EXHIBIT 10.14
CREDIT AGREEMENT
among
NRT INCORPORATED,
VARIOUS LENDING INSTITUTIONS,
THE CHASE MANHATTAN BANK,
AS CO-ARRANGER
and
SYNDICATION AGENT,
BANKBOSTON, N.A.
as
CO-AGENT
and
BANKERS TRUST COMPANY,
AS LEAD ARRANGER
and
ADMINISTRATIVE AGENT
________________________________
Dated as of January 7, 1999
and
Amended and Restated as of March 31, 1999
________________________________
TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.......................................... 1
1.01 Commitments.......................................................... 1
1.02 Minimum Borrowing Amounts, etc....................................... 3
1.03 Notice of Borrowing.................................................. 3
1.04 Disbursement of Funds................................................ 5
1.05 Notes................................................................ 5
1.06 Conversions.......................................................... 6
1.07 Pro Rata Borrowings.................................................. 7
1.08 Interest............................................................. 7
1.09 Interest Periods..................................................... 8
1.10 Increased Costs; Illegality; etc..................................... 9
1.11 Compensation; Breakage............................................... 11
1.12 Change of Lending Office............................................. 12
1.13 Replacement of Banks................................................. 12
SECTION 2. Letters of Credit................................................... 14
2.01 Letters of Credit.................................................... 14
2.02 Letter of Credit Requests............................................ 15
2.03 Letter of Credit Participations...................................... 16
2.04 Agreement to Repay Letter of Credit Drawings......................... 18
2.05 Increased Costs...................................................... 19
2.06 Indemnification...................................................... 20
SECTION 3. Fees; Commitments................................................... 20
3.01 Fees................................................................. 20
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment.................................................... 21
3.03 Mandatory Reduction of Commitments................................... 22
SECTION 4. Payments............................................................ 22
4.01 Voluntary Prepayments................................................ 22
4.02 Mandatory Repayments and Commitment Reductions....................... 23
4.03 Method and Place of Payment.......................................... 27
4.04 Net Payments......................................................... 27
SECTION 5. Conditions Precedent to Restatement Effective Date.................. 30
5.01 Execution of Agreement; Notes........................................ 30
(i)
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5.02 Officer's Certificate................................................ 30
5.03 Opinions of Counsel.................................................. 30
5.04 Company Documents; Proceedings....................................... 30
5.05 Adverse Change, etc.................................................. 31
5.06 Litigation........................................................... 31
5.07 Approvals............................................................ 32
5.08 Refinancing of Indebtedness; Existing Credit Agreement............... 32
5.09 Pledge Agreement..................................................... 32
5.10 Subsidiaries Guaranty................................................ 33
5.11 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Existing Indebtedness Agreements 33
5.12 Solvency Certificate................................................. 34
5.13 Financial Statements; Balance Sheet.................................. 34
5.14 Payment of Fees...................................................... 34
SECTION 6. Conditions Precedent to All Credit Events........................... 34
6.01 No Default; Representations and Warranties........................... 35
6.02 Notice of Borrowing; Letter of Credit Request........................ 35
SECTION 7. Representations and Warranties...................................... 35
7.01 Company Status....................................................... 35
7.02 Company Power and Authority.......................................... 36
7.03 No Violation......................................................... 36
7.04 Litigation........................................................... 36
7.05 Use of Proceeds; Margin Regulations.................................. 37
7.06 Governmental Approvals............................................... 37
7.07 Investment Company Act............................................... 37
7.08 Public Utility Holding Company Act................................... 37
7.09 True and Complete Disclosure......................................... 37
7.10 Financial Condition; Financial Statements............................ 38
7.11 Security Interests................................................... 39
7.12 Compliance with ERISA................................................ 39
7.13 Capitalization....................................................... 40
7.14 Subsidiaries......................................................... 40
7.15 Intellectual Property, etc........................................... 40
7.16 Compliance with Statutes, etc........................................ 41
7.17 Environmental Matters................................................ 41
7.18 Properties........................................................... 42
7.19 Labor Relations...................................................... 42
7.20 Tax Returns and Payments............................................. 42
7.21 Existing Indebtedness................................................ 43
7.22 Insurance............................................................ 43
7.23 Year 2000 Representation............................................. 43
(ii)
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SECTION 8. Affirmative Covenants............................................... 43
8.01 Information Covenants................................................ 43
8.02 Books, Records and Inspections....................................... 46
8.03 Insurance............................................................ 47
8.04 Payment of Taxes..................................................... 47
8.05 Corporate Franchises................................................. 47
8.06 Compliance with Statutes; etc........................................ 47
8.07 Compliance with Environmental Laws................................... 47
8.08 ERISA................................................................ 48
8.09 Good Repair.......................................................... 49
8.10 End of Fiscal Years; Fiscal Quarters................................. 49
