notes.
"Notice of Canadian Borrowing" shall have the meaning
assigned to such term in Section 2.5(b).
"Notice of Rollover" shall mean a written notice to the
Canadian Agent substantially in the form attached hereto as Exhibit J.
"Objecting Lender" shall mean any Lender that does not
consent to the extension of the Maturity Date pursuant to Section
2.24.
"Obligations" shall mean the collective reference to the
Domestic Obligations and the Canadian Obligations.
"Original Closing Date" shall mean March 4, 1997.
"Participant" shall have the meaning assigned to such term in
Section 9.3(g).
"participating member state " shall mean each state so
described in any EMU legislation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Encumbrances" shall mean Liens permitted under
Section 6.5.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, limited liability company, trust, joint
venture, association, company, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Plan" shall mean an employee pension benefit plan described
in Section 3(2) of ERISA, other than a Multiemployer Plan.
"Pounds Sterling Borrowing" shall mean a Borrowing consisting
of simultaneous Pounds Sterling Loans from each of the Pounds Sterling
Lenders.
"Pounds Sterling Commitment" shall mean, with respect to each
Lender, its commitment to make Pounds Sterling Loans to the Borrower
pursuant to Section 2.1(c), in an aggregate Dollar Equivalent Amount
not to exceed at any time the amount set forth opposite such Lender's
name under the heading "Pounds Sterling Commitment" on or in (i)
Schedule 1.1A hereto, (ii) any applicable Assignment and Acceptance to
which it may be a party, and/or (iii) any agreement delivered pursuant
to Section 2.24(d), as the case may be, as such Lender's Pounds
Sterling Commitment may be permanently terminated or reduced from time
to time pursuant to Section 2.12 or 2.24 or Article 7 or changed
18
pursuant to Section 9.3. The Pounds Sterling 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.
"Pounds Sterling Lender" shall mean each Lender which has a
Pounds Sterling Commitment or which has extended a Pounds Sterling
Loan.
"Pounds Sterling Loan" shall have the meaning assigned to
such term in Section 2.1(c).
"Pounds Sterling Note" shall have the meaning assigned to
such term in Section 2.8.
"Primary Borrowing" shall mean a Borrowing consisting of
simultaneous Primary Loans from each of the Primary Lenders.
"Primary Commitment" shall mean, with respect to each Lender,
its commitment to make Primary Loans to the Borrower pursuant to
Section 2.1(a), in an aggregate amount not to exceed at any time the
amount set forth opposite such Lender's name under the heading
"Primary Commitment" on or in (i) Schedule 1.1A hereto, (ii) any
applicable Assignment and Acceptance to which it may be a party,
and/or (iii) any agreement delivered pursuant to Section 2.24(d), as
the case may be, as such Lender's Primary Commitment may be
permanently terminated or reduced from time to time pursuant to
Section 2.12 or 2.24 or Article 7 or changed pursuant to Section 9.3.
The Primary 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.
"Primary Lender" shall mean each Lender which has a Primary
Commitment or which has extended a Primary Loan.
"Primary Loan" shall mean any Loan made by any Primary Lender
pursuant to Section 2.1(a).
"Pro Forma Balance Sheet" shall have the meaning assigned to
such term in Section 3.4.
"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.
19
"Reportable Event" shall mean any reportable event as defined
in Section 4043(c) 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 (in Dollar amounts) 51% or more of the
Primary 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% or more of
the aggregate principal amount of the Loans at the time outstanding.
"Revolving Credit Borrowing" shall mean a Borrowing
consisting of simultaneous Revolving Credit Loans from each of the
Primary Lenders or Pounds Sterling Lenders, as the case may be.
"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
Primary or Pounds Sterling Lenders to the Borrower pursuant to a
notice given by the Borrower under Section 2.5(a). 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.
"Rollover Date" shall mean any Business Day specified in a
Notice of Rollover pursuant to Section 2.25 as the date of issue of a
B/A in respect of any maturing B/As.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies.
"Special Purpose Vehicle Subsidiary" shall mean PHH Caribbean
Leasing, Inc. and any Subsidiary engaged in the fleet-leasing
management business which (i) is, at any one time, a party to one or
more lease agreements with only one lessee and (ii) finances, at any
one time, its investment in lease agreements or vehicles with only one
lender, which lender may be the Borrower if and to the extent that
such loans and/or advances by the Borrower are not prohibited hereby.
20
"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 of the Board) (or, at any time when such Lender may be
required by the Board or by any other Governmental Authority, whether
within the United States or in another relevant jurisdiction, to
maintain reserves against any other category of liabilities which
includes deposits by reference to which LIBOR is determined as
provided in this Agreement or against any category of extensions of
credit or other assets of such Lender which includes any such LIBOR
Loans). Such reserve percentages shall include those imposed under
Regulation D of the Board. 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 of the Board. 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. Unless otherwise qualified, all references to a "Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Supermajority Lenders" shall mean Lenders which have
Commitments representing at least 75% of the aggregate Dollar amount
of the Primary Commitments.
"Target Operating Day" shall mean any day that is not (a) a
Saturday or Sunday, (b) Christmas Day or New Year's Day or (c) any
other day on which the Trans-European Real-time Gross Settlement
Operating System (or any successor settlement system) is not operating
(as determined by the Administrative Agent).
"Total Commitment" shall mean, at any time, the aggregate
amount of the Lenders' Commitments as in effect at such time.
"Treaty on European Union" shall mean the Treaty of Rome of
March 25, 1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the
Maastricht Treaty (which was signed at Maastricht on February 7, 1992,
and came into force on November 1, 1993), as amended from time to
time.
"United States" shall mean the United States of America.
21
"US Lenders" shall mean the Lenders other than the Canadian
Lenders.
"US Loans" shall mean Loans other than Canadian Loans.
"Working Day" shall mean any Business Day on which dealings
in foreign currencies and exchange between banks may be carried on in
London, England and in New York, New York.
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 Primary Lender
agrees, severally and not jointly, to make Revolving Credit Loans to the
Borrower in Dollars, at any time and from time to time on and after the
Original Closing Date and until the earlier of the Maturity Date and the
termination of the Primary Commitment of such Lender, in an aggregate principal
amount at any time outstanding not to exceed such Primary Lender's Primary
Commitment minus the sum of such Primary Lender's pro rata share of the
aggregate principal Dollar Equivalent Amount of the Pounds Sterling Loans and
Canadian Loans made by such Lender plus the outstanding Dollar Equivalent
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 condition that at no time shall (i) the sum of (A) the
outstanding aggregate principal amount of all Revolving Credit Loans made by
all Primary Lenders plus the outstanding aggregate principal Dollar Equivalent
Amount of all Competitive Loans, Pounds Sterling Loans and Canadian Revolving
Credit Loans made by the Lenders exceed (ii) the Total Commitment. During the
Commitment Period, the Borrower may use the Primary Commitments of the Primary
Lenders by borrowing, prepaying the Primary Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Canadian Lender
agrees, severally and not jointly, to make revolving credit loans (each, a
"Canadian Revolving Credit Loan") to the Canadian Borrower in Canadian Dollars,
at any time and from time to time on and after the Original Closing Date and
until the earliest of (i) the Maturity Date, (ii) such date on which the
Borrower shall fail to own, directly or indirectly, beneficially and of record,
all of the capital stock of the Canadian Borrower and (iii) the termination of
the Canadian Commitment of such Canadian Lender, in an aggregate principal
amount at any time outstanding not to exceed such Canadian Lender's Canadian
Commitment minus the sum of such Canadian Lender's pro rata share of the
outstanding Dollar Equivalent Amount by which the Competitive Loans outstanding
at such time shall be deemed to have used such Canadian 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 Dollar
Equivalent Amount of all Canadian Revolving Credit Loans made by all Canadian
Lenders plus the outstanding aggregate principal Dollar Equivalent Amount of
all Primary Loans, Pounds Sterling Loans and Competitive Loans made by the
22
Lenders exceed (ii) the Total Commitment and (b) at all times the outstanding
aggregate principal amount of all Canadian Revolving Credit Loans made by each
Canadian Lender shall equal the product of (i) the percentage that its Canadian
Commitment represents of the aggregate Canadian Commitment times (ii) the
outstanding aggregate principal amount of all Canadian Revolving Credit Loans.
During the Commitment Period, the Canadian Borrower may use the Canadian
Commitments of the Canadian Lenders by borrowing, prepaying the Canadian
Revolving Credit Loans in whole or in part and reborrowing, all in accordance
with the terms and conditions hereof.
(c) Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Pounds Sterling
Lender agrees, severally and not jointly, to make revolving credit loans (each,
a "Pounds Sterling Loan") to the Borrower in U.K. Pounds Sterling, at any time
and from time to time on and after the Original Closing Date and until the
earlier of the Maturity Date and the termination of the Pounds Sterling
Commitment of such Pounds Sterling Lender, in an aggregate principal amount at
any time outstanding not to exceed such Pounds Sterling Lender's Pounds
Sterling Commitment minus the sum of such Pounds Sterling Lender's pro rata
share of the outstanding Dollar Equivalent Amount by which the Competitive
Loans outstanding at such time shall be deemed to have used such Pounds
Sterling 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 Dollar Equivalent Amount of all Pounds Sterling Loans made
by all Pounds Sterling Lenders plus the outstanding aggregate principal Dollar
Equivalent Amount of all Primary Loans, Canadian Revolving Credit Loans and
Competitive Loans made by the Lenders exceed (ii) the Total Commitment and (b)
at all times the outstanding aggregate principal amount of all Pounds Sterling
Loans made by each Pounds Sterling Lender shall equal the product of (i) the
percentage that its Pounds Sterling Commitment represents of the aggregate
Pounds Sterling Commitment times (ii) the outstanding aggregate principal
amount of all Pounds Sterling Loans. During the Commitment Period, the Pounds
Sterling Borrower may use the Pounds Sterling Commitments of the Pounds
Sterling Lenders by borrowing, prepaying the Pounds Sterling Loans in whole or
in part and reborrowing, all in accordance with the terms and conditions
hereof.
(d) The Commitments of the Lenders may be terminated or
reduced from time to time pursuant to Section 2.12 or Article 7.
SECTION 2.2. Loans.
(a) Each Primary Loan, Pounds Sterling Loan or Canadian
Revolving Credit Loan, as the case may be, shall be made as part of a Borrowing
from the Primary Lenders, Pounds Sterling Lenders or the Canadian Lenders, as
the case may be, ratably in accordance with their respective applicable
Commitments; provided that the failure of any Primary Lender, Pounds Sterling
Lender or Canadian Lender, as the case may be, to make any Primary Loan, Pounds
Sterling Loan or Canadian Revolving Credit Loan, as the case may be, shall not
in itself relieve any other Primary Lender, Pounds Sterling Loan or Canadian
Lender, as the case may be, 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
23
other Lender); and provided, further, that (I) each Pounds Sterling Loan made
by a Pounds Sterling Lender shall reduce the Primary Commitment and Canadian
Commitment of such Lender by the principal amount of such Pounds Sterling Loan
and (II) each Canadian Loan shall reduce the Primary Commitment and Pounds
Sterling Commitment of such Lender by the principal amount of such Canadian
Loan. Each Competitive Loan shall be made in accordance with the procedures set
forth in Section 2.4. The Loans comprising any Borrowing shall be (i) in the
case of Competitive Loans and LIBOR Loans, in an aggregate principal Dollar
Equivalent 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 $5,000,000 (or if
less, an aggregate principal amount equal to the remaining balance of the
available Total Commitment). Each Borrowing of Canadian Revolving Credit Loans
shall be in an amount equal to (A) in the case of C$ Prime Rate Loans,
C$1,000,000 or a whole multiple of C$500,000 in excess thereof (or, if the then
available Total Commitments or Canadian Commitments are less than C$500,000,
such lesser amount) and (B) in the case of B/As, C$2,500,000 or a whole
multiple of C$100,000 in excess thereof.
(b) Each Competitive Borrowing shall be comprised entirely of
LIBOR Competitive Loans or Fixed Rate Loans, each Primary Borrowing shall be
comprised entirely of LIBOR Revolving Credit Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.4 or 2.5, as applicable, each
Canadian Borrowing shall be comprised entirely of C$ Prime Rate Loans or B/As,
as the Canadian Borrower may request pursuant to Section 2.5 and each Pounds
Sterling Borrowing shall be comprised entirely of LIBOR Revolving Credit Loans.
Each US Lender may at its option make any LIBOR Loan by causing any domestic or
foreign branch or Affiliate of such US 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 that the Borrowers shall not be entitled
to request any Borrowing that, if made, would result in an aggregate of more
than twenty (20) separate Loans (other than Competitive 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 or having been made in different Currencies,
regardless of whether they commence on the same date, shall be considered
separate Loans and all Loans of a single Interest Rate Type made on a single
date shall be considered a single Loan if such Loans have a common Interest
Period.
(c) (i) Subject to Section 2.6, each US Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by making funds
available at the office of the Administrative Agent specified in Section 9.1
for credit to PHH Corporation Clearing Account, Account No. ▇▇▇-▇-▇▇▇▇▇
(Reference: PHH Corporation Credit Agreement dated as of March 4, 1997) or as
otherwise directed by the Administrative Agent no later than 1:00 P.M. New York
City time in the case of Loans other than ABR Loans, and 4:00 P.M. New York
City time in the case of ABR Loans, in each case, in immediately available
funds. Upon receipt of the funds to be made available by the US 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
24
whose Competitive Bids therefor are accepted pursuant to Section 2.4 in the
amounts so accepted and Primary Loans and Pounds Sterling Loans shall be made
by all the Primary Lenders or Pounds Sterling Lenders, as the case may be, pro
rata in accordance with Section 2.1 and this Section 2.2.
