FOURTH AMENDMENT dated as of November 2, 1998 (this "Fourth
Amendment"), to the Five Year Competitive Advance and Revolving Credit
Agreement, dated as of March 4, 1997 (as heretofore and hereafter amended,
supplemented or otherwise modified from time to time, the "Five Year Credit
Agreement"), among PHH Corporation (the "Borrower"), the Lenders referred to
therein and The Chase Manhattan Bank, as agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders amend
certain provisions of the Five Year Credit Agreement;
WHEREAS, the Lenders have agreed to such amendments only upon
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
capitalized terms which are defined in the Five Year Credit Agreement are used
herein as therein defined.
SECTION 2. Amendments to Section 1. Section 1 of the Five Year
Credit Agreement is hereby amended by adding the following definition in proper
alphabetical order:
"Asset Securitization Subsidiary" shall mean (i) any
Subsidiary engaged solely in the business of effecting asset
securitization transactions permitted by this Agreement and activities
incidental thereto or (ii) any Subsidiary whose primary purpose is to
hold title or ownership interests in vehicles, mortgages, relocation
assets and related assets under management.
SECTION 3. Amendments to Section 2. (a) Section 2.9 of the
Five Year Credit Agreement is hereby amended by adding at the end of paragraph
(b) the phrase "plus the applicable margin therefor from time to time in effect
in accordance with Section 2.22".
(b) Section 2.22 of the Five Year Credit Agreement is hereby
amended by deleting such Section and substituting therefor the following:
SECTION 2.22. Certain Pricing Adjustments.
The Facility Fee and the applicable LIBOR Spread in effect
from time to time shall be determined in accordance with the following
table:
S&P/Xxxxx'x Rating Applicable LIBOR
Equivalent of the Borrower's Facility Fee Spread Spread (in Basis
senior unsecured long-term debt (in Basis Points) Points)
------------------------------- ----------------- -----------------------
A/A2 or better 10.0 27.5
A-/A3 12.5 37.5
BBB+/Baa1 15.0 47.5
BBB/Baa2 17.5 57.5
BBB-/Baa3 22.5 65.0
BB+/Ba1 or lower 37.5 112.5
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 lower rating will determine the Facility Fee and applicable LIBOR
Spread. 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. The
applicable margin for ABR Loans shall be 1% less than the applicable
LIBOR Spread (but not less than 0%), including as the LIBOR Spread may
be increased pursuant to the next paragraph.
In addition, on each day on which the Borrower's commercial
paper is rated A2 or lower by S&P or P2 or lower by Xxxxx'x or is not
rated by each of S&P and Xxxxx'x, the applicable LIBOR Spread shall be
increased by .25% per annum. If the rating system with respect to
commercial paper 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
reflect such changed rating system. Any decrease in the Borrower's
commercial paper rating shall be deemed to become effective for
purposes of this Section 2.22 on the date of announcement or
publication by the Borrower or either such rating agency of a reduction
in such rating or, in the absence of such announcement or publication,
on the effective date of such decreased rating, or on the date of any
request by the Borrower to either of such rating agencies not to rate
its commercial paper or on the date either of such rating agencies
announces it shall no longer rate the Borrower's commercial paper. Any
increase in the Borrower's commercial paper rating shall be deemed to
be effective for purposes of this Section 2.22 on the date of
announcement or publication by either of such rating agencies of an
increase in rating or in the absence of announcement or publication on
the effective date of such increase in rating.
(c) Section 2.24 of the Five Year Credit Agreement is hereby
amended by adding to paragraph (f)(i)(A) thereof the phrase "plus any applicable
margin therefor from time to time in effect in accordance with Section 2.22"
immediately after the phrase "Alternate Base Rate".
SECTION 4. Amendments to Section 6. (a) Section 6.1 of the
Five Year Credit Agreement is hereby amended by (i) deleting the word "and" from
the end of paragraph (f), (ii) deleting the period at the end of paragraph (g)
and substituting therefor a semicolon and (iii) adding the following new
paragraphs at the end thereof:
(h) Indebtedness of any Asset Securitization Subsidiary
incurred solely to finance asset securitization transactions as long as
(i) such Indebtedness is unsecured or is secured solely as permitted by
Section 6.5(n), and (ii) the lender (and any other party) in respect of
such Indebtedness has recourse (other than customary limited recourse
based on misrepresentations or failure of such assets to meet customary
eligibility criteria), if any, solely to the assets securitized in the
applicable asset securitization transaction and, if such Asset
Securitization Subsidiary is of the type described in clause (i) of the
definition of "Asset Securitization Subsidiary", the capital stock of
such Asset Securitization Subsidiary; and
(i) Indebtedness consisting of the obligation to repurchase
mortgages and related assets to the extent permitted by Section 6.12.
