Exhibit 10(b)
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of January 30, 1998 among SODEXHO MARRIOTT
OPERATIONS, INC., a Delaware corporation (the "Borrower"), MARRIOTT
INTERNATIONAL, INC., a Delaware corporation, to be renamed SODEXHO MARRIOTT
SERVICES, INC. (the "Parent Guarantor"), the banks, financial institutions and
other institutional lenders listed on the signature pages hereof as the Initial
Lenders (the "Initial Lenders"), SOCIETE GENERALE and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK ("Xxxxxx"), as the initial issuing banks (the "Initial
Issuing Banks"), and XXXXXX, as documentation agent and as administrative agent
(together with any successor appointed pursuant to Article VIII, the
"Administrative Agent") for the Lender Parties (as hereinafter defined), with
SOCIETE GENERALE and X.X. XXXXXX SECURITIES INC., as arrangers (the
"Arrangers").
PRELIMINARY STATEMENTS:
(1) Pursuant to the Transaction Documents (as hereinafter defined),
the Parent Guarantor will (i) distribute (the "Spinoff") to its shareholders all
of its, and its Subsidiaries' (as hereinafter defined), businesses other than
the Foodservice Business, (ii) Sodexho (as hereinafter defined) will transfer
(the "Canadian Subsidiary Transfer") the shares of Sodexho Financiere du Canada,
Inc. ("Sodexho Canada"), its Canadian Subsidiary engaged in the food service and
facilities management business, to the Parent Guarantor, (iii) Sodexho will pay
(the "Cash Payment") $304,000,000 to the Parent Guarantor, (iv) International
Catering Corporation, a Delaware corporation and a wholly owned indirect
Subsidiary of Sodexho ("ICC"), will merge (the "Merger") with Merger Corp. (as
hereinafter defined), a newly-formed, wholly owned Subsidiary of the Parent
Guarantor, with ICC being the surviving corporation and (v) Sodexho will
receive, as consideration in respect of the Cash Payment, the Merger and the
Canadian Subsidiary Contribution, not less than 40.1% and not more than 49.9% of
the common stock of the Parent Guarantor.
(2) The Borrower has been organized as a wholly owned Subsidiary of
the Parent Guarantor in order to facilitate the transactions contemplated by the
Transaction Documents and to obtain the financing contemplated herein. At the
time of the Merger, the Parent Guarantor will contribute (the "Subsidiary
Contribution") all of the capital stock and other Investments (as hereinafter
defined) held by the Parent Guarantor in its Subsidiaries (other than Sodexho
Canada, Marriott Corporation of Canada, Ltd. ("MMS Canada"), New Marriott and
Subsidiaries of New Marriott) to the Borrower. The Spinoff, the Canadian
Subsidiary Contribution, the Cash Payment, the Merger and the Subsidiary
Contribution are herein referred to, collectively, as the "Transaction".
(3) The Borrower has requested that, in connection with the
Transaction, the Lender Parties lend to it up to $735,000,000 to refinance
certain Existing Debt (as hereinafter defined) of the Parent Guarantor and ICC
and their respective Subsidiaries and to pay transaction fees and expenses and
that, from time to time, the Lender Parties lend to the Borrower and issue
Letters of Credit for the benefit of the Borrower and its Subsidiaries for
general corporate purposes of the Borrower, the Parent Guarantor and their
respective Subsidiaries. The Lender Parties have indicated their willingness to
agree to lend such amounts, and issue letters of credit in such amounts, on the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
2
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Xxxxxx at
its office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, ABA No.
000-000-000, Account No. 000-00-000, Attention: Global Credit Support,
Reference: Sodexho Marriott.
"Advance" means a Term Advance, a Revolving Credit Advance or a
Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise; provided that, from and after the
consummation of the Transaction, none of the Borrower, the Parent
Guarantor or any of their respective Subsidiaries shall be an Affiliate of
New Marriott or any of its Subsidiaries or Affiliates unless New Marriott
or any of its Subsidiaries or Affiliates purchases or otherwise acquires
more than 10% of the Voting Stock of the Parent Guarantor or any of its
Subsidiaries after the date hereof.
"Amendment Agreement" means the Amendment Agreement dated as of
January 28, 1998 among the Borrower, Sodexho, Merger Corp., New Marriott
and ICC.
"Applicable Lending Office" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a Base
Rate Advance and such Lender Party's Eurodollar Lending Office in the case
of a Eurodollar Rate Advance.
"Applicable Margin" means, with respect to Eurodollar Rate Advances
(i) at any time during the 12-month period commencing on the Funding Date
(as hereinafter defined) 1.125% per annum, and (ii) at any time and from
time to time thereafter, a percentage per annum determined by reference to
the Leverage Ratio as set forth below:
============================================
Leverage Ratio Percentage
-------------- ----------
--------------------------------------------
Level 6
-------
greater than 4.5:1.0 1.125%
--------------------------------------------
Level 5
-------
greater than 4.0:1.0
but not greater than 4.5:1.0 0.875%
--------------------------------------------
Level 4
-------
greater than 3.5:1.0
but not greater than 4.0:1.0 0.75%
============================================
3
-----------------------------------------
Level 3
-------
greater than 3.0:1.0
but not greater than 3.5:1.0 0.625%
-----------------------------------------
Level 2
-------
greater than 2.5:1.0
but not greater than 3.0:1.0 0.50%
-----------------------------------------
Level 1
-------
2.5:1.0 or less 0.375%
=========================================
Subject to the effectiveness provisions of Section 9.02, the Applicable
Margin for any day shall be determined by reference to the ratio set forth
in the schedule most recently delivered by the Borrower to the
Administrative Agent on or prior to such day pursuant to subsection
5.03(b)(ii)(B) or 5.03(c)(ii)(B); provided that if the Borrower has not
submitted any such schedule to the Administrative Agent as and when
required under such Section 5.03(b)(ii)(B) or 5.03(c)(ii)(B), as the case
may be, the Applicable Margin shall be at Level 6 until a schedule
complying with such Section has been so delivered.
"Appropriate Lender" means, at any time, with respect to (a) any of
the Term or Revolving Credit Facilities, a Lender that has a Commitment
with respect to such Facility at such time and (b) the Letter of Credit
Facility, (i) any Issuing Bank and (ii) if the other Revolving Credit
Lenders have made Letter of Credit Advances pursuant to Section 2.03(c)
that are outstanding at such time, such other Revolving Credit Lenders.
"Arrangers" has the meaning specified in the recital of parties to
this Agreement.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in substantially
the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (whether or not any conditions to drawing can then be met).
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by Xxxxxx in New
York, New York, from time to time, as Xxxxxx'x prime rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest at the Base
Rate pursuant to the applicable Notice of Borrowing, the applicable Notice
of Interest Rate Election, Section 2.03(c), Section 2.10(c) or Section
2.17.
"Base Transaction Documents" has the meaning specified in Section
3.02(a).
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrowing" means a Term Borrowing or a Revolving Credit Borrowing.
4
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings in U.S. dollar deposits are carried on in the London interbank
market.
"Canadian Subsidiary Transfer" has the meaning specified in
Preliminary Statement (1).
"Capital Expenditures" means, for any Person for any period, all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property
or improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with GAAP,
reflected as capital expenditures or increases in other long-term tangible
assets related to client investments on a Consolidated cash flow statement
of such Person. For purposes of this definition, the purchase price of
equipment that is purchased simultaneously with the trade-in of existing
equipment or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price
less the credit granted by the seller of such equipment for the equipment
being traded in at such time or the amount of such proceeds, as the case
may be.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Cash Payment" has the meaning specified in Preliminary Statement
(1).
"Cash Equivalents" means any of the following, to the extent having
a maturity of not greater than one year from the date of acquisition
thereof: (a) direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of the Government of the United
States or any agency or instrumentality thereof, (b) certificates of
deposit of or time deposits with (i) any Lender Party, (ii) a bank or
trust company which is organized or licensed under the laws of the United
States or any State thereof and has capital, surplus and undivided profits
of at least $1,000,000,000 or (iii) any other financial institution whose
unsecured senior long-term debt is rated at least A- (or the then
equivalent) by Xxxxx'x or A3 (or the then equivalent) by S&P, or (c)
commercial paper rated at least "Prime-1" (or the then equivalent) by
Xxxxx'x or "A-1" (or the then equivalent) by S&P or which is issued by an
entity whose senior unsecured long-term debt securities are rated at least
A- (or the then equivalent) by Xxxxx'x or A3 (or the then equivalent) by
S&P, (d) repurchase agreements with respect to securities described in
clause (a) above entered into with an office of a bank, trust company or
other financial institution specified in clause (b) above, (e) mutual
funds at least 90% of whose assets are held in Investments referred to in
clauses (a) through (d) above (except that the maturities of certain
investments held by such mutual funds may exceed one year so long as the
dollar-weighted average life of the Investments of such mutual fund is
less than one year), and (f) in the case of any non-United States
Subsidiary of the Parent Guarantor, corresponding Investments in the local
currency of the jurisdiction in which such Subsidiary is located.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Closing Date" means the date on which all conditions precedent set
forth in Section 3.01 shall have been satisfied, but in no event later
than January 30, 1998.
5
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Administrative Agent for the benefit of the
Secured Parties.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement and any other agreement that creates or purports to create a
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Grantor" means each of the Borrower and the Guarantors.
"Commitment" means a Term Commitment, a Revolving Credit Commitment
or a Letter of Credit Commitment.
"Confidential Information" means any information that Sodexho, the
Parent Guarantor, the Borrower or any of their respective Subsidiaries,
Affiliates, advisors or agents furnishes to the Administrative Agent or
any Lender Party other than any such information that is or becomes
generally available to the public or that is or becomes available to the
Administrative Agent or such Lender Party from a source other than
Sodexho, the Parent Guarantor, the Borrower or any of their respective
Subsidiaries, Affiliates, advisors or agents that is not, to the best of
the Administrative Agent's or such Lender Party's knowledge, acting in
violation of a confidentiality agreement with Sodexho, the Parent
Guarantor, the Borrower or any of their respective Subsidiaries,
Affiliates, advisors or agents.
"Consents Side Letter" means the letter dated as of October 2, 1997
among the Parent Guarantor, Merger Corp., New Marriott, Sodexho and ICC.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Debt" means, on any date, Debt of the Parent Guarantor
and its Subsidiaries on such date (other than Debt referred to in clause
(i) of the definition of "Debt"), determined on a Consolidated basis.
"Consolidated Interest Expense" means, for any period, Consolidated
interest expense of the Parent Guarantor and its Subsidiaries for such
period (excluding any such amounts not payable on a current basis in cash
and any amounts attributable to the amortization of deferred financing
costs or other capitalized fees or expenses paid prior to the Funding Date
or incurred in connection with the Transaction, the prepayment of any
Marriott Bonds or the incurrence of the Guaranteed Senior Debt or any Debt
hereunder), net of Consolidated interest income of the Parent Guarantor
and its Subsidiaries for such period.
"Contingent Obligation" of any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt (whether arising
by virtue of partnership arrangements, by virtue of an agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise),
(ii) to reimburse a bank for amounts drawn under a letter of credit for
the purpose of paying such Debt or (iii) entered into for the purpose of
assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term "Contingent Obligation" shall
not include endorsements for collection or deposit in the ordinary course
of business.
6
"Conversion", "Convert" and "Converted" each refer to a conversion
of Advances of one Type into Advances of the other Type pursuant to
Section 2.09 or 2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person.
"Current Liabilities" of any Person means all items that in
accordance with GAAP would be classified as current liabilities of such
Person other than Debt for borrowed money.
"Debt" of any Person means, at any date, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (d) all obligations of such
Person as lessee which are capitalized in accordance with GAAP, (e) all
obligations, contingent or otherwise, of such Person to reimburse any bank
or other Person in respect of a letter of credit or similar instrument,
(f) all Debt secured by a Lien on any asset of such Person, whether or not
such Debt is otherwise an obligation of such Person, (g) all Contingent
Obligations of such Person in respect of Debt of another Person (each such
Contingent Obligation to constitute Debt in an amount equal to the lesser
of the amount of such other Person's Debt subject to such Contingent
Obligation and the maximum amount payable under such Contingent
Obligation), (h) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Hybrid
Capital Stock of such Person or any other Person, valued, in the case of
Redeemable Hybrid Capital Stock, at the greater of its voluntary or
involuntary liquidation preference, and (i) all obligations in respect of
Hedge Agreements.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party
to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time
which has not been made by such Lender Party or by the Administrative
Agent for the account of such Lender Party pursuant to Section 2.02(d) as
of such time. In the event that a portion of a Defaulted Advance shall be
deemed made pursuant to Section 2.15(a), the remaining portion of such
Defaulted Advance shall continue to be considered a Defaulted Advance.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so paid as
of such time, including, without limitation, any amount required to be
paid by such Lender Party to (a) any Issuing Bank pursuant to Section
2.03(c) to purchase a portion of a Letter of Credit Advance made by such
Issuing Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender Party, (c) any
other Lender Party pursuant to Section 2.13 to purchase any participation
in Advances owing to such other Lender Party and (d) the Administrative
Agent or any Issuing Bank pursuant to Section 8.05 to reimburse the
Administrative Agent or such Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to the
Administrative Agent or such Issuing Bank as provided therein. In the
event that a portion of a Defaulted Amount shall be deemed paid pursuant
to Section 2.15(b), the remaining portion of such Defaulted Amount shall
continue to be considered a Defaulted Amount.
7
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 7.01(f).
"Disclosed Litigation" has the meaning specified in Section 3.02(j).
"Distribution Agreement" means the Distribution Agreement dated as
of September 30, 1997 between the Parent Guarantor and New Marriott, as
amended by the Amendment Agreement.
"Domestic Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such
other office of such Lender Party as such Lender Party may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, (a) Consolidated net income (or net
loss) of the Parent Guarantor and its Subsidiaries for such period (after
eliminating the effect of any non-Foodservice Business discontinued
operations incurred during the period prior to the Funding Date or to be
allocated to New Marriott as contemplated by the Distribution Agreement)
plus (b) the sum of each of the following items to the extent deducted in
determining such Consolidated net income: (i) interest expense for such
period less interest income for such period, (ii) net income tax expense
for such period, (iii) depreciation expense for such period, (iv)
amortization expense for such period, (v) Integration Costs deducted for
such period in an amount not to exceed, in aggregate for all such
deductions taken over the term of the Facilities, $45,000,000 less the
amount of such costs classified by the Parent Guarantor's independent
public accountants, and recorded, as capitalized expenses, (vi) the net
amount of (A) extraordinary non-cash losses for such period less (B)
extraordinary non-cash gains for such period, (vii) non-cash non-recurring
items for such period, and (viii) other non-cash items for such period, in
each case determined on a Consolidated basis and in accordance with GAAP
for such period.
"Eligible Assignee" means (a) with respect to any Facility (other
than the Letter of Credit Facility), (i) a Lender; (ii) a financial
institution or other entity engaged in the financing of loans and accounts
which is an Affiliate of a Lender; and (iii) any other Person approved by
the Administrative Agent and, unless an Event of Default shall have
occurred and be continuing, the Borrower, such approval not to be
unreasonably withheld or delayed, and (b) with respect to the Letter of
Credit Facility, a Lender that is a commercial bank and is approved by the
Administrative Agent and, unless an Event of Default shall have occurred
and be continuing, the Borrower, such approval not to be unreasonably
withheld or delayed; provided, however, that neither any Loan Party nor
any Affiliate of a Loan Party shall qualify as an Eligible Assignee under
this definition.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury
to the environment, including, without limitation, (a) by any governmental
or regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any applicable federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, writ,
judgment, injunction, decree or judicial or agency interpretation, policy
or guidance relating to pollution or protection of the environment, or the
effect of the environment on human health or safety, including, without
limitation, those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.
8
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (taking into account subsection (2) of such Section) are
met with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA in a
distress termination pursuant to ERISA Section 4041(c) (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of any Loan Party or
any ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been met
with respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307
of ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for
the termination of, or the appointment of a trustee to administer, such
Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender Party (or, if no such
office is specified, its Domestic Lending Office), or such other office of
such Lender Party as such Lender Party may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate
per annum equal to the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars at
11:00 A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to Xxxxxx'x Eurodollar
Rate Advance to which such Interest Period is to apply (or, if Xxxxxx
shall not have such a Eurodollar Rate Advance, $1,000,000) and for a
period equal to such Interest Period (provided that if for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any
Interest Period, the rate per annum (rounded upward, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in U.S. dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates;
provided further that, in the case of the initial Interest Period with
respect to any Term
9
Advance, if such period is not an exact period of 1, 2 ,3, 6, 9 or 12
months, the Eurodollar Rate shall mean the interest rate per annum
determined by the Administrative Agent to be the arithmetic mean (rounded
upwards, if necessary, to the nearest 1/16 of 1%) of the rates at which
deposits in U.S. dollars approximately equal in principal amount to the
Term Advances of the Eurodollar Reference Banks, in their capacities as
Lenders, included in such initial Term Advance and for a maturity
comparable to such Interest Period are offered to the principal London
offices of each of the Eurodollar Reference Banks in immediately available
funds in the London interbank market as of 11:00 A.M. (London time) on the
day that is two Business Days prior to the first day of such Interest
Period.
"Eurodollar Rate Advance" means an Advance that bears interest at a
rate based on a Eurodollar Rate pursuant to the applicable Notice of
Borrowing or Notice of Interest Period Election.
"Eurodollar Rate Reserve Percentage" means for any day, the
percentage which is in effect on such day under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that
includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined).
"Eurodollar Reference Banks" means the principal London office of
each of Xxxxxx Guaranty Trust Company of New York, Societe Generale,
Citibank, N.A., or such other Lender or Lenders as from time to time may
be agreed upon between the Borrower and the Administrative Agent.
"Events of Default" has the meaning specified in Section 7.01.
"Excess Cash Flow" means, for any period, an amount equal to (i)
Consolidated net income (or loss) of the Parent Guarantor and its
Subsidiaries for such period plus (ii) the aggregate amount of all
non-cash charges deducted in arriving at such Consolidated net income (or
loss) plus (iii) if there was a net increase in Consolidated Current
Liabilities of the Parent Guarantor and its Subsidiaries during such
period, the amount of such net increase plus (iv) if there was a net
decrease in Consolidated Current Assets (excluding cash and Cash
Equivalents) of the Parent Guarantor and its Subsidiaries during such
period, the amount of such net decrease less (v) the aggregate amount of
all non-cash credits included in arriving at such Consolidated net income
(or loss) less (vi) if there was a net decrease in Consolidated Current
Liabilities of the Parent Guarantor and its Subsidiaries during such
period since the date of the initial Borrowing, the amount of such net
decrease less (vii) if there was a net increase in Consolidated Current
Assets (excluding cash and Cash Equivalents) of the Parent Guarantor and
its Subsidiaries during such period, the amount of such net increase less
(viii) the aggregate amount of cash Capital Expenditures made by the
Parent Guarantor and its Subsidiaries during such period, less (ix)
dividends and other restricted payments contemplated by Section
5.02(h)(i)(A) paid by the Parent Guarantor during such period, less (x)
the aggregate amount of payments of principal made by the Parent Guarantor
and its Subsidiaries on Debt (excluding payments on revolving credit or
similar arrangements for which the commitment is not reduced as a result
of such payment) during such period, less (xi) taxes paid on account of
deferred taxes accrued in a previous period to the extent not included in
Current Assets or Current Liabilities in such period, less (xii) the net
cash effect of changes in long-term assets and long-term liabilities for
such period.
"Existing Debt" has the meaning specified in Section 4.01(y).
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person in the form of proceeds of insurance (other than
proceeds of business interruption insurance to the extent such proceeds
constitute compensation for lost earnings or proceeds of liability
insurance),
10
condemnation awards (and payments in lieu thereof), and litigation
settlements, other recoveries and indemnity payments in respect of any
loss or damage to equipment, fixed assets or property, in each case, in
excess of $10,000,000 for each such Extraordinary Receipt or $30,000,000
in the aggregate for all such Extraordinary Receipts received during the
term of the Facilities; provided, however, that an Extraordinary Receipt
shall not include cash receipts received from proceeds of insurance,
condemnation awards (or payments in lieu thereof), litigation settlements,
other recoveries or indemnity payments to the extent that such proceeds,
awards or payments (A) in respect of loss or damage to equipment, fixed
assets or real property are applied (or in respect of which expenditures
were previously incurred) to replace or repair the equipment, fixed assets
or real property in respect of which such proceeds were received, so long
as such application is made within 12 months after the occurrence of such
damage or loss, (B) are received by any Person in respect of any third
party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of
such Person with respect thereto or (C) are received by such Person in
respect of any litigation settlements or other receivables or awards in
respect of collection by such Person of accounts receivables due under
service or management contracts.
"Facility" means the Term Facility, the Revolving Credit Facility or
the Letter of Credit Facility.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is
a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" has the meaning specified in Section 1.03(b).
"Fiscal Year" means the fiscal accounting period of 52 or 53 weeks
of the Parent Guarantor and its Consolidated Subsidiaries ending closest
to December 31 or, if the Parent Guarantor changes its fiscal year to
"August 31", closest to August 31 in any calendar year.