(ii) Subject to Section 2.6, each Canadian Lender shall make
each Canadian Loan to be made by it hereunder on the proposed date thereof by
making funds available to the Canadian Agent at Royal Bank of Canada Swift Code
▇▇▇▇▇▇▇▇, for credit to PHH Vehicle Management Services Inc. Clearing Account,
Account No. ▇▇▇-▇▇▇-▇ (Reference: PHH Vehicle Management Services Inc. Credit
Agreement dated as of March 4, 1997) no later than 4:00 P.M. Toronto time in
the case of Canadian Loans (other than C$ Prime Rate Loans) and 1:00 P.M.
Toronto time in the case of C$ Prime Rate Loans, in each case, in immediately
available funds. Upon receipt of the funds to be made available by the Canadian
Lenders to fund any Canadian Borrowing hereunder, the Canadian Agent shall
disburse such funds by depositing them into an account of the Canadian Borrower
maintained with the Canadian Agent. Canadian Revolving Credit Loans shall be
made by all the Canadian Lenders pro rata in accordance with Section 2.1 and
this Section 2.2.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers 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.
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 2:00 p.m., New York City time, four Working Days before a proposed
Competitive Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 2:00 p.m., New York City time, one Business Day before a proposed
Competitive Borrowing. Each Competitive Bid Request shall specify the requested
Currency. No ABR Loan, C$ Prime Rate Loan or Bankers' Acceptance 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 in the case of a Fixed Rate Borrowing and a Working Day
in the case of a LIBOR Competitive Borrowing) and the aggregate principal
Dollar Equivalent Amount thereof, which shall be in a minimum principal Dollar
Equivalent
25
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 such
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 Working 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 Competitive 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
Competitive Bid of such rejection as soon as practicable. Each Competitive Bid
shall refer to this Agreement and specify (i) the principal Dollar Equivalent
Amount (which shall be in a minimum principal Dollar Equivalent 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 applicable Lender is willing to make
to the Borrower, (ii) the Competitive Bid Rate or Rates at which such Lender is
prepared to make such 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 Working 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
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
Competitive Bid. The Administrative Agent shall send a copy of all Competitive
Bids to the Borrower for its records as soon as practicable after completion of
the bidding process set forth in this Section 2.4.
(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (c) above. The Borrower shall notify
the Administrative Agent by telephone, promptly confirmed by telecopier in the
form of a Competitive Bid Accept/Reject Letter whether and to what extent it
has decided to accept or reject any or all of the Competitive Bids referred to
in paragraph (c)
26
above, (i) in the case of a LIBOR Competitive Borrowing, not later than 10:30
a.m., New York City time, three Working 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 that (A) the failure by the Borrower to give such notice shall be
deemed to be a rejection of all the Competitive Bids referred to in paragraph
(c) above, (B) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower has decided to reject a
Competitive 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 Competitive Bid or Competitive Bids made at a particular Competitive
Bid Rate but the amount of such Competitive Bid or Competitive Bids shall cause
the total amount of Competitive 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 Competitive Bid or Competitive 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 Competitive Bids at such Competitive Bid Rate, shall be made pro
rata in accordance with the amount of each such Competitive Bid at such
Competitive Bid Rate), (E) except pursuant to clause (D) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal Dollar Equivalent Amount of $10,000,000 and an integral
multiple of $5,000,000 and (F) the Borrower may not accept Competitive Bids for
Competitive Loans in any Currency other than the Currency specified in the
related Competitive Bid Request; and provided, further, that if a Competitive
Loan must be in an amount less than the Dollar Equivalent Amount of $10,000,000
because of the provisions of clause (D) above, such Competitive Loan shall be
in a minimum principal Dollar Equivalent Amount of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple Competitive 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 Competitive Bid has been accepted in the applicable
Currency.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
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 Competitive Bids
to the Administrative Agent pursuant to paragraph (b) above. Canadian Lenders
shall not be permitted to extend Competitive Loans.
(g) All notices required by this Section 2.4 shall be given
in accordance with Section 9.1.
27
SECTION 2.5. Revolving Credit Borrowing Procedure.
(a) 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 Borrowing of a LIBOR
Revolving Credit Loan, not later than 2:00 p.m., New York City time, three
Working Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 2:00 p.m., New York City time, on the day of a
proposed Borrowing. No Fixed Rate Loan or LIBOR Competitive 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 Borrowing of a LIBOR Revolving Credit Loan or
an ABR Borrowing, (b) the date of such Revolving Credit Borrowing (which shall
be a Working Day) and the amount thereof, (c) if such Borrowing is to be a
Borrowing of LIBOR Revolving Credit Loans, the Interest Period with respect
thereto and (d) whether such Borrowing is to be made in Dollars or U.K. Pounds
Sterling. 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. Pounds Sterling Loans shall be a Borrowing
of LIBOR Revolving Credit Loans. If no Interest Period with respect to any
Borrowing of LIBOR Revolving Credit Loans 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 in the case of Primary Loans and a LIBOR Revolving Credit Loan
with an Interest Period of one month's duration in the case of a Pounds
Sterling Loan. The Administrative Agent shall promptly advise the Primary or
Pounds Sterling Lenders, as the case may be, of any notice given pursuant to
this Section 2.5 and of each such Lender's portion of the requested Borrowing.
(b) The Canadian Borrower may borrow under the Canadian
Commitments of the Canadian Lenders during the Commitment Period on any
Business Day, provided that the Canadian Borrower shall give the Canadian Agent
(and the Administrative Agent) irrevocable notice (a "Notice of Canadian
Borrowing") (which notice must be received by the Canadian Agent prior to (a)
2:00 p.m., Toronto time, three Business Days prior to the requested Borrowing
Date, if all or any part of the requested Canadian Revolving Credit Loans are
to be initially B/As or (b) 2:00 p.m., Toronto time, on the requested Borrowing
Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of C$ Prime Rate Loans or
B/As or a combination thereof and (iv) if the borrowing is to be entirely or
partially of B/As, the respective amounts and lengths of the initial Contract
Period thereof. Upon receipt of any such notice from the Canadian Borrower, the
Canadian Agent shall promptly notify each Canadian Lender thereof.
SECTION 2.6. Refinancings.
Each of the Borrowers may refinance all or any part of any
Borrowing made by it with a Borrowing of the same or a different Interest Rate
Type made pursuant to Section 2.4 (in
28
the case of the Borrower) or pursuant to a notice under Section 2.5, subject to
the conditions and limitations set forth herein and elsewhere in this
Agreement, including, in the case of the Borrower, refinancings of Competitive
Borrowings with Revolving Credit Borrowings in Dollars and Revolving Credit
Borrowings in Dollars with Competitive Borrowings; provided that (i) a
Borrowing by way of B/As may be refinanced only on the last day of the relevant
Contract Period and (ii) on any partial refinancing from a C$ Prime Rate Loan,
or B/A, not less than C$500,000 shall remain as Borrowings by way of C$ Prime
Rate Loan or B/A, as applicable and; provided, further, that at any time after
the occurrence, and during the continuation, of a Default or an Event of
Default, (i) a Revolving Credit Borrowing of Dollars or portion thereof may
only be refinanced with an ABR Borrowing and (ii) C$ Revolving Credit Loans may
not be refinanced with a B/A. 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 applicable Lenders to the Applicable Agent or by the
Applicable Agent to the Applicable Borrower pursuant to Section 2.2(c);
provided 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 Applicable
Agent for distribution to the Lenders described in clause (b) below, (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 Applicable 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 Applicable 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 2.8 and, to the extent of such
failure, the Applicable Borrower shall pay such amount to the Applicable Agent
as required by Section 2.10; and (d) to the extent the Applicable Borrower
fails to pay to the Applicable Agent any amounts due in accordance with Section
2.8 as a result of the failure of a Lender to pay the Applicable 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 Applicable 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 Primary Lender, through
the Administrative Agent, on each March 31, June 30, September 30 and December
31, and on the date on which the Primary 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 Primary Commitment of such Lender, whether used or unused, during
the preceding quarter (or shorter period commencing with the Original Closing
Date, or ending with the Maturity Date or any date on which the Primary
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 Primary Lender shall commence to accrue on
the Original Closing Date, shall be payable in arrears and shall cease to
29
accrue on the earlier of the Maturity Date and the termination of the Primary
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 February __, 1999 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) (i) 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 to the Administrative Agent 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.
(ii) The Canadian Borrower hereby unconditionally promises to
pay to the Canadian Agent (with notice to the Administrative Agent) for the
account of each Canadian Lender the then unpaid principal amount of each
Canadian Revolving Credit Loan of such Canadian Lender on the Maturity Date (or
such earlier date on which the Canadian Revolving Credit Loans become due and
payable pursuant to Article 7 or such earlier date on which the Borrower shall
fail to own, directly or indirectly, beneficially and of record, all of the
capital stock of the Canadian Borrower); provided that the Canadian Revolving
Credit Loans made by Objecting Lenders shall be repaid as provided in Section
2.25. The Canadian Borrower hereby further agrees to pay to the Canadian Agent
(with notice to the Administrative Agent) interest on the unpaid principal
amount of the Canadian 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.
30
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower and the
Canadian Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register
pursuant to Section 9.3(e), and a subaccount therein for each Lender, in which
shall be recorded (i) the amount of each Loan made hereunder, the Interest Rate
Type thereof and each Interest Period or Contract Period, if any, applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from each Borrower to each Lender or the Canadian Agent
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower or the Canadian Borrower, as the case may be,
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(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided 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 Borrowers to repay (with applicable interest) the Loans made to such
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 Primary Lender, the Borrower will execute and
deliver to such Primary Lender a promissory note of the Borrower evidencing the
Primary Loans of such Primary 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, principal amount and Currency (a "Competitive Note").
(h) The Canadian Borrower agrees that, upon the request to the
Canadian Agent by any Canadian Lender, the Canadian Borrower will execute and
deliver to such Canadian Lender a promissory note of the Canadian Borrower
evidencing the Canadian Revolving Credit Loans of such Canadian Lender,
substantially in the form of Exhibit A-3 with appropriate insertions as to date
and principal amount (a "Canadian Revolving Credit Note").
(i) The Borrower agrees that, upon the request of the
Administrative Agent by any Pounds Sterling Lender, the Borrower will execute
and deliver to such Lender a promissory note of the Borrower evidencing the
Pounds Sterling Loans of such Pounds Sterling Lender, substantially in the form
of Exhibit A-4 with appropriate insertions as to date and principal amount
("Pounds Sterling Note").
31
SECTION 2.9. Interest on Loans.
(a) (i) 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 or 365 days in the
case of a Pounds Sterling Loan) 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 or minus the Margin offered by the Lender
making such Loan and accepted by the Borrower pursuant to Section 2.4. Interest
on each LIBOR Borrowing shall be payable on each applicable Interest Payment
Date.
(ii) Subject to the provisions of Section 2.10, the Loans
comprising each B/A Borrowing shall be subject to an Acceptance Fee (computed
on the basis of the actual number of days elapsed over a year of 365 days)
calculated and payable at a rate per annum equal to the applicable B/A Spread
from time to time in effect payable as set forth in Section 2.25(f).
(b) (i) Subject to the provisions of Section 2.10, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be when determined by reference to the Prime Rate and over a year of 360 days
at all other times) at a rate per annum equal to the Alternate Base Rate plus
the applicable margin therefor from time to time in effect in accordance with
Section 2.22.
(ii) Subject to the provisions of Section 2.10, the Loans
comprising each C$ Prime Rate 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) at a rate per annum equal to the C$ Prime Rate plus the
applicable margin therefor from time to time in effect in accordance with
Section 2.22.
(c) Subject to the provisions of Section 2.10, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.4.
(d) Interest on each Loan (other than in the case of a B/A,
which shall be payable in accordance with Section 2.25) 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, the C$ Prime Rate for each
Interest Period or day within an Interest Period shall be determined by the
Canadian Agent, and, in each case, such determination shall be conclusive
absent manifest error.
(e) For the purposes of the Interest Act (Canada) and
disclosure thereunder, whenever interest to be paid hereunder or in connection
herewith is to be calculated on the basis of a year of 360 days or any other
period of time that is less than a calendar year, the yearly rate of interest
to which the rate determined pursuant to such calculation is equivalent is the
rate so
32
determined multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by either 360 or such other
period of time, as the case may be.
(f) If any provision of any Fundamental Document would oblige
the Canadian Borrower to make any payment of interest or other amount payable
to any Canadian Lender in an amount or calculated at a rate which would be
prohibited by law or would result in a receipt by that Canadian Lender of
interest at a criminal rate (as such terms are construed under the Criminal
Code (Canada)), then notwithstanding such provision, such amount or rate shall
be deemed to have been adjusted with retroactive effect to the maximum amount
or rate of interest, as the case may be, as would not be so prohibited by law
or so result in a receipt by that Canadian Lender of interest at a criminal
rate, such adjustment to be effected, to the extent necessary, as follows:
(i) first, by reducing the amount or rate of interest
required to be paid to the affected Canadian Lender under Section 2.9
or 2.10; and
(ii) thereafter, by reducing any fees, commissions, premiums
and other amounts required to be paid to the affected Canadian Lender
which would constitute interest for purposes of Section 347 of the
Criminal Code (Canada).