8.11 Additional Security; Further Assurances.............................. 49
8.12 Ownership of Subsidiaries............................................ 50
8.13 Permitted Acquisitions............................................... 50
8.14 Maintenance of Company Separateness.................................. 52
8.15 Performance of Obligations........................................... 52
8.16 Use of Proceeds...................................................... 53
SECTION 9. Negative Covenants.................................................. 53
9.01 Changes in Business.................................................. 53
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc............... 53
9.03 Liens................................................................ 56
9.04 Indebtedness......................................................... 59
9.05 Advances; Investments; Loans......................................... 61
9.06 Dividends; etc....................................................... 64
9.07 Transactions with Affiliates and Unrestricted Subsidiaries........... 66
9.08 Consolidated Adjusted Interest Coverage Ratio........................ 67
9.09 Total Leverage Ratio................................................. 67
9.10 Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; Issuances of Capital Stock; etc.......... 67
9.11 Limitation on Issuance of Capital Stock.............................. 68
9.12 Limitation on Certain Restrictions on Subsidiaries................... 69
9.13 Limitation on the Creation of Subsidiaries, Joint Ventures and
Unrestricted Subsidiaries.......................................... 70
9.14 De Minimis Subsidiaries.............................................. 71
9.15 Burnet Realty, Inc. Title Insurance Business........................ 71
SECTION 10. Events of Default.................................................. 71
10.01 Payments............................................................ 71
10.02 Representations, etc................................................ 71
10.03 Covenants........................................................... 71
(iii)
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10.04 Default Under Other Agreements........................................ 72
10.05 Bankruptcy, etc....................................................... 72
10.06 ERISA................................................................. 72
10.07 Security Documents.................................................... 73
10.08 Guaranties............................................................ 73
10.09 Judgments............................................................. 73
10.10 Ownership............................................................. 74
10.11 Franchise Agreements.................................................. 74
SECTION 11. Definitions.......................................................... 74
SECTION 12. The Administrative Agent.............................................103
12.01 Appointment...........................................................103
12.02 Delegation of Duties..................................................104
12.03 Exculpatory Provisions................................................104
12.04 Reliance by the Administrative Agent..................................105
12.05 Notice of Default.....................................................105
12.06 Nonreliance on Administrative Agent and Other Banks...................105
12.07 Indemnification.......................................................106
12.08 Administrative Agent in its Individual Capacity.......................106
12.09 Holders...............................................................107
12.10 Resignation of the Administrative Agent...............................107
12.11 Co-Arranger, Syndication Agent, Co-Agent..............................107
SECTION 13. Miscellaneous........................................................107
13.01 Payment of Expenses, etc..............................................107
13.02 Right of Setoff.......................................................108
13.03 Notices...............................................................109
13.04 Benefit of Agreement..................................................109
13.05 No Waiver; Remedies Cumulative........................................111
13.06 Payments Pro Rata.....................................................112
13.07 Calculations; Computations............................................112
13.08 Governing Law; Submission to Jurisdiction; Venue......................113
13.09 Counterparts..........................................................114
13.10 Effectiveness.........................................................114
13.11 Headings Descriptive..................................................114
13.12 Amendment or Waiver; etc..............................................114
13.13 Survival..............................................................116
13.14 Domicile of Loans and Commitments.....................................116
13.15 Confidentiality.......................................................116
13.16 Waiver of Jury Trial..................................................117
(iv)
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13.17 Register....................................................................................... 117
13.18 Additions of New Banks; Conversion of Original Loans of Continuing
Banks; Surrender of Notes...................................................................... 117
13.19 Limitation on Additional Amounts, etc.......................................................... 118
(v)
SCHEDULE I List of Banks and Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Indebtedness
SCHEDULE IV Plans
SCHEDULE V Capitalization
SCHEDULE VI Subsidiaries
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Letters of Credit
SCHEDULE XI Affiliate Transactions
SCHEDULE XII IPO Amendments
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
special New York counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Pledge Agreement Acknowledgment
EXHIBIT H Subsidiaries Guaranty Acknowledgment
EXHIBIT I Form of Solvency Certificate
EXHIBIT J Form of Assignment and Assumption Agreement
EXHIBIT K Form of Intercompany Note
EXHIBIT L Form of Shareholder Subordinated Note
(iv)
CREDIT AGREEMENT, dated as of January 7, 1999 and amended and restated
as of March 31, 1999, among NRT Incorporated, a Delaware corporation (the
"Borrower"), the Banks from time to time party hereto, BANKERS TRUST COMPANY
("BTCo") as Lead Arranger, and THE CHASE MANHATTAN BANK ("Chase") as Co-
Arranger, (BTCo and Chase, each an "Arranger" and, collectively, the
"Arrangers"), BANKBOSTON, N.A. as Co-Agent (in such capacity, "Co-Agent") and
BTCo, as Administrative Agent (in such capacity, the "Administrative Agent") and
Chase, as Syndication Agent (in such capacity, the "Syndication Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as so defined.