"Foodservice Business" means the businesses conducted by the Parent
Guarantor and its Affiliates which consist of (i) providing food and
facilities management services to businesses and industrial operations,
health care facilities, schools and universities, (ii) providing
commercial laundry services, (iii) managing the Retained Conference
Centers (as defined in the Distribution Agreement) and (iv) business
undertaken pursuant to the NANA Joint Ventures (as defined in the
Distribution Agreement), each of the foregoing as and to the extent
conducted through the Parent Guarantor's Marriott Management Services
strategic business unit (referred to in the Distribution Agreement).
"Funding Date" means the date on which the Initial Extension of
Credit occurs following satisfaction of all of the conditions precedent
set forth in Section 3.02 but in no event later than June 30, 1998.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, applied on a basis consistent
(except for changes concurred in by the Parent Guarantor's independent
public accountants) with the most recent audited consolidated financial
statements of the Parent Guarantor and its Consolidated Subsidiaries
delivered to the Lenders.
"Group of Advances" means, at any time, a group of Advances
consisting of (i) all Advances under the same Facility which are Base Rate
Advances at such time, (ii) all Eurodollar Rate Advances
11
under the same Facility and having the same Interest Period at such time,
provided that, if an Advance of any particular Lender is Converted to or
made as a Base Rate Advance pursuant to Section 2.10 or 2.17, such Advance
shall be included in the same Group or Groups of Advances from time to
time as it would have been in if it had not been so Converted or made.
"Guaranteed Senior Debt" means the Debt under the Guaranteed Senior
Debt Credit Agreement or any replacement thereof (including, without
limitation, Debt incurred on the Funding Date in place of the incurrence
of Debt under the Guaranteed Senior Debt Credit Agreement) as permitted by
Section 6.07.
"Guaranteed Senior Debt Credit Agreement" means the $620,000,000
Credit Agreement dated as of the date hereof among the Parent Guarantor,
the lenders party thereto, Xxxxxx, as Documentation Agent, and Societe
Generale, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms).
"Guaranteed Senior Debt Documents" means the Guaranteed Senior Debt
Credit Agreement, together with the Note and the Guaranty (each as defined
therein) executed in connection therewith.
"Guarantees" means the Subsidiary Guaranty specified in Section
3.02(k)(xiii) and the Parent Guaranty contained in Section 6.01.
"Guarantors" means the Parent Guarantor and the Subsidiary
Guarantors.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hybrid Capital Stock" means, with respect to any Person, capital
stock of such Person, the dividends in respect of which are deductible by
such Person for United States federal income tax purposes.
"ICC" has the meaning specified in Preliminary Statement (1).
"Indemnified Consent Exposure" means the exposure resulting from the
absence of certain third-party consents and approvals required with
respect to the Transaction that is indemnified by New Marriott pursuant to
the Distribution Agreement.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Indemnity Support Agreement" means the Indemnity Support Agreement
referred to in the Consents Side Letter, between the Parent Guarantor and
New Marriott in connection with the indemnification of the Parent
Guarantor for the Indemnified Consent Exposure.
"Information Memorandum" means the information memorandum dated
December, 1997 used by the Arrangers in connection with the syndication of
the Commitments.
12
"Initial Extension of Credit" means the earlier to occur of the
initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"Initial Issuing Banks" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Integration Costs" means costs incurred in connection with the
combination of the businesses of MMS, ICC, Sodexho Canada, MMS Canada and
their respective Subsidiaries and Affiliates.
"Interest Period" means, for each Eurodollar Rate Advance, the
period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three, six, or, to the extent
available to each Lender, nine or twelve months thereafter, as the
Borrower may elect in such Notice; provided, however, that:
(a) the first Interest Period in respect of any Term Advances
that are Eurodollar Rate Advances shall end on the last Business Day
of the first, second, third, sixth or, to the extent available to
each Lender, ninth or twelfth, calendar month after the month in
which such Term Advance was made, as elected by the Borrower in the
applicable Notice of Borrowing;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on
the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months equal
to the number of months in such Interest Period), such Interest
Period shall end on the last Business Day of such succeeding
calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1 of the
Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or other
securities of such Person, any capital contribution to such Person or any
other investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (f) or (g) of the definition of "Debt" in respect of
such Person, but excluding any demand deposit maintained with any Person.
"Issuing Bank" means any Initial Issuing Bank, each Eligible
Assignee to which a Letter of Credit Commitment hereunder has been
assigned pursuant to Section 9.07 and any other Lender that shall, at the
request of the Borrower, agree to become an Issuing Bank hereunder, with
the consent of the Administrative Agent, which consent shall not be
unreasonably withheld or delayed.
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"L/C Related Documents" has the meaning specified in Section
2.04(c)(ii).
"Lender Party" means any Lender or any Issuing Bank.
"Lenders" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 9.07.
"Letter of Credit" has the meaning specified in Section 2.01(c).
"Letter of Credit Advance" means an advance made by any Issuing Bank
pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to any Issuing
Bank at any time, such Issuing Bank's commitment to issue Letters of
Credit pursuant to Section 2.01(c).
"Letter of Credit Facility" means the facility provided by the
Issuing Banks hereunder for the issuance of Letters of Credit for the
account of the Parent Guarantor and its Subsidiaries, as provided herein.
"Letter of Credit Facility Amount" means, at any time, the lesser of
(a) $100,000,000 and (b) the aggregate Revolving Credit Commitments of all
Revolving Credit Lenders at such time.
"Leverage Ratio" means, as of the last day of any Fiscal Quarter of
the Parent Guarantor, the ratio of Consolidated Debt as at such day to
Consolidated EBITDA for the period of four consecutive Fiscal Quarters of
the Parent Guarantor ending on such day.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means this Agreement, the Notes, the Guarantees,
the Collateral Documents, each Letter of Credit Agreement and the
agreement related to the fees referred to in Section 2.08, in each case as
amended or otherwise modified from time to time.
"Loan Parties" means the Borrower and the Guarantors.
"XXXXx" means the Liquid Yield Option Notes due 2011 of the Parent
Guarantor issued pursuant to the Indenture dated as of March 25, 1996
between the Parent Guarantor and The Bank of New York, as indenture
trustee, together with all supplemental indentures executed thereunder.
"XXXXx Allocation Agreement" means the XXXXx Allocation Agreement to
be entered into by the Parent Guarantor, New Marriott and Sodexho
substantially in the form of the draft dated December 8, 1997.
"Margin Stock" has the meaning specified in Regulation U.
"Marriott Bond Tender Period" has the meaning specified in Section
2.01(a).
"Marriott Bonds" means (i) the notes in the principal amount of
$600,000,000 issued pursuant to the Indenture dated as of December 1, 1993
between the Parent Guarantor and Chemical Bank, as
14
trustee, and (ii) the notes in the principal amount of $120,000,000 issued
pursuant to the Indenture dated as of October 1, 1995 among RHG Finance,
as issuer, Renaissance Hotel Group N.V., as guarantor, the Parent
Guarantor, as additional guarantor, and the First National Bank of
Chicago, as indenture trustee, in each case, as amended from time to time.
"Material Adverse Change" means any material adverse change in the
business, financial condition, results of operations or prospects of the
Borrower and its Subsidiaries taken as a whole or the Parent Guarantor and
its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, financial condition, results of operations or prospects of the
Borrower and its Subsidiaries taken as a whole or the Parent Guarantor and
its Subsidiaries taken as a whole, (b) the rights and remedies of the
Administrative Agent and the Lenders under any Loan Document or (c) the
ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party.
"Material Contract" means, with respect to any Person, each contract
to which such Person is a party involving aggregate consideration payable
to or by such Person of an amount equal to not less than 2% of
Consolidated sales of the Parent Guarantor and its Subsidiaries in any
year or otherwise material to the business, financial condition or results
of operations of such Person.
"Merger" has the meaning specified in Preliminary Statement (1).
"Merger Agreement" means the Agreement and Plan of Merger dated as
of September 30, 1997 among the Parent Guarantor, Merger Corp., New
Marriott, ICC and Sodexho, as amended by the Amendment Agreement.
"Merger Corp." means Marriott-ICC Merger Corp., a Delaware
corporation.
"MMS" means Marriott Management Services Corp., a New York
corporation.
"MMS Canada" has the meaning specified in Preliminary Statement (2).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Xxxxxx" has the meaning specified in the recital of parties to this
Agreement.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA which is a defined benefit plan within the
meaning of Section 3(35) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any business or fixed or capital asset or the sale
or issuance of any capital stock or other ownership or profit interest, or
any warrants, rights, options or other securities to acquire capital stock
or other ownership or profit interest by any Person, or any Extraordinary
Receipt received by or paid to or for the account of any Person, the
aggregate amount of cash received from time to time (whether as initial
consideration
15
or through payment or disposition of deferred consideration) by or on
behalf of such Person in connection with such transaction after deducting
therefrom (without duplication) (a) brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees and
commissions and (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a
Lien on such asset that, by the terms of such transaction or Debt, is
required to be repaid upon such disposition, in each case under this
clause (c) to the extent, but only to the extent, that the amounts so
deducted are actually paid to a Person that is not a Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof, provided that any such payment made to an Affiliate of
any Loan Party shall be reasonable and customary.
"New Marriott" means New Marriott MI, Inc., a Delaware corporation
(to be renamed Marriott International, Inc. after the Spinoff).
"Note" means a Term Note or a Revolving Credit Note.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Interest Rate Election" has the meaning specified in
Section 2.09.
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 7.01(f). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender
Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"Omnibus Restructuring Agreement" means the Omnibus Restructuring
Agreement dated as of September 30, 1997 among the Parent Guarantor,
Merger Corp., New Marriott, ICC and Sodexho, as amended by the Amendment
Agreement.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent Guarantor" has the meaning specified in Preliminary
Statement (1).
"Parent Guaranty" has the meaning specified in Section 6.01.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means each of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing obligations that
are not overdue for a period of more than 30 days; (c) pledges or deposits
to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; (d) easements,
16
rights of way and other encumbrances on title to real property that do not
render title to the property encumbered thereby unmarketable or materially
adversely affect the use of such property for its present purposes; (e)
Liens in respect of judgments not constituting an Event of Default under
Section 7.01(g); and (f) Liens on inventory or equipment arising under
Article 2 of the Uniform Commercial Code or any similar provision of
applicable law securing payment of the purchase price of such inventory or
equipment, provided that such Lien does not extend to any asset other than
such inventory and equipment and the obligation to pay such purchase price
does not constitute Debt and, provided further that no Loan Party shall
have executed a Uniform Commercial Code financing statement (Form UCC-1 or
a comparable form) in connection with any such Lien on inventory.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" has the meaning specified in Section
3.02(k)(xiv).
"Procurement Contracts" means procurement agreements related to
inventory, equipment, supplies and information systems between the Parent
Guarantor and parties that are not Affiliates of the Borrower.
"Procurement Contracts Agreement" means the agreement to be entered
into by the Borrower and the Parent Guarantor in respect of payments to be
made by the Borrower on behalf of the Parent Guarantor under, or to
reimburse the Parent Guarantor for payments made by it under, the
Procurement Contracts.
"Pro Rata Share" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit
Commitment at such time and the denominator of which is the Revolving
Credit Facility at such time.
"Proxy Statement" means the Notice of Special Meeting of
Stockholders and related Preliminary Proxy Statement filed with the
Securities and Exchange Commission on January 12, 1998 by the Parent
Guarantor and all related documents, schedules, annexes and attachments
filed therewith.
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely within
the control of the issuer or (b) is redeemable at the option of the
holder.
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Transaction Documents, the Guaranteed
Senior Debt Documents and the Tax Agreement.
"Required Lenders" means at any time Lenders owed or holding at
least 51% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available
17
Amount of all Letters of Credit outstanding at such time, (c) the
aggregate unused Commitments under the Term Facilities at such time and
(d) the aggregate Unused Revolving Credit Commitments at such time;
provided, however, that if any Lender shall be a Defaulting Lender at such
time, there shall be excluded from the determination of Required Lenders
at such time (A) the aggregate principal amount of the Advances owing to
such Lender (in its capacity as a Lender) and outstanding at such time,
(B) such Lender's Pro Rata Share of the aggregate Available Amount of all
Letters of Credit outstanding at such time, (C) the aggregate unused Term
Commitments of such Lender at such time and (D) the Unused Revolving
Credit Commitment of such Lender at such time. For purposes of this
definition, each Revolving Credit Lender shall be deemed to hold its Pro
Rata Share of the aggregate principal amount of Letter of Credit Advances
owing to any Issuing Bank and the Available Amount of each Letter of
Credit.
"Requisite Lenders" means at any time Lenders owed or holding at
least 662/3% of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount of
all Letters of Credit outstanding at such time, (c) the aggregate unused
Commitments under the Term Facilities at such time and (d) the aggregate
Unused Revolving Credit Commitments at such time; provided, however, that
if any Lender shall be a Defaulting Lender at such time, there shall be
excluded from the determination of Requisite Lenders at such time (A) the
aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, (B) such Lender's Pro
Rata Share of the aggregate Available Amount of all Letters of Credit
outstanding at such time, (C) the aggregate unused Term Commitments of
such Lender at such time and (D) the Unused Revolving Credit Commitment of
such Lender at such time. For purposes of this definition, each Revolving
Credit Lender shall be deemed to hold its Pro Rata Share of the aggregate
principal amount of Letter of Credit Advances owing to any Issuing Bank
and the Available Amount of each Letter of Credit.
"Responsible Officer" means, with respect to any Loan Party, any
executive officer of such Loan Party.
"Retained Marriott Bonds" means any Marriott Bonds that, on the last
day of the Marriott Bond Tender Period, shall not have been tendered and
that are retained as obligations of the Parent Guarantor.
"Revolving Credit Advance" has the meaning specified in Section
2.01(b).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Revolving Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Revolving
Credit Lender's name on Schedule I hereto under the caption "Revolving
Credit Commitment" or, if such Revolving Credit Lender has entered into
one or more Assignments and Acceptances, set forth for such Revolving
Credit Lender in the Register maintained by the Administrative Agent
pursuant to Section 9.07(d) as such Revolving Credit Lender's "Revolving
Credit Commitment," as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Revolving Credit Facility" means the facility provided by the
Revolving Credit Lenders and the Issuing Banks hereunder for the making of
Revolving Credit Advances to the Borrower, and the issuance of Letters of
Credit for the account of the Parent Guarantor and its Subsidiaries, as
provided herein.
"Revolving Credit Lender" means any Lender that has a Revolving
Credit Commitment.
18
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the
form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of the
Borrower to such Revolving Credit Lender resulting from the Revolving
Credit Advances made by such Revolving Credit Lender.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Scheduled Amortization Payments" means, for any period, all
scheduled payments of principal made or required to be made in cash by the
Parent Guarantor and its Subsidiaries during such period, determined on a
Consolidated basis in accordance with GAAP.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Administrative Agent, the Arrangers, the
Lender Parties and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the
Collateral Documents.
"Security Agreement" has the meaning specified in Section
3.02(k)(viii).
"Shareholders' Equity" means common stock, additional paid-in
capital, retained earnings and treasury stock of the Parent Guarantor and
its Subsidiaries on a Consolidated basis.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Societe Generale" has the meaning specified in the recital of
parties to this Agreement.
"Sodexho" means Sodexho Alliance, S.A., a societe anonyme organized
under the laws of France, and its successors.
"Sodexho Canada" has the meaning specified in Preliminary Statement
(1).
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and liabilities
as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Spinoff" has the meaning specified in Preliminary Statement (1).
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of the issued and outstanding capital
19
stock or other ownership interests having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar
functions (irrespective of whether at the time capital stock or other
ownership interests of any other class or classes shall or might have
voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries. Except as otherwise expressly provided
herein, neither New Marriott nor any Person that is, will be or will
become a Subsidiary of New Marriott upon the consummation of the
Transaction shall be a Subsidiary of the Borrower or Parent Guarantor for
any purpose under this Agreement.
"Subsidiary Contribution" has the meaning specified in Preliminary
Statement (2).
"Subsidiary Guarantors" means each of ICC, MMS, Xxxxxxx Merchant
Holdings, Inc., a Delaware corporation, Sodexho Services, Inc., a
Connecticut corporation, Sodexho USA, Inc., a Massachusetts corporation,
Marriott Laundry Services, Inc., a Delaware corporation, and at any time
and from time to time each other Subsidiary of the Borrower that becomes a
Subsidiary Guarantor pursuant to Section 5.01(l) of this Agreement.
"Subsidiary Guaranty" has the meaning specified in Section
3.02(k)(xiii).
"Substantial Subsidiary" means, on any date, each Subsidiary
Guarantor and any other Subsidiary of the Borrower (i) whose revenues for
the four Fiscal Quarters of the Borrower most recently ended on or prior
to such date equaled or exceeded 2% of the Consolidated revenues of the
Parent Guarantor and its Subsidiaries for such period or (ii) whose assets
as of such date equaled or exceeded 2% of the Consolidated assets of the
Parent Guarantor and its Subsidiaries as of such date.
"Tax Agreement" means the Tax Sharing and Indemnification Agreement
to be entered into by the Parent Guarantor, New Marriott and Sodexho in
respect of certain tax matters in connection with the Transaction.
"Taxes" has the meaning specified in Section 2.12(a).
"Term Advance" has the meaning specified in Section 2.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Advances of the same Type made by the Term Lenders.
"Term Commitment" means, with respect to any Term Lender at any
time, the amount set forth opposite such Term Lender's name on Schedule I
hereto under the caption "Term Commitment" or, if such Term Lender has
entered into one or more Assignments and Acceptances, set forth for such
Term Lender in the Register maintained by the Administrative Agent
pursuant to Section 9.07(d) as such Term Lender's "Term Commitment," as
such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Term Facility" means the facility provided by the Term Lenders
hereunder for the making of Term Advances to the Borrower as provided
herein.
"Term Lender" means any Lender that has a Term Commitment.
"Term Note" means a promissory note of the Borrower payable to the
order of any Term Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Term Lender resulting
from the Term Advance made by such Term Lender.
20
"Termination Date" means the earlier of (i) the sixth anniversary of
the Funding Date and (ii) the date of termination in whole of the Term
Commitments, the Revolving Credit Commitments and the Letter of Credit
Commitments pursuant to Section 2.05 or 7.01.
"Transaction" has the meaning specified in Preliminary Statement
(2).
"Transaction Documents" means the Merger Agreement, the Distribution
Agreement, the Omnibus Restructuring Agreement, the Consents Side Letter
and the Indemnity Support Agreement (but only if and to the extent
required to be entered into pursuant to the Consents Side Letter).
"Type" refers to the distinction between Advances bearing interest
at the Base Rate and Advances bearing interest at a Eurodollar Rate.
"Unused Letter of Credit Facility Amount" means, at any time, the
Letter of Credit Facility Amount at such time minus the sum of the
aggregate Available Amount of all Letters of Credit outstanding at such
time and the aggregate principal amount of all Letter of Credit Advances
outstanding at such time.
"Unused Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender at any time, such Lender's Revolving Credit
Commitment at such time minus the sum of (i) the aggregate principal
amount of all Revolving Credit Advances and Letter of Credit Advances made
by such Lender (in its capacity as a Lender) and outstanding at such time
plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (B) the
aggregate principal amount of all Letter of Credit Advances made by the
Issuing Banks and outstanding at such time.
"Unused Term Commitment" means, with respect to any Term Lender at
any time, such Term Lender's Term Commitment at such time minus the
aggregate principal amount of all Term Advances made by such Term Lender
at or prior to such time, whether or not any such Term Advance remains
outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03. Accounting Terms and Determinations. (a) Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP; provided that, if the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any provision hereof to eliminate the
effect of any change in GAAP (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend any provision hereof for such
purpose), then such provision shall be applied on the basis of GAAP in effect
immediately before the relevant change in GAAP became
21
effective, until either such notice is withdrawn or such provision is amended in
a manner satisfactory to the Borrower and the Required Lenders.
(b) For all purposes of this Agreement, including the computation of
the financial covenants set forth in Section 5.04, the term "Fiscal Quarter"
with respect to any Loan Party shall mean the three-month fiscal period of such
Loan Party ending nearest to the last day of each November, February, May and
August.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Term Advances. Each Term Lender
severally agrees, on the terms and conditions hereinafter set forth, to make one
or more advances (each a "Term Advance") to the Borrower from time to time on
any Business Day during the period from the Funding Date until December 31, 1998
(the "Marriott Bond Tender Period") in an amount for each such Advance not to
exceed such Lender's Unused Term Commitment at such time. Each Term Borrowing
shall be in an aggregate amount of at least $5,000,000 and shall consist of Term
Advances made simultaneously by the Term Lenders ratably according to their Term
Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid
may not be reborrowed.
(b) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the Funding Date until the
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing
shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof (other than a Borrowing the proceeds of which shall
be used solely to repay or prepay in full outstanding Letter of Credit Advances)
and shall consist of Revolving Credit Advances made simultaneously by the
Revolving Credit Lenders ratably according to their Revolving Credit
Commitments. Within the limits of each Revolving Credit Lender's Unused
Revolving Credit Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(b), prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(b).