SECTION 2.10. Interest on Overdue Amounts.
If either Borrower shall default in the payment of the
principal of, or interest on, any Loan or any other amount becoming due
hereunder, the Applicable 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 days in the case of B/As and 365 or 366 days,
as applicable, in the case of amounts bearing interest determined by reference
to the Prime Rate or the C$ 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 or Contract Period, as the case may be, for any LIBOR Loan or Fixed Rate
Loan or B/A, 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 if such other amount is payable in US$ or to a C$
Prime Rate Loan if such other amount is payable in C$, in each case, under
Section 2.9 plus 2% per annum.
SECTION 2.11. Alternate Rate of Interest.
In the event the Administrative Agent shall have determined
that deposits in Dollars or the applicable Available Foreign Currency in the
amount of the requested principal amount of any LIBOR Loan are not generally
available in the London Interbank Market (or such other interbank eurocurrency
market where the foreign currency and exchange operations in respect of Dollars
or such applicable Available Foreign Currency, as the case may be, are then
being conducted for delivery on the first day of such Interest Period), or that
the rate at which such deposits are being offered will not adequately and
fairly reflect the cost to any Lender of
33
making or maintaining its portion of such LIBOR Loans during such Interest
Period, or that reasonable means do not exist for ascertaining LIBOR, the
Administrative Agent shall, as soon as practicable thereafter, give written or
telecopier notice of such determination to the Borrower and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
determined that circumstances giving rise to such notice no longer exist, (a)
any request by the Borrower for a LIBOR Competitive Borrowing pursuant to
Section 2.4 shall be of no force and effect and shall be denied by the
Administrative Agent and (b) any request by the Borrower for a LIBOR Borrowing
pursuant to Section 2.5 shall be deemed to be a request for an ABR Loan. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.12. Termination and Reduction of Commitments.
(a) (i) The Commitments of all of the Lenders shall be
automatically terminated on the Maturity Date.
(ii) The Canadian Commitments of all of the Canadian Lenders
shall be automatically terminated on such date on which the Borrower shall fail
to own, directly or indirectly, beneficially and of record, all of the capital
stock of the Canadian Borrower.
(b) Subject to Section 2.13(b), upon at least three Business
Days' prior irrevocable written or telecopy notice to the Administrative Agent
(which shall promptly notify each Lender), the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided that (i) each partial reduction shall be in an
integral multiple of $1,000,000 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 a type of Commitment to an amount
less than the sum of the aggregate outstanding principal Dollar Equivalent
Amount of the related Loans.
(c) Each reduction in a type of Commitment hereunder
shall be made ratably among the applicable Lenders in accordance with
their respective Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders on the
date of each termination or reduction in a type of Commitment, the
Facility Fees on the amount of the Commitments so terminated or
reduced accrued to the date of such termination or reduction.
SECTION 2.13. Prepayment of Loans.
(a) (i) 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
(which shall promptly notify each Lender) before 2:00 p.m. New York City time
of at least one Business Day in the case of an ABR Loan and of at least three
Working Days in the case of a LIBOR Loan; provided that each such partial
prepayment shall be in a minimum aggregate principal Dollar Equivalent Amount
of $1,000,000 or a whole multiple in
34
excess thereof. The Borrower shall not have the right to prepay any Competitive
Borrowing without the consent of the relevant Lender.
(ii) Prior to the Maturity Date, the Canadian Borrower shall
have the right at any time to prepay any C$ Prime Rate Loan, in whole or in
part, without premium or penalty, upon prior written or telecopy notice to the
Canadian Agent before 2:00 p.m. Toronto time of at least three Business Days;
provided that each such partial prepayment shall be in a minimum aggregate
principal amount of $1,000,000 or a whole multiple in excess thereof. The
Borrower shall not have the right to optionally prepay any B/As.
(b) (i) On any date when the sum of the Dollar Equivalent
Amount of the aggregate outstanding Loans (after giving effect to any
Borrowings effected on such date) exceeds the Total Commitment, the Borrower
shall make a mandatory prepayment of the Loans in such amount as may be
necessary so that the Dollar Equivalent Amount of the aggregate amount of
outstanding Loans after giving effect to such prepayment does not exceed the
Total Commitment then in effect. Any prepayments required by this paragraph
shall be applied to outstanding ABR Loans and C$ Prime Rate Loans up to the
full amount thereof before they are applied to outstanding LIBOR Loans or
B/A's.
(ii) If at any date the sum of the Dollar Equivalent Amount
of the Canadian Revolving Credit Loans exceeds 105% (or 110% to the extent such
Canadian Loans consist of B/As' for which the remaining Contract Period as of
such date is less than 60 days), of the Canadian Commitments (including at any
time after any reduction of the Canadian Commitments pursuant to Section 2.12),
the Canadian Agent may promptly notify the Canadian Borrower, and the next
Business Day after such notification, the Canadian Borrower shall make a
payment in the amount of such excess. Any such payment shall be applied first,
to payment of the C$ Prime Rate Loans and second, to cash collateralize any
outstanding B/As on terms satisfactory to the Canadian Agent acting reasonably.
(iii) If at any date the sum of the Dollar Equivalent Amount
of the Pounds Sterling Loans exceeds 105% (or 110% to the extent such Pounds
Sterling Loans consist of LIBOR Loans for which the remaining Interest Period
as of such date is less than 2 calendar months) of the Pounds Sterling
Commitments (including at any time after any reduction of the Pounds Sterling
Commitments pursuant to Section 2.12), the Administrative Agent may promptly
notify the Borrower, and the next Business Day after such notification, the
Borrower shall make a payment in the amount of such excess, which payment shall
be applied to reduce the outstanding Pounds Sterling Loans.
(c) Each notice of prepayment pursuant to this Section 2.13
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 Applicable 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 and any amounts due pursuant to Section 2.17.
35
SECTION 2.14. Eurocurrency 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) (or, at any time when such Lender may be required by
the Board or by any other Governmental Authority, whether within the United
States or in another relevant jurisdiction, to maintain reserves against any
other category of liabilities which includes deposits by reference to which
LIBOR is determined as provided in this Agreement or against any category of
extensions of credit or other assets of such Lender which includes any such
LIBOR Loans), 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, provided that with respect to Pounds Sterling Loans such
additional interest shall be calculated as specified on Schedule 2.14. 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 Loan, or shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Loan made by such Lender or any other fees
or amounts payable hereunder (other than (x) taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or its applicable Lending Office or by any political
subdivision or taxing authority therein (or any tax which is enacted or adopted
by such jurisdiction, political subdivision or taxing authority as a direct
substitute for any such taxes) or (y) any tax, assessment, or other
governmental charge that would not have been imposed but for the failure of any
Lender to comply with any certification, information, documentation or other
reporting requirement), (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender, or (iii) shall
impose on any Lender or eurocurrency market any other condition affecting this
Agreement or any 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 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,
36
then the Borrowers 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 or any
change after the date hereof in any applicable law, rule, regulation or
guideline regarding capital adequacy, 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 such 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 (or its holding company) such additional amount or
amounts as will compensate such Lender for such reduction upon demand by such
Lender.
(c) A certificate of a Lender setting forth in reasonable
detail (i) such amount or amounts as shall be necessary to compensate such
Lender as specified in paragraph (a) or (b) above, as the case may be, and (ii)
the calculation of such amount or amounts referred to in the preceding clause
(i), shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay the Administrative Agent for the account of such
Lender the amount shown as due on any such certificate within 10 Business Days
after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital with respect to any Interest Period or Contract
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 or Contract Period. The protection of this
Section 2.15 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 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
37
reduction of amounts receivable by such Lender thereunder in respect of such
Loans 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 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
reasonable discretion, the making, funding or maintaining of such Loans through
such other Lending Office would not otherwise materially adversely affect such
Loans.
(f) In the event any Lender shall have delivered to the
Borrower a notice that LIBOR Loans or B/As are no longer available from such
Lender pursuant to Section 2.16, that amounts are due to such Lender pursuant
to paragraph (c) above, that any of the events designated in paragraph (e)
above have occurred or that a Lender shall not be rated at least BBB by S&P and
Baa2 by ▇▇▇▇▇'▇, the Borrower may (but subject in any such case to the payments
required by Section 2.17), provided that there shall exist no Default or Event
of Default, upon at least five Business Days' prior written or telecopier
notice to such Lender and the Administrative Agent, but not more than 30 days
after receipt of notice from such Lender, identify to the Administrative Agent
a lending institution reasonably acceptable to the Administrative Agent which
will purchase the Commitment, the amount of outstanding Loans from the Lender
providing such notice and such Lender shall thereupon assign its Commitment,
any Loans owing to such Lender 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 and
Sections 2.21, 9.4 and 9.5) 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 B/A or to give effect to its obligations as
contemplated hereby, then, by written notice to the Borrower or the Canadian
Borrower, as applicable and to the Administrative Agent and the Canadian Agent,
as applicable, such Lender may:
(i) declare that LIBOR Loans or B/As 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 and the Canadian Borrower shall be prohibited from
requesting LIBOR Revolving Credit Loans or B/As from such Lender
hereunder unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans (in Dollars) or
B/As made by it be converted to ABR Loans or C$ Prime Rate Loans,
respectively, in which event (A) all such LIBOR Loans or B/As shall be
automatically converted to ABR Loans or C$ Prime Rate Loans,
respectively, as of the effective date of such notice as provided in
Section
38
2.16(b) and (B) all payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBOR Loans or B/As
shall instead be applied to repay the ABR Loans or C$ Prime Rate
Loans, as the case may be resulting from the conversion of such LIBOR
Loans or B/As.
(b) For purposes of this Section 2.16, a notice to the
Borrower or the Canadian Borrower, as the case may be, by any Lender pursuant
to Section 2.16(a) shall be effective on the date of receipt thereof by the
Borrower or the Canadian Borrower, as the case may be.
SECTION 2.17. Reimbursement of Lenders.
(a) The Borrower or the Canadian Borrower, as the case may
be, 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, including any refinancing) of any LIBOR or Fixed Rate Loan or
B/A if such Loan is repaid other than on the last day of the applicable
Interest Period or Contract Period, as the case may be, for such Loan or (ii)
in the event that after the Borrower or the Canadian Borrower, as the case may
be 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) or B/A, pursuant to which it has accepted Competitive 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 or the Canadian Borrower, as the case
may be for any reason other than (I) a suspension or limitation under Section
2.16 of the right of the Borrower or the Canadian Borrower, as the case may be,
to select a LIBOR Loan or B/A 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 or Contract Period, as the case
may be 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 or Contract Period, as the
case may be for a Loan, such loss shall be the amount 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 Interest Period or Contract Period, as the case may be for
such Loan, over (B) an 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 or
Canadian Treasury Securities, as the case may be (at such date of
determination) with maturities approximately equal to the remaining Interest
Period or Contract Period, as the case may be for such Loan times (z) the
number of days remaining in the Interest Period or Contract Period, as the case
may be for such Loan. Each Lender shall deliver to the Borrower or the Canadian
Borrower, as the case may be 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 or the Canadian Borrower, as the
case may be, shall pay to the Administrative Agent or the Canadian
39
Agent, as the case may be 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 or the Canadian Borrower, as
the case may be, fails to prepay any Loan on the date specified in any
prepayment notice delivered pursuant to Section 2.13(a), the Borrower or the
Canadian Borrower, as the case may be, on demand by any Lender shall pay to the
Administrative Agent or the Canadian Agent, as the case may be 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 or the Canadian Borrower, as the case may be, and the
Administrative Agent or the Canadian Agent, as the case may be, from time to
time one or more certificates setting forth the amount of such loss (and in
reasonable detail the manner of computation thereof) as determined by such
Lender, which certificates shall be conclusive absent manifest error.
SECTION 2.18. Pro Rata Treatment.
Except as permitted under Sections 2.14, 2.15(c), 2.15(f),
2.16, 2.17 and 2.24, (i) each Primary Borrowing, each reduction of the
aggregate Primary Commitments and each refinancing of any Borrowing with, or
conversion of any Borrowing to, a Primary Borrowing, or continuation of any
Borrowing as a Primary Borrowing, shall be allocated pro rata among the Primary
Lenders in accordance with their respective Primary Commitments (or, if such
Primary Commitments shall have expired or been terminated, in accordance with
the respective principal amount of their Primary Loans) and each payment or
prepayment of principal of any Primary Borrowing and each payment of interest
on the Primary Loans shall be allocated pro rata in accordance with the
respective principal amount of the Primary Loans then held by the Primary
Lenders, (ii) each Pounds Sterling Borrowing, each reduction of the aggregate
Pounds Sterling Commitments and each refinancing of any Borrowing with, or
conversion of any Borrowing to, a Pounds Sterling Borrowing, or continuation of
any Borrowing as a Pounds Sterling Borrowing, shall be allocated pro rata among
the Pounds Sterling Lenders in accordance with their respective Pounds Sterling
Commitments (or, if such Pounds Sterling Commitments shall have expired or been
terminated, in accordance with the respective principal amount of their
outstanding Pounds Sterling Loans) and each payment or prepayment of principal
of any Pounds Sterling Borrowing and each payment of interest on the Pounds
Sterling Loans shall be allocated pro rata in accordance with the respective
principal amount of the Pounds Sterling Loans then held by the Pounds Sterling
Lenders and (iii) each Canadian Borrowing, each reduction of the aggregate
Canadian Commitments and each refinancing of any Canadian Borrowing, or
continuation of any Borrowing as a Canadian Borrowing, shall be allocated pro
rata among the Canadian Lenders in accordance with their respective Canadian
Commitments (or, if such Canadian Commitments shall have expired or been
terminated, in accordance with the respective principal amount of their
outstanding Canadian Revolving Credit Loans) and each payment or prepayment of
principal of any Canadian Borrowing and each payment of interest on the
Canadian Loans shall be allocated pro rata in accordance with the respective
principal amount of the Canadian Loans then held by the Canadian Lenders. Each
payment of principal of any Competitive Borrowing shall be
40
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, each Borrower, against any of and all the obligations
now or hereafter existing under this Agreement and the Loans held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such Loans and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Applicable 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 and
are subject to the provisions of Section 8.2.