W I T N E S S E T H:
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WHEREAS, the Borrower, the Existing Banks, the Administrative Agent
and the Syndication Agent are party to a Credit Agreement, dated as of January
7, 1999, (as the same has been amended, modified or supplemented to, but not
including, the Restatement Effective Date, the "Existing Credit Agreement"); and
subject to and upon the terms and conditions set forth herein, the Banks are
willing to make available to the Borrower the credit facility provided for
herein; and
WHEREAS, the parties hereto wish to amend and restate the Existing
Credit Agreement as herein provided;
NOW THEREFORE, the parties hereto agree that the Existing Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitments. (a) Subject to and upon the terms and conditions
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herein set forth, each Bank severally agrees (I) in the case of each Continuing
Bank, to convert into Revolving Loans (each a "Revolving Loan Conversion", and
together the "Revolving Loan Conversions"), on the Restatement Effective Date,
Original Revolving Loans made by such Continuing Bank to the Borrower pursuant
to the Existing Credit Agreement and outstanding on the Restatement Effective
Date and (II) to make a Revolving Loan or Revolving Loans to the Borrower, which
Revolving Loans shall be made and maintained in U.S. Dollars (each, a "Revolving
Loan" and, collectively, the "Revolving Loans") and which Revolving Loans:
(i) shall be made at any time and from time to time on and after the
Restatement Effective Date and prior to the Maturity Date;
(ii) shall, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided
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that (x)
except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans made as part of the same Borrowing shall at all times be of the same
Type;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not be made (or be required to be made) by any Bank on any
date if, after giving effect thereto, the Revolving Credit Exposure of such
Bank would exceed the Revolving Loan Commitment of such Bank at such time;
and
(v) shall not, in the case of all Revolving Loans, be made at any time
if, after giving effect thereto, the Aggregate Revolving Credit Exposure
(exclusive of Unpaid Drawings and Swingline Loans which are to be repaid
with the proceeds of and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) would exceed the Total Revolving
Loan Commitment at such time.
(b) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to time
on and after the Restatement Effective Date and prior to the Swingline Expiry
Date, a loan or loans to the Borrower (each, a "Swingline Loan" and,
collectively, the "Swingline Loans"), which Swingline Loans:
(i) shall be denominated in U.S. Dollars;
(ii) shall be made and maintained as Base Rate Loans;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not be made (or be required to be made) on any date, if
after giving effect thereto, the Aggregate Revolving Credit Exposure would
exceed the Total Revolving Loan Commitment at such time; and
(v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount.
BTCo shall not be obligated to make any Swingline Loans at a time when a Bank
Default exists unless BTCo has entered into arrangements satisfactory to it and
the Borrower to eliminate BTCo's risk with respect to the Defaulting Bank's or
Banks' participation in such Swingline Loans, including by cash collateralizing
such Defaulting Bank's or Banks' RL Percentage of the outstanding Swingline
Loans. BTCo will not make a Swingline Loan after it has received written notice
from the Borrower or the Required Banks stating that a Default or an Event of
Default exists until such time as BTCo shall have received a written notice of
(i) rescission of such notice from the party or parties originally delivering
the same or (ii) a waiver of such Default or Event of Default from the requisite
Banks hereunder.
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(c) On any Business Day, BTCo may, in its sole discretion, give notice
to the Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that each such notice shall be deemed to
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have been automatically given upon the occurrence of a Default or an Event of
Default under Section 10.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 10), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks pro rata based on each Bank's RL Percentage, and the proceeds thereof
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shall be applied directly to repay BTCo for such outstanding Swingline Loans.
Each Bank hereby irrevocably agrees to make Revolving Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by BTCo notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5 or 6 are then satisfied, (iii)
whether a Default or an Event of Default has occurred and is continuing, (iv)
the date of such Mandatory Borrowing and (v) the amount of the Total Revolving
Loan Commitment or such Bank's Revolving Loan Commitment at such time. In the
event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code or any other bankruptcy,
reorganization, dissolution, insolvency, receivership, liquidation or similar
law with respect to the Borrower), each Bank (other than BTCo) hereby agrees
that it shall forthwith purchase from BTCo (without recourse or warranty) such
assignment of the outstanding Swingline Loans as shall be necessary to cause the
Banks to share in such Swingline Loans ratably based upon their respective RL
Percentages, provided that (x) all interest payable on the Swingline Loans shall
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be for the account of BTCo until the date the respective assignment is purchased
and, to the extent attributable to the purchased assignment, shall be payable to
the Bank purchasing same from and after such date of purchase and (y) at the
time any purchase of assignments pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay BTCo interest on the principal amount
of assignment purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such assignment, at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing of Loans shall not be less than the Minimum Borrowing Amount
applicable to such Loans, provided that Mandatory Borrowings shall be made in
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the amounts required by Section 1.01(c). More than one Borrowing may be
incurred on any day, provided, that at no time shall there be outstanding more
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than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
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a Borrowing hereunder (excluding (x) Borrowings of Swingline Loans and (y)
Mandatory Borrowings), an Authorized Officer of the Borrower shall give the
Administrative Agent at
3
its Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Eurodollar Loans, and at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans to be made hereunder. Each such notice (each, a
"Notice of Borrowing") shall, except as otherwise expressly provided in Section
1.10, be irrevocable, and, in the case of each written notice and each
confirmation of telephonic notice, shall be in the form of Exhibit A,
appropriately completed to specify: (i) the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day), (iii) whether the respective Borrowing shall
consist of Base Rate Loans or, to the extent permitted hereunder, Eurodollar
Loans and, if Eurodollar Loans, the Interest Period to be initially applicable
thereto, and (iv) in the case of a Borrowing of Revolving Loans the proceeds of
which are to be utilized to finance, in whole or in part, the purchase price of
a Permitted Acquisition, (x) a reference to the officer's certificate, if any,
delivered in accordance with Section 8.13, (y) the aggregate principal amount of
such Revolving Loans to be utilized in connection with such Permitted
Acquisition and (z) the Total Unutilized Revolving Loan Commitment then in
effect after giving effect to the respective Permitted Acquisition (and all
payments to be made in connection therewith). The Administrative Agent shall
promptly give each Bank written notice (or telephonic notice promptly confirmed
in writing) of each proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, an Authorized Officer of the Borrower shall give BTCo not later than
2:00 P.M. (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or BTCo (in the case of a Borrowing of Swingline Loans) or
the respective Letter of Credit Issuer (in the case of the issuance of Letters
of Credit), as the case may be, may prior to receipt of written confirmation act
without liability upon the basis of such telephonic notice, believed by the
Administrative Agent, BTCo or such Letter of Credit Issuer, as the case may be,
in good faith to be from an Authorized Officer of the Borrower. In each such
case, the Administrative Agent's, BTCo's or the respective Letter
4
of Credit Issuer's, as the case may be, record of the terms of such telephonic
notice shall be conclusive evidence of the contents of such notice, absent
manifest error.
1.04 Disbursement of Funds. (a) Not later than 1:00 P.M. (New York
---------------------
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 3:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(c)), each Bank
will make available its pro rata share (determined in accordance with Section
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1.07), of each Borrowing requested to be made on such date (or in the case of
Swingline Loans, BTCo shall make available the full amount thereof) in the
manner provided below. All amounts shall be made available to the
Administrative Agent in U.S. Dollars and in immediately available funds at the
Payment Office and the Administrative Agent promptly will make available to the
Borrower (or BTCo in the case of a Mandatory Borrowing) by depositing to its
account at the Payment Office the aggregate of the amounts so made available.
Unless the Administrative Agent shall have been notified by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Bank and the Administrative Agent
has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent. The Administrative Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Bank, the
overnight Federal Funds Rate or (y) if paid by the Borrower, the then applicable
rate of interest, calculated in accordance with Section 1.08.