(b) Section 6.5 of the Five Year Credit Agreement is hereby
amended by (i) deleting the word "and" from the end of paragraph (l), (ii)
deleting the period at the
end of paragraph (m) and substituting therefor a semi-colon and (iii) adding the
following new paragraphs at the end thereof:
(n) Liens securing Indebtedness and related
obligations of an Asset Securitization Subsidiary in respect
of one or more asset securitization transactions, which
Indebtedness is reported on a consolidated balance sheet of
the Borrower and its Subsidiaries, covering only the assets
securitized in the asset securitization transaction financed
by such Indebtedness and, if such Asset Securitization
Subsidiary is of the type described in clause (i) of the
definition of "Asset Securitization Subsidiary", the capital
stock of such Asset Securitization Subsidiary; and
(o) Liens on mortgages and related assets securing
obligations to repurchase such mortgages and related assets to
the extent such obligations are permitted by Section 6.12.
(c) Section 6.10 of the Five Year Credit Agreement is hereby
amended by adding immediately after the phrase "Special Purpose Vehicle
Subsidiaries" the phrase "and Asset Securitization Subsidiaries".
(d) Section 6 of the Five Year Credit Agreement is hereby
amended by adding the following new Section 6.12.
SECTION 6.12. Limitation on Mortgage Repurchase Indebtedness.
Incur, assume or suffer to exist any Indebtedness (other than
Indebtedness of Asset Securitization Subsidiaries incurred to finance
asset securitization transactions permitted by this Agreement) in
respect of the repurchase of mortgages and related assets if the
aggregate principal amount of all such Indebtedness would exceed
$900,000,000 at any time.
SECTION 5. Conditions to Effectiveness. This Fourth Amendment
shall become effective as of the date hereof (the "Effective Date") upon
execution and delivery by a duly authorized officer of each of the Borrower, the
Administrative Agent and the Required Lenders.
SECTION 6. Representation and Warranties. The Borrower
represents and warrants to each Lender that as of the Effective Date, before and
after giving effect to this Fourth Amendment: (I) no Default or Event of Default
has occurred and is continuing; (ii) the representations and warranties made by
the Borrower in or pursuant to the Five Year Credit Agreement or any Fundamental
Documents are true and correct in all material respects on and as of the
Effective Date as if made on such date (except to the extent that any such
representation and warranty expressly relates to an earlier date) and (iii) this
Fourth Amendment constitutes the legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization,
moratorium or similar laws affecting creditors' rights generally, by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law) and an implied covenant of good faith and fair dealing.
SECTION 7. Continuing Effect of the Five Year Credit
Agreement. This Fourth Amendment shall not constitute an amendment or waiver of
or consent to any provision of the Five Year Credit Agreement not expressly
referred to herein and shall not be construed as an amendment, waiver or consent
to any action on the part of the Borrower that would require an amendment,
waiver or consent of the Administrative Agent or the Lenders except as expressly
stated herein. Except as expressly consented to hereby, the provisions of the
Five Year Credit Agreement are and shall remain in full force and effect.
SECTION 8. Expenses. The Borrower agrees to pay and reimburse
the Administrative Agent for all of its reasonable costs and out-of-pocket
expenses incurred in connection with the preparation, execution and delivery of
this Fourth Amendment and ancillary documents, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent.
SECTION 9. Counterparts. This Fourth Amendment may be executed
in any number of counterparts by the parties hereto, each of which counterparts
when so executed shall be an original, but all counterparts taken together shall
constitute one and the same instrument.
SECTION 10. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be executed and delivered by their respective duly authorized
officers as of the date first above written.
PHH CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Title: Senior Executive Vice President and CFO
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By: /s/ Xxxxxxxx Xxxxx
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Title: Vice President
THE CHASE MANHATTAN BANK OF CANADA, as
Canadian Agent
By: /s/ Xxxxxxxxx Xxxx
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Title: Vice President
By: /s/ Xxxx X. Xxxx
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Title: Vice President
BANK OF AMERICA NT&SA
By: /s/ Xxxx Poralyko
--------------------------------------------------
Title: Managing Director
BANK OF MONTREAL
By: /s/ Xxxxx X. Xxxxx
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Title: Director
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. Xxxxx
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Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ J. Xxxx Xxxxxxx
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Title: Authorized Signatory
THE BANK OF TOKYO-MITSUBISHI, LIMITED,
NEW YORK BRANCH
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Title: Attorney-in-fact
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxxx
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Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Xxxxxxxxx Xxxx
--------------------------------------------------
Title: Authorized Signatory
COMERICA BANK
By: /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------------------------
Title: Vice President
COMMERZBANK AG (NEW YORK BRANCH)
By: /s/ Xxxxx X. Xxxxxxxxx
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Title: Senior Vice President
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
--------------------------------------------------
Title: Assistant Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxxx Xxxxx
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Title: First Vice President-Manager
DEUTSCHE BANK AG NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Managing Director
By: /s/ Xxxxx X. Xxxxxxx
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Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxx Xxxxxxx
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Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ Xxxxx Xxxxxx Xxxxxxxxxxx
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Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxx
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Title: Vice President
THE FUJI BANK, LTD. NEW YORK BRANCH
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------------------
Title: Vice President and Manager
MELLON BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Title: First XX
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Xxxxxx Bottamidi
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Title: Vice President
NATIONSBANK, N.A.
By: /s/ Xxxx X.
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Title: Managing Director
ROYAL BANK OF CANADA
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Senior Manager
THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By: /s/ J. Xxxxx Xxxxxxxx
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Title: Senior Vice President
XXXXX FARGO BANK, N.A.
By:
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Title:
By:
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Title:
