FIVE YEAR COMPETITIVE ADVANCE AND REVOLVING CREDIT AGREEMENT
(the "Agreement"), dated as of March 4, 1997, among PHH CORPORATION, a Maryland
corporation (the "Borrower"), the Lenders referred to herein, CHASE SECURITIES
INC., as arranger (the "Arranger") for the Lenders, and THE CHASE MANHATTAN
BANK, a New York banking corporation, as agent (the "Administrative Agent") for
the Lenders.
INTRODUCTORY STATEMENT
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The Borrower has requested that the Lenders establish a
$1,250,000,000 committed revolving credit facility pursuant to which Revolving
Credit Loans may be made to the Borrower (as defined below), and Letters of
Credit issued for the account of the Borrower (of which not more than the
amounts described herein at any time shall consist of Letters of Credit). In
addition, the Borrower has requested that the Lenders provide a procedure
pursuant to which Lenders may bid on an uncommitted basis on short-term
borrowings by the Borrower.
Subject to the terms and conditions set forth herein, the
Administrative Agent is willing to act as agent for the Lenders and each Lender
is willing to make Loans and to participate in Letters of Credit.
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
For the purposes hereof unless the context otherwise requires,
the following terms shall have the meanings indicated, all accounting terms not
otherwise defined herein shall have the respective meanings accorded to them
under GAAP and all terms defined in the New York Uniform Commercial Code and not
otherwise defined herein shall have the respective meanings accorded to them
therein:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Alternate Base Rate
in accordance with the provisions of Article 2.
"Acquisition" shall mean the acquisition by HFS Incorporated
("HFS") of all of the voting common stock of the Borrower pursuant to
the Agreement dated as of November 10, 1996 between HFS, the Borrower
and Mercury Acq. Corp.
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"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.
"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 Federal Funds Effective Rate shall be
effective on the effective date of such change in the Federal Funds
Effective Rate.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of governmental bodies or regulatory agencies
applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question
is a party.
"Assessment Rate" shall mean, for any day, the net annual
assessment rate (rounded upwards, if necessary, to the next higher
Basis Point) as most recently 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
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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.
"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.
"Basis Point" shall mean 1/100th of 1%.
"Board" shall mean the Board of Governors of the Federal
Reserve System.
"Borrowing" shall mean a group of Loans of a single Interest
Rate Type made by 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.
"Business Day" shall mean, with respect to any 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).
"Capital Lease" shall mean as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as
lessee which, in accordance with GAAP, is or should be accounted for as
a capital lease on the balance sheet of that Person.
"Cash Collateral Account" shall mean a collateral account
established with the Administrative Agent, in the name of the
Administrative Agent and under its sole dominion and control, into
which the Borrower shall from time to time deposit Dollars pursuant to
the express provisions of this Agreement requiring such deposit.
"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
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Xxxxx'x, (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
Xxxxx'x, (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 Xxxxx'x 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 Xxxxx'x.
"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 HFS Incorporated on a fully
diluted basis at any time or (ii) at any time, individuals who at the
date hereof constituted the Board of Directors of HFS Incorporated
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of HFS
Incorporated, 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 a nomination for
election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors of HFS Incorporated then in office
or (iii) HFS Incorporated 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.
"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 April 15, 1997.
"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.
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"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender as set forth 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
2.25(d), as the case may be, as such Lender's Commitment may be
permanently terminated or reduced from time to time pursuant to Section
2.12 or 2.25 or Article 7 or changed pursuant to Section 9.3. The
Commitments shall automatically and permanently terminate on the
earlier of (a) the Maturity Date or (b) the date of termination in
whole pursuant to Section 2.12 or Article 7.
"Commitment Expiration Date" shall have the meaning assigned
to such term in Section 2.25(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.
"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.
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"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 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.
"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.
"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.
"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.
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"Dollars" and "$" and "US$" shall mean lawful currency of the
United States.
"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. xx.xx.
1251 et seq., the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. xx.xx. 136
et seq., the Surface Mining Control and Reclamation Act, 30 U.S.C.
xx.xx. 1201 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. xx.xx. 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. xx.xx. 11001 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. xx.xx. 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.
"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
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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 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 2.25 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.
"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 and any other ancillary
documentation which is required to be, or is otherwise, executed by the
Borrower and delivered to the Administrative Agent in connection with
this Agreement.
"GAAP" shall mean generally accepted accounting principles
consistently applied (except for accounting changes in response to FASB
releases or other authoritative pronouncements) provided, however, that
all calculations made pursuant to Sections 6.7 and 6.8 and the related
definitions shall have been computed based on such generally accepted
accounting principles as are in effect on the 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
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or other monetary obligation ("primary obligation") of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services, in each case, primarily
for the purpose of assuring the owner of any such primary obligation
of the repayment of such primary obligation or (d) as a general
partner of a partnership or a joint venturer of a joint venture in
respect of indebtedness of such partnership or such joint venture
which is treated as a general partnership for purposes of Applicable
Law. The amount of any Guaranty shall be deemed to be an amount
equal to the stated or determinable amount (or portion thereof) of the
primary 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
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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' duration, as the case may be, been applicable to
such Borrowing, and, in addition, the date of any refinancing or
conversion of a Borrowing with, or to, a Borrowing of a different
Interest Rate Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing,
the period commencing on the date of such Borrowing, and ending on the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2,
3, 6 or, subject to each Lender's approval, 12 months thereafter, as
the Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31,
commencing Xxxxx 00, 0000, (xx) the Maturity Date and (iii) the date
such Borrowing is refinanced with a Borrowing of a different Interest
Rate Type in accordance with Section 2.6 or is prepaid in accordance
with Section 2.13, (c) as to any Fixed Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer to make the Fixed
Rate Loans comprising such Borrowing were extended, which shall not be
earlier than seven days after the date of such Borrowing or later than
360 days after the date of such Borrowing; 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.
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"Interest Rate Type" when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which interest on
such Loan or on the Loans comprising such Borrowing is determined. For
purposes hereof, "Rate" shall include LIBOR, the Alternate Base Rate
and the Fixed Rate.
"Issuing Lender" shall mean Chase or Chase Delaware, and/or
such other of the Lenders as may be designated in writing by the
Borrower and which agrees in writing to act as such in accordance with
the terms hereof.
"L/C Exposure" shall mean, at any time, the amount expressed
in Dollars of the aggregate face amount of all drafts which may then or
thereafter be presented by beneficiaries under all Letters of Credit
then outstanding plus (without duplication) the face amount of all
drafts which have been presented under Letters of Credit but have not
yet been paid or have been paid but not reimbursed.
"Lender and "Lenders" shall mean the financial institutions
whose names appear at the foot hereof and any assignee of a Lender
pursuant to Section 9.3(b).
"Lending Office" shall mean, with respect to any of the
Lenders, the branch or branches (or affiliate or affiliates) from which
any such Lender's LIBOR Loans, Fixed Rate Loans or ABR Loans, as the
case may be, are made or maintained and for the account of which all
payments of principal of, and interest on, such Lender's LIBOR Loans,
Fixed Rate Loans or ABR Loans are made, as notified to the
Administrative Agent from time to time.
"Letters of Credit" shall mean the letters of credit issued
pursuant to Section 2.24.
"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.
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"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.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any
conditional sale or other title retention agreement, any lease in the
nature thereof or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction).
"Loan" shall mean a Competitive Loan or a Revolving Credit
Loan, whether made as a LIBOR Loan, an ABR Loan or a Fixed Rate Loan,
as permitted hereby.
"Margin" shall mean, as to any LIBOR Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a
decimal to four decimal places) to be added to, or subtracted from,
LIBOR in order to determine the interest rate applicable to such Loan,
as specified in the Competitive Bid relating to such Loan.
"Margin Stock" shall be as defined in Regulation U of the
Board.
"Material Adverse Effect" shall mean a material adverse effect
on the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean 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.
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"Maturity Date" shall mean the fifth anniversary of the
Closing Date or such later date as shall be determined pursuant to the
provisions of Section 2.25 with respect to non-Objecting Lenders.
"Moody's" shall mean Xxxxx'x Investors Service Inc.
"Multiemployer Plan" shall mean a plan described in Section
3(37) of ERISA.
"non-Objecting Lender" shall mean any Lender that is not an
Objecting Lender.
"Notes" shall mean the Competitive Notes and the Revolving
Credit Notes.
"Objecting Lender" shall mean any Lender that does not consent
to the extension of the Maturity Date pursuant to Section 2.25.
"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, reimbursement obligations in respect of Letters of
Credit, and all other monetary obligations of the Borrower to the
Administrative Agent, any Issuing Lender or any Lender under this
Agreement, the Notes or the Fundamental Documents or with respect to
any Interest Rate Protection Agreements entered into between the
Borrower or any of its Subsidiaries and any Lender.
"Participant" shall have the meaning assigned to such term in
Section 9.3(g).
"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.
"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
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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.
"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 Total
Commitment, except that (i) for purposes of determining the Lenders
entitled to declare the principal of and the interest on the Loans and
the Notes and all other amounts payable hereunder or thereunder to be
forthwith due and payable pursuant to Article 7 and (ii) at all times
after the termination of the Total Commitment in its entirety,
"Required Lenders" shall mean Lenders holding 51% or more of the
aggregate principal amount of the Loans and L/C Exposure at the time
outstanding.
"Revolving Credit Borrowing" shall mean a Borrowing consisting
of simultaneous Revolving Credit Loans from each of the Lenders.
"Revolving Credit Borrowing Request" shall mean a request made
pursuant to Section 2.5 in the form of Exhibit F.
"Revolving Credit Loans" shall mean the Loans made by the
Lenders to the Borrower pursuant to a notice given by the Borrower
under Section 2.5(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.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx 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
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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.
"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 Total Commitments.
"364-Day Credit Agreement" shall mean the 364-Day Competitive
Advance and Revolving Credit Agreement, dated as of the date hereof,
among the Borrower, PHH Vehicle Management Services Inc., the lenders
referred to therein, Chase, as Administrative Agent, and The Chase
Manhattan Bank of Canada, as Canadian Agent.
"Total Commitment" shall mean, at any time, the aggregate
amount of the Lenders' Commitments as in effect at such time.
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"United States" shall mean the United States of America.
"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 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 Closing Date and
until the earlier of the Maturity Date and the termination of the Commitment of
such Lender, in an aggregate principal amount at any time outstanding not to
exceed such Lender's Commitment minus the sum of such Lender's pro rata share of
the then current L/C Exposure 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
conditions that (1) at no time shall (i) the sum of (A) the outstanding
aggregate principal amount of all Revolving Credit Loans made by all Lenders
plus (B) the then current L/C Exposure plus (C) the outstanding aggregate
principal Dollar Equivalent Amount of all Competitive Loans made by the Lenders
exceed (ii) the Total Commitment and (2) at all times the outstanding aggregate
principal amount of all Revolving Credit Loans made by each Lender shall equal
the product of (i) the percentage that its Commitment represents of the Total
Commitment times (ii) the outstanding aggregate principal amount of all
Revolving Credit Loans. During the Commitment Period, the Borrower may use the
Commitments of the Lenders by borrowing, prepaying the Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
(b) The Commitments of the Lenders may be terminated or
reduced from time to time pursuant to Section 2.12 or Article 7.