SECTION 2.20. Manner of Payments.
(a) All payments by the Borrower hereunder and under the
Notes shall be made in Dollars or other applicable Currency in immediately
available funds at the office of the Administrative Agent's Agent Bank Services
Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇, for credit to PHH Corporation Clearing Account, Account No.
▇▇▇-▇-▇▇▇▇▇ (Reference: PHH Corporation Credit Agreement dated March 4, 1997)
or as otherwise directed by the Borrower (with the consent of the
Administrative Agent, which consent shall not be unreasonably withheld) no
later than 4:30 p.m., 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.
(b) All payments by the Canadian Borrower hereunder and under
the Canadian Revolving Credit Notes shall be made in Canadian Dollars in
immediately available funds at
41
Royal Bank of Canada Swift Code ▇▇▇▇▇▇▇▇ for credit to PHH Vehicle Management
Services Inc. Clearing Account, Account No. ▇▇▇-▇▇▇-▇ Reference: PHH Vehicle
Management Services Inc. Credit Agreement dated March 4, 1997) no later than
4:30 p.m., Toronto time, on the date on which such payment shall be due.
Interest in respect of any Canadian Revolving Credit Loan hereunder shall
accrue from and including the date of such Canadian Revolving Credit Loan to,
but excluding, the date on which such Canadian Revolving Credit Loan is paid or
refinanced with a Canadian Revolving Credit Loan of a different Interest Rate
Type.
SECTION 2.21. Withholding Taxes.
(a) Prior to the date of the initial Loans hereunder, and
from time to time thereafter if requested by either of the Borrowers or the
Applicable 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 or Canada,
in the case of a Canadian Lender, shall provide, if applicable, the Applicable
Agents and the Borrowers with complete, accurate and duly executed forms or
other statements prescribed by a Governmental Authority certifying such
Lender's exemption, if any, from, or entitlement to a reduced rate, if any, of,
withholding taxes (including backup withholding taxes) with respect to all
payments to be made to such Lender hereunder and under the Notes.
(b) The Borrowers and the Applicable Agents 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 Borrowers or the Applicable Agents in good
faith determine that such deduction or withholding is required by Applicable
Law, including, without limitation, any applicable treaty. In the event either
of the Borrowers or the Applicable Agents 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 either of the Borrowers or the Applicable Agents shall so
deduct or withhold taxes from amounts payable hereunder, it (i) shall pay to or
deposit with the appropriate taxing authority in a timely manner the full
amount of taxes it has deducted or withheld; (ii) shall provide evidence of
payment of such taxes to, or the deposit thereof with, the appropriate taxing
authority and a statement setting forth the amount of taxes deducted or
withheld, the applicable rate, and any other information or documentation
reasonably requested by the Lenders from whom the taxes were deducted or
withheld; and (iii) shall forward to such Lenders any receipt for such payment
or deposit of the deducted or withheld taxes as may be issued from time to time
by the appropriate taxing authority. Unless either of the Borrowers and the
Applicable Agents have received forms or other documents satisfactory to them
indicating that payments hereunder or under the Notes are not subject to
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrowers or the Applicable Agents may withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for any
Lender.
(c) Each Lender agrees (i) that as between it and either of
the Borrowers or the Applicable Agents, it shall be the Person to deduct and
withhold taxes, and to the extent required
42
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 Borrowers and the
Applicable Agents and any of their officers, directors, agents, or employees
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 as a result of any change in any statute, treaty, ruling, determination
or regulation occurring after the Initial Date (as defined below) in respect of
any sum payable hereunder or under any other Fundamental Document to any Lender
or either of the Applicable Agents (i) the sum payable by either of the
Borrowers 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 Applicable Agents (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Applicable Borrower shall make such deductions
and (iii) the Applicable 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 Applicable Agents, 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 and
B/A Spread in effect from time to time shall be determined in
accordance with the following table:
43
Applicable
S&P/▇▇▇▇▇'▇ Rating Equivalent LIBOR Spread
of the Borrower's senior Facility Fee And B/A Spread
unsecured long-term debt (in Basis Points) (in Basis Points)
------------------------ ----------------- -----------------
A/A2 or better 8.0 29.5
A-/A3 10.0 40.0
BBB+/Baa1 12.5 50.0
BBB/Baa2 15.0 60.0
BBB-/Baa3 17.5 70.0
BB+/Ba1 or worse 32.5 117.5
In the event the S&P rating on the Borrower's senior
unsecured long-term debt is not equivalent to the ▇▇▇▇▇'▇ rating on such debt,
the lower rating will determine the Facility Fee and applicable LIBOR Spread
and B/A Spread. In the event that the Borrower's senior unsecured long-term
debt is rated by only one of S&P and ▇▇▇▇▇'▇ (for any reason, including if S&P
or ▇▇▇▇▇'▇ shall cease to be in the business of rating corporate debt
obligations) or if the rating system of either S&P or ▇▇▇▇▇'▇ shall change,
then an amendment shall be negotiated in good faith (and shall be effective
only upon approval by the Borrower and the Supermajority Lenders) to the
references to specific ratings in the table above to reflect such changed
rating system or the unavailability of ratings from such rating agency
(including an amendment to provide for the substitution of an equivalent or
successor ratings agency). 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 and B/A 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 and B/A Spread determined in
accordance with the foregoing table shall become effective on the date of
announcement or publication by the Borrower or either such rating agency of a
reduction in such rating or, in the absence of such announcement or
publication, on the effective date of such decreased rating, or on the date of
any request by the Borrower to either of such rating agencies not to rate its
senior unsecured long-term debt or on the date either of such rating agencies
announces it shall no longer rate the Borrower's senior unsecured long-term
debt. Any decrease in the Facility Fee or applicable LIBOR Spread and B/A
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.
The applicable margin for ABR Loans and C$ Prime Rate Loans shall be 1% less
than the applicable LIBOR Spread (but not less than 0%), including as the LIBOR
Spread may be increased pursuant to the next paragraph.
In addition, on each day on which the Borrower's commercial
paper is rated A2 or lower by S&P or P2 or lower by ▇▇▇▇▇'▇ or is not rated by
each of S&P and ▇▇▇▇▇'▇, the applicable LIBOR Spread and B/A Spread shall be
increased by .25% per annum. If the rating system with respect to commercial
paper of either S&P or ▇▇▇▇▇'▇ shall change, then an
44
amendment shall be negotiated in good faith (and shall be effective only upon
approval by the Borrower and the Supermajority Lenders) to reflect such changed
rating system. Any decrease in the Borrower's commercial paper rating shall be
deemed to become effective for purposes of this Section 2.22 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
commercial paper or on the date either of such rating agencies announces it
shall no longer rate the Borrower's commercial paper. Any increase in the
Borrower's commercial paper rating shall be deemed to be effective for purposes
of this Section 2.22 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. [Intentionally Deleted.]
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 the Maturity Date then in effect 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 such Maturity Date
then in effect, notify the Borrower and the Administrative Agent of its
election to grant or not to grant the extension 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 such Maturity Date then in effect. If the
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 such 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 such 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) Loans (including any principal, interest, fees and other
amounts due hereunder) 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.
45
(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 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, 9.4 and 9.5 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 in whole or in part 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 H 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 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.
SECTION 2.25. Bankers' Acceptances. () Subject to the terms
and conditions of this Agreement, the Canadian Borrower may request a Borrowing
by presenting drafts for acceptance and purchase as B/As by the Canadian
Lenders.
(b) No Contract Period with respect to a B/A shall extend
beyond the Maturity Date.
(c) To facilitate availment of the Borrowings by way of B/As,
the Canadian Borrower hereby appoints each Canadian Lender as its attorney to
sign and endorse on its behalf, in handwriting or by facsimile or mechanical
signature as and when deemed necessary by such Canadian Lender, blank forms of
B/As substantially in the form of Exhibit I. In this respect, it is each
Canadian Lender's responsibility to maintain an adequate supply of blank forms
of B/As for acceptance under this Agreement. The Canadian Borrower recognizes
and agrees that all B/As signed and/or endorsed on its behalf by a Canadian
Lender shall bind the Canadian Borrower as fully and effectually as if signed
in the handwriting of and duly issued by the proper signing officers of the
Canadian Borrower. Each Canadian Lender is hereby authorized to issue such B/As
endorsed in blank in such face amounts as may be determined by such Canadian
Lender; provided that the aggregate amount thereof is equal to the aggregate
amount of B/As required to be accepted and purchased by such Canadian Lender.
No Canadian Lender shall be liable for any damage, loss or other claim arising
by reason of any loss or improper use of any such instrument except the gross
negligence or wilful misconduct of the Canadian Lender or its officers,
employees, agents or representatives. Each Canadian Lender shall maintain a
record with respect
46
to B/As (a) received by it from the Canadian Agent in blank hereunder, (b)
voided by it for any reason, (c) accepted and purchased by it hereunder, and
(d) cancelled at their respective maturities. Each Canadian Lender further
agrees to retain such records in the manner and for the statutory periods
provided in the various provincial or federal statutes and regulations which
apply to such Canadian Lender. Each Canadian Lender agrees to provide a copy of
such records to the Canadian Borrower at the Canadian Borrower's expense upon
request. On request by or on behalf of the Canadian Borrower, a Canadian Lender
shall cancel all forms of B/A which have been pre-signed or pre-endorsed on
behalf of the Canadian Borrower and which are held by the said Canadian Lender
and are not required to be issued in accordance with the Canadian Borrower's
irrevocable notice.
(d) Drafts of the Canadian Borrower to be accepted as B/As
hereunder shall be signed as set forth in this Section 2.25. Notwithstanding
that any Person whose signature appears on any B/A may no longer be an
authorized signatory for any of the Canadian Lenders or the Canadian Borrower
at the date of issuance of a B/A, such signature shall nevertheless be valid
and sufficient for all purposes as if such authority had remained in force at
the time of such issuance and any such B/A so signed shall be binding on the
Canadian Borrower.
(e) Promptly following receipt of a Notice of Canadian
Borrowing or Notice of Rollover or notice of refinancing pursuant to Section
2.6 by way of B/As, the Canadian Agent shall so advise the Canadian Lenders and
shall advise each Canadian Lender of the aggregate face amount of the B/As to
be accepted by it and the applicable Contract Period (which shall be identical
for all Lenders). The aggregate face amount of the B/As to be accepted by a
Canadian Lender shall be a whole multiple of C$100,000, and such face amount
shall be in the Canadian Lenders pro rata portion of such Borrowing, provided
that the Canadian Agent may in its sole discretion increase or reduce each
Canadian Lender's portion of such Borrowing to the nearest C$100,000.
(f) Upon acceptance of a B/A by a Canadian Lender, such
Canadian Lender shall purchase, or arrange the purchase of, each B/A from the
Canadian Borrower at the Discount Rate for such Canadian Lender applicable to
such B/A accepted by it and provide to the Canadian Agent the Discount Proceeds
for the account of the Canadian Borrower. The Acceptance Fee payable by the
Canadian Borrower to a Canadian Lender under Section 2.9 in respect of each B/A
accepted by such Canadian Lender shall be set off against the Discount Proceeds
payable by such Canadian Lender under this Section 2.25.
(g) Each Canadian Lender may at any time and from time to
time hold, sell, rediscount or otherwise dispose of any or all B/As accepted
and purchased by it.
(h) With respect to each Borrowing which is outstanding
hereunder by way of B/As, at or before 11:00 a.m. two Business Days before the
maturity date of such B/As, the Canadian Borrower shall notify the Canadian
Agent at the Canadian Agent's address set forth in Section 9.1 by irrevocable
telephone notice, followed by a Notice of Rollover on the same day, if the
Canadian Borrower intends to issue B/As on such maturity date to provide for
the payment of such maturing B/As. If the Canadian Borrower fails to notify the
Canadian Agent of its intention
47
to issue B/As on such maturity date, the Canadian Borrower shall provide
payment to the Canadian Agent on behalf of the Canadian Lenders of an amount
equal to the aggregate face amount of such B/As on the maturity date of such
B/As. If the Canadian Borrower fails to make such payment, such maturing B/As
shall be deemed to have been converted on their maturity date into a C$ Prime
Rate Loan in an amount equal to the face amount of such B/As and the Canadian
Borrower shall on demand pay any penalties that may have been incurred by the
Canadian Agent and any Canadian Lender due to the failure of the Canadian
Borrower to make such payment.