(b) Nothing in this Agreement shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, all the Loans made to the Borrower by each Bank shall be set
forth on the Register maintained by the Administrative Agent pursuant to Section
13.17 and, subject to the provisions of Section 1.05(e), shall be evidenced (i)
if Revolving Loans, by a promissory note substantially in the form of Exhibit B-
1 with blanks appropriately
5
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes") and (ii) if Swingline Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the date of issuance thereof, (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Bank and be payable in the principal
amount of the outstanding Revolving Loans evidenced thereby, (iv) mature on the
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to BTCo or its registered assigns and be dated the
Restatement Effective Date, (iii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of the
Base Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it to the Borrower and each payment in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to make
any such notation or any error in such notation shall not affect the Borrower's
obligations in respect of such Loans.
(e) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, Revolving Notes and the Swingline Note shall only
be delivered to Banks which at any time specifically request the delivery of
such Notes. No failure of any Bank to request or obtain a Note evidencing its
Loans to the Borrower shall affect or in any manner impair the obligations of
the Borrower to pay the Loans (and all related Obligations) which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Bank which does not have
a Note evidencing its outstanding Loans shall in no event be required to make
the notations otherwise described in preceding clause (d). At any time when any
Bank requests the delivery of a Note to evidence any of its Loans, the Borrower
shall promptly execute and deliver to the respective Bank the requested Note or
Notes in the appropriate amount or amounts to evidence such Loans.
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1.06 Conversions. The Borrower shall have the option to convert on
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any Business Day occurring on or after the Restatement Effective Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of Loans (other than Swingline Loans which shall at
all times be maintained as Base Rate Loans) made pursuant to one or more
Borrowings of one or more Types of Loans into a Borrowing or Borrowings of
another Type of Loan; provided, that (i) except as otherwise provided in Section
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1.10(b) or unless the Borrower pays all breakage costs and other amounts owing
to each Bank pursuant to Section 1.11 concurrently with any such conversion,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted, and no partial
conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such Borrowing to less
than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may
only be converted into Eurodollar Loans if no Default under Sections 10.01 or
10.05 or Event of Default is in existence on the date of the conversion and the
Administrative Agent or the Required Banks have notified the Borrower that such
an election at such time would be disadvantageous to the Banks and (iii)
Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited
in number as provided in Section 1.02. Each such conversion shall be effected
by the Borrower by giving the Administrative Agent at its Notice Office, prior
to 12:00 Noon (New York time), at least three Business Days' (or one Business
Day's in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which the Loans were made and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any
such proposed conversion affecting any of its Loans. Upon any such conversion,
the proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Loans being
converted.
1.07 Pro Rata Borrowings. Subject to the provisions of 1.01(c), all
-------------------
Borrowings of Revolving Loans under this Agreement (including Mandatory
Borrowings) shall be incurred by the Borrower from the Banks pro rata on the
--- ----
basis of their RL Percentages. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans to be made by
it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect
--------
of the unpaid principal amount of each Base Rate Loan made to it from the date
of the Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be the relevant Applicable Margin plus the Base
----
Rate, each as in effect from time to time.
7
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by acceleration
or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable, at a rate per annum which shall at all times be the relevant
Applicable Margin plus the Eurodollar Rate for such Interest Period, each as in
----
effect from time to time.
(c) To the extent permitted by law, overdue principal and overdue
interest in respect of each Loan shall, in each case, bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
borne by such Loan immediately prior to the respective payment default and (y)
the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on (x) the date of any conversion
into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable
(on the amount converted) and (y) the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iii) in respect of each Loan, (x) at maturity (whether
by acceleration or otherwise) and (y) after such maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with Section 13.07(c).