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SECTION 2.2. Loans.
-----
(a) Each Revolving Credit Loan shall be made as part of a
Borrowing from the Lenders ratably in accordance with their respective
applicable Commitments; provided that the failure of any Lender to make any
Revolving Credit Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.4. The Revolving Credit Loans or
Competitive Loans comprising any Borrowing shall be (i) in the case of
Competitive Loans and LIBOR Loans, in an aggregate principal 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).
(b) Each Competitive Borrowing shall be comprised entirely of
LIBOR Competitive Loans or Fixed Rate Loans, and each Revolving Credit Borrowing
shall be comprised entirely of LIBOR Revolving Credit Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.4 or 2.5, as applicable. Each Lender
may at its option make any LIBOR Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan, provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement and the applicable Note.
Borrowings of more than one Interest Rate Type may be outstanding at the same
time; provided that the Borrower 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, 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) Subject to Section 2.6, each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by making funds
available at the office of the Administrative Agent specified in Section 9.1 for
credit to PHH Corporation Clearing Account, Account No. 000-0-00000 (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 Lenders to fund any Borrowing
hereunder, the Administrative Agent shall disburse such funds by depositing them
into an account of the Borrower maintained with the Administrative Agent.
Competitive Loans shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.4 in the amounts so accepted and
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Revolving Credit Loans shall be made by all the Lenders pro rata in accordance
with Section 2.1 and this Section 2.2.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.3. Use of Proceeds.
---------------
The proceeds of the Loans shall be used for working capital
and general corporate purposes.
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 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 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.
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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) 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,
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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.
(g) All notices required by this Section 2.4 shall be given in
accordance with Section 9.1.
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SECTION 2.5. Revolving Credit Borrowing Procedure.
------------------------------------
In order to effect a Revolving Credit Borrowing, the Borrower
shall hand deliver or telecopy to the Administrative Agent a Borrowing notice in
the form of Exhibit F (a) in the case of a 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
and (c) if such Borrowing is to be a Borrowing of LIBOR Revolving Credit Loans,
the Interest Period with respect thereto. If no election as to the Interest Rate
Type of a Revolving Credit Borrowing is specified in any such notice, then the
requested Revolving Credit Borrowing shall be an ABR Borrowing. If no Interest
Period with respect to any 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. The Administrative Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.5 and
of each such Lender's portion of the requested Borrowing.
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SECTION 2.6. Refinancings.
------------
The Borrower may refinance all or any part of any Borrowing
made by it with a Borrowing of the same or a different Interest Rate Type made
pursuant to Section 2.4 or pursuant to a notice under Section 2.5, subject to
the conditions and limitations set forth herein and elsewhere in this Agreement,
including refinancings of Competitive Borrowings with Revolving Credit
Borrowings in Dollars and Revolving Credit Borrowings in Dollars with
Competitive Borrowings; provided that at any time after the occurrence, and
during the continuation, of a Default or an Event of Default, a Revolving Credit
Borrowing of Dollars or portion thereof may only be refinanced with an ABR
Borrowing. Any Borrowing or part thereof so refinanced shall be deemed to be
repaid in accordance with Section 2.8 with the proceeds of a new Borrowing
hereunder and the proceeds of the new Borrowing, to the extent they do not
exceed the principal amount of the Borrowing being refinanced, shall not be paid
by the applicable Lenders to the Administrative Agent or by the Administrative
Agent to the 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 Administrative 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
Administrative Agent shall return the difference to such Lender out of amounts
received pursuant to clause (a) above, and (c) to the extent any Lender fails to
pay the Administrative Agent amounts due from it pursuant to clause (a) above,
any Loan or portion thereof being refinanced with such amounts shall not be
deemed repaid in accordance with Section 2.8 and, to the extent of such failure,
the Borrower shall pay such amount to the Administrative Agent as required by
Section 2.10; and (d) to the extent the Borrower fails to pay to the
Administrative Agent any amounts due in accordance with Section 2.8 as a result
of the failure of a Lender to pay the Administrative Agent any amounts due as
described in clause (c) above, the portion of any refinanced Loan deemed not
repaid shall be deemed to be outstanding solely to the Lender which has failed
to pay the Administrative Agent amounts due from it pursuant to clause (a) above
to the full extent of such Lender's portion of such Loan.
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SECTION 2.7. Fees.
----
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31,
commencing March 31, 1997, and on the date on which the Commitment of such
Lender shall be terminated as provided herein, a facility fee (a "Facility
Fee",) at the rate per annum from time to time in effect in accordance with
Section 2.22, on the amount of the Commitment of such Lender, whether used or
unused, during the preceding quarter (or shorter period commencing with the
Closing Date, or ending with the Maturity Date or any date on which the
Commitment of such Lender shall be terminated). All Facility Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Facility Fee due to each Lender shall commence to accrue on the
Closing Date, shall be payable in arrears and shall cease to accrue on the
earlier of the Maturity Date and the termination of the Commitment of such
Lender as provided herein.
(b) The Borrower agrees to pay the Administrative Agent, for
its own account, the fees at the times and in the amounts provided for in the
letter agreement dated February 4, 1997 among the Borrower, Chase and Chase
Securities Inc.
(c) All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the fees shall be refundable
under any circumstances.
SECTION 2.8. Repayment of Loans; Evidence of Debt.
------------------------------------
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Credit Loan of such Lender on the Maturity Date (or
such earlier date on which the Revolving Credit Loans become due and payable
pursuant to Article 7); provided that the Revolving Credit Loans made by
Objecting Lenders shall be repaid as provided in Section 2.25. 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.
(b) The Borrower unconditionally promises to pay to the
Administrative Agent, for the account of each Lender that makes a Competitive
Loan, on the last day of the Interest Period applicable to such Competitive
Loan, the principal amount of such Competitive Loan. The Borrower further
unconditionally promises to pay interest on each such Competitive Loan for the
period from and including the date of Borrowing of such Competitive Loan on the
unpaid principal amount thereof from time to time outstanding at the applicable
rate per annum determined as provided in, and payable as specified in, Section
2.9.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of
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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 applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(e) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided that the failure of any
Lender or the Administrative Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by
such Lender in accordance with the terms of this Agreement.
(f) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit A-1 with appropriate
insertions as to date and principal amount (a "Revolving Credit Note").
(g) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing the Competitive Loans
of such Lender, substantially in the form of Exhibit A-2 with appropriate
insertions as to date, principal amount and Currency (a "Competitive Note").
SECTION 2.9. Interest on Loans.
-----------------
(a) Subject to the provisions of Section 2.10, the Loans
comprising each LIBOR Borrowing shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 360 days) at a rate per annum
equal to (i) in the case of each LIBOR Revolving Credit Loan, LIBOR for the
Interest Period in effect for such Borrowing plus the applicable LIBOR Spread
from time to time in effect and (ii) in the case of each LIBOR Competitive Loan,
LIBOR for the Interest Period in effect for such Borrowing plus 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.
(b) Subject to the provisions of Section 2.10, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a
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year of 365 or 366 days, as the case may be when determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate per
annum equal to the Alternate Base Rate.
(c) Subject to the provisions of Section 2.10, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.4.
(d) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan. The LIBOR or the Alternate Base
Rate for each Interest Period or day within an Interest Period shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.10. Interest on Overdue Amounts.
---------------------------
If the Borrower shall default in the payment of the principal
of, or interest on, any Loan or any other amount becoming due hereunder, the
Borrower shall on demand from time to time pay interest, to the extent permitted
by Applicable Law, on such defaulted amount up to (but not including) the date
of actual payment (after as well as before judgment) at a rate per annum
computed on the basis of the actual number of days elapsed over a year of 365 or
366 days, as applicable, in the case of amounts bearing interest determined by
reference to the Prime Rate and a year of 360 days in all other cases, equal to
(a) in the case of the remainder of the then current Interest Period for any
LIBOR Loan or Fixed Rate Loan, the rate applicable to such Loan under Section
2.9 plus 2% per annum and (b) in the case of any other amount, the rate that
would at the time be applicable to an ABR Loan under Section 2.9 plus 2% per
annum.
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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 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) The Commitments of all of the Lenders shall be
automatically terminated on the earlier of (i) the Maturity Date or (ii) April
15, 1997 if the Closing Date has not occurred on or prior to such date.
(b) Subject to Section 2.13(b), upon at least three Business
Days' prior irrevocable written or telecopy notice to the Administrative Agent
(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
Total Commitment; 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 the Total Commitment to an amount less than the sum
of the aggregate outstanding principal Dollar Equivalent Amount of the Loans
plus the then current L/C Exposure.
(c) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Borrower shall pay to the Administrative Agent for the account of the
Lenders on the date of each termination or reduction in the Total Commitment,
the Facility Fees on the amount of the Commitments so terminated or reduced
accrued to the date of such termination or reduction.
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SECTION 2.13. Prepayment of Loans.
-------------------
(a) Prior to the Maturity Date, the Borrower shall have the
right at any time to prepay any Revolving Credit Borrowing, in whole or in part,
subject to the requirements of Section 2.17 but otherwise without premium or
penalty, upon prior written or telecopy notice to the Administrative Agent
(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 excess thereof. The Borrower shall not have
the right to prepay any Competitive Borrowing without the consent of the
relevant Lender.
(b) On any date when the sum of the Dollar Equivalent Amount
of the aggregate outstanding Loans (after giving effect to any Borrowings
effected on such date) plus the then current L/C Exposure 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 plus the then current L/C Exposure after giving
effect to such prepayment does not exceed the Total Commitment then in effect.
Any prepayments required by this paragraph shall be applied to outstanding ABR
Loans up to the full amount thereof before they are applied to outstanding LIBOR
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 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.
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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. 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.
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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, then the Borrower shall pay such
additional amount or amounts as will compensate such Lender for such increase or
reduction to such Lender upon demand by such Lender.
(b) If, after the date of this Agreement, any Lender shall
have determined in good faith that the adoption after the date hereof of 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.
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(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 shall not
constitute a waiver of such Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to such Interest Period or any other Interest
Period. The protection of this Section 2.15 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, Section 2.21 or Section 2.24(g) or (ii) would require the Borrower
to pay an increased amount under this Section 2.15, Section 2.16, Section 2.21
or Section 2.24(g), it will use reasonable efforts to notify the Borrower of
such event or condition and, to the extent not inconsistent with such Lender's
internal policies, will use its reasonable efforts to make, fund or maintain the
affected Loans of such Lender, or, if applicable to participate in Letters of
Credit, through another Lending Office of such Lender if as a result thereof the
additional monies which would otherwise be required to be paid or the reduction
of amounts receivable by such Lender thereunder in respect of such Loans or
Letters of Credit would be materially reduced, or any inability to perform would
cease to exist, or the increased costs which would otherwise be required to be
paid in respect of such Loans or Letters of Credit pursuant to this Section
2.15, Section 2.16, Section 2.21 or Section 2.24(g) would be materially reduced
or the taxes or other amounts otherwise payable under this Section 2.15, Section
2.16, Section 2.21 or Section 2.24(g) would be materially reduced, and if, as
determined by such Lender, in its sole reasonable discretion, the making,
funding or maintaining of such Loans or Letters of Credit through such other
Lending Office would not otherwise materially adversely affect such Loans or
Letters of Credit or such Lender.