(i) The Canadian Borrower waives presentment for payment and
any other defense to payment of any amounts due to a Canadian Lender in respect
of a B/A accepted and purchased by it pursuant to this Agreement which might
exist solely by reason of such B/A being held, at the maturity thereof, by such
Canadian Lender in its own right and the Canadian Borrower agrees not to claim
any days of grace if such Canadian Lender as holder sues the Canadian Borrower
on the B/A for payment of the amount payable by the Canadian Borrower
thereunder. On the specified maturity date of a B/A, or such earlier date as
may be required or permitted pursuant to the provisions of this Agreement, the
Canadian Borrower shall pay the Canadian Lender that has accepted and purchased
such B/A the full face amount of such B/A and after such payment, the Canadian
Borrower shall have no further liability in respect of such B/A and such
Canadian Lender shall be entitled to all benefits of, and be responsible for
all payments due to third parties under, such B/A.
(j) If a Canadian Lender grants a participation in a portion
of its rights under this Agreement to a Participant, then in respect of any
Borrowing by way of Bankers' Acceptances, a portion thereof may, at the option
of such Canadian Lender, be by way of Bankers' Acceptance accepted by such
Participant. In such event, the Canadian Borrower shall upon request of the
Canadian Agent or the Canadian Lender granting the participation execute and
deliver a form of Bankers' Acceptance undertaking in favor of such Participant
for delivery to such Participant.
SECTION 2.26. Guarantee. (a) To induce the Agents and the
Lenders to execute and deliver this Agreement and to make or maintain the
Canadian Loans hereunder, and in consideration thereof, the Borrower hereby
unconditionally and irrevocably guarantees to the Agents, for the ratable
benefit of the Lenders, the prompt and complete payment and performance by the
Canadian Borrower when due (whether at stated maturity, by acceleration or
otherwise) of the Canadian Obligations, and the Borrower further agrees to pay
any and all expenses (including, without limitation, all reasonable fees,
charges and disbursements of counsel) which may be paid or incurred by the
Agents or by the Lenders in enforcing, or obtaining advice of counsel in
respect of, any of their rights under the guarantee contained in this Section
2.26. The guarantee contained in this Section 2.26, subject to Section 2.26(e),
shall remain in full force and effect until the Canadian Obligations are paid
in full and the Canadian Commitments are terminated, notwithstanding that from
time to time prior thereto the Canadian Borrower may be free from any Canadian
Obligations.
(b) Notwithstanding any payment or payments made by the
Borrower hereunder or any set-off or application of funds of the Borrower by
any Lender, the Borrower shall not be entitled to be subrogated to any of the
rights of the Agents or any Lender against the Canadian
48
Borrower or any collateral security or guarantee or right of offset held by any
Lender for the payment of the Canadian Obligations, nor shall the Borrower seek
or be entitled to seek any contribution or reimbursement from the Canadian
Borrower in respect of payments made by the Borrower hereunder, until all
amounts owing to the Agents and the Lenders by the Canadian Borrower on account
of the Canadian Obligations are paid in full and the Canadian Commitments are
terminated. If any amount shall be paid to the Borrower on account of such
subrogation rights at any time when all of the Canadian Obligations shall not
have been paid in full or the Canadian Commitments shall not have been
terminated, such amount shall be held by the Borrower in trust for the Agents
and the Lenders, segregated from other funds of the Borrower, and shall,
forthwith upon receipt by the Borrower, be turned over to the Agents in the
exact form received by the Borrower (duly endorsed by the Borrower to the
Administrative Agent, if required), to be applied against the Canadian
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine. The Borrower hereby further irrevocably waives all
contractual, common law, statutory and other rights of reimbursement,
contribution, exoneration or indemnity (or any similar right) from or against
the Canadian Borrower or any other Person which may have arisen in connection
with the guarantee contained in this Section 2.26.
(c) The Borrower shall remain obligated under this Section
2.26 notwithstanding that, without any reservation of rights against the
Borrower, and without notice to or further assent by the Borrower, any demand
for payment of or reduction in the principal amount of any of the Canadian
Obligations made by either of the Agents or any Lender may be rescinded by
either of the Agents or such Lender, and any of the Canadian Obligations
continued, and the Canadian Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by either of the Agents or any Lender, and this
Agreement, any other Fundamental Document, and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Lenders (or the Required Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by either of the Agents
or any Lender for the payment of the Canadian Obligations may be sold,
exchanged, waived, surrendered or released. Neither of the Agents nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Canadian Obligations or for the
guarantee contained in this Section 2.26 or any property subject thereto.
(d) The Borrower waives any and all notice of the creation,
renewal, extension or accrual of any of the Canadian Obligations and notice of
or proof of reliance by either of the Agents or any Lender upon the guarantee
contained in this Section 2.26 or acceptance of the guarantee contained in this
Section 2.26; the Canadian Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section
2.26; and all dealings between the Canadian Borrower or the Borrower, on the
one hand, and the Agents and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2.26. The Borrower
49
waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Canadian Borrower or the Borrower with
respect to the Canadian Obligations. The guarantee contained in this Section
2.26 shall be construed as a continuing, absolute and unconditional guarantee
of payment without regard to (i) the validity or enforceability of this
Agreement, any other Fundamental Document, any of the Canadian Obligations or
any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by either of the Agents or any
Lender, (ii) any defense, setoff or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Borrower against either of the Agents or any Lender, or (iii) any other
circumstance whatsoever (with or without notice to or knowledge of the Canadian
Borrower or the Borrower) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Canadian Borrower for the
Canadian Obligations, or of the Borrower under the guarantee contained in this
Section 2.26, in bankruptcy or in any other instance. When either of the Agents
or any Lender is pursuing its rights and remedies under this Section 2.26
against the Borrower, either of the Agents or any Lender may, but shall be
under no obligation to, pursue such rights and remedies as it may have against
the Canadian Borrower or any other Person or against any collateral security or
guarantee for the Canadian Obligations or any right of offset with respect
thereto, and any failure by either of the Agents or any Lender to pursue such
other rights or remedies or to collect any payments from the Canadian Borrower
or any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Canadian Borrower or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve the Borrower of any liability
under this Section 2.26, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Agents and the Lenders against the Borrower.
(e) The guarantee contained in this Section 2.26 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Canadian Obligations is rescinded
or must otherwise be restored or returned by either of the Agents or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Canadian Borrower or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Canadian
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.
(f) The Borrower hereby agrees that any payments in respect
of the Canadian Obligations pursuant to this Section 2.26 will be paid to the
Canadian Agent without setoff or counterclaim (other than a defense of payment
or performance) in Dollars at the office of the Canadian Agent specified in
Section 9.1.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement
and to make the Loans, each of the Borrowers makes the following
representations and warranties to the Administrative Agent, the Canadian 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:
50
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.
Each of the Borrowers 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 and No Violation.
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 Borrowers, (b)
will not violate any provision of any Applicable Law 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 Contractual Obligation of
the Borrower or any of its Subsidiaries, (d) will not be in conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under, any material indenture, agreement, bond, note or instrument
and (e) will not result in the creation or imposition of any Lien upon any
property or assets of the Borrower or any of its Subsidiaries other than
pursuant to this Agreement or any other Fundamental Document.
SECTION 3.3. Governmental and Other Approval and Consents.
No action, consent or approval of, or registration or filing
with, or any other action by, any governmental agency, bureau, commission or
court is required in connection with the execution, delivery and performance
(including the making of borrowings) by the Borrowers of this Agreement or the
other Fundamental Documents.
SECTION 3.4. Financial Statements of Borrower.
The (a) audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries as of December 31, 1997 and December
31, 1998, and (b) unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 30, 1998, in each case, together with
the related unaudited statements of income, shareholders' equity and cash flows
for the periods then ended fairly present the financial position of the
Borrower and its Consolidated Subsidiaries as at the dates indicated and the
results of operations and cash flows for the periods indicated in conformity
with GAAP subject to normal year-end adjustments in the case of such quarterly
financial statements.
51
SECTION 3.5. No Material Adverse Change.
Since December 31, 1997 there has been no material adverse
change in the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole; provided that
the foregoing representation is made solely as of the Closing Date.
SECTION 3.6. [Intentionally Deleted].
SECTION 3.7. Copyrights, Patents and Other Rights.
Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, service marks, copyrights, patents
and other intellectual property material to its business, and the use thereof
by the Borrower and its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.8. Title to Properties.
Each of the Borrower and its Material Subsidiaries will have
at the Closing Date good title or valid leasehold interests to each of the
properties and assets reflected on the balance sheets referred to in Section
3.4, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties
for their intended purposes, and all such properties and assets will be free
and clear of Liens, except Permitted Encumbrances.
SECTION 3.9. Litigation.
There are no lawsuits or other proceedings pending
(including, but not limited to, matters relating to environmental liability),
or, to the knowledge of the Borrower, threatened, against or affecting the
Borrower or any of its Subsidiaries or any of their respective properties, by
or before any Governmental Authority or arbitrator, which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries is in default with respect to any order, writ, injunction, decree,
rule or regulation of any Governmental Authority, which default would have a
Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans will be used, whether immediately,
incidentally or ultimately, for any purpose violative of or inconsistent with
any of the provisions of Regulation T, U or X of the Board.
52
SECTION 3.11. Investment Company Act.
Neither of the Borrowers is, nor will 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 Borrowers (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 have filed or
caused to be filed all federal, provincial, state and local tax returns which
are required to be filed, and have paid or have 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
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 and the applicable laws, rules and regulations of
any jurisdiction applicable to Plans. Neither the Borrower nor any of its
Subsidiaries has, with respect to any Plan established or maintained by it,
engaged in a prohibited transaction which would subject it to a material tax or
penalty on prohibited transactions imposed by ERISA or Section 4975 of the
Code. No liability to the PBGC that is material to the Borrower and its
Subsidiaries taken as a whole has been, or to the Borrower's best knowledge is
reasonably expected to be, incurred with respect to the Plans and there has
been no Reportable Event and no other event or condition that presents a
material risk of termination of a Plan by the PBGC. Neither the Borrower nor
any of its Subsidiaries has engaged in a transaction which would result in the
incurrence of a material liability under Section 4069 of ERISA. As of the
Closing Date, neither the Borrower nor any of its Subsidiaries contributes to a
Multiemployer Plan, and has not incurred any liability that would be material
to the Borrower and its Subsidiaries taken as a whole on account of a partial
or complete withdrawal (as defined in Sections 4203 and 4205 of ERISA,
respectively) with respect to any Multiemployer Plan.
53
SECTION 3.15. Disclosure.
As of the Closing Date, neither this Agreement nor the
Confidential Information Memorandum dated February 1999, at the time it was
furnished, contained any untrue statement of a material fact or omitted to
state a material fact, under the circumstances under which it was made,
necessary in order to make the statements contained herein or therein not
misleading. At the Closing Date, there is no fact known to the Borrowers which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.16. Environmental Liabilities.
Except with respect to any matters, that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii)
has become subject to any Environmental Liability, (iii) has received notice of
any claim with respect to any Environmental Liability or (iv) knows of any
basis for any Environmental Liability.
4. CONDITIONS OF LENDING
SECTION 4.1. Conditions Precedent to Effectiveness.
The effectiveness of this Agreement is subject to
the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received this Agreement and each of the other Fundamental Documents,
each executed and delivered by a duly authorized officer of each of
the Borrowers party thereto.
(b) Corporate Documents for the Borrowers. The Administrative
Agent shall have received, with copies for each of the Lenders, a
certificate of the Secretary or Assistant Secretary of each of the
Borrowers dated the date hereof and certifying (A) that attached
thereto is a true and complete copy of the certificate of
incorporation and by-laws of such 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 such 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
such Borrower executing this Agreement or any other document delivered
by it in connection herewith (such certificate to contain a
certification by another officer of such Borrower as to the incumbency
and signature of the officer signing the certificate referred to in
this paragraph (b)).
54
(c) Financial Statements. The Lenders shall have received the
(i) audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries as of and for the fiscal years ended
December 31, 1997 and December 31, 1998 and (ii) unaudited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries as of and for the nine-month period ended September 30,
1998.
(d) Opinions of Counsel. The Administrative Agent shall have
received the favorable written opinions, dated the date hereof and
addressed to the Agents and the Lenders, of in-house counsel of PHH
Corporation, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and of Blake,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, substantially in the form of Exhibits ▇-▇, ▇-▇ and
B-3 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, 1997.
(f) Payment of Fees. The Administrative Agent shall be
satisfied that all amounts payable to the Arranger, the Agents and the
other Lenders pursuant hereto or with regard to the transactions
contemplated hereby have been or are simultaneously being paid.
(g) Closing Date Payments. The Borrower and the Lenders shall
have made such payments among themselves on the Closing Date as
directed by the Administrative Agent with the result that, after
giving effect thereto, the outstanding Revolving Credit Loans,
Canadian Revolving Credit Loans and Pounds Sterling Loans, if any,
shall be held by the Lenders pro rata in accordance with their
respective Primary Commitments, Canadian Commitments and Pounds
Sterling Commitments. The Borrowers shall have paid to the
Administrative Agent, for the account of the respective lenders under
the Existing Credit Agreement, all unpaid fees and other amounts
accrued under the Existing Credit Agreement to the Closing Date.
(h) Litigation. No litigation shall be pending or, to the
Borrower's knowledge, 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 Borrowers to fulfill
their obligations hereunder or to otherwise materially impair the
interests of the Lenders.
(i) Officer's Certificate. The Administrative Agent shall have
received a certificate of the chief executive officer or chief
financial officer or chief accounting officer of each of the Borrowers
certifying, as of the Closing Date, compliance with the conditions set
forth in paragraphs (b) and (c) of Section 4.2.