(f) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the Borrower and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives a Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period),
the Borrower shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower be a one, two, three, six or, to the extent available
to each Bank, nine or twelve month period. Notwithstanding anything to the
contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
8
(ii) the initial Interest Period for any Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for any Borrowing of Eurodollar Loans
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period for any
--------
Borrowing of Eurodollar Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period for a Borrowing of Eurodollar Loans shall be
selected which would extend beyond the Maturity Date;
(vi) no Interest Period may be elected at any time when a Default
under Section 10.01 or 10.05 or an Event of Default is then in existence
and the Administrative Agent or the Required Banks have notified the
Borrower that such an election at such time would be disadvantageous to the
Banks; and
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 Increased Costs; Illegality; etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank, shall have determined in good faith
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any Interest Determination Date, that, by reason of any changes
arising after the Restatement Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans because of (x) any change since the Restatement
Effective Date in any
9
applicable law, governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (other than, in
each case, any such change with respect to taxes or any similar charges),
such as, for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances affecting such Bank, the interbank
Eurodollar market or the position of such Bank in such market (other than
circumstances relating to taxes or any similar charges); or
(iii) at any time since the Restatement Effective Date, that the
making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Bank with any law, governmental rule, regulation,
guideline or order (or would conflict with any governmental rule,
regulation, guideline, request or order not having the force of law but
with which such Bank customarily complies even though the failure to comply
therewith would not be unlawful), or has become impracticable as a result
of a contingency occurring after the Restatement Effective Date which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clauses (i)) to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter, (w) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the Banks
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (x)
in the case of clause (ii) above, the Borrower agrees, subject to the provisions
of Section 13.19 (to the extent applicable), to pay to such Bank, upon written
demand therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Bank in its
sole discretion shall determine) as shall be required to compensate such Bank
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Bank,
showing in reasonable detail the basis for the calculation thereof, prepared in
good faith and submitted to the Borrower by such Bank shall, absent manifest
error, be final and conclusive and binding upon all parties hereto, although the
failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(a) upon the subsequent receipt of such notice) and (y) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
10
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or
(iii)), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' notice to the Administrative Agent, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan (which
conversion, in the case of the circumstance described in Section 1.10(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such Eurodollar Loan or such earlier day as shall be required by applicable
law); provided, that if more than one Bank is affected at any time, then all
--------
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the Restatement
Effective Date, the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank or any corporation
controlling such Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's or such other corporation's capital or assets as a consequence of
such Bank's Revolving Loan Commitment or its obligations hereunder to the
Borrower to a level below that which such Bank or such other corporation could
have achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Bank's or such other corporation's policies with respect
to capital adequacy), then from time to time, upon written demand by such Bank
(with a copy to the Administrative Agent), accompanied by the notice referred to
in the last sentence of this clause (c), the Borrower agrees, subject to the
provisions of Section 13.19 (to the extent applicable), to pay to such Bank such
additional amount or amounts as will compensate such Bank or such other
corporation for such reduction in the rate of return to such Bank or such other
corporation. Each Bank, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower (a copy of which shall be sent by such
Bank to the Administrative Agent), which notice shall set forth in reasonable
detail the basis of the calculation of such additional amounts, although the
failure to give any such notice shall not release or diminish the Borrower's
obligation to pay additional amounts pursuant to this Section 1.10(c) upon the
subsequent receipt of such notice. In determining any additional amounts owing
under this Section 1.10(c), each Bank will act reasonably and in good faith and
will use averaging and attribution methods which are reasonable; provided that
--------
such Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
11
1.11 Compensation; Breakage. The Borrower agrees, subject to the
----------------------
provisions of Section 13.19 (to the extent applicable), to compensate each Bank,
upon its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion given by the Borrower
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 4.01 or 4.02 or as a result of an acceleration of the Loans pursuant
to Section 10 or as a result of the replacement of a Bank pursuant to Section
1.13 or 13.12(b)) or conversion of any Eurodollar Loans occurs on a date which
is not the last day of an Interest Period applicable thereto; (iii) if any
prepayment of any Eurodollar Loans, is not made on any date specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay its Eurodollar Loans when required by the
terms of this Agreement or (y) an election made by the Borrower pursuant to
Section 1.10(b). Each Bank's calculation of the amount of compensation owing
pursuant to this Section 1.11 shall be made in good faith. A Bank's basis for
requesting compensation pursuant to this Section 1.11 and a Bank's calculation
of the amount thereof made in accordance with the requirements of this Section
1.11, shall, absent manifest error, be final and conclusive and binding on all
parties hereto.
1.12 Change of Lending Office. (a) Each Bank may at any time or
------------------------
from time to time designate, by written notice to the Administrative Agent to
the extent not already reflected on Schedule II, one or more lending offices
(which, for this purpose, may include Affiliates of the respective Bank) for the
various Loans made, and Letters of Credit participated in, by such Bank;
provided that, for designations made after the Restatement Effective Date, to
the extent such designation shall result in increased costs under Section 1.10,
2.05 or 4.04 in excess of those which would be charged in the absence of the
designation of a different lending office (including a different Affiliate of
the respective Bank), then the Borrower shall not be obligated to pay such
excess increased costs (although the Borrower, in accordance with and pursuant
to the other provisions of this Agreement, shall be obligated to pay the costs
which would apply in the absence of such designation and any subsequent
increased costs of the type described above resulting from changes after the
date of the respective designation). Each lending office and Affiliate of any
Bank designated as provided above shall, for all purposes of this Agreement, be
treated in the same manner as the respective Bank (and shall be entitled to all
indemnities and similar provisions in respect of its acting as such hereunder).