(c) Letters of Credit. Each Issuing Bank severally agrees, on the
terms and conditions hereinafter set forth, to issue letters of credit (the
"Letters of Credit") for the account of the Borrower and in the name of the
Parent Guarantor or any of its Subsidiaries from time to time on any Business
Day during the period from the Funding Date until 5 days before the Termination
Date in an Available Amount for each such Letter of Credit not to exceed the
lesser of (x) the Unused Letter of Credit Facility Amount at such time and (y)
the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such
time. No Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than the earlier of
the Termination Date and one year after the date of issuance thereof, but may by
its terms be renewable annually either (i) upon notice (a "Notice of Renewal")
given to the Issuing Bank that issued such Letter of Credit and the
Administrative Agent on or prior to any date for notice of renewal set forth in
such Letter of Credit but in any event at least three Business Days prior to the
date of the proposed renewal of such Letter of Credit and upon fulfillment of
the applicable conditions set forth in Article III or (ii) automatically unless
such Issuing Bank has notified the beneficiary of such Letter of Credit (with a
copy to the Borrower and the Administrative Agent) on or prior to the date for
notice of termination set forth in such Letter of Credit but in any event at
least 30 Business Days prior to the date of automatic renewal of its election
not to renew such Letter of Credit (a "Notice of Termination"); provided that
(i) the applicable Issuing Bank shall not give a Notice of Termination unless
(x) such Issuing Bank has assigned its entire Letter of Credit Commitment to an
Eligible
22
Assignee pursuant to Section 9.07(f) or (y) the applicable conditions set forth
in Article III are not satisfied at such time and (ii) the terms of each Letter
of Credit that is automatically renewable annually shall (x) require the Issuing
Bank that issued such Letter of Credit to give the beneficiary named in such
Letter of Credit notice of any Notice of Termination, (y) permit such
beneficiary, upon receipt of such notice, to draw under such Letter of Credit
prior to the date such Letter of Credit otherwise would have been automatically
renewed or terminated and (z) not permit the expiration date (after giving
effect to any renewal) of such Letter of Credit in any event to be extended to a
date later than the Termination Date. If either a Notice of Renewal is not given
by the Borrower or a Notice of Termination is given by the relevant Issuing Bank
pursuant to the immediately preceding sentence, such Letter of Credit shall
expire on the date on which it otherwise would have been automatically renewed;
provided, however, that even in the absence of receipt of a Notice of Renewal
the relevant Issuing Bank may in its discretion, unless instructed to the
contrary by the Administrative Agent or the Borrower, deem that a Notice of
Renewal had been timely delivered and in such case, a Notice of Renewal shall be
deemed to have been so delivered for all purposes under this Agreement. Within
the limits of the Letter of Credit Facility, and subject to the limits referred
to above, the Borrower may request the issuance of Letters of Credit under this
Section 2.01(c), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional
Letters of Credit under this Section 2.01(c).
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made
on notice, given not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or 10:30 A.M. (New York City
time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Administrative Agent,
which shall give to each Appropriate Lender prompt notice thereof by telephone,
confirmed immediately in writing, or by telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately
in writing, or telecopier, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each Appropriate Lender shall, before 11:00 A.M. (New York
City time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the applicable
Facility of such Lender and the other Appropriate Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower by crediting such account or accounts
as the Borrower shall direct.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000
or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.10(c) and (ii) the Term Advances
may not be outstanding as part of more than four separate Groups of Advances and
the Revolving Credit Advances may not be outstanding as part of more than
fifteen separate Groups of Advances.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall,
within 15 days after demand, indemnify each Appropriate Lender against any loss,
cost or expense (but excluding loss of margin for any day after the date
specified in the Notice of Borrowing for such Borrowing) incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Borrowing for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as part of such
Borrowing when such Advance, as a result of such failure, is not made on such
date, provided that such Lender shall have delivered to the Borrower a
certificate setting forth in reasonable detail the amount of, the basis for
23
and the calculation of, such loss, cost or expense, which certificate shall be
conclusive in the absence of manifest error.
(d) Unless the Administrative Agent shall have received notice from
an Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and each Revolving Credit Lender prompt notice thereof by
telecopier. Each such notice of issuance of a Letter of Credit (a "Notice of
Issuance") shall be by telephone, confirmed immediately in writing, or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
such Issuing Bank may specify to the Borrower for use in connection with such
requested Letter of Credit (a "Letter of Credit Agreement"). If the requested
form of such Letter of Credit is acceptable to such Issuing Bank in its sole
discretion including, without limitation, the expiration and renewal provisions
thereof, such Issuing Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Letter of Credit available to the Borrower
at its office referred to in Section 9.02 or as otherwise agreed with the
Borrower in connection with such issuance. In the event and to the extent that
the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the previous week and drawings during such week under all
Letters of Credit issued by such Issuing Bank, (B) to each Revolving Credit
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued by such Issuing Bank
during the preceding month and drawings during such month under all Letters of
Credit issued by such Issuing Bank and (C) to the Administrative Agent and each
Revolving Credit Lender on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.
(c) Drawing and Reimbursement. The payment by any Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by such Issuing Bank of
24
a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of
such draft. Upon written demand by any Issuing Bank with an outstanding Letter
of Credit Advance, with a copy of such demand to the Administrative Agent, each
Revolving Credit Lender shall purchase from such Issuing Bank, and such Issuing
Bank shall sell and assign to each such Revolving Credit Lender, such Lender's
Pro Rata Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available for the account of its Applicable Lending
Office to the Administrative Agent for the account of such Issuing Bank, by
deposit to the Administrative Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. Promptly after receipt thereof,
the Administrative Agent shall transfer such funds to such Issuing Bank. The
Borrower hereby agrees to each such sale and assignment. Each Revolving Credit
Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (i) the Business Day on which demand therefor is made by the Issuing
Bank which made such Advance, provided notice of such demand is given not later
than 11:00 A.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by an Issuing Bank to any other Revolving
Credit Lender of a portion of a Letter of Credit Advance, such Issuing Bank
represents and warrants to such other Lender that such Issuing Bank is the legal
and beneficial owner of such interest being assigned by it, free and clear of
any Liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Revolving Credit Lender shall
not have so made the amount of its Pro Rata Share of any such Letter of Credit
Advance available to the Administrative Agent, such Revolving Credit Lender and
the Borrower severally agree to pay to the Administrative Agent for its account
or the account of such Issuing Bank, as applicable, forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
such Issuing Bank until the date such amount is paid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at such
time to Base Rate Advances and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall pay to the Administrative Agent such amount for
the account of such Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance that is a Base
Rate Advance made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Letter of Credit Advance
made by such Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Term Advances. The Borrower
shall repay to the Administrative Agent for the ratable account of the Term
Lenders the aggregate outstanding principal amount of the Term Advances on the
following dates and in the amounts indicated (which amounts shall be reduced as
a result of the application of prepayments in accordance with the order of
priority set forth in Section 2.06 and as otherwise set forth in this Section
2.04(a)):
25
================================================================================
Payment Payment
Date Amount Date Amount
--------------------------------------------------------------------------------
November 30, 1998 $17,500,000 August 31, 2001 $20,000,000
--------------------------------------------------------------------------------
February 28, 1999 $17,500,000 November 30, 2001 $20,000,000
--------------------------------------------------------------------------------
May 31, 1999 $17,500,000 February 28, 2002 $20,000,000
--------------------------------------------------------------------------------
August 31, 1999 $17,500,000 May 31, 2002 $25,000,000
--------------------------------------------------------------------------------
November 30, 1999 $20,000,000 August 31, 2002 $25,000,000
--------------------------------------------------------------------------------
February 29, 2000 $20,000,000 November 30, 2002 $25,000,000
--------------------------------------------------------------------------------
May 31, 2000 $20,000,000 February 28, 2003 $25,000,000
--------------------------------------------------------------------------------
August 31, 2000 $20,000,000 May 31, 2003 $32,500,000
--------------------------------------------------------------------------------
November 30, 2000 $20,000,000 August 31, 2003 $32,500,000
--------------------------------------------------------------------------------
February 28, 2001 $20,000,000 November 30, 2003 $32,500,000
--------------------------------------------------------------------------------
May 31, 2001 $20,000,000 February 29, 2004 $32,500,000
================================================================================
provided, however, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Term Advances outstanding on such date, and provided
further that on the last day of the Marriott Bond Tender Period (i) the
principal installments shall be reduced pro rata by the face amount of any
Retained Marriott Bonds Series B, C and D and (ii) the final four scheduled
principal installments shall be reduced pro rata by the face amount of any
Retained Marriott Bonds Series A.
(b) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Termination Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.
(c) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of each Issuing Bank or Revolving Credit
Lender, as the case may be, on the earlier of demand (provided that if demand is
made by any Issuing Bank or Revolving Credit Lender later than 10:00 A.M. (New
York City time) on any day, such repayment shall be due on the next succeeding
Business Day) and the Termination Date the outstanding principal amount of each
Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit to repay outstanding Letter of Credit Advances shall, to the
fullest extent permitted under applicable law, be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Borrower is without prejudice to,
and does not constitute a waiver of, any rights the Borrower might have or might
acquire as a result of the payment by any Issuing Bank of any draft or the
reimbursement by the Borrower thereof):
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the
"L/C Related Documents");
(B) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
any L/C Related Document or any other amendment or waiver of or any
consent to departure from all or any of the L/C Related Documents;
26
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with the transactions contemplated by
the L/C Related Documents or any unrelated transaction, provided that any
such claim may be asserted by separate suit or compulsory counterclaim;
(D) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(E) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent to
departure from the Guarantees or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related Documents;
or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Term Commitments, the Letter of Credit Facility and the Unused Revolving
Credit Commitments; provided, however, that each partial reduction of a Facility
(i) shall be in an aggregate amount of $10,000,000 or an integral multiple of
$5,000,000 in excess thereof and (ii) shall be made ratably among the
Appropriate Lenders in accordance with their Commitments with respect to such
Facility.
(b) Mandatory. (i) The Revolving Credit Commitments shall be
automatically and permanently reduced to zero at the close of business on the
Termination Date.
(ii) At the close of business on the last day of the Marriott Bond
Tender Period, the Term Commitments shall be automatically and permanently
reduced to zero.
(iii) The Letter of Credit Facility Amount shall be permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Commitments by the amount, if any, by which the Letter of Credit Facility Amount
exceeds the aggregate amount of the Revolving Credit Commitments after giving
effect to such reduction of the Revolving Credit Commitments.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon same
Business Day's notice in the case of Base Rate Advances and three Business Days'
notice in the case of Eurodollar Rate Advances, in each case given to the
Administrative Agent not later than 11:00 A.M. (New York City time) stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding aggregate principal
amount of any Group of Advances in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $10,000,000 or an integral multiple of
$5,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for such
Advance the Borrower shall also pay any amounts owing pursuant to Section
9.04(c). Each such prepayment of any Term Advances shall be applied to the
installments thereof in direct order of maturity.
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(b) Mandatory. (i) The Borrower shall, on the last day of the
Marriott Bond Tender Period, prepay one or more Groups of Term Advances in an
aggregate principal amount equal to the excess, if any, of the aggregate
principal amount of all Term Advances then outstanding over an amount equal to
the aggregate Term Commitments on the Closing Date (without regard to any later
reduction or termination thereof) less the aggregate principal amount of
Retained Marriott Bonds then outstanding.
(ii) The Borrower shall, subject to clause (vii) of this Section
2.06(b), on the date of receipt by any Loan Party of the Net Cash Proceeds from:
(A) the sale, lease, transfer or other disposition of any business
or fixed or capital assets of the Borrower or any of its Subsidiaries
(other than (i) any sale, lease, transfer or other disposition of assets
pursuant to clauses (i) through (vii) of Section 5.02(e), (ii) any sale,
transfer or other disposition of synergy related assets to the extent such
proceeds are reinvested in similar assets for the purpose of achieving the
planned synergy cost savings and (iii) other sales in an aggregate amount
not to exceed $10,000,000 in Net Cash Proceeds in any Fiscal Year of the
Borrower and $30,000,000 in Net Cash Proceeds over the term of the
Facilities),
(B) the sale or issuance by the Parent Guarantor of any capital
stock or other ownership or profit interest, or any warrants, rights or
options to acquire capital stock or other ownership or profit interest
(other than equity contributions hereafter made by Sodexho to the Parent
Guarantor and stock options or warrants currently outstanding or hereafter
issued pursuant to any stock option, plan or other compensation
arrangement approved by the Borrower's or the Parent Guarantor's Board of
Directors),
(C) any Extraordinary Receipt received by or paid to or for the
account of the Borrower or any of its Subsidiaries and not otherwise
included in clause (A) or (B) above,
prepay, ratably, the Advances in a Group or Groups of Term Advances in an
aggregate principal amount equal to (x) in the case of clause (A) above, 100%,
(y) in the case of clause (B) above, 50% and (z) in the case of clause (C)
above, 70% of the amount of such Net Cash Proceeds. Each such prepayment shall
be applied pro rata to the Term Advances of the several Lenders included in such
Group or Groups and shall reduce pro rata the remaining installments set forth
in Section 2.04(a); provided that, in the case of clause (B) only, no such
prepayment shall be required if the Leverage Ratio is less than 3.0:1.0 as at
the end of each of the immediately preceding two consecutive Fiscal Quarters of
the Borrower or in the event that the senior unsecured non-credit-enhanced Debt
of the Parent Guarantor or the Borrower obtains a rating of Baa3 or higher by
Xxxxx'x or BBB- or higher by S&P.
(iii) The Borrower shall, subject to clause (vii) of this Section
2.06(b), on the tenth day following the date of delivery of the audited
financial statements contemplated by Section 5.03(c), commencing with the four
Fiscal Quarters ended August 1999, prepay ratably, the Advances in a Group or
Groups of Term Advances in an aggregate principal amount equal to fifty percent
(50%) of the Excess Cash Flow in excess of $5,000,000 for such Fiscal Year. Each
such prepayment shall be applied pro rata to the Term Advances of the several
Lenders included in such Group or Groups and shall reduce the remaining
installments set forth in Section 2.04(a) in direct order of maturity; provided
that such prepayment shall not be required if the Leverage Ratio is less than
3.0:1.0 as at the end of each of the immediately preceding two consecutive
Fiscal Quarters of the Borrower or in the event that the senior unsecured
non-credit-enhanced Debt of the Parent Guarantor or the Borrower obtains a
rating of Baa3 or higher by Xxxxx'x or BBB- or higher by S&P.
(iv) The Borrower shall, on each Business Day, prepay ratably the
Advances in a Group or Groups of Revolving Credit Advances and/or prepay Letter
of Credit Advances in an aggregate principal amount equal to the amount by which
the sum of the aggregate principal amount of the Revolving Credit Advances and
the Letter of Credit Advances then outstanding plus the aggregate Available
Amount of all Letters of Credit then outstanding exceeds the aggregate Revolving
Credit Facility Commitments on such Business Day.
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(v) Prepayments of the Revolving Credit Facility made pursuant to
clause (iv) above shall be first applied to prepay Letter of Credit Advances
then outstanding until such Advances are paid in full and second applied to
prepay Groups of Revolving Credit Advances then outstanding until such Advances
are paid in full.
(vi) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
(vii) If any prepayment pursuant to clause (i) or (ii) above would
otherwise be required to be made on a day on which the aggregate principal
amount of Term Advances that are Base Rate Advances and the aggregate principal
amount of Term Advances that are Eurodollar Rate Advances with Interest Periods
ending on such day is less than the amount of such prepayment, such prepayment
may, at the election of the Borrower, be deferred, but only to the extent of
such shortfall, until the last day of the next ending Interest Period in respect
of Term Advances.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall
pay interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) Base Rate Advances. For each day on which such Advance is a Base
Rate Advance, a rate per annum equal to the Base Rate for such day,
payable in arrears quarterly on the last day of each February, May, August
and November during such periods and on the date such Base Rate Advance
shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, for each day during each Interest Period
applicable thereto a rate per annum equal to the sum of (A) the Eurodollar
Rate for such Interest Period plus (B) the Applicable Margin for such day,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day
of such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. The Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender that is not paid
when due and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, in
each case, from the date such amount shall be due until such amount shall be
paid in full, payable in arrears on the date such amount shall be paid in full
and on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above, and, in all other cases, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing or Notice of Interest Rate Election pursuant to Section 2.02(a) or
2.09(a), the Administrative Agent shall give notice to the Borrower and each
Appropriate Lender of the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii).
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to
the Administrative Agent for the account of the Lenders a commitment fee, from
the Funding Date in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
quarterly on the last Business Day of each February, May, August and November,
commencing on the first such Business Day following the Funding Date, and on the
Termination Date, at the rate of 37.5 basis points per annum (calculated on the
basis of a 360-day year) for each Fiscal Quarter in which the Leverage Ratio as
at the end of the immediately preceding Fiscal Quarter equals or exceeds
3.0:1.0, and 25 basis points per annum for each Fiscal Quarter in which the
Leverage
29
Ratio as at the end of the immediately preceding Fiscal Quarter is less than
3.0:1.0, on the sum of the average daily Unused Revolving Credit Commitment and
Unused Term Commitment of each Appropriate Lender; provided, however, that any
commitment fee accrued with respect to any of the Commitments of a Defaulting
Lender during the period prior to the time such Lender became a Defaulting
Lender and unpaid at such time shall not be payable by the Borrower so long as
such Lender shall be a Defaulting Lender except to the extent that such
commitment fee shall otherwise have been due and payable by the Borrower prior
to such time; and provided further that no commitment fee shall accrue on any of
the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Ticking Fee. The Borrower shall pay to the Administrative Agent
for the account of the Lenders a ticking fee payable in arrears on the earlier
of the Funding Date and the Termination Date and, in addition, if neither the
Funding Date nor the Termination Date has occurred prior to such date, on April
30, 1998, (A) for the period commencing February 27, 1998 until the earliest of
(i) the Funding Date, (ii) April 30, 1998 and (iii) the Termination Date, at the
rate of 25 basis points per annum (calculated on the basis of a 360-day year) on
the sum of the aggregate Commitments of each Lender hereunder and (B) for the
period commencing May 1, 1998 until the earlier of (i) the Funding Date and (ii)
the Termination Date, at the rate of 37.5 basis points per annum (calculated on
the basis of a 360-day year) on the sum of the aggregate Commitments of each
Lender hereunder; provided, however, that any ticking fee accrued with respect
to any of the Commitments of a Defaulting Lender during the period prior to the
time such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrower to such Defaulting Lender so long as such Lender shall
be a Defaulting Lender except to the extent that such ticking fee shall
otherwise have been due and payable by the Borrower prior to such time; and
provided further that no ticking fee shall accrue on any of the Commitments of a
Defaulting Lender so long as such Lender shall be a Defaulting Lender.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.
(d) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable quarterly in arrears on the last Business Day of each
February, May, August and November, commencing on the first such Business Day
following the Funding Date and on the Termination Date, on such Lender's Pro
Rata Share of the Available Amount of all Letters of Credit outstanding on each
day in each such period at a per annum rate equal to the Applicable Margin for
Eurodollar Advances in effect for such day.
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and such Issuing Bank shall agree.
SECTION 2.09. Conversion and Continuation of Advances. (a) Optional.
The Borrower may on any Business Day, upon notice (a "Notice of Interest Rate
Election") given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion or continuation and subject to the provisions of Sections 2.07 and
2.10, Convert all or any portion of a Group of Advances into Advances of the
other Type or, in the case of a Group of Eurodollar Rate Advances, continue such
Advances as Eurodollar Rate Advances for an additional Interest Period;
provided, however, that any Conversion of Base Rate Advances into Eurodollar
Rate Advances, and any continuation of Eurodollar Rate Advances for an
additional Interest Period, shall be in an aggregate amount not less than the
minimum amount specified in Section 2.02(b), no Conversion of any Advances shall
result in more separate Groups of Advances than permitted under Section 2.02(b)
and each Conversion or continuation of less than all of the Advances in any
Group of Advances shall apply ratably to the Advances of the respective
Appropriate Lenders included in such Group. Each such Notice of Interest Rate
Election shall, within the restrictions specified above, specify (i) the date of
such Conversion or continuation, (ii) the Advances to be Converted or continued
and (iii) in the case of
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any such continuation of or Conversion into Eurodollar Rate Advances, the
duration of the initial or next Interest Period for such Advances. Each Notice
of Interest Rate Election shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Group of Eurodollar
Rate Advances shall be reduced, by payment or prepayment or otherwise, to less
than $5,000,000, such Advances shall automatically Convert into Base Rate
Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Group of Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) the
introduction, after the date hereof, of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request issued after the date hereof from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender Party of agreeing to make or of making,
funding or maintaining Eurodollar Rate Advances or of agreeing to issue or of
issuing or maintaining Letters of Credit or of agreeing to make or of making or
maintaining Letter of Credit Advances (excluding for purposes of this Section
2.10 any such increased costs resulting from (i) Taxes, Other Taxes or taxes
expressly excluded from the definition of Taxes and Other Taxes (as to which
Section 2.12 shall govern), (ii) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender Party is organized or
has its Applicable Lending Office or any political subdivision thereof and (iii)
any requirement as to which such Lender is entitled to compensation under
Section 2.16), then the Borrower shall from time to time, within 15 days after
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), accompanied by a certificate of such Lender Party setting forth in
reasonable detail the amount of, the basis for and the calculation of such
additional amounts, pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate as to
the amount of such increased cost, submitted to the Borrower by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that the adoption, after the date
hereof, of any law or regulation or compliance with any guideline or request
issued after the date hereof from any central bank or other governmental
authority (whether or not having the force of law) regarding capital adequacy
affects or would affect the amount of capital required or expected to be
maintained by such Lender Party or any corporation controlling such Lender Party
and that the amount of such capital is increased by or based upon the existence
of such Lender Party's commitment to lend or to issue Letters of Credit
hereunder and other commitments of such type or the issuance or maintenance of
the Letters of Credit (or similar contingent obligations), then, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent),
accompanied by a certificate of such Lender Party setting forth in reasonable
detail the amount of, the basis for and the calculation of such additional
amounts, the Borrower shall pay to the Administrative Agent for the account of
such Lender Party, from time to time within 30 days after demand by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, for any reduction in the rate of return on capital
of such Lender or corporation controlling such Lender below the level that such
Lender or controlling corporation could have achieved but for such adoption or
issuance (taking into consideration its policies with
31
respect to capital adequacy) to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrower by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Appropriate Lenders, whereupon
(i) each such Eurodollar Rate Advance under any Facility will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lenders have determined
that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 12:00 noon (New York City time) on the day when due in U.S. dollars
to the Administrative Agent at the Administrative Agent's Account in same day
funds. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrower is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder and
under the Notes to more than one Lender Party, to such Lender Parties for the
account of their respective Applicable Lending Offices ratably in accordance
with the amounts of such respective Obligations then payable to such Lender
Parties and (ii) if such payment by the Borrower is in respect of any Obligation
then payable hereunder to one Lender Party, to such Lender Party for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 9.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to
the Obligations under the Loan Documents under circumstances in which neither
the Borrower nor the Loan Documents specify the Advances or the Facility to
which, or the manner in which, such funds are to be applied, the Administrative
Agent may, but shall not be obligated to, elect to distribute such funds to each
Lender Party ratably in
32
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding, in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender Party, and for application to such
principal installments, as the Administrative Agent shall direct.