(f) In the event any Lender shall have delivered to the
Borrower a notice that LIBOR Loans are no longer available from such Lender
pursuant to Section 2.16, that amounts are due to such Lender pursuant to
paragraph (c) 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 Xxxxx'x, 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,
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but not more than 30 days after receipt of notice from such Lender, identify
to the Administrative Agent a lending institution reasonably acceptable to the
Administrative Agent which will purchase the Commitment, the amount of
outstanding Loans and any participations in Letters of Credit from the Lender
providing such notice and such Lender shall thereupon assign its Commitment,
any Loans owing to such Lender and any participations in Letters of
Credit and the Notes held by such Lender to such replacement lending
institution pursuant to Section 9.3. Such notice shall specify an effective
date for such assignment and at the time thereof, the Borrower shall pay
all accrued interest, Facility Fees and all other amounts (including without
limitation all amounts payable under this Section and Sections 2.21,
2.24(g), 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 to
give effect to its obligations as contemplated hereby, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that LIBOR Loans will not thereafter be
made by such Lender hereunder, whereupon such Lender shall not submit a
Competitive Bid in response to a request for LIBOR Competitive Loans
and the Borrower shall be prohibited from requesting LIBOR Revolving
Credit Loans from such Lender hereunder unless such declaration is
subsequently withdrawn; and
(ii) require that all outstanding LIBOR Loans made by
it be converted to ABR Loans, in which event (A) all such LIBOR Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in Section 2.16(b) and (B) all payments and
prepayments of principal which would otherwise have been applied to
repay the converted LIBOR Loans shall instead be applied to repay the
ABR Loans resulting from the conversion of such LIBOR Loans.
(b) For purposes of this Section 2.16, a notice to the
Borrower by any Lender pursuant to Section 2.16(a) shall be effective on the
date of receipt thereof by the Borrower.
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SECTION 2.17. Reimbursement of Lenders.
------------------------
(a) The Borrower shall reimburse each Lender on demand for any
loss incurred or to be incurred by it in the reemployment of the funds released
(i) by any prepayment (for any reason, including any refinancing) of any LIBOR
or Fixed Rate Loan if such Loan is repaid other than on the last day of the
applicable Interest Period for such Loan or (ii) in the event that after the
Borrower delivers a notice of borrowing under Section 2.5 in respect of LIBOR
Revolving Credit Loans or a Competitive Bid Accept/Reject Letter under Section
2.4(d), pursuant to which it has accepted 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 for any reason other than (I) a suspension or
limitation under Section 2.16 of the right of the Borrower to select a LIBOR
Loan or (II) a breach by a Lender of its obligations hereunder. In the case of
such failure to borrow, such loss shall be the amount as reasonably determined
by such Lender as the excess, if any, of (A) the amount of interest which would
have accrued to such Lender on the amount not borrowed, at a rate of interest
equal to the interest rate applicable to such Loan pursuant to Section 2.9, for
the period from the date of such failure to borrow to the last day of the
Interest Period for such Loan which would have commenced on the date of such
failure to borrow, over (B) the amount realized by such Lender in reemploying
the funds not advanced during the period referred to above. In the case of a
payment other than on the last day of the Interest Period for a Loan, such loss
shall be the amount as 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 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 (at such date of determination) with maturities approximately equal
to the remaining Interest Period for such Loan times (z) the number of days
remaining in the Interest Period for such Loan. Each Lender shall deliver to the
Borrower from time to time one or more certificates setting forth the amount of
such loss (and in reasonable detail the manner of computation thereof) as
determined by such Lender, which certificates shall be conclusive absent
manifest error. The Borrower shall pay to the Administrative Agent for the
account of each Lender the amount shown as due on any certificate within thirty
(30) days after its receipt of the same.
(b) In the event the Borrower fails to prepay any Loan on the
date specified in any prepayment notice delivered pursuant to Section 2.13(a),
the Borrower on demand by any Lender shall pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any loss incurred by such Lender as a result of such failure to prepay,
including, without limitation, any loss, cost or expenses incurred by reason of
the acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Each Lender shall
deliver to the Borrower and the Administrative Agent from time to time one or
more certificates setting forth the amount of such loss (and in reasonable
detail the manner of computation thereof) as determined by such Lender, which
certificates shall be conclusive absent manifest error.
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SECTION 2.18. Pro Rata Treatment.
------------------
Except as permitted under Sections 2.14, 2.15(c), 2.15(f),
2.16, 2.17 and 2.25, (i) each Revolving Credit Borrowing, each payment or
prepayment of principal of any Revolving Credit Borrowing, each payment of
interest on the Revolving Credit Loans, each payment of the Facility Fees, each
reduction of the Total Commitment and each refinancing of any Borrowing with, or
conversion of any Borrowing to, a Revolving Credit Borrowing, or continuation of
any Borrowing as a Revolving Credit Borrowing, shall be allocated pro rata among
the Lenders in accordance with their respective Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amount of their outstanding Revolving Credit Loans). Each
payment of principal of any Competitive Borrowing shall be allocated pro rata
among the Lenders participating in such Borrowing in accordance with the
respective principal amounts of their outstanding Competitive Loans comprising
such Borrowing. Each payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders that shall not have made
Loans as part of such Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may, in
its discretion, round each Lender's percentage of such Borrowing computed in
accordance with Section 2.1, to the next higher or lower whole Dollar amount.
SECTION 2.19. Right of Setoff.
---------------
If any Event of Default shall have occurred and be continuing
and any Lender shall have requested the Administrative Agent to declare the
Loans immediately due and payable pursuant to Article 7, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by such Lender and any
other indebtedness at any time owing by such Lender to, or for the credit or the
account of, the Borrower, against any of and all the obligations now or
hereafter existing under this Agreement and the Loans and interests in Letters
of Credit 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 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.
------------------
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All payments by the Borrower hereunder and under the Notes
shall be made in Dollars in immediately available funds at the office of the
Administrative Agent's Agent Bank Services Department, Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx, for credit to PHH
Corporation Clearing Account, Account No. 000-0-00000 (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.
SECTION 2.21. Withholding Taxes.
-----------------
(a) Prior to the date of the initial Loans hereunder, and from
time to time thereafter if requested by the Borrower or the Administrative Agent
or required because, as a result of a change in Applicable Law or a change in
circumstances or otherwise, a previously delivered form or statement becomes
incomplete or incorrect in any material respect, each Lender organized under the
laws of a jurisdiction outside the United States shall provide, if applicable,
the Administrative Agent and the Borrower with complete, accurate and duly
executed forms or other statements prescribed by 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 Borrower and the Administrative Agent shall be
entitled to deduct and withhold any and all present or future taxes or
withholdings, and all liabilities with respect thereto, from payments hereunder
or under the Notes, if and to the extent that the Borrower or the Administrative
Agent in good faith determines that such deduction or withholding is required by
Applicable Law, including, without limitation, any applicable treaty. In the
event the Borrower or the Administrative Agent shall so determine that deduction
or withholding of taxes is required, it shall advise the affected Lender as to
the basis of such determination prior to actually deducting and withholding such
taxes. In the event the Borrower or the Administrative Agent shall so deduct or
withhold taxes from amounts payable hereunder, it (i) shall pay to or deposit
with the appropriate taxing authority in a timely manner the full amount of
taxes it has deducted or withheld; (ii) shall provide evidence of payment of
such taxes to, or the deposit thereof with, the appropriate taxing authority and
a statement setting forth the amount of taxes deducted or withheld, the
applicable rate, and any other information or documentation reasonably requested
by the Lenders from whom the taxes were deducted or withheld; and (iii) shall
forward to such Lenders any receipt for such payment or deposit of the deducted
or withheld taxes as may be issued from time to time by the appropriate taxing
authority. Unless the Borrower and the Administrative Agent have received forms
or other documents satisfactory to them indicating that payments hereunder or
under the Notes are not subject to withholding tax or are subject to such tax at
a rate reduced by an applicable tax treaty, the Borrower or the Administrative
Agent
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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 the Borrower
or the Administrative Agent, it shall be the Person to deduct and withhold
taxes, and to the extent required by law it shall deduct and withhold taxes, on
amounts that such Lender may remit to any other Person(s) by reason of any
undisclosed transfer or assignment of an interest in this Agreement to such
other Person(s) pursuant to paragraph (g) of Section 9.3 and (ii) to indemnify
the Borrower and the Administrative Agent and any 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 the Administrative Agent (i) the sum payable by the Borrower shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.21) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with Applicable Law. For purposes of this Section 2.21, the term
"Initial Date" shall mean (i) in the case of the Administrative Agent, the date
hereof, (ii) in the case of each Lender as of the date hereof, the date hereof
and (iii) in the case of any other Lender, the effective date of the Assignment
and Acceptance pursuant to which it became a Lender.
SECTION 2.22. Certain Pricing Adjustments.
---------------------------
The Facility Fee and the applicable LIBOR Spread in effect
from time to time shall be determined in accordance with the following table:
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S&P/Xxxxx'x Rating Equivalent Facility Fee (in Basis Applicable LIBOR Spread
of the Borrower's senior Points) (in Basis Points)
unsecured long-term debt
AA-/Aa3 or better 6.0 12.75
A+/A1 7.0 13.00
A/A2 8.0 14.50
A-/A3 9.0 16.00
BBB+/Baa1 10.0 20.00
BBB/Baa2 12.5 22.50
BBB-/Baa3 17.5 32.50
BB+/Ba1 or worse 25.0 37.50
In the event the S&P rating on the Borrower's senior unsecured
long-term debt is not equivalent to the Xxxxx'x rating on such debt, the higher
rating will determine the Facility Fee and applicable LIBOR Spread, unless the
S&P and Xxxxx'x ratings are more than one level apart, in which case the rating
one level below the higher rating will be determinative. In the event that the
Borrower's senior unsecured long-term debt is rated by only one of S&P and
Xxxxx'x (for any reason, including if S&P or Xxxxx'x shall cease to be in the
business of rating corporate debt obligations) or if the rating system of either
S&P or Xxxxx'x 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 Xxxxx'x, then the Facility Fee and
the applicable LIBOR Spread shall be deemed to be calculated as if the lowest
rating category set forth above applied. Any increase in the Facility Fee or the
applicable LIBOR Spread determined in accordance with the foregoing table shall
become effective on the date of announcement or publication by the Borrower or
either such rating agency of a reduction in such rating or, in the absence of
such announcement or publication, on the effective date of such decreased
rating, or on the date of any request by the Borrower to either of such rating
agencies not to rate its senior unsecured long-term debt or on the date either
of such rating agencies announces it shall no longer rate the Borrower's senior
unsecured long-term debt. Any decrease in the Facility Fee or applicable LIBOR
Spread shall be effective on the date of announcement or publication by either
of such rating agencies of an increase in rating or in the absence of
announcement or publication on the effective date of such increase in rating.