(b) Each Bank agrees that, upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04
with respect to such Bank, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy
12
considerations of such Bank) to designate another lending office for any Loans
or Letters of Credit affected by such event; provided, that such designation is
--------
made on such terms that such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequences
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.10, 2.05 or 4.04 (although each such
Bank shall nevertheless have an obligation to change its applicable lending
office subject to the terms set forth in the immediately preceding sentence).
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in a material amount in excess of those being generally charged
by the other Banks or (z) in the case of a refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Required Banks as provided in Section 13.12(b),
the Borrower shall have the right, in accordance with Section 13.04(b), if no
Default or Event of Default will exist after giving effect to such replacement,
to replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank") and each of
which shall be reasonably acceptable to the Administrative Agent; provided that:
--------
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire all of the Revolving Loan
Commitment and outstanding Revolving Loans and participations in Letter of
Credit Outstandings by, the Replaced Bank and, in connection therewith,
shall pay to (x) the Replaced Bank in respect thereof an amount equal to
the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Revolving Loans of the Replaced Bank, (B) an
amount equal to all Unpaid Drawings (unless there are no Unpaid Drawings)
that have been funded by (and not reimbursed to) such Replaced Bank,
together with all then unpaid interest with respect thereto at such time
and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing
to the Replaced Bank pursuant to Section 3.01, (y) to BTCo an amount equal
to such Replaced Bank's RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Bank; and
(ii) all obligations of the Borrower then owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being,
paid, but including all amounts, if any, owing under Section 1.11 shall be
paid in full to such Replaced Bank concurrently with such replacement; and
13
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 13.17
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and the Replaced Bank shall cease to
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05,
4.04, 13.01 and 13.06), which shall survive as to such Replaced Bank and (y) the
RL Percentages of the Banks shall be automatically adjusted at such time to give
effect to such replacement.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time after the Restatement Effective Date and prior
to the tenth Business Day (or the 30th day in the case of Trade Letters of
Credit) preceding the Maturity Date to issue on a sight basis, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee, agent
or other similar representative for any such holders) of L/C Supportable
Obligations, irrevocable sight standby letters of credit in a form customarily
used by such Letter of Credit Issuer or in such other form as has been approved
by such Letter of Credit Issuer (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Obligations and (y) for
the account of the Borrower and for the benefit of sellers of goods and
materials to the Borrower or any of its Subsidiaries in the ordinary course of
business, irrevocable sight trade letters of credit in a form customarily used
by such Letter of Credit Issuer or in such other form as has been approved by
such Letter of Credit Issuer (each such trade letter of credit, a "Trade Letter
of Credit," and each such Standby Letter of Credit and Trade Letter of Credit, a
"Letter of Credit" and, collectively, the "Letters of Credit").
(b) Subject to and upon the terms and conditions set forth herein,
each Letter of Credit Issuer hereby agrees that it will, at any time and from
time to time after the Restatement Effective Date and prior to the tenth
Business Day (or the 30th day in the case of Trade Letters of Credit) preceding
the Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower one or more Letters of Credit,
(x) in the case of Trade Letters of Credit, in support of trade obligations of
the Borrower or any of its Subsidiaries that arise in the ordinary course of
business or (y) in the case of Standby Letters of Credit, in support of such L/C
Supportable Obligations as is permitted to remain outstanding hereunder.