(c) All computations of interest based on the Base Rate shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days, as
the case may be, and all computations of interest based on the Eurodollar Rate
and all computations of fees and Letter of Credit commissions (including,
without limitation, fees payable under Section 2.08) shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, fees or commissions,
as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower and
the Parent Guarantor hereunder or under the Notes shall be made, in accordance
with Section 2.11, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Lender
Party and the Administrative Agent, taxes that are imposed on its overall net
income by the United States and taxes that are imposed on its overall net income
(and franchise and similar taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender Party or the
Administrative Agent (as the case may be) is organized or in which it is
resident or any political subdivision thereof and, in the case of each Lender
Party, taxes that are imposed on its overall net income (and franchise and
similar taxes imposed in lieu thereof) by the state or foreign jurisdiction of
such Lender Party's Applicable Lending Office or any political subdivision
thereof and in the case of each Lender Party and the Administrative Agent,
overall net income taxes imposed solely by reason of such Lender Party or the
Administrative Agent (as the case may be) doing business in the jurisdiction
imposing such tax, other than taxes arising solely as a result of such Lender
Party or the Administrative Agent entering into this Agreement or holding any
Note or performing any activity contemplated herein (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as "Taxes"). If the Borrower or the Parent Guarantor (as the case may be) shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender Party or the Administrative Agent, (i)
the sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such Lender Party 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 or the Parent Guarantor (as
33
the case may be) shall make such deductions and (iii) the Borrower or the Parent
Guarantor (as the case may be) shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, subject to the limitations set forth in Section
6.06, the Borrower and the Parent Guarantor shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) Subject to the limitations set forth in Section 6.06, the
Borrower and the Parent Guarantor shall indemnify each Lender Party and the
Administrative Agent for and hold it harmless against the full amount of Taxes
and Other Taxes, and for the full amount of Taxes and Other Taxes on amounts
payable under this Section 2.12, imposed on or paid by such Lender Party or the
Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date
such Lender Party or the Administrative Agent (as the case may be) makes written
demand therefor, accompanied by a certificate of such Lender Party setting forth
the amount thereof, the basis therefor and the calculation thereof provided,
however, that neither the Borrower nor the Parent Guarantor shall be obligated
to make payment to the Lender Party or the Administrative Agent (as the case may
be) pursuant to this Section in respect of penalties, additions to tax,
interest, expenses and other liabilities attributable to any Taxes or Other
Taxes, if (i) written demand therefor has not been made by such Lender Party or
the Administrative Agent within 30 Business Days from the date on which such
Lender Party or the Administrative Agent received written notice of an
imposition of Taxes or Other Taxes by the relevant taxing or governmental
authority (but only to the extent that the Borrower or the Parent Guarantor (as
the case may be) is materially damaged as a result of such failure), (ii) such
penalties, additions to tax, interest, expenses and other liabilities have
accrued as a result of the failure of such Lender Party to remit the amount of
any indemnity payment it receives from the Borrower or the Parent Guarantor (as
the case may be) pursuant to this Section to a taxing authority or (iii) such
penalties, additions to tax, interest, expenses and other liabilities are
attributable to the gross negligence or willful misconduct of such Lender Party
or the Administrative Agent. After a Lender Party or the Administrative Agent
(as the case may be) receives notice of an assessment of Taxes or Other Taxes,
such Lender Party or Administrative Agent will act in good faith to promptly
notify the Borrower or a Parent Guarantor (as the case may be) of its
obligations hereunder.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower or the Parent Guarantor (as the case may be) shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, the original
or a certified copy of a receipt evidencing such payment except to the extent
such receipt or other document is not legally available, in which case the
Borrower or the Parent Guarantor (as the case may be) will furnish other
satisfactory evidence of such payment.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank (as the case may be) and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter as requested in writing by the Borrower
(but only so long thereafter as such Lender Party remains lawfully able to do
so), provide each of the Administrative Agent and the Borrower with two original
Internal Revenue Service forms 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender
Party is exempt from or entitled to a reduced rate of United States withholding
tax on payments pursuant to this Agreement or the Notes. If the forms provided
by a Lender Party at the time such Lender Party first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender Party provides the appropriate form certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate only shall
be considered excluded from Taxes for periods governed by such form; provided,
34
however, that, if at the date of the Assignment and Acceptance pursuant to which
a Lender Party assignee becomes a party to this Agreement, the Lender Party
assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender Party
assignee on such date.
(f) For any period with respect to which a Lender Party has failed
to provide the Borrower with the appropriate form described in subsection (e)
above (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender Party shall reasonably request to assist such Lender Party to recover
such Taxes at such Lender Party's expense.
(g) If a Lender Party shall become aware that it is entitled to
receive a refund from a relevant taxing or governmental authority in respect of
Taxes or Other Taxes as to which it has been indemnified by the Borrower or the
Parent Guarantor (as the case may be) pursuant to this Section, it shall
promptly notify the Borrower or the Parent Guarantor (as the case may be) of the
availability of such refund and shall, within 30 days after receipt of a request
by the Borrower or the Parent Guarantor (as the case may be) (whether as a
result of notification that it has made to the Borrower or the Parent Guarantor
(as the case may be) or otherwise) make a claim to such taxing or governmental
authority for such refund at the Borrower's or the Parent Guarantor's (as the
case may be) expense; provided that the Borrower or the Parent Guarantor (as the
case may be) agrees to indemnify the Lender Party for any adverse tax
consequences resulting from the making of such claim for refund. If such Lender
Party finally and irrevocably receives a refund of any Taxes or Other Taxes
(including penalties, additions to tax and interest) for which it has been
indemnified by the Borrower or the Parent Guarantor (as the case may be)
pursuant to this Section, or which the Borrower or the Parent Guarantor (as the
case may be) has paid pursuant to this Section, then, to the extent such Lender
Party may do so without jeopardizing the right to such refund or the right to
benefit from any other refunds, credits, reliefs, remissions or repayments to
which it may be entitled, it shall promptly notify the Borrower or the Parent
Guarantor (as the case may be) of such refund and shall within 30 days from the
date of receipt of such refund pay to the Borrower or the Parent Guarantor (as
the case may be) the portion of such refund (including the after-tax amount of
any interest paid by the relevant taxing or governmental authority with respect
to such refund) that the Lender Party determines would leave such Lender Party
in no worse position than if no Taxes or Other Taxes had been imposed (but in no
case shall such portion exceed the amount of the indemnity payments made, or
Taxes or Other Taxes (including penalties, additions to tax, and interest) paid,
by the Borrower or the Parent Guarantor (as the case may be) under this Section
that gave rise to such refund), net of all out-of-pocket expenses of such Lender
Party and without interest, provided, however, that the Borrower or the Parent
Guarantor (as the case may be), upon the request of such Lender Party agrees to
repay the amount paid over to the Borrower or the Parent Guarantor (as the case
may be) (plus penalties, interest or other charges due to the appropriate
authorities in connection therewith) to such Lender Party in the event such
Lender Party is required to repay such refund to such relevant authority.
(h) Any Lender Party claiming any additional amounts payable
pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office or take such other actions as may
be reasonably requested by the Borrower, if the making of such a change or the
taking of such an action would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party; provided that the mere existence of quantifiable fees, charges,
costs and expenses that the Borrower has offered and agreed to pay on behalf of
such Lender Party shall not be deemed to be disadvantageous to such Lender
Party.
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SECTION 2.13. Sharing of Payments, Etc. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
hereunder and under the Notes at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time obtained by all of the Lender Parties at such time, such Lender Party
shall forthwith purchase from the other Lender Parties such participations in
the Obligations due and payable or owing to them, as the case may be, as shall
be necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and such other Lender
Party shall repay to the purchasing Lender Party the purchase price to the
extent of such Lender Party's ratable share (according to the proportion of (i)
the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered. The Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit) solely to refinance certain
Existing Debt of ICC, the Parent Guarantor, and their respective Subsidiaries,
to make any required payment to New Marriott, to pay transaction fees and
expenses and, from time to time, to finance working capital needs and for
general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Event of Default shall have occurred and be continuing at such time and to
the fullest extent permitted by applicable law, set off and otherwise apply the
Obligation of the Borrower to make such payment to or for the account of such
Defaulting Lender against the obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that, on any date, the Borrower shall so set off
and otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on or
prior to such date, the amount so set off and otherwise applied by the Borrower
shall constitute for all purposes of this Agreement and the other Loan Documents
an Advance by such Defaulting Lender made on the date of such set off under the
Facility pursuant to which such Defaulted Advance was originally required to
have been made pursuant to Section 2.01. Such Advance shall be considered, for
all purposes of this Agreement, (i) to comprise part of the Borrowing in
connection with which such Defaulted Advance was originally required to have
been made pursuant to Section 2.01 and (ii) to be of the same Type as, and to
bear interest at the rate applicable to, the Advances of the other Applicable
Lenders included in such Borrowing, which interest shall be payable on the dates
upon which interest is payable on such other Advances. The Borrower shall notify
the Administrative Agent at any time the Borrower exercises its right of set-off
pursuant to this subsection (a) and shall set forth in such notice (A) the
36
name of the Defaulting Lender and the Defaulted Advance required to be made by
such Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower pursuant to
this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted Amounts
then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Xxxxxx, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Xxxxxx'x standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
37
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to any other Lender Parties for any amount then due and
payable by such Defaulting Lender to such other Lender Parties hereunder,
ratably in accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16. Regulation D Compensation. If and so long as a reserve
requirement of the type described in the definition of "Eurodollar Rate Reserve
Percentage" is prescribed by the Board of Governors of the Federal Reserve
System (or any successor), each Lender subject to such requirement may require
the Borrower to pay, contemporaneously with each payment of interest on each of
such Lender's Eurodollar Rate Advances, additional interest on such Eurodollar
Rate Advance at a rate per annum determined by such Lender up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided by (B)
one minus the Eurodollar Rate Reserve Percentage over (ii) the applicable
Eurodollar Rate. Any Lender wishing to require payment of such additional
interest (x) shall so notify the Borrower and the Administrative Agent, in which
case such additional interest on the Eurodollar Rate Advances of such Lender
shall be payable to such Lender at the place indicated in such notice with
respect to each Interest Period commencing at least three Business Days after
such Lender gives such notice and (y) shall notify the Borrower at least five
Business Days before each date on which interest is payable on the Eurodollar
Rate Advances of the amount then due it under this Section.
SECTION 2.17. Base Rate Advances Substituted for Affected Eurodollar
Rate Advances. If (i) the obligation of any Lender to make, or to continue or
Convert outstanding Advances as or to, Eurodollar Rate Advances has been
suspended pursuant to Section 2.10(d) or (ii) any Lender has demanded
compensation under Section 2.10(a) or (b) or Section 2.12 with respect to its
Eurodollar Rate Advances, and in any such case the Borrower shall, by at least
five Business Days' prior notice to such Lender through the Administrative
Agent, have elected that the provisions of this Section shall apply to such
Lender, then, unless and until such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist, all Advances which would otherwise be made by such Lender as (or
continued as or Converted to) Eurodollar Rate Advances, shall instead be Base
Rate Advances on which interest and principal shall be payable contemporaneously
with the related Eurodollar Rate Advances of the other Lenders. If such Lender
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer exist, the principal amount of each such Base
Rate Advance shall be converted into a Eurodollar Rate Advance on the first day
of the next succeeding Interest Period applicable to the related Eurodollar Rate
Advances of the other Lenders.
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SECTION 2.18. Replacement of Certain Lenders. If any Lender (a
"Subject Lender") (i) is a Defaulting Lender that owes a Defaulted Advance to
the Borrower, (ii) makes demand upon the Borrower for (or if the Borrower is
otherwise required to pay) amounts pursuant to Section 2.10(a) or (b) or Section
2.12 or (iii) gives notice pursuant to Section 2.10(d) requiring a conversion of
such Subject Lender's Eurodollar Rate Advances to Base Rate Advances or
suspending such Lender's obligation to make Advances as, or to Convert or
continue Advances into or as, Eurodollar Rate Advances, the Borrower may, within
90 days of receipt by the Borrower of such demand or notice (or the occurrence
of such other event causing the Borrower to be required to pay such
compensation), as the case may be, give notice (a "Replacement Notice") in
writing to the Administrative Agent and such Subject Lender of its intention to
replace such Subject Lender with a financial institution (a "Replacement
Lender") designated in such Replacement Notice. Unless the Administrative Agent
shall, in the exercise of its reasonable discretion and within 30 days of its
receipt of such Replacement Notice, notify the Borrower and such Subject Lender
in writing that the designated financial institution is unsatisfactory to the
Administrative Agent (such denial not being available to the Administrative
Agent where the Replacement Lender is already a Lender), then such Subject
Lender shall, subject to the payment of any amounts due pursuant to Sections
2.10(a) and (b) and Section 2.12, assign, in accordance with Section 9.07, all
of its Commitments, Advances, Notes and other rights and obligations under this
Agreement and all other Loan Documents to such designated financial institution;
provided, however, that (i) such assignment shall be without recourse,
representation or warranty and (ii) the purchase price paid by such designated
financial institution shall be in at least the amount of such Subject Lender's
Advances, together with all accrued and unpaid interest and fees in respect
thereof, plus all other amounts (including the amounts demanded and unreimbursed
under Sections 2.10(a) and (b) and Section 2.12) owing to such Subject Lender
hereunder. Upon the effective date of an assignment described above, the
Borrower shall issue a replacement Note or Notes, as the case may be, to such
designated financial institution or Replacement Lender, as applicable, and such
institution shall become a "Lender" for all purposes under this Agreement and
the other Loan Documents.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing. This Agreement shall
become effective on the date (the "Closing Date") that the following conditions
precedent are satisfied:
(a) The Administrative Agent shall have received, dated the Closing
Date, in form and substance satisfactory to the Arrangers and their legal
counsel, a copy of this Agreement duly executed by each party hereto, with
definitive forms of all exhibits hereto mutually satisfactory to the
Borrower and the Arrangers and their legal counsel;
(b) The Borrower shall have paid all accrued fees and reimbursable
expenses of the Arrangers (including the accrued reasonable fees and
expenses of counsel to the Arrangers) due on or before the Closing Date,
to the extent invoiced at least two Business Days prior to the Closing
Date; and
(c) The Guaranteed Senior Debt Credit Agreement shall have been duly
executed by each party thereto and delivered to the Administrative Agent.
SECTION 3.02. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make an Advance or of any Issuing Bank to issue
a Letter of Credit on the Funding Date is subject to the satisfaction of the
following conditions precedent before or concurrently therewith:
(a) The Spinoff, the Canadian Subsidiary Transfer, the Cash Payment
and the Merger shall have been consummated in accordance with the terms of
the Transaction Documents, without any written waiver or amendment not
consented to by the Requisite Lenders of any term, provision or
39
condition set forth therein, and in compliance with all applicable laws
(it being understood that the Consents Side Letter, the Distribution
Agreement, the Merger Agreement, the Omnibus Restructuring Agreement and
related documents delivered to the Arrangers prior to November 27, 1997,
and as amended through the date hereof pursuant to amendments provided to
the Lenders prior to the date hereof (the "Base Transaction Documents"),
are satisfactory to the Lender Parties and their legal counsel), and, if
the Hypothetical Consent Exposure Amount (as defined in the Consents Side
Letter) on the Funding Date exceeds $25,000,000, the arrangements as
contemplated by Section 1 of the Consents Side Letter and Exhibit B
thereto shall have been fully satisfied or other arrangements acceptable
to the Requisite Lenders shall have been put in place.
(b) The Subsidiary Contribution shall have been consummated in
accordance with the terms described on Schedule 3.02(b).
(c) The Transaction Documents shall be in full force and effect.
(d) The Lender Parties shall be reasonably satisfied with the
corporate and legal structure and capitalization of each Loan Party,
including the terms and conditions of the charter and bylaws (or other
similar organizational documents) and each class of capital stock of each
Loan Party and of each agreement or instrument relating to such structure
or capitalization, provided that the corporate and legal structure and
capitalization of the Loan Parties, to the extent specified in the
Information Memorandum or the Base Transaction Documents, are satisfactory
to the Lender Parties.
(e) The Parent Guarantor shall have received $620,000,000 in gross
cash proceeds of the Guaranteed Senior Debt.
(f) All Existing Debt identified as "To Be Refinanced" on Schedule
4.01(y) (other than any Retained Marriott Bonds) shall have been prepaid,
redeemed or defeased in full or otherwise satisfied and extinguished or
arrangements therefor satisfactory to the Administrative Agent shall have
been made (or, in the case of certain Marriott Bonds, assumed by New
Marriott).
(g) There shall have occurred no Material Adverse Change since
September 12, 1997.
(h) The Borrower shall have paid all accrued fees and expenses of
the Administrative Agent and the Lender Parties (including the fees and
expenses of counsel to the Administrative Agent) due on or before the
Funding Date, to the extent invoiced at least two Business Days prior to
the Funding Date.
(i) All governmental authorizations, and material consents,
approvals and authorizations of, and notices and filings to or with, and
other actions by, any other Person necessary in connection with the
Transaction, any of the Loan Documents or the Related Documents or any
transactions contemplated thereby, other than (i) filings and recordings
under, or with respect to the Collateral under, the Loan Documents, (ii)
governmental authorizations, and consents, approvals, authorizations,
notices, filings and other actions, described on Schedule 4.01(d) hereto,
(iii) third party consents and approvals that have not been obtained that
relate to Indemnified Consent Exposure and (iv) consents, approvals,
authorizations, notices, filings and other actions the absence of which
would not reasonably be expected to have a Material Adverse Effect, shall
have been obtained (without the imposition of any conditions that are not
reasonably acceptable to the Lender Parties) and shall remain in full
force and effect; and all applicable waiting periods shall have expired
without any action being taken by any competent authority.
(j) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or
40
arbitrator that could reasonably be expected to have a Material Adverse
Effect other than the matters described on Schedule 4.01(i) (the
"Disclosed Litigation").
(k) The Administrative Agent shall have received on or before the
Funding Date the following, each dated such day (unless otherwise
specified), in form and substance satisfactory to the Administrative Agent
(unless otherwise specified) and (except for the Notes) in sufficient
copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower, the Parent Guarantor and each other Loan
Party approving the Transaction, this Agreement, the Notes and each
other Loan Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action (including
shareholder approval) and governmental approvals and consents, if
any, with respect to the Transaction, this Agreement, the Notes,
each other Loan Document and each Related Document.
(iii) A copy of the charter (or similar organizational
document) of the Borrower, the Parent Guarantor and each other Loan
Party and each amendment thereto, certified (as of a date reasonably
near the Funding Date) by the Secretary of State of the jurisdiction
of its incorporation (or similar governmental authority) as being a
true and correct copy thereof.
(iv) A copy of a certificate of the Secretary of State (or
similar governmental authority) of the jurisdiction of its
incorporation, dated reasonably near the Funding Date, listing the
charter (or similar organizational document) of the Borrower, the
Parent Guarantor and each other Loan Party and each amendment
thereto on file in his office and certifying that (A) such
amendments are the only amendments to the Borrower's, the Parent
Guarantor's or such other Loan Party's charter (or similar
organizational document) on file in the office of such Secretary of
State, (B) the Borrower, the Parent Guarantor and each other Loan
Party have paid all franchise taxes (or the equivalent thereof) to
the date of such certificate and (C) the Borrower, the Parent
Guarantor and each other Loan Party are duly incorporated and in
good standing under the laws of the jurisdiction of its
incorporation.