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SECTION 2.23. [Intentionally Deleted.]
SECTION 2.24. Letters of Credit.
-----------------
(a) (i) Upon the terms and subject to the conditions hereof,
each Issuing Lender agrees to issue Letters of Credit payable in Dollars from
time to time after the Closing Date and prior to the earlier of the Maturity
Date and the termination of the Commitments, upon the request of the Borrower,
provided that (A) the Borrower shall not request that any Letter of Credit be
issued if, after giving effect thereto, the sum of the then current L/C Exposure
plus the aggregate principal Dollar Equivalent Amount of the Loans then
outstanding would exceed the Total Commitment, (B) in no event shall any Issuing
Lender issue (x) any Letter of Credit having an expiration date later than five
Business Days before the Maturity Date or (y) any Letter of Credit having an
expiration date more than one year after its date of issuance, provided,
further, that any Letter of Credit with a 365-day duration may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (x) above), (C) the Borrower shall not
request that an Issuing Lender issue any Letter of Credit if, after giving
effect to such issuance, the L/C Exposure would exceed $100,000,000, and (D) an
Issuing Lender shall be prohibited from issuing or renewing Letters of Credit
hereunder upon the occurrence and during the continuance of an Event of Default.
(ii) Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the applicable Issuing Lender, a participation in such Letter
of Credit in accordance with the percentage which its Commitment represents
of the Total Commitment.
(iii) Each Letter of Credit may, at the option of the
applicable Issuing Lender, provide that such Issuing Lender may (but shall not
be required to) pay all or any part of the maximum amount which may at any time
be available for drawing thereunder to the beneficiary thereof upon the
occurrence of an Event of Default and the acceleration of the maturity of the
Loans, provided that, if payment is not then due to such beneficiary, such
Issuing Lender shall deposit the funds in question in an account with such
Issuing Lender to secure payment to such beneficiary and any funds so deposited
shall be paid to such beneficiary of such Letter of Credit if conditions to such
payment are satisfied or returned to the Administrative Agent for distribution
to the Lenders (or, if all Obligations shall have been paid in full in cash, to
the Borrower) if no payment to such beneficiary has been made and the final date
available for drawings under such Letter of Credit has passed. Each payment or
deposit of funds by an Issuing Lender as provided in this paragraph shall be
treated for all purposes of this Agreement as a drawing duly honored by such
Issuing Lender under the related Letter of Credit.
(b) Whenever the Borrower desires the issuance of a Letter of
Credit, it shall deliver to the Administrative Agent and the applicable Issuing
Lender a written notice no later than 1:00 p.m. (New York time) at least five
Business Days prior to the proposed date of issuance provided, however, that the
Borrower and the Administrative Agent and such Issuing
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Lender may agree to a shorter time period. That notice shall specify (i) the
Issuing Lender for such Letter of Credit, (ii) the proposed date of issuance
(which shall be a Business Day), (iii) the face amount of such Letter of
Credit, (iv) the expiration date of such Letter of Credit and (v) the name and
address of the beneficiary. Such notice shall be accompanied by a brief
description of the underlying transaction and upon the request of the
applicable Issuing Lender, the Borrower shall provide additional details
regarding the underlying transaction. Concurrently with the giving of written
notice of a request for the issuance of a Letter of Credit, the Borrower
shall specify a precise description of the documents and the verbatim text of
any certificate to be presented by the beneficiary of such Letter of Credit
which, if presented by such beneficiary prior to the expiration date of such
Letter of Credit, would require the applicable Issuing Lender to make payment
under such Letter of Credit; provided that the applicable Issuing Lender, in
its reasonable discretion, may require customary changes in any such documents
and certificates. Upon issuance of any Letter of Credit, the applicable
Issuing Lender shall notify the Administrative Agent of the issuance of such
Letter of Credit. Promptly after receipt of such notice, the
Administrative Agent shall notify each Lender of the issuance and the amount of
each such Lender's respective participation therein.
(c) The payment of drafts under any Letter of Credit shall be
made in accordance with the terms of such Letter of Credit and, in that
connection, any Issuing Lender shall be entitled to honor any drafts and accept
any documents presented to it by the beneficiary of such Letter of Credit in
accordance with the terms of such Letter of Credit and believed by such Issuing
Lender in good faith, and in the absence of gross negligence or willful
misconduct, to be genuine. No Issuing Lender shall have any duty to inquire as
to the accuracy or authenticity of any draft or other drawing documents which
may be presented to it, but shall be responsible only to determine in accordance
with customary commercial practices, and in the absence of gross negligence or
willful misconduct, that the documents which are required to be presented before
payment or acceptance of a draft under any Letter of Credit have been delivered
and that they comply on their face with the requirements of that Letter of
Credit. The Borrower's obligations under this Section 2.24 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Issuing Lender, any beneficiary of a Letter of Credit or any other
Person.
(d) If any Issuing Lender shall make payment on any draft
presented under a Letter of Credit, such Issuing Lender shall give notice of
such payment to the Administrative Agent and the Lenders and each Lender hereby
authorizes and requests such Issuing Lender to advance for its account pursuant
to the terms hereof its share of such payment based upon its participation in
such Letter of Credit and agrees promptly to reimburse such Issuing Lender in
immediately available funds for the Dollar equivalent of the amount so advanced
on its behalf. If such reimbursement is not made by any Lender in immediately
available funds on the same day on which such Issuing Lender shall have made
payment on any such draft, such Lender shall pay interest thereon to such
Issuing Lender at a rate per annum equal to the Issuing Lender's cost of
obtaining overnight funds in the New York Federal Funds Market.
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(e) In the case of any draft presented under a Letter of
Credit which is required to be paid at any time on or before the Maturity Date
and provided that the conditions specified in Section 4.2 are then satisfied,
such payment shall constitute an ABR Loan hereunder, and interest shall accrue
from the date the applicable Issuing Lender makes payment of a draft under the
Letter of Credit. If any draft is presented under a Letter of Credit and (i) the
conditions specified in Section 4.2 are not satisfied or (ii) if the Commitments
have been terminated, then the Borrower will, upon demand by the Administrative
Agent, pay to the applicable Issuing Lender, in immediately available funds, the
full amount of such draft.
(f) (i) The Borrower agrees to pay the following amount to
each Issuing Lender with respect to Letters of Credit issued by it hereunder:
(A) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by such Issuing Lender
in respect of each such drawing from the date of the drawing to, but
excluding, the date such amount is reimbursed by the Borrower at a rate
which is at all times equal to 2% per annum in excess of the Alternate
Base Rate; provided that no such default interest shall be payable if
such reimbursement is made from the proceeds of Revolving Credit Loans
pursuant to Section 2.24(e);
(B) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder, documentary and
processing charges in accordance with such Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or drawing, as the case may be; and
(C) a fronting fee computed at the rate agreed to by the
Borrower and the applicable Issuing Lender, on the daily average face
amount of each outstanding Letter of Credit issued by such Issuing
Lender, such fee to be due and payable in arrears on and through the
last day of each fiscal quarter of the Borrower, on the Maturity Date
and on the expiration of the last outstanding Letter of Credit.
(ii) The Borrower agrees to pay to the
Administrative Agent for distribution to each Lender in respect of all Letters
of Credit outstanding, such Lender's pro rata share of a commission on the
maximum amount available from time to time to be drawn under such outstanding
Letters of Credit calculated at a rate per annum equal to the applicable LIBOR
Spread from time to time in effect hereunder. Such commission shall be payable
in arrears on and through the last day of each fiscal quarter of the Borrower
and on the later of the Maturity Date and the expiration of the last
outstanding Letter of Credit.
(iii) Promptly upon receipt by any Issuing Lender
or the Administrative Agent (as applicable) of any amount described in clause
(i)(A) or (ii) of this Section 2.24(f), or any amount described in Section
2.24(e) previously reimbursed to the applicable Issuing Lender by the Lenders,
such Issuing Lender or the Administrative Agent (as applicable) shall distribute
to each Lender its pro rata share of such amount. Amounts payable under clauses
(i)(B) and
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(i)(C) of this Section 2.24(f) shall be paid directly to the Issuing Lender and
shall be for its exclusive use.
(g) If by reason of (i) any change after the date hereof in
Applicable Law, or in the interpretation or administration thereof (including,
without limitation, any request, guideline or policy not having the force of
law) by any Governmental Authority charged with the administration or
interpretation thereof, or (ii) compliance by any Issuing Lender or any Lender
with any direction, request or requirement (whether or not having the force of
law) issued after the date hereof by any Governmental Authority or monetary
authority (including any change whether or not proposed or published prior to
the date hereof), including, without limitation, Regulation D of the Board:
(A) any Issuing Lender or any Lender shall be subject to any
tax, levy, charge or withholding of any nature (other than withholding
tax imposed by the United States or any political subdivision or taxing
authority thereof or therein or any other tax, levy, charge or
withholding (i) that is measured with respect to the overall net income
of such Issuing Lender or such Lender (or is imposed in lieu of a tax
on net income) or of a Lending Office of such Issuing Lender or such
Lender, and that is imposed by the United States, or by the
jurisdiction in which such Issuing Lender or such Lender is
incorporated, or in which such Lending Office is located, managed or
controlled or in which such Issuing Lender or such Lender has its
principal office (or any political subdivision or taxing authority
thereof or therein) or (ii) that is imposed solely by reason of such
Issuing Lender or such Lender failing to make a declaration of, or
otherwise to establish, non-residence, or to make any other claim for
exemption, or otherwise to comply with any certification,
identification, information, documentation or reporting requirements
prescribed under the laws of the relevant jurisdiction, in those cases
where such Issuing Lender or such Lender may properly make the
declaration or claim or so establish non-residence or otherwise comply)
or to any variation thereof or to any penalty with respect to the
maintenance or fulfillment of its obligations under this Section 2.24,
whether directly or by such being imposed on or suffered by any Issuing
Lender or any Lender;
(B) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letter of Credit
issued by any Issuing Lender or participations therein purchased by any
Lender; or
(C) there shall be imposed on any Issuing Lender or any Lender
any other condition regarding this Section 2.24, any Letter of Credit
or any participation therein;
and the result of the foregoing is directly or indirectly to increase the cost
to any Issuing Lender or any Lender of issuing, making or maintaining any Letter
of Credit or of purchasing or maintaining any participation therein, or to
reduce the amount receivable in respect thereof by any Issuing Lender or any
Lender, then and in any such case such Issuing Lender or such Lender
-40-
may, at any time, notify the Borrower, and the Borrower shall pay on demand
such amounts as such Issuing Lender or such Lender may specify to be necessary
to compensate such Issuing Lender or such Lender for such additional cost or
reduced receipt. The determination by any Issuing Lender or any Lender, as
the case may be, of any amount due pursuant to this Section 2.24 as set
forth in a certificate setting forth the calculation thereof in reasonable
detail shall, in the absence of manifest error, be final, conclusive and
binding on all of the parties hereto.
(h) If at any time when an Event of Default shall have
occurred and be continuing, any Letters of Credit shall remain outstanding, then
either the applicable Issuing Lender(s) or the Required Lenders may, at their
option, require the Borrower to deposit cash or Cash Equivalents in a Cash
Collateral Account in an amount equal to the full amount of the L/C Exposure or
to furnish other security acceptable to the Administrative Agent and the
applicable Issuing Lender(s). Any amounts so delivered pursuant to the preceding
sentence shall be applied to reimburse the applicable Issuing Lender(s) for the
amount of any drawings honored under Letters of Credit issued by it; provided,
however, that if prior to the Maturity Date, no Event of Default is then
continuing, the Administrative Agent shall return all of such collateral
relating to such deposit to the Borrower if requested by it.
(i) If, at any time, the L/C Exposure exceeds the aggregate
Commitments, then the Required Lenders may, at their option, require the
Borrower to deposit cash or Cash Equivalents in a Cash Collateral Account in an
amount sufficient to eliminate such excess or to furnish other security for such
excess acceptable to the Administrative Agent and the Issuing Lender(s). Any
amounts so delivered pursuant to the preceding sentence shall be applied to
reimburse the applicable Issuing Lender(s) for the amount of any drawings
honored under Letters of Credit; provided that if subsequent to any such deposit
such excess is reduced to an amount less than the portion of such deposited
amounts and no Default or Event of Default is then continuing, the Borrower
shall be entitled to receive such excess collateral if requested by it.
(j) Upon the request of the Administrative Agent, each Issuing
Lender shall furnish to the Administrative Agent copies of any Letter of Credit
issued by such Issuing Lender and such related documentation as may be
reasonably requested by the Administrative Agent.
(k) Notwithstanding the termination of the Commitments and the
payment of the Loans, the obligations of the Borrower under this Section 2.24
shall remain in full force and effect until the Administrative Agent, each
Issuing Lender and the Lenders shall have been irrevocably released from their
obligations with regard to any and all Letters of Credit.
SECTION 2.25. Extension of Maturity Date. (a) Not less than
30 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, within 30
days of the date of such request, notify the
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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 within
30 days of the date of such request. 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
2.25 shall be for a maximum of one year and (ii) the Commitment of any Lender
which does not consent in writing to such extension within 30 days of such
request (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
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 2.25 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.
(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
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shall notify the Lenders of the execution of any such agreement, the name
of the financial institution executing such agreement and the amount of such
financial institution's Commitment.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce the Lenders to enter into this Agreement
and to make the Loans and participate in the Letters of Credit provided for
herein, the Borrower makes the following representations and warranties to the
Administrative Agent and the Lenders, all of which shall survive the execution
and delivery of this Agreement, the issuance of the Notes and the making of the
Loans and issuance of the Letters of Credit:
SECTION 3.1. Corporate Existence and Power.
-----------------------------
The Borrower and its Subsidiaries have been duly organized and
are validly existing in good standing under the laws of their respective
jurisdictions of incorporation and are in good standing or have applied for
authority to operate as a foreign corporation in all jurisdictions where the
nature of their properties or business so requires it and where a failure to be
in good standing as a foreign corporation would have a Material Adverse Effect.
The Borrower has the corporate power to execute, deliver and perform its
obligations under this Agreement and the other Fundamental Documents and other
documents contemplated hereby and to borrow and obtain other extensions of
credit 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 and other extensions of
credit hereunder (a) have been duly authorized by all necessary corporate action
on the part of the Borrower, (b) will not violate any provision of any
Applicable Law 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 and other extensions of credit) by the
Borrower of this Agreement or the other Fundamental Documents.
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SECTION 3.4. Financial Statements of Borrower.
--------------------------------
(a) The (i) audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries as of April 30, 1995 and April 30,
1996, and (ii) unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of October 31, 1996, 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.
(b) Upon its delivery to the Lenders pursuant to Section
5.1(g), the unaudited pro forma consolidated balance sheet of the Borrower as of
a date reasonably acceptable to the Administrative Agent (including the notes
thereto) (the "Pro Forma Balance Sheet"), has been prepared giving effect (as if
such events had occurred on such date) to (i) the Acquisition, (ii) the
financings and other transactions contemplated hereby to be made on or before
the Closing Date and the use of proceeds thereof and (iii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the Borrower as of the
date of delivery thereof and presents fairly on a pro forma basis the estimated
consolidated financial position of the Borrower as of such date, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
SECTION 3.5. No Material Adverse Change.
--------------------------
Since April 30, 1996 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 Acquisition
shall not be deemed to be a material adverse change); provided that the
foregoing representation is made solely as of the Closing Date.
SECTION 3.6. Material Subsidiaries.
---------------------
Annexed hereto as Schedule 3.6 is a correct and complete list
as of the date hereof of all Material Subsidiaries of the Borrower showing, as
to each Material Subsidiary, its name, the jurisdiction of its incorporation,
its authorized capitalization and the ownership of the capital stock of such
Material Subsidiary.
SECTION 3.7. Copyrights, Patents and Other Rights.
------------------------------------
Each of the Borrower and its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, 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.
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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 and no Letters of Credit will be used, whether
immediately, incidentally or ultimately, for any purpose violative of or
inconsistent with any of the provisions of Regulation G, T, U or X of the Board.
SECTION 3.11. Investment Company Act.
----------------------
The Borrower is not, and will not during the term of this
Agreement be, (x) an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (y) subject to regulation under the Public
Utility Holding Company Act of 1935 or the Federal Power Act.
SECTION 3.12. Enforceability.
--------------
This Agreement and the other Fundamental Documents when
executed will constitute legal, valid and enforceable obligations (as
applicable) of the Borrower (subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity).
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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.
SECTION 3.15. Disclosure.
----------
As of the Closing Date, neither this Agreement nor the
Confidential Information Memorandum dated February 1997, 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
date hereof, there is no fact known to the Borrower which, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect (provided that the Acquisition shall not be deemed to be a material
adverse change).
-46-
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 the
Borrower.
(b) Corporate Documents for the Borrower. The Administrative
Agent shall have received, with copies for each of the Lenders, a
certificate of the Secretary or Assistant Secretary of the Borrower
dated the date hereof and certifying (A) that attached thereto is a
true and complete copy of the certificate of incorporation and
by-laws of the Borrower as in effect on the date of such
certification; (B) that attached thereto is a true and complete copy
of resolutions adopted by the Board of Directors of the Borrower
authorizing the borrowings and other extensions of credit hereunder
and the execution, delivery and performance in accordance with their
respective terms of this Agreement and any other documents required
or contemplated hereunder; and (C) as to the incumbency and specimen
signature of each officer of the Borrower executing this Agreement
or any other document delivered by it in connection herewith (such
certificate to contain a certification by another officer of the
Borrower as to the incumbency and signature of the officer signing
the certificate referred to in this paragraph (b)).
(c) Financial Statements. The Lenders shall have received
the (i) audited consolidated financial statements of the Borrower
and its Consolidated Subsidiaries as of and for the period ended
April 30, 1995 and April 30, 1996 and (ii) unaudited consolidated
financial statements of the Borrower and its Consolidated
Subsidiaries as of and for the period ended October 31, 1996.
(d) Opinions of Counsel. The Administrative Agent shall
have received the favorable written opinions, dated the date hereof
and addressed to the Administrative
-47-
Agent and the Lenders, of Xxxxxx X. Xxxxxx, Xx., Assistant
General Counsel of PHH Corporation and Piper & Marbury, counsel
to the Borrower, substantially in the form of Exhibits B-1 and B-2
hereto respectively.
(e) No Material Adverse Change. The Administrative Agent
shall be satisfied that no material adverse change shall have
occurred with respect to the business, assets, operations or
condition, financial or otherwise, of the Borrower and its
Consolidated Subsidiaries, taken as a whole, since April 30, 1996
(provided that the Acquisition shall not be deemed to be a material
adverse change).
(f) Payment of Fees. The Administrative Agent shall be
satisfied that all amounts payable to the Arranger, the
Administrative Agent and the other Lenders pursuant hereto or with
regard to the transactions contemplated hereby have been or are
simultaneously being paid.
(g) Litigation. No litigation shall be pending or, 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 Borrower to fulfill
its obligations hereunder or to otherwise materially impair the
interests of the Lenders.
(h) Existing Credit Agreements. Prior to or simultaneously
with the Closing Date, all obligations under the master 3-year
and 364-day committed existing credit agreements of the Borrower
shall have been paid in full and the commitments of the lenders
thereunder shall have been terminated.
(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 the Borrower
certifying, as of the Closing Date, compliance with the
conditions set forth in paragraphs (b) and (c) of Section 4.2.
The Administrative Agent shall provide the Borrower with written confirmation of
the satisfaction of the conditions precedent specified in this Section 4.1.
SECTION 4.2. Conditions Precedent to Each Loan and Letter of
Credit.
----------------------------------------------
The obligation of the Lenders to make each Loan and of any
Issuing Lender to issue a Letter of Credit, including the initial Loan and
initial Letter of Credit hereunder, is subject to the following conditions
precedent:
(a) Notice. The Administrative Agent shall have received a
notice with respect to such Borrowing or Letter of Credit as
required by Article 2 hereof.
-48-
(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 or Letter of Credit issuance 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 or the
issuance of a Letter of Credit hereunder, the Borrower shall
be in material compliance with all of the terms and provisions
set forth herein to be observed or performed and no Event of
Default or Default shall have occurred and be continuing;
provided 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 or issuance of a Letter of Credit shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing or
issuance of a Letter of Credit 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 or
there shall be any outstanding L/C Exposure, the Borrower agrees that, unless
the Required Lenders shall otherwise consent in writing, it will, and will cause
each of its Subsidiaries to:
-49-
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 financial
statements were prepared in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods;
(b) Commencing with the quarter ending June 30, 1997 and 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;
-50-
(d) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available by the Borrower or any of its Subsidiaries to its
shareholders generally, of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any of them
with any securities exchange or with the Securities and Exchange
Commission, or any comparable foreign bodies, and of all press releases
and other statements made available generally by any of them to the
public concerning material developments in the business of the Borrower
or any of its Subsidiaries;
(e) Promptly upon any executive officer of the Borrower or any
of its Subsidiaries obtaining knowledge of the occurrence of any
Default or Event of Default, a certificate of the president, 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;
(f) Promptly upon any executive officer of the Borrower or any
of its Subsidiaries obtaining knowledge of (i) the institution of any
action, suit, proceeding, investigation or arbitration by any
Governmental Authority or other Person against or affecting the
Borrower or any of its Subsidiaries or any of their assets, or (ii) any
material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to
the Lenders), which, in each case might reasonably be expected to have
a Material Adverse Effect, 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; and
(g) As soon as available, the Pro Forma Balance Sheet.
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.
-51-
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).
-52-
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 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 or Letters of Credit 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.
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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 or
there shall be any outstanding L/C Exposure, unless the Required Lenders shall
otherwise consent in writing, the Borrower agrees that it will not, nor will it
permit any of its Subsidiaries to, directly or indirectly:
SECTION 6.1. Limitation on 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)-(g) 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;
-54-
(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; and
(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.
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, other than
pursuant to the Acquisition; 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).