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:
55
(a) Notice. The Administrative Agent and the Canadian 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 (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 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 Borrowers 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 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
Borrowers on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section.
5. AFFIRMATIVE COVENANTS
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 90
days after the end of each fiscal year of the Borrower, (i) either (A)
consolidated statements of income (or operations) and consolidated
statements of cash flows and changes in stockholders' equity of the
Borrower and its Consolidated Subsidiaries for such year and the
related consolidated balance sheets as at the end of such year, or (B)
the Form 10K filed by the Borrower with the Securities and Exchange
Commission and (ii) if not included in such Form 10K, an opinion of
independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated financial
statements fairly present the consolidated financial position and
results of operations of the Borrower and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year and that such
56
financial statements were prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior
periods;
(b) As soon as is practicable, but in any event within 60 days
after the end of each of the first three fiscal quarters of each
fiscal year, either (i) the Form 10-Q filed by the Borrower with the
Securities and Exchange Commission or (ii) the unaudited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries, as at
the end of, and the related unaudited statements of income and cash
flows 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 of the end of the preceding fiscal year, and
for the corresponding period in the preceding fiscal year, in each
case, together with a certificate (substantially in the form of
Exhibit D) signed by the chief financial officer, the chief accounting
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, chief accounting 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 and the nature thereof and (ii) demonstrating in
reasonable detail compliance with the provisions of Sections 6.7 and
6.8;
(d) 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, chief
financial officer or chief accounting 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; and
(e) 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, prompt notice thereof and 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.
57
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, 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, and
all applicable restrictions imposed by any Governmental Authority, and all
state and provincial laws and regulations of similar import; provided that
mergers, dissolutions and liquidations permitted under Section 6.4 shall be
permitted.
SECTION 5.3. Insurance.
Maintain with good 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 as such insurance is usually carried
by companies of established reputation and comparable size.
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 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, as amended) of the Borrower
knows that (i) any Reportable Event with respect to any Plan has occurred, a
statement of the chief financial officer of the Borrower, setting forth details
as to such Reportable Event and the action which it proposes to take with
respect thereto, together with a copy of the notice, if any, required to be
filed by the Borrower or any of its Subsidiaries of such Reportable Event with
the PBGC or (ii) an accumulated funding deficiency has been
58
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 Section 4062, 4063 or 4064 of ERISA or the
withdrawal or partial withdrawal from a Multiemployer Plan under Section 4201
or 4204 of ERISA, a statement of the chief financial officer of the Borrower,
setting forth details as 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, after the occurrence and during the continuance of an Event of
Default (at a time during which Loans are outstanding), 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 companies of
established reputation and comparable size.
6. NEGATIVE COVENANTS
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:
59
SECTION 6.1. Limitation on Material Subsidiary Indebtedness.
Incur, assume or suffer to exist any Indebtedness of any
Material Subsidiary which principally transacts business in the United States,
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 (to the extent not otherwise
permitted by paragraphs (b)-(h) of this Section 6.1), 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) Indebtedness owing by any Material Subsidiary to the
Borrower or any other Subsidiary;
(d) 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 (e) and (f) below, shall not
exceed $125,000,000;
(e) any renewal, extension or modification of Indebtedness
under paragraph (d) above so long (i) as such renewal, extension or
modification is effected on substantially the same terms or on terms
which, in the aggregate, are not more adverse to the Lenders and (ii)
the principal amount of such Indebtedness is not increased;
(f) other Indebtedness of any Material Subsidiary in an
aggregate principal amount which, when added to the aggregate
outstanding principal amount of Indebtedness permitted by paragraphs
(d) and (e) above, does not exceed $125,000,000;
(g) Indebtedness of Special Purpose Vehicle Subsidiaries
incurred to finance investment in lease agreements and vehicles by
such Subsidiaries, so long as the lender (and any other party) in
respect of such Indebtedness has recourse, if any, solely to the
assets of such Special Purpose Vehicle Subsidiary;
(h) Indebtedness of any Asset Securitization Subsidiary
incurred solely to finance asset securitization transactions as long
as (i) such Indebtedness is unsecured or is secured solely as
permitted by Section 6.5(n), and (ii) the lender (and any other party)
in respect of such Indebtedness has recourse (other than
60
customary limited recourse based on misrepresentations or failure of
such assets to meet customary eligibility criteria), if any, solely to
the assets securitized in the applicable asset securitization
transaction and, if such Asset Securitization Subsidiary is of the
type described in clause (i) of the definition of "Asset
Securitization Subsidiary", the capital stock of such Asset
Securitization Subsidiary; and
(i) Indebtedness consisting of the obligation to repurchase
mortgages and related assets to the extent permitted by Section 6.12.
SECTION 6.2. [Intentionally deleted].
SECTION 6.3. Limitation on Transactions with Affiliates.
Enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate (other than the Borrower or a wholly-owned Subsidiary of the
Borrower) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of the Borrower's or such Subsidiary's
business and (c) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate.
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, (ii) in which the surviving entity
becomes a Subsidiary of the Borrower immediately upon the
effectiveness of such merger, consolidation, dissolution or
liquidation or (iii) in connection with a transaction permitted by
Section 6.4(b); provided that immediately prior to and on a Pro Forma
Basis after giving effect to such transaction no Default or Event of
Default has occurred or is continuing.
(b) Sell or otherwise dispose of all or substantially
all of the assets of the Borrower and its Subsidiaries, taken as a
whole; provided that it is understood for purposes of clarity that
this Section 6.4(b) shall not prohibit or limit in any respect
transactions in the ordinary course of business of the Borrower or any
of its Subsidiaries (including but not limited to asset securitization
transactions entered into in the ordinary course of business).
SECTION 6.5. Limitations on Liens.
Suffer any Lien on the property of the Borrower or any of the
Material Subsidiaries which principally transact business in the United States,
except:
61
(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 materialmen 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 such 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 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 as
contemplated by this Agreement;
(f) Liens securing Indebtedness of any Material Subsidiary to
the Borrower;
(g) Liens covering only the property or other assets of any
Special Purpose Vehicle Subsidiary and securing only such Indebtedness
of such Special Purpose Vehicle Subsidiary as is permitted by
paragraph (g) of Section 6.1;
(h) mortgage liens existing on homes acquired by the Borrower
or any of its Material Subsidiaries in the ordinary course of their
relocation management business;
(i) other Liens incidental to the conduct of its business or
the ownership of its property and other assets, which do not secure
any Indebtedness and did not otherwise
62
arise in connection with the borrowing of money or the obtaining of
advances or credit and which do not, in the aggregate, materially
detract from the value of its property or other assets or materially
impair the use thereof in the operation of its business;
(j) Liens covering only the property or other assets of any
Subsidiary which principally transacts business outside of the United
States;
(k) to the extent not otherwise permitted by this Section
6.5, Liens existing on the date hereof listed on Schedule 6.5 hereto
and any extensions or renewals thereof;
(l) Liens securing indebtedness in respect of one or more
asset securitization transactions, which indebtedness is not reported
on a consolidated balance sheet of the Borrower and its Subsidiaries,
covering only the assets securitized in the asset securitization
transaction financed by such indebtedness and the capital stock of any
special purpose vehicle the sole purpose of which is to effectuate
such asset securitization transaction;
(m) other Liens securing obligations having an aggregate
principal amount not to exceed $100,000,000;
(n) Liens securing Indebtedness and related obligations of an
Asset Securitization Subsidiary in respect of one or more asset
securitization transactions, which Indebtedness is reported on a
consolidated balance sheet of the Borrower and its Subsidiaries,
covering only the assets securitized in the asset securitization
transaction financed by such Indebtedness and, if such Asset
Securitization Subsidiary is of the type described in clause (i) of
the definition of "Asset Securitization Subsidiary", the capital stock
of such Asset Securitization Subsidiary; and
(o) Liens on mortgages and related assets securing obligations
to repurchase such mortgages and related assets to the extent such
obligations are permitted by Section 6.12.
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 $100,000,000 in the aggregate
on a cumulative basis.
SECTION 6.7. Consolidated Net Worth.
Permit Consolidated Net Worth on the last day of any fiscal
quarter to be less than the sum of (i) $601,400,000 plus (ii) 25% of
Consolidated Net Income, if positive, for each fiscal quarter after September
30, 1998.
63
SECTION 6.8. Ratio of Indebtedness To Consolidated Net Worth.
Permit, at any time, Indebtedness of the Borrower and its
Subsidiaries less Cash Equivalents (owned by the Borrower or any of its
Subsidiaries and free of Liens (other than Liens securing Indebtedness)) to
exceed ten (10) times Consolidated Net Worth.
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.
SECTION 6.10. Restrictions Affecting Subsidiaries.
Enter into, or suffer to exist, any Contractual Obligation
with any Person, which prohibits or limits the ability of any Material
Subsidiary (other than Special Purpose Vehicle Subsidiaries and Asset
Securitization Subsidiaries) to (a) pay dividends or make other distributions
or pay any Indebtedness owed to the Borrower or any other Subsidiary, (b) make
loans or advances to the Borrower or any other Subsidiary or (c) transfer any
of its properties or assets to the Borrower or any other Subsidiary.
Section 6.11. Restrictions Regarding Coldwell Banker
Securitization Facility. () Sell, convey, lease, assign or otherwise transfer
any of its property, business or assets, whether now owned or hereafter
acquired, to Funding (as defined in the Creditor Acknowledgment and Agreement)
or Services (as defined in the Creditor Acknowledgment and Agreement) except to
the extent required by the Transaction Documents (as defined in the Creditor
Acknowledgment and Agreement); or
(b) Amend, supplement or otherwise modify the Transaction
Documents (as defined in the Creditor Acknowledgment and Agreement) as in
effect on the Closing Date in a manner materially adverse to the Lenders.
SECTION 6.12. Limitation on Mortgage Repurchase Indebtedness.
Incur, assume or suffer to exist any Indebtedness (other than
Indebtedness of Asset Securitization Subsidiaries incurred to finance asset
securitization transactions permitted by this Agreement) in respect of the
repurchase of mortgages and related assets if the aggregate principal amount of
all such Indebtedness would exceed $900,000,000 at any time.
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"):
64
(a) any representation or warranty made or deemed made by
either of the Borrowers 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 either of
the Borrowers or any of its Subsidiaries to the Administrative Agent
or the Canadian Agent or any Lender under or in connection with this
Agreement, shall prove to have been false or misleading in any
material respect when made or delivered;
(b) default shall be made in the payment of any principal of
or interest on the Notes or of any fees or other amounts payable by
either of the Borrowers 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 Business 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 Business 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) or Article 6;
(d) default shall be made by either of the Borrowers 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 such Borrower obtains
knowledge of such occurrence;
(e) (i) default in payment shall be made with respect to any
Indebtedness of its Protection Agreements of the Borrower or
any of its Subsidiaries where the amount or amounts of such
Indebtedness exceeds $25,000,000 (or its equivalent thereof in any
other currency) in the aggregate; or (ii) default in payment or
performance shall be made with respect to any Indebtedness or Interest
Rate Protection Agreements of the Borrower or any of its Subsidiaries
where the amount or amounts of such Indebtedness or Interest Rate
Protection Agreements exceeds $25,000,000 (or its equivalent thereof
in any other currency) in the aggregate, if the effect of such default
is to result in the acceleration of the maturity of such Indebtedness
or Interest Rate Protection Agreement; 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 or Interest Rate Protection
Agreement where the amount or amounts of such Indebtedness or Interest
Rate Protection Agreement exceeds $25,000,000 (or its equivalent
thereof in any other currency) in the aggregate; provided that clause
(iii) shall not apply to secured Indebtedness or Interest Rate
Protection Agreement that becomes due as a result of a voluntary sale
of the property or assets securing such Indebtedness or Interest Rate
65
Protection Agreement and provided, further, that clauses (ii) and
(iii) shall not apply to any Indebtedness or Interest Rate Protection
Agreement of any Subsidiary issued and outstanding prior to the date
such Subsidiary became a Subsidiary of the Borrower (other than
Indebtedness or Interest Rate Protection Agreement issued in
connection with, or in anticipation of, such Subsidiary becoming a
Subsidiary of the Borrower) if such default or circumstance arises
solely as a result of a "change of control" provision applicable to
such Indebtedness or Interest Rate Protection Agreement 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
$25,000,000 (or its equivalent thereof in any other currency) 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;
(j) a Reportable Event relating to a failure to meet minimum
funding standards or an inability to pay benefits when due shall have
occurred with respect to any Plan under the control of the Borrower or
any of its Subsidiaries and shall not have been remedied
66
within 45 days after the occurrence of such Reportable Event, if the
occurrence thereof could reasonably be expected to have a Material
Adverse Effect; or
(k) any provision of Section 2.26 shall cease, for any
reason, to be in full force and effect, or either of the Borrowers or
any Affiliate of either of the Borrowers shall so assert;
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may or, if directed by the Required
Lenders, shall 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; provided that,
in the case of a payment of principal default pursuant to paragraph (b), the
Administrative Agent, unless it is directed to do so by the Required Lenders,
will not take either or both of such actions for three Business Days. If an
Event of Default specified in paragraph (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 AGENTS
SECTION 8.1. Administration by Agents.