(v) A copy of a certificate of the Secretary of State of the
State of Delaware certifying as to the filing and acceptance of the
certificate of merger in respect of the Merger, or other
confirmation of such filing satisfactory to the Arrangers.
(vi) A certificate of the Borrower, the Parent Guarantor and
each other Loan Party, signed on behalf of the Borrower, the Parent
Guarantor and such other Loan Party by any two of its chief
executive officer, chief financial officer, chief accounting
officer, president, secretary, any vice president or any assistant
secretary, dated the Funding Date, certifying as to (A) the absence
of any amendments to the charter (or similar organizational
document) of the Borrower, the Parent Guarantor or such other Loan
Party since the date of the Secretary of State's (or similar
governmental authority's) certificate referred to in Section
3.02(k)(iv), other than, to the extent applicable, (x) the filing of
the certificate of merger referred to in Section 3.02(k)(v) and (y)
the filing of an amendment to the certificate of incorporation of
the Parent Guarantor, in the form attached thereto, on the Funding
Date, (B) a true and correct copy of the bylaws (or similar
organizational document) of the Borrower, the Parent Guarantor and
such other Loan Party as in effect on the Funding Date, (C) the due
incorporation and good standing of the Borrower, the Parent
Guarantor and such other Loan Party as a corporation organized under
the laws of the jurisdiction of its incorporation and the absence of
any proceeding for the dissolution or liquidation of the Borrower,
the Parent Guarantor or such
41
other Loan Party, (D) the truth of the representations and
warranties contained in the Loan Documents as though made on and as
of the Funding Date (other than any such representation or warranty
that is limited to a particular date or dates, as to which the truth
of such representation or warranty is as of such date or dates) and
(E) the absence of any Default at the time of, or immediately after
giving effect to, the Initial Extension of Credit.
(vii) A certificate of the Secretary or an Assistant Secretary
of the Borrower, the Parent Guarantor and each other Loan Party
certifying the names and true signatures of the officers of the
Borrower, the Parent Guarantor and such other Loan Party authorized
to sign this Agreement, the Notes and each other Loan Document to
which they are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(viii) A security agreement in substantially the form of
Exhibit D (as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "Security Agreement"),
duly executed by the Borrower and each Subsidiary Guarantor,
together with:
(A) certificates representing the Pledged Shares
referred to therein accompanied by undated stock powers
executed in blank,
(B) duly executed financing statements (Form UCC-1 or a
comparable form), in suitable form for filing under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order
to perfect the liens and security interests created under the
Security Agreement and the priority thereof,
(C) completed requests for information, dated on or
before the Funding Date, listing all effective financing
statements filed in the jurisdictions referred to in clause
(B) above that name the Borrower or any other Loan Party as
debtor, together with copies of such other financing
statements,
(D) duly executed termination statements (Form UCC-3 or
a comparable form) or the equivalent thereof in suitable form
for filing under the Uniform Commercial Code of all
jurisdictions that may be necessary or that the Administrative
Agent may reasonably deem desirable in order to terminate or
amend existing liens on and security interests in the
Collateral described in the Security Agreement (other than
liens and security interests permitted to continue under the
terms of the Security Agreement), duly executed by the
appropriate secured party, and
(E) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to perfect the liens and security interests
created under the Security Agreement and the priority thereof
has been taken or arrangements reasonably satisfactory to the
Administrative Agent for the taking thereof have been made.
(ix) A copy of a ruling issued by the Internal Revenue Service
to the effect that the Spinoff will qualify as a tax-free
reorganization under Section 368(a)(1)(D) of the Internal Revenue
Code and a tax-free distribution under Section 355 of the Internal
Revenue Code to the holders of the stock of the Parent Guarantor.
42
(x) Satisfaction of the Lender Parties and counsel for the
Administrative Agent with respect to the tax treatment of the
Borrower's debt as debt and not equity and the deductibility of
interest thereunder.
(xi) Evidence that Sodexho owns, directly or indirectly, not
less than 40.01% of the voting stock of the Parent Guarantor.
(xii) A copy of the fairness opinion with respect to the
Transaction issued to the Board of Directors of the Parent Guarantor
by Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
(xiii) A guaranty in substantially the form of Exhibit E (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"), duly executed
by each Subsidiary Guarantor.
(xiv) A pledge agreement in substantially the form of Exhibit
F (as amended, supplemented or otherwise modified from time to time
in accordance with its terms, the "Pledge Agreement"), duly executed
by the Parent Guarantor together with:
(A) certificates representing the Pledged Shares
referred to therein, accompanied by undated stock powers, duly
executed in blank,
(B) duly executed financing statements (Form UCC-1 or a
comparable form), in suitable form for filing under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order
to perfect the liens and security interests created under the
Pledge Agreement and the priority thereof,
(C) completed requests for information, dated on or
before the Funding Date, listing all effective financing
statements filed in the jurisdictions referred to in clause
(B) above that name the Parent Guarantor as debtor, together
with copies of such other financing statements, and
(D) duly executed termination statements (Form UCC-3 or
a comparable form) or the equivalent thereof in suitable form
for filing under the Uniform Commercial Code of all
jurisdictions that may be necessary or that the Administrative
Agent may reasonably deem desirable in order to terminate or
amend existing liens on and security interests in the
Collateral described in the Pledge Agreement (other than liens
and security interests permitted to continue under the terms
of the Pledge Agreement), duly executed by the appropriate
secured party.
(xv) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance
satisfactory to the Lender Parties (it being understood that the
Base Transaction Documents are satisfactory to the Lender Parties
and their legal counsel), together with all agreements, instruments
and other documents delivered in connection therewith.
(xvi) Certified copies of each contract with Sodexho listed on
Schedule 4.01(aa), duly executed by the parties thereto.
43
(xvii) A copy of the solvency opinion with respect to the
Parent Guarantor after giving effect to the Transaction and the
other transactions contemplated hereby, from American Appraisal
Associates, Inc.
(xviii) Evidence of insurance complying with the provisions of
Section 5.01(d).
(xix) A duly completed and executed Notice of Borrowing for
each Advance to be made on the Funding Date.
(xx) An opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Borrower, the Parent Guarantor and each other Loan Party in
substantially the form of Exhibit G-1 hereto and as to such other
matters as the Required Lenders through the Administrative Agent may
reasonably request.
(xxi) An opinion of Xxxxxx X. Xxxxx, Esq., General Counsel for
the Borrower, the Parent Guarantor and each other Loan Party, in
substantially the form of Exhibit G-2 hereto and as to such other
matters as the Required Lenders through the Administrative Agent may
reasonably request.
(xxii) An opinion of Ober, Kaler, Xxxxxx & Xxxxxxx, a
Professional Corporation, Maryland counsel to the Loan Parties, in
substantially the form of Exhibit G-3 hereto and as to such other
matters as the Required Lenders through the Administrative Agent may
reasonably request.
(xxiii) A favorable opinion of Shearman & Sterling, counsel
for the Administrative Agent, in form and substance satisfactory to
the Administrative Agent.
SECTION 3.03. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make an Advance (other than a Letter of Credit Advance made by
an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c)) on the
occasion of each Borrowing (including the Initial Extension of Credit), and the
obligation of the Issuing Banks to issue Letters of Credit (including the
initial issuance) or renew a Letter of Credit, shall be subject to the
conditions precedent that,
(a) on the date of such Borrowing or issuance or renewal, the
following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Issuance or Notice of Renewal
and the acceptance by the Borrower of the proceeds of such Borrowing or of
such Letter of Credit or the renewal of such Letter of Credit, shall
constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or
renewal such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such
date, before and after giving effect to such Borrowing and the
application of the proceeds therefrom, as though made on and as of
such date, except to the extent that any such representation or
warranty is limited to a particular date or dates, in which case
such representation or warranty was true on and as of such date or
dates;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds
therefrom, that constitutes a Default, and
(b) the Administrative Agent shall have received a Notice of
Borrowing in accordance with Section 2.02(a), a Notice of Issuance in
accordance with Section 2.03(a) or, except in the case of
44
an automatic renewal pursuant to a Letter of Credit referred to in Section
2.01(c)(ii), a Notice of Renewal in accordance with Section 2.01(c).
SECTION 3.04. Determinations Under Section 3.02. For purposes of
determining compliance with the conditions specified in Section 3.02, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower and the
Parent Guarantor. Each of the Borrower and the Parent Guarantor hereby
represents and warrants (i) in the case of clauses (a), (c)(i), (c)(ii)(w),
(c)(ii)(x), (d) (but only insofar as clauses (c)(ii)(x) and (d) relate to the
execution and delivery, but not the performance, of this Agreement) and (e) to
the extent that such clauses relate to the Borrower and the Parent Guarantor
(but not to any other Loan Party) and to this Agreement (but not to any other
Loan Document) and are not expressly limited to another particular date or
dates, on the date hereof and, except to the extent expressly limited to a
particular date or dates, on each date thereafter on which such representation
or warranty is made or deemed made hereunder and (ii) in the case of such
clauses and all other clauses of this Section 4.01, except to the extent
expressly limited to another particular date or dates, on the Funding Date
(after giving effect to the Transaction) and on each date thereafter on which
such representation or warranty is made or deemed made hereunder, as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify, be in good standing or be
licensed, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority, and all governmental licenses, permits and
other approvals (except for the absence of certain third-party consents
and approvals that result in Indemnified Consent Exposure), necessary to
own or lease and operate its properties and to carry on its business as
now conducted, and as proposed to be conducted except any such power,
authority, license, permit or approval the failure to have which would not
reasonably be expected to have a Material Adverse Effect. All of the
outstanding capital stock of the Borrower has been validly issued, is
fully paid and non-assessable and is owned by the Persons and in the
amounts specified on Schedule 4.01(a) free and clear of all Liens, except
those created under the Collateral Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list, as of the Funding Date (after giving effect to the Transaction), of
all Subsidiaries, including all Substantial Subsidiaries, showing, as of
the Funding Date (after giving effect to the Transaction), as to each such
Substantial Subsidiary, the correct legal name thereof, the jurisdiction
of its incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the Funding Date and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by each Loan Party on the Funding Date and the number of
shares covered by all outstanding options, warrants, rights of conversion
or purchase and similar rights on the Funding Date. As of the Funding
Date, all of the
45
outstanding capital stock of all of such Substantial Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by the
person indicated on such Schedule 4.01(b), free and clear of all Liens,
except those created under the Loan Documents and those permitted under
Section 5.02(a). Each such Substantial Subsidiary (i) is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so qualify, be
in good standing or be licensed would not reasonably be expected to have a
Material Adverse Effect and (iii) has all requisite corporate power and
authority, and all governmental licenses, permits and other approvals
necessary to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted except any such
power, authority, license, permit or approval the failure to have which
would not reasonably be expected to have a Material Adverse Effect.
(c) The execution, delivery and performance by each Loan Party of
each of this Agreement, the Notes, each other Loan Document to which it is
or is to be a party, and the consummation of the Transaction, (i) are
within such Loan Party's corporate powers and have been duly authorized by
all necessary corporate action, and (ii) do not (w) contravene such Loan
Party's charter or bylaws (or other similar organizational documents), (x)
violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award
applicable to it the violation of which would reasonably be expected to
have a Material Adverse Effect, (y) except for the absence of certain
third-party consents and approvals that result in Indemnified Consent
Exposure, conflict with or result in the breach of, or constitute a
default under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting any Loan Party,
any of its Subsidiaries or any of their properties, which conflict,
default or breach would reasonably be expected to have a Material Adverse
Effect, or (z) except for the Liens created under the Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or, except as set forth in clause (y) above, in
breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or either instrument, the violation or breach of which would
reasonably be expected to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for (i) the due execution, delivery or
performance by any Loan Party of this Agreement, the Notes or any other
Loan Document to which it is or is to be a party, or for the consummation
of the Transaction, (ii) the grant by any Loan Party of the Liens granted
by it pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created by the Collateral Documents (including
the required priority thereof) or (iv) the exercise by the Administrative
Agent or any Lender Party of its rights under the Loan Documents or the
remedies in respect of the Collateral pursuant to the Collateral
Documents, except for (w) the authorizations, approvals, actions, notices
and filings listed on Part A of Schedule 4.01(d), all of which have been
duly obtained, taken, given or made as of the Closing Date and are, as of
the Closing Date, in full force and effect (x) the authorizations,
approvals, actions, notices and filings listed on Part B of Schedule
4.01(d), all of which will have been (except to the extent indicated on
Schedule 4.01(d)) duly obtained, taken, given or made as of the Funding
Date and, as of the Funding Date, will be in full force and effect, (y)
third-party consents and approvals that have not been obtained that result
in Indemnified Consent Exposure and (z) authorizations, approvals,
actions, notices and filings the absence of which would not reasonably be
expected to have a Material Adverse Effect. As of the Funding Date, all
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any competent authority
restraining, preventing or imposing materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries freely
to transfer or
46
otherwise dispose of, or to create any Lien on, any properties now owned
or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes and each other
Loan Document, when executed and delivered hereunder by each Loan Party
party thereto, will be, duly executed and delivered by each Loan Party
party thereto. This Agreement is, and each of the Notes and each other
Loan Document when executed and delivered hereunder by each Loan Party
party thereto will be, a valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its
terms, subject to applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally and to general equitable principles.
(f) The unaudited pro forma combined balance sheet of the Parent
Guarantor and its Subsidiaries as of September 12, 1997, and the related
unaudited pro forma combined statement of income of the Parent Guarantor
and its Subsidiaries for the 36 weeks then ended included in the Proxy
Statement, fairly present, subject to the provisions of Regulation S-X of
the Securities and Exchange Commission, the pro forma combined financial
condition of the Parent Guarantor and its Subsidiaries as at such date and
the pro forma combined results of operations of the Parent Guarantor and
its Subsidiaries for the period ended on such date, in each case giving
effect to the Transaction and the other transactions contemplated hereby
as if the Transaction and such other transactions had been consummated on
such date or at the beginning of such period, respectively, and since
September 12, 1997, there has been no Material Adverse Change.
(g) The Consolidated forecasted balance sheets and income and cash
flow statements of the Parent Guarantor and its Subsidiaries included in
the Information Memorandum were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were reasonable in the light
of conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Parent Guarantor's reasonable
estimate of its future financial performance.
(h) The information concerning the Loan Parties contained in the
Information Memorandum and the information concerning the Loan Parties
contained in the other information, exhibits and reports furnished by the
Loan Parties to the Administrative Agent or any Lender Party in connection
with the negotiation of the Loan Documents or pursuant to the terms of the
Loan Documents (other than information relating to the non-Foodservice
Business), taken as a whole, did not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made therein not misleading.
(i) Except as set forth on Schedule 4.01(i), there is no action,
suit, investigation, litigation or proceeding affecting any Loan Party or
any of its Subsidiaries, including any Environmental Action, pending or
threatened before any court, governmental agency or arbitrator that would
reasonably be expected to have a Material Adverse Effect.
(j) No proceeds of any Advance or drawings under any Letter of
Credit will be used in violation of Regulation G, U or X of the Board of
Governors of the Federal Reserve System.
(k) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted in or is reasonably expected to
result in a liability of any Loan Party or any ERISA Affiliate that would
reasonably be expected to have a Material Adverse Effect.
(l) As of the last annual actuarial valuation date, except as would
not reasonably be expected to have a Material Adverse Effect, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA, of
each Plan exceeds 90% and there has been no adverse change in the funding
status of any such Plan since such date.
47
(m) Neither any Loan Party nor any ERISA Affiliate has incurred or
is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan that would reasonably be expected to have a Material
Adverse Effect.
(n) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA, in any such case, in a manner or to an extent that would reasonably
be expected to have a Material Adverse Effect.
(o) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106 that would reasonably
be expected to have a Material Adverse Effect.
(p) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not
covered by insurance) that could reasonably be expected to have a Material
Adverse Effect.
(q) Except to the extent that the same would not reasonably be
expected to have a Material Adverse Effect, the operations and properties
of each Loan Party and each of its Subsidiaries comply in all material
respects with all applicable Environmental Laws and Environmental Permits,
all past non-compliance with such Environmental Laws and Environmental
Permits has been resolved without ongoing obligations or costs, and no
circumstances exist that could reasonably be expected to (i) form the
basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties or (ii) cause any such property to
be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(r) Except to the extent that the same would not reasonably be
expected to have a Material Adverse Effect, (i) none of the properties
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to
any such property; (ii) there are no and never have been any underground
or aboveground storage tanks or any surface impoundments, septic tanks,
pits, slumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or
operated by any Loan Party or any of its Subsidiaries or, to the best of
its knowledge, on any property formerly owned or operated by any Loan
Party or any of its Subsidiaries; (iii) there is no asbestos or
asbestos-containing material on any property currently owned or operated
by any Loan Party or any of its Subsidiaries; and (iv) Hazardous Materials
have not been released, discharged or disposed of on any property
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries.
(s) Except to the extent that any such disposal would not reasonably
be expected to have a Material Adverse Effect, all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from,
any property currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to any Loan Party or any of its
Subsidiaries.
(t) The Collateral Documents create a valid and perfected security
interest in the Collateral, securing the payment of the Secured
Obligations, subject to no prior Liens other than as permitted hereunder,
and all filings and other actions necessary or desirable to perfect such
security interest have been duly taken. The Loan Parties are the legal and
beneficial owners of the Collateral
48
free and clear of any Lien, except for the liens and security interests
created or permitted under the Loan Documents.
(u) Each Loan Party and each of its Subsidiaries has filed, has
caused to be filed or has been included in all material tax returns
(federal, state, local or foreign) required to be filed and has paid (or
there has been paid by others) all material taxes shown thereon to be due,
together with applicable interest and penalties, other that any such taxes
or tax returns in respect of which any Loan Party or any such Subsidiary
shall have been indemnified by New Marriott.
(v) Neither the Merger nor the Subsidiary Contribution will be
taxable to the Parent Guarantor or any of its Subsidiaries.
(w) No Loan Party is an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended.
(x) As of the Funding Date, each Loan Party is, individually and
together with its Subsidiaries, Solvent.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list, as of the Closing Date, of all items of Existing Debt with a
principal amount in excess of $5,000,000 (other than Debt that, following
the consummation of the Transaction but without giving effect to the
redemption of any Marriott Bonds, will be Debt of New Marriott or any
Subsidiary of New Marriott and not Debt of the Parent Guarantor or any of
its Subsidiaries) showing as of the date hereof the principal amount
outstanding thereunder and showing the aggregate principal amount of all
items of such Existing Debt with an outstanding principal amount not in
excess of $5,000,000 as of the Closing Date.
(z) On the Funding Date, the Borrower and its Subsidiaries own or
have the legal right to use the "Sodexho" trade name for a period of ten
years following the Funding Date and the "Marriott" trade name for a
period of four years following the Funding Date, in each case, subject to
the terms and conditions of applicable license agreements, without known
conflict with the rights of any other Person.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list, as of the date of this Agreement and as of the Funding
Date, of all contracts entered or to be entered into with Sodexho for the
providing of business-related support services, expertise or other
assistance to the Borrower or any of its Subsidiaries, under which the
annual compensation payable to Sodexho, or the fair market value of the
annual services to be provided by Sodexho, exceeds $2,000,000, showing as
of the date of this Agreement the parties, subject matter and term
thereof. Each such contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise
modified except as permitted under Section 5.02(k), and, except to the
extent that any such failure to be in full force and effect, binding or
enforceable or any such default would not reasonably be expected to have a
Material Adverse Effect, is in full force and effect and is binding upon
and enforceable against all parties thereto in accordance with its terms,
and there exists no default under any such contract by any party thereto.
ARTICLE V
COVENANTS OF THE BORROWER AND THE PARENT GUARANTOR
SECTION 5.01. Affirmative Covenants. From and after the Funding Date
(after giving effect to the Transaction), so long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, each of the Borrower and the Parent Guarantor will:
49
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA, except to the extent that such failure
would not reasonably be expected to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, all material taxes, assessments and governmental charges or
levies imposed upon it or upon its property; provided, however, that
neither the Borrower nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(c) Compliance with Environmental Laws. Except to the extent that
the failure to do so would not reasonably be expected to have a Material
Adverse Effect, (i) comply, and cause each of its Subsidiaries and all
lessees and other Persons operating or occupying its properties to comply,
in all material respects, with all applicable Environmental Laws and
Environmental Permits; (ii) obtain and renew and cause each of its
Subsidiaries to obtain and renew all Environmental Permits necessary for
its operations and properties; and (iii) conduct, and cause each of its
Subsidiaries to conduct, if required under Environmental Laws, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that neither
the Borrower nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its
existence, legal structure, legal name, rights (charter and statutory),
permits, licenses, approvals, privileges and franchises, including,
without limitation, on the Funding Date only, the right to use the
"Sodexho" trade name for a period of ten years following the Funding Date
and the "Marriott" trade name for a period of four years following the
Funding Date (subject, in each case, to the terms and conditions of
applicable license agreements); provided, however, that the Borrower and
its Subsidiaries may consummate the Transaction and any other merger or
consolidation permitted under Section 5.02(d) and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise if
the Borrower or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Borrower or such Subsidiary, as the case may be, and that the loss thereof
would not reasonably be expected to have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to time,
upon reasonable prior notice and at the expense of the Administrative
Agent or such Lender Party, permit the Administrative Agent or any of the
Lender Parties or any agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and, subject to prior
notice to the Borrower and affording a reasonable opportunity for the
Borrower to have its representatives participate therein, with their
independent certified public accountants.
50
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with GAAP.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(i) Performance of Certain Documents. Perform and observe all of the
material terms and provisions of the Tax Agreement, the Indemnity Support
Agreement (if the Indemnity Support Agreement has been entered into) and
the Consents Side Letter to be performed or observed by it, maintain each
such document in full force and effect, enforce each such document in
accordance with its terms, take all such action to such end as may be from
time to time requested by the Administrative Agent and, upon request of
the Administrative Agent, make to each other party to each such document
such demands and requests for information and reports or for action as the
Parent Guarantor or any of its Subsidiaries is entitled to make under such
document; provided that this subsection (i) shall only apply to the
Consents Side Letter and the Indemnity Support Agreement (if the Indemnity
Support Agreement is entered into) for so long as third-party consents as
set forth in Exhibit A to the Consents Side Letter with potential
liability in excess of $25,000,000 have not been obtained.
(j) Performance of Material Contracts. Perform and observe all the
terms and provisions of each Material Contract to be performed or observed
by it (except for the absence of certain third-party consents and
approvals for which the potential liability exposure is indemnified
pursuant to the Consents Side Letter and the Indemnity Support Agreement),
maintain each such Material Contract in full force and effect (other than
such Material Contracts that may be terminated by either party thereto
without cause or by the Borrower or the Parent Guarantor with cause),
enforce each such Material Contract in accordance with its terms, and
cause each of its Subsidiaries to do so except in any case where the
failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(k) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than (i) the Borrower
and its Subsidiaries, and (ii) up to an aggregate value of the
consideration that would be paid in an arm's-length transaction with a
Person not an Affiliate not to exceed $5,000,000 in any Fiscal Year of the
Borrower, the Parent Guarantor and its Subsidiaries (other than the
Borrower and its Subsidiaries)) on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain
in a comparable arm's-length transaction with a Person not an Affiliate;
provided that (i) the Loan Parties may enter into and perform contracts
with Sodexho existing on the Funding Date and any amendments thereof not
prohibited by Section 5.02(k), (ii) the Borrower and the Parent Guarantor
may make payments, distributions and other transfers, and enter into
transactions, permitted under Section 5.02(h), (iii) the Borrower and its
Subsidiaries may make payments under the Procurement Contracts Agreement
so long as payments made to the Parent Guarantor thereunder do not exceed
amounts paid by the Parent Guarantor to parties to the Procurement
Contracts and (iv) the Borrower and its Subsidiaries may assume the
liabilities of the Parent Guarantor under the Procurement Contracts.
(l) Additional Subsidiary Guarantors. The Borrower will cause
sufficient of its Subsidiaries to become Subsidiary Guarantors so that, at
all times, (i) at least ninety percent (90%) of the Consolidated domestic
assets of the Parent Guarantor and its Subsidiaries and ninety percent
(90%) of the Consolidated domestic sales of the Parent Guarantor and its
Subsidiaries are held by or generated by Subsidiary Guarantors, and (ii)
each Subsidiary generating five percent (5%) or more of the total
Consolidated domestic sales of the Parent Guarantor and its Subsidiaries
or holding five percent (5%) or
51
more of the Consolidated domestic assets of the Parent Guarantor and its
Subsidiaries, is a Subsidiary Guarantor; and each Subsidiary that becomes
a Subsidiary Guarantor pursuant to this Section 5.01(1) shall become an
additional Subsidiary Guarantor pursuant to the terms of the Subsidiary
Guaranty and an additional Grantor pursuant to the terms of the Security
Agreement, and shall, within 30 days of becoming a Subsidiary Guarantor
hereunder, execute and deliver to the Administrative Agent a Subsidiary
Guaranty Supplement, a Security Agreement Supplement and such other
documents as the Administrative Agent may reasonably deem desirable in
order to perfect and protect any Liens granted under the Collateral
Documents and the Security Agreement Supplement and to enable the
Administrative Agent and the Lenders to exercise and enforce their rights
and their remedies under the Loan Documents, in each case, in form
reasonably satisfactory to the Administrative Agent.
(m) Interest Rate Hedging. Enter into, within 6 months following the
Funding Date, and maintain thereafter, interest rate Hedge Agreements with
Persons acceptable to the Administrative Agent or other fixed rate
arrangements (including a fixed rate facility covering the Guaranteed
Senior Debt) acceptable to the Administrative Agent (i) covering a
notional amount of not less than 45% of the sum of the aggregate
outstanding principal balance of each of the Term Facility and the
Guaranteed Senior Debt plus $100,000,000, and (ii) having an average life
of not less than three years from the date of commencement.
SECTION 5.02. Negative Covenants. From and after the Funding Date
(after giving effect to the Transaction), so long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, each of the Borrower and the Parent Guarantor will
not, at any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Parent Guarantor or any of its Subsidiaries as debtor, or sign or suffer
to exist, or permit any of its Subsidiaries to sign or suffer to exist,
any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding, however,
from the operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and, in the case of
any such Lien securing any amount in excess of $3,000,000, described
on Schedule 5.02(a) hereto;
(iv) Liens arising in connection with Capitalized Leases and
other Debt permitted under Section 5.02(b)(v); provided that no such
Lien shall extend to or cover any Collateral or assets other than
the assets subject to such Capitalized Leases or the purchase of
which was financed with such Debt;
(v) any Lien existing on any asset of any corporation at the
time such corporation becomes a Subsidiary of the Parent Guarantor
and not created in contemplation of such event;
(vi) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the
Parent Guarantor or a Subsidiary of the Parent Guarantor and not
created in contemplation of such event;
52
(vii) any Lien existing on any asset prior to the acquisition
thereof by the Parent Guarantor or a Subsidiary of the Parent
Guarantor and not created in contemplation of such acquisition;
(viii) Liens on contract rights, accounts receivable arising
thereunder and fixed and capital assets used or to be used in
connection with the performance thereof securing obligations
incurred to finance such fixed or capital assets or investments
required under such contracts or obligations to subcontractors,
partners or other participants in respect of such contracts,
provided that accounts receivable subject to such Liens do not
exceed $30,000,000 in aggregate at any one time;
(ix) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt or other obligation secured by any
Lien permitted by any of the foregoing clauses of this Section,
provided that such Debt or other obligation is not increased and is
not secured by any additional assets;
(x) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt and other obligations in an aggregate
principal or face amount at any date not to exceed $15,000,000; and
(xi) Uniform Commercial Code financing statements (Form UCC-1
or other comparable form) signed in connection with operating
leases.
(b) Debt. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(i) Debt owed to the Parent Guarantor or to a Subsidiary of
the Parent Guarantor incurred in connection with cash management
operations in the ordinary course of business;
(ii) Debt outstanding on the date hereof and identified as
"Not To Be Refinanced" on Schedule 4.01(y);
(iii) Debt owed to the Borrower or to a wholly owned
Subsidiary of the Borrower;
(iv) Debt under the Loan Documents;
(v) Capitalized Leases and Debt incurred or assumed for the
purpose of financing all or a part of the cost of acquiring or
constructing any fixed or capital asset, not to exceed in the
aggregate $50,000,000 at any time outstanding;
(vi) in the case of the Parent Guarantor, Debt in respect of
the Guaranteed Senior Debt, the Retained Marriott Bonds, the XXXXx,
the indenture in respect of the XXXXx, as the same may be amended
from time to time, and the XXXXx Allocation Agreement;
(vii) Debt incurred to finance capital assets for specific
clients in the ordinary course of business in connection with
management contracts with such clients;
(viii) Debt in respect of obligations secured by Liens
permitted under Section 5.02(a)(viii);
(ix) Debt in respect of Hedge Agreements entered into to hedge
against currency, interest rate and commodity price risks of the
Parent Guarantor and its Subsidiaries arising
53
from the operations and financing of the Parent Guarantor and its
Subsidiaries and not for speculative purposes; and
(x) other Debt not permitted under clauses (i) through (ix)
above in an aggregate principal amount outstanding at any time not
to exceed $15,000,000.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease (other
than Capitalized Leases) having an original term of one year or more other
than (i) leases and agreements that would not, in the aggregate, cause the
rental obligations (excluding obligations for rent determined on the basis
of a percentage of profits, revenues or other similar measures or
representing the cost of utilities, taxes, insurance or other similar
items under a "net lease" or similar arrangement) of the Borrower and its
Subsidiaries, on a Consolidated basis, in respect of all such leases and
agreements to exceed $15,000,000 payable in any period of 12 consecutive
months, (ii) operating leases entered into in the ordinary course of
business and (iii) other operating leases with respect to real and
personal property for use in connection with, and directly attributable
to, particular food services or facilities management contracts of the
Borrower and its Subsidiaries.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that (i) the Parent Guarantor and its Subsidiaries may
consummate the Transaction and (ii) any Subsidiary of the Borrower may
merge into or consolidate with any other Subsidiary of the Borrower
provided that the Person formed by such merger or consolidation shall be a
Subsidiary of the Borrower in which the Borrower's direct or indirect
percentage equity interest is at least as high as the higher, immediately
prior to such merger or consolidation, of its percentage equity interests
in the two Subsidiaries of the Borrower party to such merger or
consolidation and (iii) a Subsidiary of the Borrower may merge with and
into the Borrower so long as the Borrower is the surviving entity of such
merger.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any Collateral, any fixed or capital assets other
than Collateral, or substantially all assets constituting the business of
a division, branch or other unit operation, except:
(i) sales in the ordinary course of its business;
(ii) leases of equipment in the ordinary course of its
business;
(iii) sales of worn out or obsolete machinery, fixtures,
equipment and materials;
(iv) sales, leases, transfer or other dispositions by the
Parent Guarantor or any of its Subsidiaries to the Parent Guarantor
or any Subsidiaries provided that any such sale, lease, transfer or
other disposition by the Borrower or any of its Subsidiaries to the
Parent Guarantor or any of its Subsidiaries that is not the Borrower
or a Subsidiary of the Borrower shall be subject to Section 5.01(k);
(v) in a transaction authorized by subsection (h) of this
Section;
(vi) dispositions of contracts, and associated inventory,
equipment and accounts receivable, in the ordinary course of
business;
(vii) in a transaction authorized by subsection (d) of this
Section;
54
(viii) sales of substantially all assets constituting a
non-material business line for fair value and for not less than 75%
cash provided that such sales are limited to business lines
generating no more than $100,000,000 in annual revenues individually
for any such business line or $200,000,000 in aggregate annual
revenues for all such business lines sold over the term of the
Facilities; and
(ix) sales of any other capital or fixed assets by the Parent
Guarantor or any of its Subsidiaries so long as (A) the purchase
price paid to the Parent Guarantor or such Subsidiary for each such
asset shall be no less than the fair market value of such asset at
the time of such sale and (B) not less than 75% of the purchase
price for such asset shall be paid to the Parent Guarantor or such
Subsidiary solely in cash, provided that the book value of each such
asset sold pursuant to this clause (ix) shall not exceed $10,000,000
and the book value of all such assets sold by the Parent Guarantor
and its Subsidiaries during the term of the Facilities pursuant to
this clause (ix) shall not exceed $30,000,000.
(f) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Parent Guarantor and its Subsidiaries
in the Parent Guarantor and its Subsidiaries, provided that any
Investment by the Borrower or any of its Subsidiaries in the Parent
Guarantor or any of its Subsidiaries that is not the Borrower or a
Subsidiary of the Borrower shall be subject to Section 5.01(k);
(ii) (A) loans and advances to employees in connection with
employee relocation expenses and (B) other loans and advances to
employees in the ordinary course of the business of the Parent
Guarantor and its Subsidiaries in an aggregate principal amount for
all such loans and advances under this subclause (B) not to exceed
$3,000,000 at any time outstanding;
(iii) Investments by the Parent Guarantor and its Subsidiaries
in Cash Equivalents;
(iv) Investments by the Parent Guarantor and its Subsidiaries
in Hedge Agreements entered into to hedge against currency, interest
rate and commodity price risks of the Parent Guarantor and its
Subsidiaries arising from the operations and financing of the Parent
Guarantor and its Subsidiaries and not for speculative purposes;
(v) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(iii);
(vi) Investments in customers of the Parent Guarantor and its
Subsidiaries consisting of the acquisition or construction of
capital or fixed assets to be used under a contract with such
customer for the provision of food services or facilities management
services, or the financing thereof;
(vii) prepaid commissions, advances, guarantees and other
contractually obligated payments made to customers in connection
with obtaining or performing contracts with such customers in the
ordinary course of business;
(viii) Investments in joint ventures or partnerships in an
aggregate principal amount not to exceed $25,000,000 at any time
outstanding; and
(ix) Investments not otherwise permitted by the foregoing
clauses of this Section in an aggregate principal amount not to
exceed $15,000,000 at any time outstanding.
55
(g) New Subsidiaries. Create, organize, incorporate or acquire any
Subsidiary (any such newly created, organized, incorporated or acquired
Subsidiary being a "New Subsidiary"), or permit any of its Subsidiaries to
create, organize, incorporate or acquire any New Subsidiary, unless:
(i) the conditions of Section 5.01(l) are fully satisfied; and
(ii) if such New Subsidiary is required under Section 5.01(l)
to become a Subsidiary Guarantor, the capital stock or other
ownership interest in such New Subsidiary shall be pledged to the
Administrative Agent for the benefit of the Secured Parties,
pursuant to the terms and conditions of the Collateral Documents
and/or one or more additional pledge agreements (or other similar
documents), in form and substance reasonably acceptable to the
Lenders.
(h) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or
any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of
its Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for
value any capital stock of the Borrower or any warrants, rights or options
to acquire such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, except that, so
long as no Default under Section 7.01(a) or Section 7.01(f), in each case,
without giving effect to any grace periods therein, or any Event of
Default shall have occurred and be continuing at the time of any action
described in clauses (i), (ii), (iii) and (iv) below or would result
therefrom:
(i) the Parent Guarantor may:
(A) up to the amounts calculated pursuant to clauses
(ii)(B)(5) and (7), declare and pay dividends or purchase,
redeem or retire capital stock with any amounts received from
the Borrower pursuant to clauses (ii)(B)(5) and (7), or from
any other Subsidiary of the Parent Guarantor pursuant to
clause (iv); and
(B) make payments in respect of the SMS Allocable
Payment Obligation (as defined in the XXXXx Allocation
Agreement);
(ii) the Borrower may:
(A) declare and pay dividends and distributions payable
only in common stock of the Borrower; and
(B) declare and pay cash dividends to its shareholders
in an amount equal to the sum of:
(1) regularly scheduled payments of interest due
and payable on the Guaranteed Senior Debt and the
Retained Marriott Bonds,
(2) to the extent reasonably allocable to the
Borrower and its Subsidiaries, payments of current
local, state and Federal taxes due and payable by the
Parent Guarantor,
56
(3) to the extent reasonably allocable to the
Borrower and its Subsidiaries, corporate overhead
charges payable by the Parent Guarantor, including,
without limitation, legal, accounting and other
professional costs, and salary and other compensation
expenses for its officers, directors and employees,
(4) payments required to be made by the Parent
Guarantor under the Transaction Documents and the other
agreements listed on Schedule 5.02(h),
(5) up to $5,000,000 per year to permit the Parent
Guarantor to repurchase, redeem or retire capital stock
of the Parent Guarantor or options, warrants or rights
in respect thereof acquired pursuant to a stock option
or other similar plan or other compensation arrangement
from officers, directors and employees of the Parent
Guarantor and its Subsidiaries (other than officers,
directors or employees of Subsidiaries that are not
officers, directors or employees of the Parent
Guarantor, the Borrower or any Subsidiary of the
Borrower) upon the death, disability, retirement or
other termination of such Person as such an officer,
director or employee,
(6) payments of principal, interest and premium
necessary to repay or redeem the Existing Debt
(including, without limitation, payments to New Marriott
in respect of Marriott Bonds assumed by New Marriott, if
any, and payments in respect of the SMS Allocable
Payment Obligation (as defined in the XXXXx Allocation
Agreement)) and fees and expenses in respect thereof,
and
(7) to the extent the Parent Guarantor has
declared dividends in such amount, an amount equal to
(x) up to $7,100,000 in the Fiscal Quarter
ending on or about November 30, 1998; and
(y) for each Fiscal Quarter thereafter, up
to 40% (or, if the Leverage Ratio as of the end of
the Fiscal Quarter immediately preceding the
Fiscal Quarter in which the dividend is paid is
less than 4.0:1.0 but not less than 3.0:1.0, 45%)
of net income of the Parent Guarantor for the
completed Fiscal Quarters of the Fiscal Year in
which such dividend is to be paid (or, in the case
of a dividend to be paid in the first Fiscal
Quarter of any Fiscal Year, of the Fiscal Year
prior to the Fiscal Year in which such dividend is
to be paid) less such dividends paid during the
previous Fiscal Quarters of such Fiscal Year (or,
in the case of a dividend to be paid in the first
Fiscal Quarter of any Fiscal Year, the prior
Fiscal Year), other than, in any such case, the
first Fiscal Quarter of the Fiscal Year with
respect to which such computation is made,
provided that the Borrower may declare and pay
dividends to its shareholders without limitation
if the Leverage Ratio as of the end of the Fiscal
Quarter immediately preceding the Fiscal Quarter
in which the dividend is paid is less than
3.0:1.0;
57
provided, however, that dividends declared and
paid by the Borrower during the immediately
preceding four Fiscal Quarters ending on or about
August 31, 1999 pursuant to this clause (7) shall
not exceed 40% of the net income of the Parent
Guarantor for such four Fiscal Quarters;
(iii) any Subsidiary of the Borrower may declare and pay
cash dividends to the Borrower or pro rata to the holders of
its capital stock; and
(iv) any Subsidiary of the Parent Guarantor (other than
the Borrower and its Subsidiaries) may declare and pay
dividends to the Parent Guarantor or pro rata to the holders
of its capital stock.
(i) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its
business from that described in the Proxy Statement for the Parent
Guarantor and its Subsidiaries and extensions thereof into new
markets, services and product areas in related businesses.
(j) Fiscal Year Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in its Fiscal Year (other
than changing its Fiscal Year end to August 31).
(k) Amendment of Certain Sodexho Contracts. Cancel or
terminate any material contracts entered into with Sodexho for the
providing of business related support services, expertise or other
assistance to the Borrower or any of its Subsidiaries or consent to
or accept any cancellation or termination thereof, amend or
otherwise modify any such contract or give any consent, waiver or
approval thereunder, waive any default under or breach of any such
contract, agree in any manner to any other amendment, modification
or change of any term or condition of any such contract or take any
other action in connection with any such contract that would
materially impair the value of the interest or rights of the
Borrower thereunder or that would materially impair the interest or
rights of the Administrative Agent or any Lender Party, or permit
any of its Subsidiaries to do any of the foregoing, except that such
contracts may be amended, waived or modified with the consent of the
independent directors of the Parent Guarantor; provided that the
fees payable to Sodexho under such contracts (excluding guarantee
fees) do not exceed 0.3% of gross annual revenues of the Parent
Guarantor and its Consolidated Subsidiaries in any Fiscal Year.
(l) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than in favor of
the Secured Parties except for (i) any such restrictions imposed in
the Guaranteed Senior Debt Credit Agreement, (ii) any such
restrictions imposed in lease agreements with respect to the
property or equipment leased thereunder and (iii) any such
restrictions imposed in purchase money financing agreements with
respect to property financed thereunder; provided in each case that
such restrictions do not extend to any asset other than the asset
leased or financed under such agreement.
(m) Capital Expenditures. Make, or commit to make, or permit
any of its Subsidiaries to make, or commit to make, any Capital
Expenditures that would cause the aggregate of all such Capital
Expenditures and commitments therefor made by the Borrower and its
Subsidiaries in any period set forth below to exceed the amount set
forth below for such period; provided that the limitations on
Capital Expenditures set forth in this subsection (n) shall not
apply at any time after the Leverage Ratio is less than 3.0:1.0.
58
=======================================================
Period Ending August 31, Amount
------------------------
-------------------------------------------------------
1998 (stub period) $60,000,000
-------------------------------------------------------
1999 and thereafter (12-month period) $100,000,000
=======================================================
SECTION 5.03. Reporting Requirements. From and after the Funding
Date, so long as any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, each of the
Borrower and the Parent Guarantor (as the case may be) will furnish to the
Lender Parties:
(a) Default Notice. As soon as possible and in any event within five
Business Days after a Responsible Officer of the Borrower or the Parent
Guarantor has knowledge of the occurrence of a Default continuing on the
date of such statement, a statement of a Responsible Officer of the
Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto.
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each
Fiscal Year (except that the first quarterly statements may be delivered
within 90 days after the end of the relevant quarter), (i) a Consolidated
balance sheet of the Parent Guarantor and its Subsidiaries as of the end
of such quarter, a Consolidated statement of income of the Parent
Guarantor and its Subsidiaries for such Fiscal Quarter and for the portion
of the Parent Guarantor's Fiscal Year ending at the end of such quarter
and a Consolidated statement of cash flows of the Parent Guarantor and its
Subsidiaries for the portion of the Parent Guarantor's Fiscal Year ending
at the end of such quarter, and (ii) an unconsolidated balance sheet of
the Borrower as of the end of such quarter, an unconsolidated statement of
income of the Borrower for such Fiscal Quarter and the portion of the
Borrower's Fiscal Year ending at the end of such quarter and a
Consolidated statement of cash flows of the Borrower for the portion of
the Borrower's Fiscal Year ending at the end of such quarter, setting
forth, in each case, in comparative form the corresponding figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail and duly certified (subject to year-end adjustments) by the chief
financial officer of the Parent Guarantor or the Borrower (as the case may
be) as having been prepared in accordance with GAAP, together, in the case
of such financial statements of the Parent Guarantor, with (A) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Parent Guarantor has taken
and proposes to take with respect thereto and (B) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Parent Guarantor in determining compliance with the covenants contained in
Sections 5.02(h)(ii)(B)(7) and (m) and Sections 5.04(a) through (d).
(c) Annual Financials. As soon as available and in any event within
90 days after the end of each Fiscal Year, (i) a copy of the annual report
for such Fiscal Year for the Parent Guarantor and its Subsidiaries,
including therein the Consolidated balance sheet of the Parent Guarantor
and its Subsidiaries as of the end of such Fiscal Year and Consolidated
statements of income and cash flows of the Parent Guarantor and its
Subsidiaries for such Fiscal Year, reported on by independent public
accountants of internationally and nationally recognized standing in a
manner acceptable to the Securities and Exchange Commission, and (ii) an
unconsolidated balance sheet of the Borrower as of the end of such Fiscal
Year and unconsolidated statements of income and cash flows of the
Borrower for such fiscal year, together, in the case of such financial
statements of the Parent Guarantor, with (A) a certificate of the chief
financial officer of the Parent Guarantor stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Parent Guarantor has taken and proposes to take with respect thereto and
(B) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Parent Guarantor in
59
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Sections 5.02(h)(ii)(B)(7) and (m) and Sections
5.04(a) through (d).
(d) Annual Forecasts. As soon as available and in any event within
five months after the beginning of each Fiscal Year of the Parent
Guarantor, forecasts prepared by management of the Parent Guarantor, in
form satisfactory to the Administrative Agent, of Consolidated balance
sheets, statements of income and cash flows of the Parent Guarantor and
its Subsidiaries on an annual basis for the Fiscal Year following such
Fiscal Year then ended and for each Fiscal Year thereafter until the
Termination Date, setting forth in comparative form the corresponding
figures for the immediately preceding Fiscal Year, all in reasonable
detail and form satisfactory to the Administrative Agent, together with
management's strategic discussion and analysis thereof. Any forecasts or
other information provided pursuant to this Section to any Lender Party
shall be Confidential Information subject to the provisions of Section
9.10.
(e) ERISA Events and ERISA Reports. (i) Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred that would reasonably be
expected to have a Material Adverse Effect, a statement of the chief
financial officer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto and (ii) on the date any records,
documents or other information must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA in connection with a related
event or condition that would reasonably be expected to have a Material
Adverse Effect, a copy of such records, documents and information.
(f) Plan Terminations. Promptly and in any event within two Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any
Plan or to have a trustee appointed to administer any Plan that would
reasonably be expected to have a Material Adverse Effect.
(g) Plan Annual Reports. Promptly and in any event within 10 days
after request of the Administrative Agent therefor, copies of each
Schedule B (Actuarial Information) to the most recently filed annual
report (Form 5500 Series) with respect to each Plan.
(h) Multiemployer Plan Notices. Promptly and in any event within
five Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning (i) the imposition of Withdrawal Liability by any such
Multiemployer Plan that would reasonably be expected to have a Material
Adverse Effect, (ii) the reorganization or termination, within the meaning
of Title IV of ERISA, of any such Multiemployer Plan that would reasonably
be expected to have a Material Adverse Effect or (iii) the amount of
liability incurred, or that may be incurred, by such Loan Party or any
ERISA Affiliate in connection with any event described in clause (i) or
(ii).
(i) Litigation. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(i), and promptly
after the occurrence thereof, notice of any adverse change in the status
or the financial effect on any Loan Party or any of its Subsidiaries of
the Disclosed Litigation from that described on Schedule 4.01(i).
(j) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that the Parent Guarantor sends to its stockholders generally, and copies
of all regular, periodic and special reports, and all registration
statements, that any
60
Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange.
(k) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that would reasonably be
expected to have a Material Adverse Effect.
(l) Other Information. Such other information respecting the
business, financial condition, results of operations, or prospects of the
Borrower and its Subsidiaries as any Lender Party (through the
Administrative Agent) may from time to time reasonably request.
SECTION 5.04. Financial Covenants. On and after the Funding Date, so
long as any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the Parent
Guarantor will:
(a) Net Worth. Maintain, at the end of each three-month fiscal
period of the Parent Guarantor ending nearest to the last day of each of
the months set forth below, an excess of Consolidated Shareholders' Equity
plus the outstanding principal balance of the Guaranteed Senior Debt of
not less than the amount set forth below, for such month (plus or minus,
as the case may be, for each such amount set forth below, the amount by
which Consolidated goodwill and intangible assets of the Parent Guarantor
resulting from the consummation of the Transaction is greater or less than
$352,100,000) (provided that this Section 5.04(a) shall not apply in
respect of any month set forth below the last day of which occurs prior to
the Funding Date):
================================================================================
Fiscal Quarter End Amount Fiscal Quarter End Amount
--------------------------------------------------------------------------------
May, 1998 $25,000,000 May, 2001 $125,000,000
--------------------------------------------------------------------------------
August, 1998 $25,000,000 August, 2001 $200,000,000
--------------------------------------------------------------------------------
November, 1998 $25,000,000 November, 2001 $200,000,000
--------------------------------------------------------------------------------
February, 1999 $25,000,000 February, 2002 $200,000,000
--------------------------------------------------------------------------------
May, 1999 $25,000,000 May, 2002 $200,000,000
--------------------------------------------------------------------------------
August, 1999 $75,000,000 August, 2002 $275,000,000
--------------------------------------------------------------------------------
November, 1999 $75,000,000 November, 2002 $275,000,000
--------------------------------------------------------------------------------
February, 2000 $75,000,000 February, 2003 $275,000,000
--------------------------------------------------------------------------------
May, 2000 $75,000,000 May, 2003 $275,000,000
--------------------------------------------------------------------------------
August, 2000 $125,000,000 August, 2003 $375,000,000
--------------------------------------------------------------------------------
November, 2000 $125,000,000 November, 2003 $375,000,000
--------------------------------------------------------------------------------
February, 2001 $125,000,000 February, 2004 $375,000,000
================================================================================
(b) Interest Expense Coverage Ratio. Maintain, at the end of each
three-month fiscal period of the Parent Guarantor ending nearest to the
last day of each of the months set forth below, a ratio of Consolidated
EBITDA to Consolidated Interest Expense for the immediately preceding four
Fiscal Quarters (or, in the case of any Fiscal Quarter ending less than 12
months after the Funding Date, such number of full Fiscal Quarters
commencing on or after the Funding Date as shall have ended on such date),
in each case, of the Parent Guarantor and its Subsidiaries, of at least
the ratio set forth below for such month (provided that this Section
5.04(b) shall not apply in respect of any month set forth below the last
day of which occurs less than one full Fiscal Quarter after the Funding
Date);
61
================================================================================
Fiscal Quarter End Ratio Fiscal Quarter End Ratio
--------------------------------------------------------------------------------
May, 1998 2.00:1.0 May, 2001 3.25:1.0
--------------------------------------------------------------------------------
August, 1998 2.00:1.0 August, 2001 3.75:1.0
--------------------------------------------------------------------------------
November, 1998 2.50:1.0 November, 2001 3.75:1.0
--------------------------------------------------------------------------------
February, 1999 2.50:1.0 February, 2002 3.75:1.0
--------------------------------------------------------------------------------
May, 1999 2.50:1.0 May, 2002 3.75:1.0
--------------------------------------------------------------------------------
August, 1999 2.75:1.0 August, 2002 4.00:1.0
--------------------------------------------------------------------------------
November, 1999 2.75:1.0 November, 2002 4.00:1.0
--------------------------------------------------------------------------------
February, 2000 2.75:1.0 February, 2003 4.00:1.0
--------------------------------------------------------------------------------
May, 2000 2.75:1.0 May, 2003 4.00:1.0
--------------------------------------------------------------------------------
August, 2000 3.25:1.0 August, 2003 4.00:1.0
--------------------------------------------------------------------------------
November, 2000 3.25:1.0 November, 2003 4.00:1.0
--------------------------------------------------------------------------------
February, 2001 3.25:1.0 February, 2004 4.00:1.0
================================================================================
(c) Fixed Charge Coverage Ratio. Maintain, at the end of each
three-month fiscal period of the Parent Guarantor ending nearest to the
last day of each month set forth below, a ratio of Consolidated EBITDA for
the immediately preceding four Fiscal Quarters less (i) Capital
Expenditures made during the immediately preceding four Fiscal Quarters
less (ii) dividends paid by the Parent Guarantor during the immediately
preceding four Fiscal Quarters, to the sum of (i) Consolidated Interest
Expense for the immediately preceding four Fiscal Quarters plus (ii)
Scheduled Amortization Payments for the immediately preceding four Fiscal
Quarters, of not less than the ratio set forth below for such month
(provided that this Section 5.04(c) shall not apply in respect of any
month set forth below the last day of which occurs less than one year
after the Funding Date):
================================================================================
Fiscal Quarter End Ratio Fiscal Quarter End Ratio
--------------------------------------------------------------------------------
February, 1999 1.00:1.0 November, 2001 1.25:1.0
--------------------------------------------------------------------------------
May, 1999 1.10:1.0 February, 2002 1.25:1.0
--------------------------------------------------------------------------------
August, 1999 1.15:1.0 May, 2002 1.25:1.0
--------------------------------------------------------------------------------
November, 1999 1.25:1.0 August, 2002 1.25:1.0
--------------------------------------------------------------------------------
February, 2000 1.25:1.0 November, 2002 1.25:1.0
--------------------------------------------------------------------------------
May, 2000 1.25:1.0 February, 2003 1.25:1.0
--------------------------------------------------------------------------------
August, 2000 1.25:1.0 May, 2003 1.25:1.0
--------------------------------------------------------------------------------
November, 2000 1.25:1.0 August, 2003 1.25:1.0
--------------------------------------------------------------------------------
February, 2001 1.25:1.0 November, 2003 1.25:1.0
--------------------------------------------------------------------------------
May, 2001 1.25:1.0 February, 2004 1.25:1.0
--------------------------------------------------------------------------------
August, 2001 1.25:1.0
================================================================================
(d) Cash Flow Leverage Ratio. Maintain, at the end of each three
month fiscal period of the Parent Guarantor ending nearest the last day of
each month set forth below, a Leverage Ratio of not more than the ratio
set forth below for such month (provided that this Section 5.04(d) shall
not apply in respect of any month set forth below the last day of which
occurs less than one year after the Funding Date):
================================================================================
Fiscal Quarter End Ratio Fiscal Quarter End Ratio
--------------------------------------------------------------------------------
February, 1999 5.25:1.0 November, 2001 3.25:1.0
--------------------------------------------------------------------------------
62
--------------------------------------------------------------------------------
May, 1999 5.25:1.0 February, 2002 3.25:1.0
--------------------------------------------------------------------------------
August, 1999 4.50:1.0 May, 2002 3.25:1.0
--------------------------------------------------------------------------------
November, 1999 4.50:1.0 August, 2002 2.75:1.0
--------------------------------------------------------------------------------
February, 2000 4.50:1.0 November, 2002 2.75:1.0
--------------------------------------------------------------------------------
May, 2000 4.50:1.0 February, 2003 2.75:1.0
--------------------------------------------------------------------------------
August, 2000 3.75:1.0 May, 2003 2.75:1.0
--------------------------------------------------------------------------------
November, 2000 3.75:1.0 August, 2003 2.50:1.0
--------------------------------------------------------------------------------
February, 2001 3.75:1.0 November, 2003 2.50:1.0
--------------------------------------------------------------------------------
May, 2001 3.75:1.0 February, 2004 2.50:1.0
--------------------------------------------------------------------------------
August, 2001 3.25:1.0
================================================================================
SECTION 5.05. Maintenance of Separate Corporate Existence. On and
after the Funding Date, so long as any Advance shall remain unpaid, any Letter
of Credit shall be outstanding or any Lender Party shall have any Commitment
hereunder, each of the Borrower and the Parent Guarantor will comply with the
following covenants, as applicable:
(a) The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, books, records and accounts that are separate
from the books, records and accounts of the Parent Guarantor such that:
(i) the revenues of the Borrower and its Subsidiaries will be credited to
the accounts of the Borrower and its Subsidiaries only; (ii) all expenses
incurred by the Borrower and its Subsidiaries shall be borne by the
Borrower and its Subsidiaries; (iii) only officers and employees of the
Borrower and its Subsidiaries shall have the authority to make
disbursements with respect to the accounts of the Borrower and its
Subsidiaries; and (iv) there shall occur no material sharing of accounts
or funds between the Borrower and its Subsidiaries, on the one hand, and
the Parent Guarantor, on the other hand.
(b) The Borrower will issue separate unaudited financial statements
from the financial statements of the Parent Guarantor, prepared not less
frequently than quarterly and prepared in accordance with GAAP.
(c) The Borrower will conduct its affairs strictly in accordance
with its certificate of incorporation and its bylaws and observe all
necessary, appropriate and customary corporate formalities, including, but
not limited to, holding all regular and special stockholders' and
directors' meetings appropriate to authorize all corporate action, keeping
separate and accurate minutes of its meetings, passing all resolutions or
consents necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts, including,
but not limited to, payroll and intercompany transaction accounts.
(d) The Borrower will not assume or guarantee any of the liabilities
of the Parent Guarantor except (i) liabilities under the Procurement
Contracts or (ii) as contemplated by the Procurement Contracts Agreement.
(e) All financial statements of the Parent Guarantor that are filed
with the Securities and Exchange Commission or any other governmental
department, authority, instrumentality, office, agency or official,
distributed on an annual or quarterly basis to any shareholders or
creditors of any of them, or of any of their Subsidiaries or affiliates,
or otherwise publicly distributed, disseminated or released, shall include
a note clearly stating that the Borrower is a separate corporate entity
with separate assets and creditors.
63
ARTICLE VI
PARENT GUARANTY
SECTION 6.01. Parent Guaranty. The Parent Guarantor hereby
unconditionally and irrevocably guarantees (the undertaking by the Parent
Guarantor under this Article VI being the "Parent Guaranty") the punctual
payment when due, whether at stated maturity, by acceleration or otherwise, of
all Obligations of the Borrower now or hereafter existing under the Loan
Documents, whether for principal, interest, fees, expenses or otherwise (such
Obligations being the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including counsel fees and expenses) incurred by the Administrative
Agent or any other Secured Party in enforcing any rights under this Parent
Guaranty. Without limiting the generality of the foregoing, the Parent
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrower to the Administrative
Agent or any other Secured Party under the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
SECTION 6.02. Parent Guaranty Absolute. The Parent Guarantor
guarantees, to the fullest extent permitted under applicable law, that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any other Secured Party with respect thereto. The
Obligations of the Parent Guarantor under this Parent Guaranty are independent
of the Guaranteed Obligations or any other Obligations of any other Loan Party
under the Loan Documents, and a separate action or actions may be brought and
prosecuted against the Parent Guarantor to enforce this Parent Guaranty,
irrespective of whether any action is brought against the Borrower or any other
Loan Party or whether the Borrower or any other Loan Party is joined in any such
action or actions. The liability of the Parent Guarantor under this Parent
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
the Parent Guarantor hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto as against any other Loan
Party;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower or any
of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of any Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other Obligations of any other Loan Party
under the Loan Documents or any other assets of the Borrower or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to the Borrower or
the Parent Guarantor any information relating to the business, financial
condition, results of operations or prospects of any
64
other Loan Party now or in the future known to any Secured Party (the
Parent Guarantor waiving any duty on the part of the Secured Parties to
disclose such information); or
(g) any other circumstance (including, without limitation, to the
extent permitted under applicable law, any statute of limitations) or any
existence of or reliance on any representation by the Administrative Agent
or any other Secured Party that might otherwise constitute a defense
available to, or a discharge of, the Borrower, the Parent Guarantor or any
other guarantor or surety.
This Parent Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise, all as though such payment had not been made.
SECTION 6.03. Waivers and Acknowledgments. (a) The Parent Guarantor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Guaranteed Obligations and this Parent Guaranty and
any requirement that the Administrative Agent or any other Secured Party
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against the Borrower or any other Person or
any Collateral.
(b) The Parent Guarantor hereby waives any right to revoke this
Parent Guaranty, and acknowledges that this Parent Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.
(c) The Parent Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in this
Section 6.03 are knowingly made in contemplation of such benefits.
(d) The Parent Guarantor has, independently and without reliance
upon the Administrative Agent, the Arrangers or any other Secured Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into the Parent Guaranty, and the
Parent Guarantor has established adequate means of obtaining from any other Loan
Parties on a continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the business, financial
condition, results of operations and prospects of such other Loan Parties.
SECTION 6.04. Subrogation. The Parent Guarantor will not exercise
any rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Parent Guaranty or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Administrative Agent or any other
Secured Party against the Borrower or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrower or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Obligations and all other amounts payable under this Parent Guaranty
shall have been paid in full in cash and the Commitments shall have expired or
terminated. If any amount shall be paid to the Parent Guarantor in violation of
the preceding sentence at any time prior to the later of the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Parent Guaranty and the Termination Date, such amount shall be held in trust for
the benefit of the Administrative Agent and the other Secured Parties and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Parent Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Parent Guaranty thereafter arising. If (i) the Parent
Guarantor
65
shall make payment to the Administrative Agent or any other Secured Party of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Parent Guaranty shall be
paid in full in cash and (iii) the Termination Date shall have occurred, the
Administrative Agent and the other Secured Parties will, at the Parent
Guarantor's request and expense, execute and deliver to the Parent Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Parent Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by the Parent
Guarantor.
SECTION 6.05. Continuing Guaranty; Assignments. This Parent Guaranty
is a continuing guaranty and shall (a) remain in full force and effect until the
later of the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Parent Guaranty and the Termination Date, (b) be
binding upon the Parent Guarantor, its successors and assigns and (c) inure to
the benefit of and be enforceable by the Administrative Agent and the other
Secured Parties and their successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise, in each case
as and to the extent provided in Section 9.07.
SECTION 6.06. Scope of Limited Recourse Liability. All claims of the
Administrative Agent or any of the other Secured Parties for any of the
Guaranteed Obligations or any of the representations, covenants or other
agreements of the Parent Guarantor contained in this Agreement or any of the
other Loan Documents to which the Parent Guarantor is or is to be a party,
except as otherwise provided in Section 6.04 above, shall be limited to the
Collateral (as defined in Section 1 of the Pledge Agreement) of the Parent
Guarantor; provided, however, that nothing contained in this Section 6.06 shall
impair in any way the validity of the Indebtedness evidenced by this Agreement,
the Notes or any of the other Loan Documents or shall affect or impair in any
way the ability of the Administrative Agent or any of the other Secured Parties
to exercise or enforce any of their respective rights and remedies in and to the
Collateral (as defined in Section 1 of the Pledge Agreement) or in and to any
other collateral that may secure the Obligations of any of the Loan Parties
under or in respect of the Loan Documents. The Administrative Agent and each
Secured Party hereby agrees, to the fullest extent permitted under applicable
law, that in any proceeding under the Bankruptcy Code in respect of the Parent
Guarantor it will, to the extent available, make an election under Section
1111(b) of the Bankruptcy Code to be treated as fully secured by the Collateral
(as defined in Section 1 of the Pledge Agreement).
SECTION 6.07. Replacement of Guaranteed Senior Debt. The Parent
Guarantor hereby agrees not to refinance or replace the Guaranteed Senior Debt
with other Debt, except Debt (i) in an aggregate principal amount not to exceed
$650,000,000 and (ii) containing terms at least as favorable to the Parent
Guarantor (taken as a whole), including maturity date, interest rate, and
restrictive covenants, as those of the Guaranteed Senior Debt Credit Agreement,
provided that the net proceeds received from such replacement Debt in excess of
(A) in the case of replacement Debt other than Debt incurred on the Funding Date
in place of the incurrence of Debt under the Guaranteed Senior Debt Credit
Agreement ("Alternate Guaranteed Senior Debt"), the outstanding principal amount
of the Guaranteed Senior Debt, accrued interest thereon and fees and expenses
payable in connection with the incurrence of such replacement Debt or (B) in the
case of Alternate Guaranteed Senior Debt, $620,000,000 shall be applied to
prepay the Term Advances in a Group or Groups of Term Advances. Each such
prepayment shall be applied pro rata to the Term Advances of the several Lenders
included in such Group or Groups and shall reduce pro rata the remaining
principal installments set forth in Section 2.04(a).