-55-
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:
(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;
-56-
(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 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; and
(k) to the extent not otherwise permitted by paragraphs
(a)-(j) of this Section 6.5, Liens existing on the date hereof listed
on Schedule 6.5 hereto and any extensions or renewals thereof.
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 greater of (a) the sum of (i) 70% of Consolidated
Net Worth on the first calendar quarter-end following the Acquisition plus (ii)
25% of Consolidated Net Income, if positive, for each fiscal quarter after the
first fiscal quarter-end following the Acquisition or (b) $400,000,000.
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.
-57-
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 Subsidiary (other
than Special Purpose Vehicle 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.
7. EVENTS OF DEFAULT
In the case of the happening and during the continuance of any
of the following events (herein called "Events of Default"):
(a) any representation or warranty made or deemed made by the
Borrower in this Agreement or any other Fundamental Document or in
connection with this Agreement or with the execution and delivery of
the Notes or the Borrowings (or other extensions of credit) hereunder,
or any statement or representation made in any report, financial
statement, certificate or other document furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Administrative Agent or
any Lender under or in connection with this Agreement, shall prove to
have been false or misleading in any material respect when made or
delivered;
(b) default shall be made in the payment of any principal of
(or Letter of Credit reimbursement obligations) or interest on the
Notes or of any fees or other amounts payable by the Borrower
hereunder, when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise, and in the case of payments of
interest, such default shall continue unremedied for five 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 the Borrower in the due
observance or performance of any other covenant, condition or agreement
to be observed or performed pursuant to the terms of this Agreement or
any other Fundamental Document and such default shall
-58-
continue unremedied for thirty (30) days after the Borrower obtains
knowledge of such occurrence;
(e) (i) default in payment shall be made with respect to any
Indebtedness or Interest Rate 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
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;
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(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 subsequent to the
Acquisition (provided that, until the Acquisition is consummated and if
the Acquisition is not consummated, the definition of "Change in
Control" shall be deemed amended on such date such that (i) all
references therein to "HFS Incorporated" shall be deemed to be
references to "the Borrower" and (ii) clause (iii) of such definition
shall be deleted in its entirety);
(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; or
(j) a Reportable Event relating to a failure to meet minimum
funding standards or an inability to pay benefits when due shall have
occurred with respect to any Plan under the control of the Borrower or
any of its Subsidiaries and shall not have been remedied within 45 days
after the occurrence of such Reportable Event, if the occurrence
thereof could reasonably be expected to have a Material Adverse Effect;
then, in every such event and at any time thereafter during the continuance of
such event, the Administrative Agent may or, 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 (or Letter of Credit reimbursement obligations)
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,
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notice of acceleration, notice of intent to accelerate or other notice of any
kind, all of which are hereby expressly waived, anything in this
Agreement or the Notes to the contrary notwithstanding and the Commitments of
the Lenders shall thereupon forthwith terminate.
8. THE ADMINISTRATIVE AGENT AND EACH ISSUING LENDER
SECTION 8.1. Administration by Administrative Agent.
--------------------------------------
The general administration of the Fundamental Documents and
any other documents contemplated by this Agreement shall be by the
Administrative Agent or its designees 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. The Administrative Agent 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.
SECTION 8.2. Advances and Payments.
---------------------
(a) On the date of each Loan, the Administrative Agent shall
be authorized (but not obligated) to advance, for the account of each of the
applicable Lenders, the amount of the Loan to be made by it in accordance with
this Agreement. Each of the Lenders hereby authorizes and requests the
Administrative Agent to advance for its account, pursuant to the terms hereof,
the amount of the Loan to be made by it, unless with respect to any Lender, such
Lender has theretofore specifically notified the Administrative Agent that such
Lender does not intend to fund that particular Loan. Each of the Lenders agrees
forthwith to reimburse the Administrative Agent in immediately available funds
for the amount so advanced on its behalf by the Administrative Agent pursuant to
the immediately preceding sentence. If any such reimbursement is not made in
immediately available funds on the same day on which the Administrative Agent
shall have made any such amount available on behalf of any Lender in accordance
with this Section 8.2, such Lender shall pay interest to the Administrative
Agent at a rate per annum equal to the Administrative Agent's cost of obtaining
overnight funds in the New York Federal Funds Market. Notwithstanding the
preceding sentence, if such reimbursement is not made by the second Business Day
following the day on which the Administrative Agent shall have made any such
amount available on behalf of any Lender or such Lender has indicated that it
does not intend to reimburse the Administrative Agent, the Borrower shall
immediately pay such unreimbursed advance amount (plus any accrued, but unpaid
interest at the rate per annum equal to the Administrative Agent's cost of
obtaining overnight funds in the New York Federal Funds Market) to the
Administrative Agent.
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(b) Any amounts received by the Administrative Agent in
connection with this Agreement or the Notes the application of which is not
otherwise provided for shall be applied, in accordance with each of the Lenders'
pro rata interest therein, first, to pay accrued but unpaid Facility Fees,
second, to pay accrued but unpaid interest on the Notes, third, to pay the
principal balance outstanding on the Notes and fourth, to pay other amounts
payable to the Administrative Agent and/or the Lenders. All amounts to be paid
to any of the Lenders by the Administrative Agent shall be credited to the
applicable Lenders, after collection by the Administrative Agent, in immediately
available funds either by wire transfer or deposit in such Lender's
correspondent account with the Administrative Agent, or as such Lender and the
Administrative Agent shall from time to time agree.
SECTION 8.3. Sharing of Setoffs and Cash Collateral.
--------------------------------------
Each of the Lenders agrees that if it shall, through the
operation of Sections 2.19, 2.24(h) or 2.24(i) or the exercise of a right of
banker's lien, setoff or counterclaim against the Borrower, including, but not
limited to, a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim and received by such Lender under any applicable bankruptcy, insolvency or
other similar law, or otherwise (other than pursuant to Section 2.15(f) or
2.25), obtain payment in respect of its Loans or interests in Letters of Credit
as a result of which the unpaid portion of its Loans or L/C Exposure 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 or L/C Exposure of such
other Lenders, so that the aggregate unpaid principal amount of each of the
Lenders' Loans and L/C Exposure and its participation in Loans and L/C Exposure
of the other Lenders shall be in the same proportion to the aggregate unpaid
principal amount of all Loans and L/C Exposure then outstanding as the principal
amount of its Loans and L/C Exposure prior to the obtaining of such payment was
to the principal amount of all Loans and L/C Exposure outstanding prior to the
obtaining of such payment and (b) such other adjustments shall be made from time
to time as shall be equitable to ensure that the Lenders share such payment pro
rata.
SECTION 8.4. Notice to the Lenders.
---------------------
Upon receipt by the Administrative Agent from the Borrower of
any communication calling for an action on the part of the Lenders, or upon
notice to the Administrative Agent of any Event of Default, the Administrative
Agent will in turn immediately inform the other Lenders in writing (which shall
include telegraphic communications) of the nature of such communication or of
the Event of Default, as the case may be.
SECTION 8.5. Liability of Administrative Agent and Each
Issuing Lender.
------------------------------------------
(a) The Administrative Agent or any Issuing Lender, when
acting on behalf of the Lenders may execute any of its duties under this
Agreement by or through its officers, agents, or
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employees and neither the Administrative Agent, the Issuing Lenders nor
their respective directors, officers, agents, or employees shall be liable to
the Lenders or any of them for any action taken or omitted to be taken in good
faith, or be responsible to the Lenders or to any of them for the
consequences of any oversight or error of judgment, or for any loss, unless
the same shall happen through its gross negligence or willful misconduct.
Neither the Administrative Agent, the Issuing Lenders 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 Administrative Agent, the Issuing Lenders nor any of
their respective directors, officers, employees, or agents shall be
responsible to any of the Lenders for the due execution (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 of any of the terms, conditions,
covenants, or agreements of this Agreement or any related agreement or document.
(b) Neither the Administrative Agent, the Issuing Lenders, nor
any of their respective directors, officers, employees, or agents shall have any
responsibility to the Borrower on account of the failure or delay in performance
or breach by any of the Lenders or the Borrower of any of their respective
obligations under this Agreement or the Notes or any related agreement or
document or in connection herewith or therewith.
(c) The Administrative Agent and the Issuing Lenders, in such
capacities hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by it to be genuine or correct and
to have been signed or sent by a Person or Persons believed by it to be the
proper Person or Persons, and it shall be entitled to rely on advice of legal
counsel, independent public accountants, and other professional advisers and
experts selected by it.
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SECTION 8.6. Reimbursement and Indemnification.
---------------------------------
Each of the Lenders severally and not jointly agrees (i) to
reimburse the Administrative Agent 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 Borrower or one of its Subsidiaries; (ii) to indemnify and
hold harmless the Administrative Agent 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 Borrower or
one of its Subsidiaries (except such as shall result from the gross negligence
or willful misconduct of the Person seeking indemnification); and (iii) to
indemnify and hold harmless each of the Issuing Lenders and any of their
respective directors, officers, employees, or agents or demand in the amount of
its proportionate share from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on or
incurred by or asserted against it relating to or arising out of the issuance of
any Letters of Credit (except such as shall result from the gross negligence or
willful misconduct of the Person seeking indemnification).
SECTION 8.7. Rights of Administrative Agent.
------------------------------
It is understood and agreed that Chase shall have the same
rights and powers hereunder (including the right to give such instructions) as
the other Lenders and may exercise such rights and powers, as well as its rights
and powers under other agreements and instruments to which it is or may be
party, and engage in other transactions with the Borrower as though it were not
the Administrative Agent on behalf of the Lenders under this Agreement.
SECTION 8.8. Independent Investigation by Lenders.
------------------------------------
Each of the Lenders acknowledges that it has decided to enter
into this Agreement and to make the Loans and participate in the Letters of
Credit hereunder based on its own analysis of the transactions contemplated
hereby and of the creditworthiness of the Borrower and agrees that neither the
Administrative Agent nor any Issuing Lender shall bear responsibility therefor.
SECTION 8.9. Notice of Transfer.
------------------
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The Administrative Agent and the Issuing Lenders may deem and
treat any Lender which is a party to this Agreement as the owners of such
Lender's respective portions of the Loans and Letter of Credit reimbursement
rights for all purposes, unless and until a written notice of the assignment or
transfer thereof executed by any such Lender shall have been received by the
Administrative Agent and become effective pursuant to Section 9.3.
SECTION 8.10. Successor Administrative Agent.
------------------------------
The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent from among the Lenders, with the consent of the Borrower,
which will not be unreasonably withheld. If no successor Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation, the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which with the
consent of the Borrower, which will not be unreasonably withheld, shall be a
commercial bank organized or licensed under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 8.11. Resignation of an Issuing Lender.
--------------------------------
Any Issuing Lender may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, such
Issuing Lender shall be discharged from any duties and obligations under this
Agreement in its capacity as an Issuing Lender with regard to Letters of Credit
not yet issued. After any retiring Issuing Lender's resignation hereunder as an
Issuing Lender, the provisions of this Agreement shall continue to inure to its
benefit as to any outstanding Letters of Credit or otherwise with regard to
outstanding L/C Exposure and any actions taken or omitted to be taken by it
while it was an Issuing Lender under this Agreement.