The general administration of the Fundamental Documents and
any other documents contemplated by this Agreement shall be by the Agents or
their designees as provided for herein. 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 appropriate, together with all powers reasonably incidental
thereto. Each of the Canadian Lenders hereby irrevocably authorizes the
Canadian 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 Canadian Revolving Credit 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 Agents shall have no duties or responsibilities except
as set forth in the Fundamental Documents. Any Lender which is a co-agent or
lead manager (as indicated on Schedule 1.1A hereto) for the credit facility
hereunder shall not have any duties or responsibilities except as a Lender
hereunder.
67
SECTION 8.2. Advances and Payments.
(a) On the date of each Loan, the Administrative Agent or the
Canadian Agent, as provided for herein, shall be authorized (but not obligated)
to advance, for the account of each of the applicable Lenders, the amount of
the Loan to be made by it in accordance with this Agreement. Each of the
Lenders (other than the Canadian Lenders) hereby authorizes and requests the
Administrative Agent and the Canadian Lenders hereby authorize and request the
Canadian Agent to advance for its account, pursuant to the terms hereof, the
amount of the Loan to be made by it, unless with respect to any Lender, such
Lender has theretofore specifically notified the Administrative Agent or the
Canadian Agent, as the case may be, that such Lender does not intend to fund
that particular Loan. Each of the Lenders agrees forthwith to reimburse the
Administrative Agent or the Canadian Agent, as the case may be, in immediately
available funds for the amount so advanced on its behalf by such Agent pursuant
to the immediately preceding sentence. If any such reimbursement is not made in
immediately available funds on the same day on which such 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 such Agent at a rate per annum
equal to such Agent's cost of obtaining overnight funds in the New York Federal
Funds Market in the case of US Loans, and the C$ Prime Rate in the case of
Canadian Loans. Notwithstanding the preceding sentence, if such reimbursement
is not made by the second Business Day following the day on which such 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 such Agent, the
Borrower or the Canadian Borrower, as the case may be, shall immediately pay
such unreimbursed advance amount (plus any accrued, but unpaid interest at the
rate per annum equal to such Agent's cost of obtaining overnight funds in the
New York Federal Funds Market in the case of US Loans and the C$ Prime Rate in
the case of Canadian Loans) to such Agent.
(b) Any amounts received by either of the Agents 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, to pay
the principal balance outstanding on the Notes and fourth, to pay other amounts
payable to the Agents and/or the Lenders. All amounts to be paid to any of the
Lenders by the Administrative Agent or the Canadian Agent, as the case may be,
shall be credited to the applicable Lenders, after collection by such Agent, in
immediately available funds either by wire transfer or deposit in such Lender's
correspondent account with such Agent, or as such Lender and such 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 or the exercise of a right of banker's lien, setoff
or counterclaim against the Borrower or the Canadian 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 (other than pursuant to Section
2.15(f) or 2.24), obtain payment in respect of its
68
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 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 or the Canadian
Agent from the Borrower or the Canadian Borrower of any communication calling
for an action on the part of the Lenders, or upon notice to the Administrative
Agent or the Canadian Agent of any Event of Default, such 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 Each Agent.
(a) Each of the Agents, 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 Agents 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. Neither the Agents nor their respective
directors, officers, agents, and employees shall in any 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 Agents nor any of their respective directors, officers,
employees, or agents shall be responsible to any of the Lenders for the due
execution (other than its own), validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty, or
representation made by any other Person 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 or the Canadian Borrower, as the case
may be, of any of the terms, conditions, covenants, or agreements of this
Agreement or any related agreement or document.
(b) Neither the Agents nor any of their respective directors,
officers, employees, or agents shall have any responsibility to the Borrowers
on account of the failure or delay in performance or breach by any of the
Lenders or the Borrowers of any of their respective
69
obligations under this Agreement or the Notes or any related agreement or
document or in connection herewith or therewith.
(c) Each of the Agents 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 Agents and the Arranger, in the amount of its proportionate
share, for any reasonable expenses and fees incurred for the benefit of the
Lenders under the Fundamental Documents, including, without limitation,
reasonable counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, and any other reasonable expense
incurred in connection with the administration or enforcement thereof not
reimbursed by the Borrowers or one of its Subsidiaries; and (ii) to indemnify
and hold harmless the Agents and the Arranger and any of their 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 Borrowers or one
of its Subsidiaries (except such as shall result from the gross negligence or
willful misconduct of the Person seeking indemnification).
SECTION 8.7. Rights of Each Agent.
It is understood and agreed that Chase and Chase
Canada 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 Borrowers as though it were not an
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 hereunder based on its own analysis
of the transactions contemplated hereby and of the creditworthiness of the
Borrowers and agrees that neither of the Agents shall bear responsibility
therefor.
SECTION 8.9. Notice of Transfer.
70
Each of the Agents 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 Agents.
Each of the Agents may resign at any time by giving written
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent from among
the Lenders, with the consent of the Borrower, which will not be unreasonably
withheld. If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, the retiring Agent may, on
behalf of the Lenders, appoint a successor 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 or of any State
thereof and having a combined capital and surplus of at least $500,000,000 in
the case of the Administrative Agent and a commercial bank organized or
licensed under the laws of the Province of Ontario and having a combined
capital and surplus of at least C$100,000,000 in the case of the Canadian
Agent. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and with a
copy (in the case of all notices relating to Pounds Sterling Loans) to Chase
Manhattan Investment Bank Ltd., Trinity Tower, 9 ▇▇▇▇▇▇ ▇▇▇▇▇ Street, London,
England EY91T, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, if to the Canadian Agent or Chase Canada,
to it at One First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ MSX 1A4, Attn: ▇▇▇▇▇▇ Staff, if to the Borrower
or the Canadian Borrower, to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Assistant Treasurer, with a copy to the General Counsel,
or if to a Lender, to it at its address set forth on Schedule 1.1A (or in its
Assignment and Acceptance or other agreement pursuant to which it became a
Lender hereunder), or such other address as such party may from time to time
designate by giving written notice to the other
71
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 each of
the Borrowers 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 Agents and the Lenders and shall survive the making of
the Loans herein contemplated and the issuance and delivery to the Agents of
the Notes regardless of any investigation made by the Agents 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 Commitments have not been terminated. All statements in any such
certificate or other instrument shall constitute representations and warranties
by the Borrowers hereunder.
SECTION 9.3. Successors and Assigns; Syndications; Loan
Sales; Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided that the Borrowers may not assign their
respective rights hereunder without the prior written consent of all the
Lenders), and all covenants, promises and agreements by, or on behalf of, the
Borrowers 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 and the Borrower, which consents shall not
be unreasonably withheld or delayed) assign to one or more banks or other
financial institutions 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 Loans (other than
Competitive 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 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
72
Acceptance with respect to such assignment is delivered to the Lender) shall be
in a minimum Dollar Equivalent Amount of $10,000,000 unless otherwise agreed by
the Borrower and the Administrative Agent and (4) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance, together with any Note or Notes subject to such assignment (if
required hereunder) and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, and from and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
not earlier than five Business Days after the date of acceptance and recording
by the Administrative Agent, (x) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of the
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto).
(3) [Intentionally Deleted].
(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 and any other Fundamental
Document 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 Borrowers or the performance or observance by the
Borrowers of any of their 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) 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, the Canadian
Agent, if the assignor is a Canadian Lender, or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Administrative
Agent and the Canadian Agent, if the assignor is a Canadian Lender, to take
such action as agent on its behalf and to exercise such powers under the
Fundamental Documents as are delegated to such 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.
73
(e) The Administrative Agent, on behalf of the Borrowers,
shall maintain at its address at which notices are to be given to it pursuant
to Section 9.1, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment 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
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
its Commitment has been assigned by an assigning Lender, then such Lender shall
deliver its Note in respect of such Commitment, 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 Note in respect of the assigned Commitment 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 Note in respect of the
assigned Commitment to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder, or (B) if Competitive Loans only have
been assigned and the assigning Lender holds a Commitment under this Agreement,
then a new Competitive Note to the order of the assignee Lender in an amount
equal to the outstanding principal amount of the Competitive Loan(s) purchased
by it pursuant to the Assignment and Acceptance, or (C) if Competitive Loans
only have been assigned and the assigning Lender does not hold a Commitment
under this Agreement, a new Competitive Note to the order of such assignee in
an amount equal to the outstanding principal amount of the Competitive Loans(s)
purchased by it pursuant to such Assignment and Acceptance and, a new
Competitive Note to the order of the assigning Lender in an amount equal to the
outstanding principal amount of the Competitive Loans retained by it hereunder.
Any new Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of the Commitments of
74
the respective Lenders. All new Notes shall be dated the date hereof and shall
otherwise be in substantially the forms of Exhibits ▇-▇, ▇-▇, ▇-▇ and A-4
hereto, as the case may be.
(g) Each of the Lenders may without the consent of the
Borrowers or the Administrative Agent sell participations to one or more banks
or other financial institutions (a "Participant") 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 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
Borrowers, 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 Borrowers furnished to the
Administrative Agent by or on behalf of the Borrowers.
(i) Each Lender hereby represents that it is a commercial
lender or financial institution which makes loans in the ordinary course of its
business and that it will make the Loans hereunder for its own account in the
ordinary course of such business; provided 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) Each of the Borrowers 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, each of the Borrowers agrees to pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Canadian Agent and the
Arranger 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 the reasonable fees and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Administrative Agent, and Blake, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel
75
to the Canadian 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 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. Such payments shall be made on the date of execution of this Agreement
and thereafter promptly on demand. Each of the Borrowers agrees that it shall
indemnify the Administrative Agent, the Canadian Agent and the 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 Borrowers under this Section shall survive the termination of this
Agreement and/or the payment of the Loans for two years.
SECTION 9.5. Indemnity.
Further, by the execution hereof, each of the Borrowers
agrees to indemnify and hold harmless the Administrative Agent, the Canadian
Agent, the Arranger and the Lenders and their respective directors, officers,
employees and agents (each, an "Indemnified Party") from and against any and
all expenses (including reasonable fees and disbursements of counsel), losses,
claims, damages and liabilities arising out of any claim, litigation,
investigation or proceeding (regardless of whether any such Indemnified Party
is a party thereto) in any way relating to the transactions contemplated
hereby, but excluding therefrom all expenses, losses, claims, damages, and
liabilities arising out of or resulting from the gross negligence or willful
misconduct of the Indemnified Party seeking indemnification, provided that the
Borrowers 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 Borrowers be liable for any settlement of any
proceeding effected without each of the Borrowers' written consent, and
provided, further, that this Section 9.5 shall not be construed to expand the
scope of the reimbursement obligations specified in Section 9.4. The
obligations of each of the Borrowers 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 AND THE
PROVINCE OF ONTARIO.
76
SECTION 9.7. No Waiver.
No failure on the part of the Administrative Agent, the
Canadian Agent or any Lender to exercise, and no delay in exercising, any
right, power or remedy hereunder or under the Notes 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 7,
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 or any other Fundamental Document, and no consent to any departure by
either of the Borrowers 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 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, (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 are paid or
(z) waive a default under Section 7(b) with respect to a scheduled principal
installment of any Loan or scheduled payment of interest or fees; 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 or (iii) amend Section 2.26; and provided, further,
however, 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 either of the
Agents hereunder without its prior written consent. No notice to or demand on
the Borrowers shall entitle either 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.
77
SECTION 9.10. Severability.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
(a) EACH OF THE BORROWERS 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, AND THE COURTS OF THE PROVINCE OF ONTARIO 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, THE CANADIAN AGENT OR A LENDER. EACH OF THE BORROWERS 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. EACH OF THE BORROWERS HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT
ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION 9.1. EACH OF
THE BORROWERS AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE
OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT,
THE CANADIAN AGENT AND THE LENDERS. THE CANADIAN BORROWER HEREBY IRREVOCABLY
APPOINTS THE BORROWER AS ITS AGENT FOR SERVICE OF PROCESS IN ANY PROCEEDING
REFERRED TO IN THIS SECTION 9.11 AND AGREES THAT SERVICE OF PROCESS IN ANY SUCH
PROCEEDING MAY BE MADE BY MAILING OR DELIVERING A COPY THEREOF TO IT CARE OF
THE BORROWER AT ITS ADDRESS FOR NOTICES SET FORTH IN SECTION 9.1. FINAL
JUDGMENT AGAINST EITHER OF THE BORROWERS 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
78
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 THAT THE ADMINISTRATIVE AGENT, THE
CANADIAN AGENT OR A LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER
JUDICIAL PROCEEDINGS AGAINST EITHER OF THE BORROWERS OR ANY OF ITS ASSETS IN
ANY ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OR OF ANY COUNTRY OR PLACE
WHERE EITHER OF THE BORROWERS OR SUCH ASSETS MAY BE FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL
BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN
CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN
INFORMED THAT THE PROVISIONS OF THIS SECTION 9.11(b) CONSTITUTE A MATERIAL
INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY
IN ENTERING INTO THIS AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 9.11(b) WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO
TRIAL BY JURY.
SECTION 9.12. Headings.
Section headings used herein are for convenience only and are
not to affect the construction of or be taken into consideration in
interpreting this Agreement.
SECTION 9.13. Execution in Counterparts.
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 February 4,
1997, 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.
79
SECTION 9.15. Foreign Currency Judgments. () If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
due hereunder in one currency into another currency, each of the Borrowers
agrees, to the fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the relevant Lender (or agent acting on
its behalf) or the Administrative Agent could purchase the first currency with
such other currency for the first currency on the Business Day immediately
preceding the day on which final judgment is given.