66
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing (i) from and after the date
of this Agreement, in the case of clauses (a) and (f) below and (ii) from and
after the Funding Date, for all clauses of this Section 7.01:
(a) (i) the Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail
to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Loan Document, in each case under this clause
(ii) within three Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement (i) contained in Section 2.14, 5.01(e) (in respect of
maintaining the existence of the Borrower only), 5.01(k) or (l), 5.02,
5.03(a) or 5.04 or (ii) contained in Section 5.01(f) or 5.03(b) through
(1) if such failure shall remain unremedied for 5 Business Days after
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender Party; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 15 days after written
notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender Party; or
(e) any Loan Party or any Substantial Subsidiary shall fail to pay
any principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal amount of at least
$25,000,000 either individually or in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or such Substantial Subsidiary
(as the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt or otherwise to
cause, or to permit the holder thereof to cause, such Debt to mature; or
any such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(f) the Borrower or any Substantial Subsidiary shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any Substantial Subsidiary seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of
67
60 days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or the
Borrower or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against any Loan Party or any Subsidiary and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
15 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any Subsidiary that would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 15 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(i) any material provision of any Collateral Document or any
provision of any other Loan Document after delivery thereof pursuant to
Section 3.02 shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it, or any such Loan Party
shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.02 or 5.01(l) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected lien on and security
interest in (with the priority purported to be created thereby) a material
portion of the Collateral purported to be covered thereby; or
(k) Sodexho shall at any time for any reason cease to be the record
and beneficial owner, directly or indirectly, of at least 40.01% of the
shares of capital stock of the Parent Guarantor; or
(l) the Parent Guarantor shall at any time for any reason cease to
be the record and beneficial owner of 100% of the shares of capital stock
of the Borrower; or
(m) (i) any Person or two or more Persons acting in concert (other
than Sodexho and its Subsidiaries and Affiliates of Sodexho that control
Sodexho and Persons controlled by a Person who controls Sodexho) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Stock of the Parent Guarantor
(or other securities convertible into such Voting Stock) representing 50%
or more of the combined voting power of all Voting Stock of the Parent
Guarantor or (ii) any Person or two or more Persons acting in concert
(other than Sodexho and its Subsidiaries and Affiliates of Sodexho that
control Sodexho and Persons controlled by a Person who controls Sodexho)
shall have acquired, by contract or otherwise, control over Voting Stock
of the Parent Guarantor (or other securities convertible into such
securities) representing 50% or more of the combined voting power of all
Voting Stock of the Parent Guarantor; or
(n) any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and the ERISA Affiliates
related to such ERISA Event) exceeds $25,000,000; or
(o) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount
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that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as
Withdrawal Liability (determined as of the date of such notification),
exceeds $25,000,000; or
(p) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $25,000,000,
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Appropriate Lender to make Advances (other than
Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender
pursuant to Section 2.03(c)) and of each Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, (A) by notice
to the Borrower, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower, and (B) by notice to each party required under the terms of any
agreement in support of which a Letter of Credit is issued, request that all
Obligations under such agreements be declared to be due and payable; provided,
however, that in the event of an actual or deemed entry of an order for relief
with respect to the Borrower under the Federal Bankruptcy Code, (x) the
obligation of each Lender to make Advances (other than Letter of Credit Advances
by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c)) and
of each Issuing Bank to issue Letters of Credit shall automatically be
terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 7.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
7.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, an amount equal to the aggregate Available Amount of all Letters
of Credit then outstanding to be held as cash collateral for the payment of all
Obligations in respect of such Letters of Credit. If at any time the
Administrative Agent determines that any funds so held are subject to any right
or claim of any Person other than the Administrative Agent and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional collateral, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held as
collateral that the Administrative Agent determines to be free and clear of any
such right and claim.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Authorization and Action. (a) Each Lender Party hereby
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to the Administrative Agent by
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the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lender Parties and all holders of Notes; provided, however,
that the Administrative Agent shall not be required to take any action that
exposes the Administrative Agent to personal liability or that is contrary to
this Agreement or applicable law. The Administrative Agent agrees to give to
each Lender Party prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
(b) The Arrangers shall have no powers or discretion under this
Agreement or any of the other Loan Documents and each of the Lender Parties
hereby acknowledges that the Arrangers have no liability under this Agreement or
under any of the other Loan Documents.
SECTION 8.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an Assignment
and Acceptance entered into by the Lender that is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(b) may consult with legal counsel (including counsel for any Loan Party),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender Party and shall not be responsible to
any Lender Party for any statements, warranties or representations (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records) of
any Loan Party; (e) shall not be responsible to any Lender Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram or
telecopy) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03. Xxxxxx and Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, Xxxxxx shall
have the same rights and powers under the Loan Documents as any other Lender
Party and may exercise the same as though it were not the Administrative Agent;
and the term "Lender Party" or "Lenders Parties" shall, unless otherwise
expressly indicated, include Xxxxxx in its individual capacity. Xxxxxx and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of its Subsidiaries and any
Person who may do business with or own securities of any Loan Party or any such
Subsidiary, all as if Xxxxxx were not the Administrative Agent and without any
duty to account therefor to the Lender Parties.
SECTION 8.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Arrangers or any other Lender Party and based on the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges that
it will, independently and without reliance upon the Administrative Agent, the
Arrangers or any other Lender Party 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.
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SECTION 8.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify the Administrative Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender Party agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that the Administrative Agent
is not promptly reimbursed for such costs and expenses by the Borrower. For
purposes of this Section 8.05(a), the Lender Parties' respective ratable shares
of any amount shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (ii) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(iii) the Unused Term Commitments of the respective Lender Parties at such time
and (iv) their respective Unused Revolving Credit Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to any Issuing Bank shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been made
shall be considered to be unused for purposes of this Section 8.05 to the extent
of the amount of such Defaulted Advance. The failure of any Lender Party to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any amount required to be paid by the Lender Party to the Administrative Agent
as provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Administrative Agent for its ratable share of such
amount, but no Lender Party shall be responsible for the failure of any other
Lender Party to reimburse the Administrative Agent for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 8.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
(b) Each Lender Party severally agrees to indemnify each Issuing
Bank (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by such Issuing Bank under the Loan Documents; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender Party agrees to reimburse such
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower. For purposes of
this Section 8.05(b), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time,
(c) the Unused Term Commitments of the respective Lender Parties at such time
and (d) their respective Unused Revolving Credit Commitments at such time;
provided that the aggregate principal amount of Letter of Credit Advances owing
to any Issuing Bank shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with
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respect to the Facility under which such Defaulted Advance was required to have
been made shall be considered to be unused for purposes of this Section 8.05(b)
to the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse such Issuing Bank promptly upon demand for its ratable share
of any amount required to be paid by the Lender Parties to such Issuing Bank as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse such Issuing Bank for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse such Issuing Bank for such other Lender Party's ratable share
of such amount. Without prejudice to the survival of any other agreement of any
Lender Party hereunder, the agreement and obligations of each Lender Party
contained in this Section 8.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 8.06. Successor Agents. The Administrative Agent may resign
at any time by giving written notice thereof to the Lender Parties and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent with, unless an Event of Default
shall have occurred and be continuing, the consent of the Borrower, which
consent shall not be unreasonably withheld or delayed. 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, then the retiring
Administrative Agent may, on behalf of the Lender Parties, appoint a successor
Administrative Agent with, unless an Event of Default shall have occurred and be
continuing, the consent of the Borrower, which consent shall not be unreasonably
withheld or delayed, which shall be a commercial bank organized under, or having
a branch authorized to operate under, the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent and upon the execution and filing
or recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Article
VIII shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Borrower and the Required Lenders,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that (a) no
amendment, waiver or consent shall, unless in writing and signed by the
Requisite Lenders, waive any of the conditions specified in Section 3.01 or
3.02, (b) no amendment, waiver or consent shall, unless in writing and signed by
all of the Lenders (other than any Lender Party that is, at such time, a
Defaulting Lender), do any of the following at any time: (i) change the number
of Lenders or the percentage of (x) the Commitments, (y) the aggregate unpaid
principal amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (ii) reduce or limit the
obligations of the Guarantors under Section 6.01 or, except as expressly
permitted under the Subsidiary Guaranty, Section 1 of the Subsidiary Guaranty or
otherwise limit the Guarantors' liability with respect to the Obligations owing
to the Administrative Agent and the Lender Parties, except as expressly
permitted therein, (iii) except as expressly permitted hereunder or under the
Collateral Documents,
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release any material portion of the Collateral in any transaction or series of
related transactions, or (iv) amend this Section 9.01 and (c) no amendment,
waiver or consent shall, unless in writing and signed by the Required Lenders
and each Lender that has a Commitment under the Term Facility or Revolving
Credit Facility if affected by such amendment, waiver or consent, (i) increase
the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, or
(iii) postpone any date fixed under Section 2.04 for any payment of principal of
or fixed under Section 2.06 or 2.07 for any payment of any interest on, the
Notes held by such Lender or fixed under Section 2.08 for payment of any fees
payable hereunder to such Lender; provided further that no amendment, waiver or
consent shall, unless in writing and signed by each Issuing Bank in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Issuing Banks under this Agreement; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement.
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SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopy communication)
and mailed, telecopied or delivered:
if to the Borrower or the Parent Guarantor:
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, General Counsel
Telecopy number: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx, Treasurer
Sodexho Marriott Operations, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopy number: (000) 000-0000
and:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Telecopy number: (000) 000-0000
if to any Initial Lender or any Initial Issuing Bank, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender
Party, at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; and
if to the Administrative Agent:
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopy number: (000) 000-0000
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall be effective (i) if given by telecopy, when
transmitted to the telecopy number referred to in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address referred to in this
Section, except that notices and communications to the Administrative Agent
pursuant to Article II or VIII shall not be effective until received by the
Administrative Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
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SECTION 9.03. No Waiver; Remedies. No failure on the part of any
Lender Party or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand (i) pursuant to a written budget mutually satisfactory to the Borrower
and the Arrangers (it being understood that such budget is not a maximum cap on
any expenses payable by the Borrower specified in this Section 9.04, or
otherwise), all reasonable costs and expenses of the Administrative Agent and
the Arrangers in connection with the preparation, execution, delivery,
administration, modification, waiver and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Administrative Agent and the
Arrangers with respect thereto, with respect to advising the Administrative
Agent and the Arrangers as to their rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of their Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) after the occurrence of
an Event of Default, all reasonable costs and expenses of the Administrative
Agent, the Arrangers and the Lender Parties in connection with the enforcement
of the Loan Documents, whether in any action, suit or litigation, any
bankruptcy, insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent, the Arrangers and each Lender Party with
respect thereto).
(b) Subject to the limitations set forth in Section 6.06, each of
the Borrower and the Parent Guarantor agrees to indemnify and hold harmless the
Administrative Agent, each Arranger, each Lender Party and each of their
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of any investigation, litigation or proceeding or preparation of a
defense in connection therewith arising out of or relating to (i) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 9.04(b) applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any
Loan Party, its directors, shareholders or creditors or an Indemnified Party or
any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. Each of the Borrower and the
Parent Guarantor also agrees not to assert any claim against the Administrative
Agent, any Arranger, any Lender Party or any of their Affiliates, or any of
their respective officers, directors, employees, attorneys and agents, on any
theory of liability, for consequential damages arising out of or otherwise
relating to the Facilities, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit, the Loan Documents or any of the transactions
contemplated thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 7.01 or for any
other reason, the Borrower shall, upon demand by
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such Lender Party (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender Party any amounts
required to compensate such Lender Party for any losses, costs or expenses that
it may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense (but excluding loss of margin after the
date of such payment or conversion) incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower and the Parent Guarantor contained in Sections 2.10
(with respect to the Borrower) and 2.12 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents.
(f) The Lender Parties acknowledge that (i) prior to the Funding
Date, the obligations of the Borrower for costs, expenses, fees and
indemnification under or in connection with this Agreement shall be the
responsibility of Sodexho and the Parent Guarantor pursuant to the terms of the
Commitment Letter dated November 26, 1997 entered into by such parties with
Xxxxxx and the Arrangers and (ii) all amounts due and payable by the Borrower
prior to the Funding Date (including pursuant to Section 3.01(b)) shall be
advanced by Sodexho; provided that nothing contained in this paragraph (f) shall
limit the liability of the parties hereto as set forth in the terms of said
Commitment Letter.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender Party or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the Obligations of the Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Lender
Party agrees promptly to notify the Borrower after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender Party and its respective Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Parent Guarantor, the
Administrative Agent, each Lender Party and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the Lender
Parties.
SECTION 9.07. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); provided, however, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of all of the Facilities, (ii) except in the case of an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment or
76
Advances of the assigning Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $15,000,000 (or $5,000,000, in the
case of an assignment to an existing Lender), (iii) each such assignment shall
be to an Eligible Assignee and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender or Issuing Bank,
hereunder and (y) the Lender or Issuing Bank assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's or
Issuing Bank's rights and obligations under this Agreement, such Lender or
Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent acting for this purpose (but only for
this purpose) as the agent of the Borrower, shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lender Parties and the Commitment under each Facility of, and
principal amount of the Advances owing under each Facility to, each Lender Party
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lender Parties shall treat each
Person whose name is recorded in the Register as a Lender Party hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
77
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially 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 notice thereof to the
Borrower. In the case of any assignment by a Lender, within 15 Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such Eligible Assignee in an
amount equal to the Commitment or after the Funding Date in the case of the Term
Facility, the sum of the principal amount of Term Advances and the Unused Term
Commitment assumed by it under a Facility pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment or a portion
of the principal amount of its outstanding Term Advances under such Facility, a
new Note to the order of the assigning Lender in an amount equal to the
Commitment or portion of such Advances retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit A-1 or A-2 hereto, as the case may be.
(f) Each Issuing Bank may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under the undrawn portion of its
Letter of Credit Commitment at any time; provided, however, that (i) no Letter
of Credit Commitment shall be less than $20,000,000 following such assignment
and (ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500.
(g) No assignee, participant or other transferee of any Lender
Party's rights shall be entitled to receive any greater payment under Section
2.10 or 2.12 than such Lender Party would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 2.10
or 2.12 requiring such Lender to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.
(h) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights, obligations, or rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it and the Note or Notes (if any) held by it); provided,
however, that (i) such Lender Party's obligations under this Agreement
(including, without limitation, its Commitments) shall remain unchanged, (ii)
such Lender Party shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender Party shall remain
the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Administrative Agent and the other Lender Parties shall continue
to deal solely and directly with such Lender Party in connection with such
Lender Party's rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, postpone any date fixed under Section 2.04 for any
payment of principal of, or fixed under Section 2.06 or 2.07 for any payment of
interest on, the Notes or fixed under Section 2.08 for any payment of any fees
payable hereunder, in each case to the extent subject to such participation.
(i) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed
78
assignee or participant shall agree in writing to preserve the confidentiality
of any Confidential Information received by it from such Lender Party in
accordance with Section 9.10 hereof.
(j) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 9.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Banks. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
any Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against such Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under any Letter of Credit comply with
the terms of the Letter of Credit or (ii) such Issuing Bank's willful failure to
make lawful payment under a Letter of Credit after the presentation to it of a
draft and certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 9.10. Confidentiality. (a) Neither the Administrative Agent
nor any Lender Party shall disclose any Confidential Information to any Person
without the consent of the Borrower, other than (i) to the Administrative
Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors who need to know such Confidential Information in
connection with the Administrative Agent's or such Lender Party's evaluation or
administration of the Facilities and to actual or prospective Eligible Assignees
and participants who have agreed in writing to be bound by this Section, (ii) as
required by any law, rule or regulation or judicial process, provided that the
Administrative Agent or any Lender Party so required to disclose any
Confidential Information will, to the extent permitted under applicable law, (x)
notify the Borrower immediately of the existence, terms and circumstances
surrounding such requirement, (y) consult with the Borrower on the advisability
of taking legally available steps to resist or narrow such requirement and (z)
if disclosure of such Confidential Information is legally required, furnish only
such portion of the Confidential Information as it is legally compelled to
disclose and exercise commercially reasonable efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to the
disclosed Confidential Information, and (iii) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking.
(b) The Administrative Agent and each Lender Party hereby
acknowledges and agrees that, in the event of any breach by it of this Section
9.10, the Borrower, the Parent Guarantor and Sodexho would be irreparably and
immediately harmed and could not be made whole by monetary damages.
79
Accordingly, the Administrative Agent and each Lender Party agrees, to the
fullest extent it may effectively do so under applicable law, that, in addition
to any other remedy to which the Borrower, the Parent Guarantor and Sodexho may
be entitled at law or in equity, the Administrative Agent and each Lender Party
shall be entitled to an injunction or injunctions (without the posting of any
bond and without proof of actual damages) to prevent breaches or threatened
breaches of this Section 9.10 and/or to compel specific performance of this
Section 9.10, and that none of the Administrative Agents, any Lender Party or
any of their respective representatives will oppose the granting of such relief.
SECTION 9.11. No Reliance on Margin Stock. Each of the Lender
Parties represents to the Administrative Agent and each of the other Lender
Parties that it in good faith is not relying upon any "margin stock" (as defined
in Regulation U) as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.12. Collateral Agent. As used herein, where the context
requires, the term Administrative Agent shall be deemed to include Xxxxxx
Guaranty Trust Company of New York as collateral agent under the Collateral
Documents.
SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any such New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 9.14. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.15. Waiver of Jury Trial. Each of the Borrower, the Parent
Guarantor, the Administrative Agent and the Lender Parties irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to any of the
Loan Documents, the Advances or the actions of the Administrative Agent or any
Lender Party in the negotiation, administration, performance or enforcement
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SODEXHO MARRIOTT OPERATIONS, INC.
By /s/ Xxxxxxxx Xxxxx
------------------------------------------
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
By /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Title: Vice President
Initial Lenders
SOCIETE GENERALE
By /s/ Xxxxxxxxx Xxxx
------------------------------------------
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Title: Vice President
Parent Guarantor
MARRIOTT INTERNATIONAL, INC. (to be
renamed SODEXHO MARRIOTT SERVICES,
INC.), as Parent Guarantor
By /s/ Xxxxxxxx Xxxxx
------------------------------------------
Title: Vice President
THE BANK OF NEW YORK
By /s/ Xxxxxx X. Xxxxx
------------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ J.R. Trimble
------------------------------------------
Title: Senior Relationship Manager
BANQUE NATIONALE DE PARIS
By /s/ Xxxxxxx Xxxx
------------------------------------------
Title: Senior Vice President
By /s/ Xxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
BANQUE PARIBAS
By /s/ Xxxxxx Xxxxxx
------------------------------------------
Title: Vice President
By /s/ Xxxxx Xxxxxxxxx
------------------------------------------
Title: Vice President
CIBC INC.
By /s/ Xxxx Xxxxxxxxxx
------------------------------------------
Title: Executive Director
CAISSE CENTRALE DES BANQUES
POPULAIRES
By /s/ Xxxxx Xxxxxxx
------------------------------------------
Title: Directeur Adjoint
By /s/ Xxxxxxxx Xxxxxxxx
------------------------------------------
Title: Fonde de Pouvoirs Principal
THE CHASE MANHATTAN BANK
By /s/ Xxxxx X. Xxxxx
------------------------------------------
Title: Vice President
CITIBANK, N.A.
By /s/ X.X. Xxxx
------------------------------------------
Title: Attorney-in-Fact
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By /s/ Xxxx XxXxxxx-Xxxxx
------------------------------------------
Title: Vice President
By /s/ Xxxxxxx Xxxxxx
------------------------------------------
Title: Deputy General Manager
CREDIT AGRICOLE INDOSUEZ
By /s/ Xxxxxxx Mamix
------------------------------------------
Title:
By /s/ Xxxxxx Xxxxxxxx
------------------------------------------
Title: Vice President
CREDIT COMMERCIAL DE FRANCE
NEW YORK BRANCH
By /s/ Xxxxxxxxx Xxxxxx
------------------------------------------
Title: Ast. VP
/s/ Xxxx-Xxxxxxx Xxxxxxx
------------------------------------------
Sr. VP
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Olivier Perrain
------------------------------------------
Title: First Vice President
DG BANK, DEUTSCHE
GENOSSENSCHAFTSBANK
By /s/ Xxxxx XxXxxx
------------------------------------------
Title: Senior Vice President
By /s/ S. Winott
------------------------------------------
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Xxx Xxxxxxxx
------------------------------------------
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
By /s/ Xxxx Xxxxxx
------------------------------------------
Title: Senior Vice President
MELLON BANK, N.A.
By /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------------
Title: Vice President
NATEXIS BANQUE
By /s/ Xxxxxx X. van Tulder
------------------------------------------
Title: Vice President
By /s/ Xxxx Xxxx
------------------------------------------
Title: Assistant Vice President
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxxx
------------------------------------------
Title: Vice President
XXXXX BANK N.A.
By /s/ Xxxxx Xxxxx
------------------------------------------
Title: Vice President
THE ROYAL BANK OF SCOTLAND plc
By /s/ Xxxxx Xxxxxx
------------------------------------------
Title: Vice President