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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 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Xxxxxx Xxxxxx, with a copy to Xxxxxx Xxxxxxx, if to the
Borrower, to it at 00000 XxXxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx 00000-0000,
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 parties hereunder. All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the fifth Business Day
after the date when sent by registered or certified mail, postage prepaid,
return receipt requested, if by mail, or when delivered to the telegraph
company, charges prepaid, if by telegram, or when receipt is acknowledged, if by
any telecopier or telegraphic communications equipment of the sender, in each
case addressed to such party as provided in this Section 9.1 or in accordance
with the latest unrevoked written direction from such party.
SECTION 9.2. Survival of Agreement, Representations and
Warranties, etc.
------------------------------------------
All warranties, representations and covenants made by the
Borrower herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Agreement shall be considered to have been
relied upon by the Administrative Agent and the Lenders and shall survive the
making of the Loans and the issuance of Letters of Credit herein contemplated
and the issuance and delivery to the Administrative Agent of the Notes
regardless of any investigation made by the Administrative Agent or the Lenders
or on their behalf and shall continue in full force and effect so long as any
amount due or to become due hereunder is outstanding and unpaid and so long as
the Commitments have not been terminated. All statements in any such certificate
or other instrument shall constitute representations and warranties by the
Borrower hereunder.
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SECTION 9.3. Successors and Assigns; Syndications; Loan
Sales; Participations.
------------------------------------------
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party (provided that the Borrower may not assign its rights
hereunder without the prior written consent of all the Lenders), and all
covenants, promises and agreements by, or on behalf of, the Borrower which are
contained in this Agreement shall inure to the benefit of the successors and
assigns of the Lenders.
(b) Each of the Lenders may (but only with the prior written
consent of the Administrative Agent, the Issuing Lenders and the Borrower, which
consents shall not be unreasonably withheld or delayed) assign to one or more
banks or other 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 and interests in Letters of Credit held by
it) (a "Ratable Assignment") or (ii) all or a portion of its rights and
obligations under and in respect of (A) its Commitment under this Agreement and
the same portion of the Revolving Credit Loans at the time owing to it or (B)
the Competitive Loans at the time owing to it (including, without limitation, in
the case of any such type of Loan, the same portion of the associated Note) (a
"Non-Ratable Assignment"); provided that (1) each Non-Ratable Assignment shall
be of a constant, and not a varying, percentage of all of the assigning Lender's
rights and obligations in respect of the Loans and the Commitment (if
applicable) which are the subject of such assignment, (2) each Ratable
Assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's rights and obligations under this Agreement, (3) the amount
of the Commitment or Competitive Loans, as the case may be, of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the Lender) shall
be in a minimum 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).
(c) [Intentionally Deleted].
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(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 Borrower or the performance or observance by the
Borrower of any of its obligations under the Fundamental Documents; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to Sections
5.1(a) and 5.1(b) (or if none of such financial statements shall have then been
delivered, then copies of the financial statements referred to in Section 3.4)
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
assigning Lender, the Administrative Agent, or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Fundamental Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; and (vi) such assignee agrees that it will be bound by the provisions
of this Agreement and will perform in accordance with its terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(e) The Administrative Agent, on behalf of the Borrower, shall
maintain at its address at which notices are to be given to it pursuant to
Section 9.1, a copy of each Assignment 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, and interests in
Letters of Credit of, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent, the Issuing Lenders and the Lenders
may (and, in the case of any Loan or other obligation hereunder not evidenced by
a Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Fundamental Documents, notwithstanding
any notice to the contrary. Any assignment of any Loan or other obligation
hereunder not evidenced by a Note shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
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(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 Revolving
Credit Note, if any, at the same time it delivers the applicable Assignment and
Acceptance to the Administrative Agent. If only Competitive Loans have been
assigned by the assigning Lender, such Lender shall not be required to deliver
its Competitive Note to the Administrative Agent, unless such Lender no longer
holds a Commitment under this Agreement, in which event such assigning Lender
shall deliver its Competitive Note, if any, at the same time it delivers the
applicable Assignment and Acceptance to the Administrative Agent. Within five
Business Days after receipt of the notice, the Borrower, at its own expense,
shall execute and deliver to the applicable Lenders at their request, either (A)
a new Revolving Credit Note to the order of such assignee in an amount equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance and a
Competitive Note to the order of such assignee in an amount equal to the Total
Commitment hereunder, and a new Revolving Credit Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder,
or (B) if Competitive Loans only have been assigned and the assigning Lender
holds a Commitment under this Agreement, then a new Competitive Note to the
order of the assignee Lender in an amount equal to the outstanding principal
amount of the Competitive Loan(s) purchased by it pursuant to the Assignment and
Acceptance, or (C) if Competitive Loans only have been assigned and the
assigning Lender does not hold a Commitment under this Agreement, a new
Competitive Note to the order of such assignee in an amount equal to the
outstanding principal amount of the Competitive Loans(s) purchased by it
pursuant to such Assignment and Acceptance and, a new Competitive Note to the
order of the assigning Lender in an amount equal to the outstanding principal
amount of the Competitive Loans retained by it hereunder. Any new Revolving
Credit Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of the Commitments of the respective Lenders. All new Notes
shall be dated the date hereof and shall otherwise be in substantially the forms
of Exhibits A-1 and A-2 hereto, as the case may be.
(g) Each of the Lenders may without the consent of the
Borrower, the Administrative Agent or any Issuing Lender sell participations to
one or more banks or other 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 and interests in Letters of Credit 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
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participating banks or other entities shall be entitled to the cost
protection provisions contained in Sections 2.14, 2.15 and 2.17 hereof but a
participant shall not be entitled to receive pursuant to such provisions an
amount larger than its share of the amount to which the Lender granting such
participation would have been entitled to receive, and (v) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(h) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to the
Administrative Agent by or on behalf of the Borrower.
(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) The Borrower consents that any Lender may at any time and
from time to time pledge, or otherwise grant a security interest in, any Loan or
any Note evidencing such Loan (or any part thereof), including any such pledge
or grant to any Federal Reserve Bank, and this Section shall not apply to any
such pledge or grant; provided that no such pledge or grant shall release a
Lender from any of its obligations hereunder or substitute any such assignee for
such Lender as a party hereto.
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SECTION 9.4. Expenses; Documentary Taxes.
---------------------------
Whether or not the transactions hereby contemplated shall be
consummated, the Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent and the Arranger in connection with the
syndication, preparation, execution, delivery and administration of this
Agreement, the Notes, the making of the Loans and issuance and administration of
the Letters of Credit, including but not limited to the reasonable fees and
disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the Administrative
Agent, as well as all reasonable out-of-pocket expenses incurred by the Lenders
in connection with any restructuring or workout of this Agreement, or the Notes
or the Letters of Credit or in connection with the enforcement or protection of
the rights of the Lenders in connection with this Agreement or the Notes or the
Letters of Credit or any other Fundamental Document, and with respect to any
action which may be instituted by any Person against any Lender or any Issuing
Lender in respect of the foregoing, or as a result of any transaction, action or
nonaction arising from the foregoing, including but not limited to the fees and
disbursements of any counsel for the Lenders or any Issuing Lender. Such
payments shall be made on the date of execution of this Agreement and thereafter
promptly on demand. The Borrower agrees that it shall indemnify the
Administrative Agent, the Lenders and the Issuing Lenders from, and hold them
harmless against, any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or the Notes or the issuance of any Letters of Credit or any other Fundamental
Document. The obligations of the Borrower under this Section shall survive the
termination of this Agreement and/or the payment of the Loans and/or expiration
of the Letters of Credit for two years.
SECTION 9.5. Indemnity.
---------
Further, by the execution hereof, the Borrower agrees to
indemnify and hold harmless the Administrative Agent, the Arranger, the Lenders
and the Issuing Lenders and their respective directors, officers, employees and
agents (each, an "Indemnified Party") from and against any and all expenses
(including reasonable fees and disbursements of counsel), losses, claims,
damages and liabilities arising out of any claim, litigation, investigation 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 Borrower shall not be liable
for the fees and expenses of more than one separate firm for all such
Indemnified Parties in connection with any one such action or any separate but
substantially similar or related actions in the same jurisdiction, nor shall the
Borrower be liable for any settlement of any proceeding effected without the
Borrower's written consent, and provided, further, 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 the Borrower under this Section 9.5 shall
survive the termination of this Agreement and/or payment of the Loans and/or the
expiration of the Letters of Credit.
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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.
SECTION 9.7. No Waiver.
---------
No failure on the part of the Administrative Agent, any Lender
or any Issuing Lender to exercise, and no delay in exercising, any right, power
or remedy hereunder or under the Notes or with regard to the Letters of Credit
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
SECTION 9.8. Extension of Maturity.
---------------------
Except as otherwise specifically provided in Article 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.
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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
the Borrower herefrom or therefrom, shall in any event be effective unless the
same shall be in writing and signed or consented to in writing by the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given; provided 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 due date of any Letter of Credit
reimbursement obligation or decrease the rate of interest payable thereon, or
the rate at which the Facility Fees or letter of credit fees accrue or (z) waive
a default under Section 7(b) with respect to a scheduled principal installment
of any Loan or payment of a Letter of Credit reimbursement obligation 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; 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 the
Administrative Agent or any Issuing Lender hereunder without its prior written
consent. No notice to or demand on the Borrower shall entitle the Borrower to
any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by any holder of a Note shall bind any Person
subsequently acquiring a Note, whether or not a Note is so marked.
SECTION 9.10. Severability.
------------
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
----------------------------------------
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF BROUGHT BY THE ADMINISTRATIVE AGENT, A LENDER OR AN ISSUING LENDER. THE
BORROWER TO THE EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES
NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (B) HEREBY WAIVES THE RIGHT
TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR COUNTERCLAIMS
EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM THE SAME
SUBJECT MATTER. THE BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY MAIL AT
ITS ADDRESS TO WHICH NOTICES ARE TO BE GIVEN PURSUANT TO SECTION 9.1. THE
BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF
PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT, THE
LENDERS AND EACH ISSUING LENDER. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION (A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR
TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF
INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY THEREIN DESCRIBED OR (B) IN
ANY OTHER MANNER PROVIDED BY, OR PURSUANT TO, THE LAWS OF SUCH OTHER
JURISDICTION, PROVIDED THAT THE ADMINISTRATIVE AGENT OR A LENDER OR AN ISSUING
LENDER MAY AT IS OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS
AGAINST THE BORROWER OR ANY OF ITS ASSETS IN ANY XXXXX XX XXXXXXX XXXXX XX XXX
XXXXXX XXXXXX OR OF ANY COUNTRY OR PLACE WHERE THE BORROWER OR SUCH ASSETS MAY
BE FOUND.
(b) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY
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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 or the Letters of Credit to be issued hereunder shall
be replaced by the terms of this Agreement.