(b) The obligations of either of the Borrowers in respect of
any sum due hereunder shall, notwithstanding any judgment in a currency (the
"Judgment Currency") other than that in which such sum is denominated in
accordance with this Agreement (the "Agreement Currency"), be discharged only
to the extent that, on the Business Day following receipt by any Lender (or
agent acting on its behalf) (the "Applicable Creditor") of any sum adjudged to
be so due in the Judgment Currency, the Applicable Creditor may in accordance
with normal banking procedures in the relevant jurisdiction purchase the
Agreement Currency with the Judgment Currency; if the amount of the Agreement
Currency so purchased is less than the sum originally due to the Applicable
Creditor in the Agreement Currency, each of the Borrowers agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Applicable
Creditor against such loss, provided, that if the amount of the Agreement
Currency so purchased exceeds the sum originally due to the Applicable
Creditor, the Applicable Creditor agrees to remit such excess to the Applicable
Borrower. The obligations of the Borrowers contained in this Section 9.15 shall
survive the termination of this Agreement and the payment of all amounts owing
hereunder. Each Borrower shall repay each Loan made to it, and interest
thereon, in the Currency in which such Loan is denominated.
SECTION 9.16. Risks of Superior Force. Each of the Borrowers
expressly assumes all risks of superior force, such that it shall be bound to
timely execute each and every of its obligations under this Agreement
notwithstanding the existence or occurrence of any event or circumstance
constituting a superior force within the meaning of Article 1693 of the Civil
Code of Quebec.
SECTION 9.17. Language. The parties hereto have agreed that
this Agreement as well as any document or instrument relating thereto be drawn
up in English only. Les parties aux presentes ont convenu que la presente
Convention ainsi que tous autres actes ou documents s'y rattachant soient
rediges en anglais seulement.
SECTION 9.18. Acknowledgment and Agreement. The Borrower, the
Canadian Borrower, and the Lenders hereby agree to the terms and provisions of
the Creditor Acknowledgment and Agreement (the "Creditor Acknowledgment and
Agreement") attached hereto as Exhibit K (which for purposes of this Agreement
is hereby incorporated herein).
SECTION 9.19. European Economic And Monetary Union. ()
Effectiveness of Provisions. The provisions of paragraphs (b) to (i) below
(inclusive) shall be effective at and from the commencement of the third stage
of EMU, provided
80
that if and to the extent that any such provision relates to any state (or the
currency of such state) that is not a participating member state on the
commencement of the third stage of EMU, such provision shall become effective
in relation to such state (and the currency of such state) at and from the date
on which such state becomes a participating member state.
(b) Redenomination and Alternative Currencies. Each
obligation under this Agreement of a party to this Agreement which has been
denominated in the national currency unit of a participating member state shall
be redenominated into the euro unit in accordance with EMU legislation,
provided that if and to the extent that any EMU legislation provides that
following the commencement of the third stage of EMU an amount denominated
either in the euro or in the national currency unit of a participating member
state and payable within that participating member state by crediting an
account of the creditor can be paid by the debtor either in the euro unit or in
that national currency unit, each party to this Agreement shall be entitled to
pay or repay any such amount either in the euro unit or in such national
currency unit.
(c) Determination of LIBOR. For the purposes of determining
the date on which LIBOR is determined under this Agreement for any Loan
denominated in the euro (or any national currency unit) for any Interest Period
therefor, references in this Agreement to Business Days shall be deemed to be
references to Target Operating Days. In addition, if the Administrative Agent
determines that LIBOR is not displayed on the screen for deposits denominated
in the national currency unit in which any Loans are denominated, LIBOR for
such Loans shall be based upon the rate displayed on the screen for the
offering of deposits denominated in euro units.
(d) Payments to the Administrative Agent. This Agreement
shall be construed so that, in relation to the payment of any amount of euro
units or national currency units, such amount shall be made available to the
Administrative Agent in immediately available, freely transferable, cleared
funds to such account with such bank in Frankfurt am Main, Germany (or such
other principal financial center in such participating member state as the
Administrative Agent may from time to time nominate for this purpose) as the
Administrative Agent shall from time to time nominate for this purpose. This
Agreement shall be construed so that, in relation to the payment of any euro
units or national currency units to be made, the references to "Business Day"
therein shall instead refer to "Target Operating Day."
(e) Payments by the Administrative Agent to the Lenders. Any
amount payable by the Administrative Agent to the Lenders under this Agreement
in the currency of a participating member state shall be paid in the euro unit.
(f) Payments by the Administrative Agent Generally. With
respect to the payment of any amount denominated in the euro or in a national
currency unit, the Administrative Agent shall not be liable to any Borrower or
any of the Lenders in any way whatsoever for any delay, or the consequences of
any delay, in the crediting to any account of any amount required by this
Agreement to be paid by the Administrative Agent if the Administrative Agent
shall have taken all relevant steps to achieve, on the date required by this
Agreement, the payment of such amount in immediately available, freely
transferable, cleared funds (in the euro
81
unit or, as the case may be, in a national currency unit) to the account of any
Lender in the principal financial center in the participating member state
which such Borrower or, as the case may be, such Lender shall have specified
for such purpose. In this paragraph (f), `all relevant steps' means all such
steps as may be prescribed from time to time by the regulations or operating
procedures of such clearing or settlement system as the Administrative Agent
may from time to time determine for the purpose of clearing or settling
payments of the euro.
(g) Basis of Accrual. If the basis of accrual of interest or
fees expressed in this Agreement with respect to the currency of any state that
becomes a participating member state shall be inconsistent with any convention
or practice in the LIBOR market for the basis of accrual of interest or fees in
respect of the euro, such convention or practice shall replace such expressed
basis effective as of and from the date on which such state becomes a
participating member state; provided that if any Loan in the currency of such
state is outstanding immediately prior to such date, such replacement shall
take effect, with respect to such Loan, at the end of the then current Interest
Period.
(h) Rounding. Without prejudice and in addition to any method
of conversion or rounding prescribed by the EMU legislation, each reference in
this Agreement to a minimum amount (or an integral multiple thereof) in a
national currency unit to be paid to or by the Administrative Agent shall be
replaced by a reference to such reasonably comparable and convenient amount (or
an integral multiple thereof) in the euro unit as the Administrative Agent may
from time to time specify.
(i) Other Consequential Changes. Without prejudice to the
respective liabilities of the Borrowers to the Lenders and the Lenders to the
Borrowers under or pursuant to this Agreement, except as expressly provided in
this Section 9.19, each provision of this Agreement shall be subject to such
reasonable changes of construction as the Administrative Agent may from time to
time specify to be necessary or appropriate to reflect the introduction of or
changeover to the euro in participating member states. Without limiting the
generality of the foregoing, for each Available Foreign Currency that is a
national currency unit, the relevant display page on the Telerate or ▇▇▇▇▇▇
screen used to determine the LIBOR Rate for applicable Loans in such Available
Foreign Currency shall be determined by the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and the year first above written.
PHH CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: Senior Executive Vice President and
Chief Financial Officer
PHH VEHICLE MANAGEMENT SERVICES INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Title: Senior Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
BANK OF AMERICA NT & SA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Managing Director
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
BANK OF MONTREAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Director
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
THE BANK OF NOVA SCOTIA
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Authorized Signatory
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
THE BANK OF TOKYO-MITSUBISHI, LIMITED,
NEW YORK BRANCH
By: /s/ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Attorney-in-Fact
Name: ▇. ▇▇▇▇▇▇▇▇
BANKERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Principal
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Executive Director
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
COMERICA BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
COMMERZBANK AG (NEW YORK BRANCH)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: /s/ A. ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
---------------------------------------
Title: Assistant Vice President
Name: A. ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: First Vice President-Manager
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇▇▇▇ ▇'▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇ ▇'▇▇▇▇
By: /s/ Glodviska
---------------------------------------
Title: Managing Director
Name: Glodviska
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: Associate
Name: ▇▇▇▇ ▇▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇ ▇. ▇▇▇▇
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
FIRST UNION NATIONAL BANK OF MARYLAND
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
FLEET BANK
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Authorized Signatory
Name: ▇▇▇ ▇▇▇▇▇▇
THE FUJI BANK, LTD. NEW YORK BRANCH
By:
---------------------------------------
Title:
HYPO VEREINSBANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Director
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Associate Director
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE INDUSTRIAL BANK OF JAPAN, LIMITED
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: President
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MELLON BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Title: First Vice President
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK
By:
---------------------------------------
Title:
NATIONAL WESTMINSTER BANK PLC
By: /s/ ▇.▇. ▇▇▇▇▇
---------------------------------------
Title: Senior Corporate Manager
Name: ▇.▇. ▇▇▇▇▇
NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇ F.T. Monhart
---------------------------------------
Title: Senior Vice President
Name: ▇▇▇▇▇ F.T. ▇▇▇▇▇▇▇
ROYAL BANK OF CANADA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Senior Manager
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SAHWA BANK LTD.
By:
---------------------------------------
Title:
THE SUMITOMO BANK, LIMITED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President
Name: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
WESTDEUTSCHE LANDESBANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Vice President
Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------------
Title: Associate
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Schedule 1.1A
Commitments
-----------
Lender Commitment
------ ----------
TOTAL $1,250,000,000.00
Schedule 1.1B
Available Foreign Currencies
For purposes of Competitive Loans, Available Foreign Currencies are
the following:
Canadian Dollars
the lawful currency of France
the lawful currency of Germany
Japanese Yen
the lawful currency of England
Swiss Francs
the lawful currency of Italy
euro
Schedule 2.14
Calculation of Additional Interest for Pounds Sterling Loans
1. The additional interest for any period shall (subject to paragraph 5
below) be calculated in accordance with the following formula:
BY + L(Y-X) + S(Y-Z) per cent, per annum
--------------------
100 - (B+S)
where on the day of application of the formula:
B is the percentage of the Administrative Agent's eligible
liabilities which the Bank of England then requires the
Administrative Agent to hold on a non-interest-bearing
deposit account in accordance with its cash ratio
requirements;
Y is the rate at which Pounds Sterling deposits are offered by
the Administrative Agent to leading banks in the London
Interbank Market at or about 11 a.m. on that day for the
relevant period;
L is the percentage of eligible liabilities which (as a result
of the requirements of the Bank of England) the
Administrative Agent maintains as secured money with members
of the London Discount Market Association or in certain
marketable or callable securities approved by the Bank of
England, which percentage shall (in the absence of evidence
that any other figure is appropriate) be conclusively
presumed to be 5%;
X is the rate at which secured Pounds Sterling investments may
be placed by the Administrative Agent with members of the
London Discount Market Association at or about 11 a.m. on
that day for the relevant period or, if greater, the rate at
which Pounds Sterling bills of exchange (of a tenor equal to
the duration of the relevant period) eligible for
rediscounting at the Bank of England can be discounted in the
London Discount Market at or about 11 a.m. on that day;
S is the percentage of the Administrative Agent's eligible
liabilities which the Bank of England requires the
Administrative Agent to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank of England
on special deposits.
2. For the purposes of this schedule 2.14:
(a) "eligible liabilities" and "special deposits" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(b) "relevant period" in relation to each period for which
additional interest is to be calculated means:
(i) if it is 3 months or less, that period; or
(ii) if it more than 3 months, 3 months.
3. In the application of the formula, B, Y, L, X, S and Z are included in
the formula as figures and not as percentages, e.g. if B 0.5% and Y
15% BY is calculated as 0.5 X 15.
4. The formula shall be applied on the first day of each relevant period.
Each amount shall be rounded up to the nearest four decimal places.
5. If the Administrative Agent determines that a change in circumstances
has rendered, or will render, the formula inappropriate, the
Administrative Agent (after consultation with the Lenders) shall
notify the Borrower of the manner in which the additional interest
will subsequently be calculated provided that no amendment to the
manner of such calculation may be made other than to restore the
position in terms of overall return to that which prevailed before
such change occurred. The manner of calculation so notified by the
Administrative Agent shall, in the absence of manifest error be
binding on all the parties.
Schedule 3.6
Material Subsidiaries
------------------------ -------------------------- --------------------------- -------------------- ----------------------
Subsidiary Jurisdiction of Authorized Shares Issued Ownership of
Name Incorporation Capitalization Capital Stock*
------------------------ -------------------------- --------------------------- -------------------- ----------------------
PHH Vehicle Management Maryland 100,000(C) 404(C) PHH Holdings
Services Corporation Corporation
PHH Real Estate Delaware 1,000(C) 860(C) PHH Holdings
Services Corporation Corporation
PHH Mortgage Services New Jersey 5,000(C) 1,000(C) PHH Holdings
Corporation 20,000(P) 0(P) Corporation
PHH Holdings Maryland 5,000 100 PHH Corporation
Corporation
PHH Investments I Delaware 5,000 1,000 PHH Corporation
Corporation
PHH Europe PLC** United Kingdom 25,000,000 18,251,110 PHH Holdings
Corporation
PHH Vehicle Management United Kingdom 2,000,000 1,147,500 PHH Europe PLC
Services PLC**
PHH Financial Services United Kingdom 10,000,000 10,000,000 PHH Investment
Ltd.** Services Ltd.***
------------------------ -------------------------- --------------------------- -------------------- ----------------------
* Ownership is 100% unless otherwise indicated.
** These Material Subsidiaries Do Not principally transact business in
the United States.
*** Does not meet the Material Subsidiary test.
(C)=Common stock
(P)=Preferred stock
Schedule 3.9
Litigation
None.
Schedule 6.1
Existing Indebtedness and Guaranties
None.
Schedule 6.5
Existing Liens
None.