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/ Xxx X. Xxxxxxxxxx
---------------------
Title: Senior Vice President
and Treasurer
-00-
XXX XXXXX XXXXXXXXX BANK, individually
and as Administrative Agent
By:/s/ Xxxx Xxxxx
--------------
Title: Vice President
BANK OF AMERICA ILLINOIS
By:/s/ Xxxxxx Xxxxxxxx
-------------------
Title: Vice President
BANK OF MONTREAL
By:/s/ Xxxxxx X. XxXxxxx
---------------------
Title: Director
THE BANK OF NEW YORK
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By:/s/ J. Xxxx Xxxxxxx
-------------------
Title: Authorized Signatory
THE BANK OF TOKYO-MITSUBISHI,
LIMITED, NEW YORK BRANCH
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By:/s/ J. Xxxxxx Xxx
-----------------
Title: Attorney-In-Fact
BANKERS TRUST COMPANY
By:/s/ Xxxxxxx XxXxxxxx
--------------------
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By:/s/ Xxxxxx X. Xxxxxxx
---------------------
Title: Director, CIBC Wood Gundy
Securites Corp., as Agent
COMERICA BANK
By:/s/ Xxxxxx X. Xxxxx
-------------------
Title: Account Officer
COMMERZBANK AG (NEW YORK BRANCH)
By:/s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------
Title: Vice President
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------
Title: Assistant Treasurer
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CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ Xxxx X. Xxxxxxx
-------------------
Title: Vice President
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By:/s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Title: Vice President
By:/s/ Xxxx X. Xxxxxx
------------------
Title: Associate
THE FIRST NATIONAL BANK OF CHICAGO
By:/s/ Xxxxxxx X. Xxxx
-------------------
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------
Title: Vice President
FIRST UNION NATIONAL BANK OF MARYLAND
By:/s/ Xxxxxx X. Xxxxx
-------------------
Title: Vice President
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THE FUJI BANK, LTD. NEW YORK BRANCH
By:/s/ Xxxxxxxx Xxxxxxxxx
----------------------
Title: Vice Preisdent and Manager
MELLON BANK, N.A.
By:/s/ Xxxxxx X. Xxxx
------------------
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By:/s/ Xxxxx Xxxxx
---------------
Title: Vice President
NATIONSBANK, N.A.
By:/s/ Xxxxxxxxx X. Xxxx
---------------------
Title: Vice President
ROYAL BANK OF CANADA
By:/s/ Xxxxx X. Xxxxxxx
--------------------
Title: Senior Manager
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THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By:/s/ Xxxx X. Xxxxxxxxx
---------------------
Title: Joint General Manager
XXXXX FARGO BANK, N.A.
By:/s/ Xxxxxxx X. Xxxxx
--------------------
Title: Senior Vice President
Schedule 1.1A
Commitments
-----------
Lender Commitment
------ ----------
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================================================================================
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
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
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PHH Real Estate Delaware 1,000(C) 860(C) PHH Holdings
Services Corporation
Corporation
PHH Mortgage New Jersey 5,000(C) 1,000(C) PHH Holdings
Services 20,000(P) 0(P) Corporation
Corporation
PHH Holdings Maryland 5,000 100 PHH
Corporation Corporation
PHH Delaware 5,000 1,000 PHH
Investments I Corporation
Corporation
PHH Europe United Kingdom 25,000,000 18,251,110 PHH Holdings
PLC** Corporation
PHH Vehicle United Kingdom 2,000,000 1,147,500 PHH Europe
Management PLC
Services PLC**
PHH Financial United Kingdom 10,000,000 10,000,000 PHH Investment
Services 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
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Existing Indebtedness and Guaranties
------------------------------------
None.
Schedule 6.5
Existing Liens
--------------
None.
EXECUTION COPY
--------------
================================================================================
$1,250,000,000
FIVE YEAR COMPETITIVE ADVANCE AND
REVOLVING CREDIT AGREEMENT
Dated as of March 4, 1997
among
PHH CORPORATION
as Borrower
and
THE LENDERS REFERRED TO HEREIN
-83-
and
THE CHASE MANHATTAN BANK, as Administrative Agent
================================================================================
CHASE SECURITIES INC., Arranger
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINITIONS................................................................................................. 1
2. THE LOANS................................................................................................... 17
SECTION 2.1. Commitments............................................................................. 17
SECTION 2.2. Loans................................................................................... 18
SECTION 2.3. Use of Proceeds......................................................................... 19
SECTION 2.4. Competitive Bid Procedure............................................................... 19
SECTION 2.5. Revolving Credit Borrowing Procedure.................................................... 22
SECTION 2.6. Refinancings............................................................................ 23
SECTION 2.7. Fees.................................................................................... 23
SECTION 2.8. Repayment of Loans; Evidence of Debt.................................................... 24
SECTION 2.9. Interest on Loans....................................................................... 25
SECTION 2.10. Interest on Overdue Amounts............................................................. 26
SECTION 2.11. Alternate Rate of Interest.............................................................. 26
SECTION 2.12. Termination and Reduction of
Commitments............................................................................. 27
SECTION 2.13. Prepayment of Loans..................................................................... 27
SECTION 2.14. Eurocurrency Reserve Costs.............................................................. 28
SECTION 2.15. Reserve Requirements; Change in Circumstances........................................... 29
SECTION 2.16. Change in Legality...................................................................... 31
SECTION 2.17. Reimbursement of Lenders................................................................ 32
SECTION 2.18. Pro Rata Treatment...................................................................... 33
SECTION 2.19. Right of Setoff......................................................................... 34
SECTION 2.20. Manner of Payments...................................................................... 34
SECTION 2.21. Withholding Taxes....................................................................... 34
SECTION 2.22. Certain Pricing Adjustments............................................................. 36
SECTION 2.23. [Intentionally Deleted.]................................................................ 37
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SECTION 2.24. Letters of Credit....................................................................... 37
SECTION 2.25. Extension of Maturity Date.............................................................. 43
3. REPRESENTATIONS AND WARRANTIES OF BORROWER.................................................................. 44
SECTION 3.1. Corporate Existence and Power........................................................... 44
SECTION 3.2. Corporate Authority and No Violation.................................................... 45
SECTION 3.3. Governmental and Other Approval and Consents............................................ 45
SECTION 3.4. Financial Statements of Borrower........................................................ 45
SECTION 3.5. No Material Adverse Change.............................................................. 46
SECTION 3.6. Material Subsidiaries................................................................... 46
SECTION 3.7. Copyrights, Patents and Other Rights.................................................... 46
SECTION 3.8. Title to Properties..................................................................... 46
SECTION 3.9. Litigation.............................................................................. 46
SECTION 3.10. Federal Reserve Regulations............................................................. 47
SECTION 3.11. Investment Company Act.................................................................. 47
SECTION 3.12. Enforceability.......................................................................... 47
SECTION 3.13. Taxes................................................................................... 47
SECTION 3.14. Compliance with ERISA................................................................... 47
SECTION 3.15. Disclosure.............................................................................. 48
SECTION 3.16. Environmental Liabilities............................................................... 48
4. CONDITIONS OF LENDING....................................................................................... 48
SECTION 4.1. Conditions Precedent to Effectiveness.................................................... 48
(a) Loan Documents........................................................................... 49
(b) Corporate Documents for the Borrower..................................................... 49
(c) Financial Statements..................................................................... 49
(d) Opinions of Counsel...................................................................... 49
(e) No Material Adverse Change............................................................... 49
(f) Payment of Fees.......................................................................... 49
(g) Litigation............................................................................... 50
(h) Existing Credit Agreements............................................................... 50
(i) Officer's Certificate.................................................................... 50
SECTION 4.2 Conditions Precedent to Each Loan and Letter of Credit................................... 50
(a) Notice................................................................................... 50
(b) Representations and Warranties........................................................... 50
(c) No Event of Default...................................................................... 51
5. AFFIRMATIVE COVENANTS....................................................................................... 51
SECTION 5.1. Financial Statements, Reports, etc. .................................................... 51
SECTION 5.2. Corporate Existence; Compliance with Statutes........................................... 53
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SECTION 5.3. Insurance............................................................................... 53
SECTION 5.4. Taxes and Charges....................................................................... 53
SECTION 5.5. ERISA Compliance and Reports............................................................ 54
SECTION 5.6. Maintenance of and Access to Books and Records; Examinations............................ 55
SECTION 5.7. Maintenance of Properties............................................................... 55
6. NEGATIVE COVENANTS.......................................................................................... 55
SECTION 6.1. Limitation on Material Subsidiary Indebtedness.......................................... 55
SECTION 6.2. [Intentionally deleted]................................................................. 56
SECTION 6.3. Limitation on Transactions with Affiliates.............................................. 56
SECTION 6.4. Consolidation, Merger, Sale of Assets................................................... 57
SECTION 6.5. Limitations on Liens.................................................................... 57
SECTION 6.6. Sale and Leaseback...................................................................... 59
SECTION 6.7. Consolidated Net Worth.................................................................. 59
SECTION 6.8. Ratio of Indebtedness To Consolidated Net Worth......................................... 59
SECTION 6.9. Accounting Practices.................................................................... 59
SECTION 6.10. Restrictions Affecting Subsidiaries..................................................... 59
7. EVENTS OF DEFAULT........................................................................................... 60
8. THE ADMINISTRATIVE AGENT AND EACH ISSUING LENDER............................................................ 63
SECTION 8.1. Administration by Administrative Agent.................................................. 63
SECTION 8.2. Advances and Payments................................................................... 63
SECTION 8.3. Sharing of Setoffs and Cash Collateral.................................................. 64
SECTION 8.4. Notice to the Lenders................................................................... 65
SECTION 8.5. Liability of Administrative Agent and Each Issuing Lender............................... 65
SECTION 8.6. Reimbursement and Indemnification....................................................... 66
SECTION 8.7. Rights of Administrative Agent.......................................................... 66
SECTION 8.8. Independent Investigation by Lenders.................................................... 67
SECTION 8.9. Notice of Transfer...................................................................... 67
SECTION 8.10. Successor Administrative Agent.......................................................... 67
SECTION 8.11. Resignation of an Issuing Lender........................................................ 68
9. MISCELLANEOUS............................................................................................... 68
SECTION 9.1. Notices................................................................................. 68
SECTION 9.2. Survival of Agreement, Representations and Warranties, etc. ............................ 68
SECTION 9.3. Successors and Assigns; Syndications; Loan Sales; Participations ...................... 69
SECTION 9.4. Expenses; Documentary Taxes............................................................. 73
SECTION 9.5. Indemnity............................................................................... 73
SECTION 9.6. CHOICE OF LAW........................................................................... 74
SECTION 9.7. No Waiver............................................................................... 74
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SECTION 9.8. Extension of Maturity................................................................... 74
SECTION 9.9. Amendments, etc. ....................................................................... 75
SECTION 9.10. Severability............................................................................ 75
SECTION 9.11. SERVICE OF PROCESS; WAIVER OF JURY TRIAL................................................ 76
SECTION 9.12. Headings................................................................................ 77
SECTION 9.13. Execution in Counterparts............................................................... 77
SECTION 9.14. Entire Agreement........................................................................ 77
SCHEDULES
1.1A Lenders, Addresses and Commitments
1.1B Available Foreign Currencies
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
B-1 Opinion of Xxxxxx X. Xxxxxx, Esq
B-2 Opinion of Piper & Marbury
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