Notwithstanding the foregoing, no Letter of Credit Issuer shall be under any
obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such
14
Letter of Credit Issuer or any request or directive (whether or not having
the force of law) from any governmental authority with jurisdiction over
such Letter of Credit Issuer shall prohibit, or request that such Letter of
Credit Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Letter of
Credit Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Letter of Credit Issuer is
not otherwise compensated) not in effect on the Restatement Effective Date,
or any unreimbursed loss, cost or expense which was not applicable, in
effect or known to such Letter of Credit Issuer as of the Restatement
Effective Date and which such Letter of Credit Issuer in good xxxxx xxxxx
material to it; or
(ii) such Letter of Credit Issuer shall have received written notice
from the Borrower or the Required Banks prior to the issuance of such
Letter of Credit of the type described in clause (vii) of Section 2.01(c)
or the last sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed $10,000,000; (ii) no Letter of Credit shall be issued, if, after giving
effect thereto, (x) the Aggregate Revolving Credit Exposure would exceed the
Total Revolving Loan Commitment at such time or (y) the Revolving Credit
Exposure of any Bank would exceed its Revolving Loan Commitment as then in
effect; (iii) (x) each Standby Letter of Credit shall have an expiry date
occurring not later than one year after such Standby Letter of Credit's date of
issuance, provided, that any such Standby Letter of Credit may be extendible for
--------
successive periods of up to one year, but not beyond the tenth Business Day
preceding the Maturity Date, on terms acceptable to the Letter of Credit Issuer
and (y) each Trade Letter of Credit shall have an expiry date occurring not
later than 180 days after such Trade Letter of Credit's date of issuance; (iv)
(x) no Standby Letter of Credit shall have an expiry date occurring later than
the tenth Business Day preceding the Maturity Date and (y) no Trade Letter of
Credit shall have an expiry date occurring later than 30 days prior to the
Maturity Date; (v) each Letter of Credit shall be denominated in U.S. Dollars;
(vi) the Stated Amount of each Letter of Credit shall not be less than $100,000
or such lesser amount as is acceptable to the respective Letter of Credit
Issuer; and (vii) no Letter of Credit Issuer will issue any Letter of Credit
after it has received written notice from the Borrower, the Administrative Agent
or the Required Banks stating that a Default or an Event of Default exists until
such time as such Letter of Credit Issuer shall have received a written notice
of (x) rescission of such notice from the party or parties originally delivering
the same or (y) a waiver of such Default or Event of Default by the requisite
Banks hereunder.
(d) Notwithstanding the foregoing, in the event a Bank Default exists,
no Letter of Credit Issuer shall be required to issue any Letter of Credit
unless the respective Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in
15
Letters of Credit of the Defaulting Bank or Banks, including by cash
collateralizing such Defaulting Bank's or Banks' RL Percentage of the Letter of
Credit Outstandings, as the case may be.
2.02 Letter of Credit Requests. (a) Whenever the Borrower desires
-------------------------
that a Letter of Credit be issued, the Borrower shall give the Administrative
Agent and the respective Letter of Credit Issuer written notice thereof prior to
12:00 Noon (New York time), via courier delivery or facsimile transmission, at
least three Business Days (or such shorter period as may be acceptable to the
respective Letter of Credit Issuer) prior to the proposed date of issuance
(which shall be a Business Day) which written notice shall be in the form of
Exhibit C (each, a "Letter of Credit Request"). Each Letter of Credit Request
shall include any other documents as such Letter of Credit Issuer customarily
requires in connection therewith.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements of, Section
2.01(c). Unless the respective Letter of Credit Issuer has received notice from
the Borrower, the Administrative Agent or the Required Banks before it issues a
Letter of Credit that one or more of the applicable conditions specified in
Section 5 or 6, as the case may be, are not then satisfied, or that the issuance
of such Letter of Credit would violate Section 2.01(c), then such Letter of
Credit Issuer may issue the requested Letter of Credit for the account of the
Borrower in accordance with such Letter of Credit Issuer's usual and customary
practice.
2.03 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each, a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's RL Percentage, in such Letter of Credit,
each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the Banks as provided in Section 3.01(b) and the Participants
shall have no right to receive any portion of any Facing Fees with respect to
such Letters of Credit) and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments or the RL
Percentages of the Banks pursuant to Sections 1.13 or 13.04(b) or as a result
of a Bank Default, it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings with respect thereto, there shall be an
automatic adjustment to the participations pursuant to this Section 2.03 to
reflect the new RL Percentages of the assigning and assignee Bank or of all
Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to
16
determine that any documents required to be delivered under such Letter of
Credit have been delivered and that they appear to substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Letter of Credit Issuer under or in connection with any
Letter of Credit issued by it if taken or omitted in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each such Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit Issuer, the amount of such Participant's RL Percentage of such
payment in U.S. Dollars and in same day funds. If the Administrative Agent so
notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (New York time) on any Business Day, such Participant shall
make available to the Administrative Agent at the Payment Office for the account
of the respective Letter of Credit Issuer such Participant's RL Percentage of
the amount of such payment on such Business Day in same day funds (and, to the
extent such notice is given after 11:00 A.M. (New York time) on any Business
Day, such Participant shall make such payment on the immediately following
Business Day). If and to the extent such Participant shall not have so made its
RL Percentage of the amount of such payment available to the Administrative
Agent for the account of the respective Letter of Credit Issuer, such
Participant agrees to pay to the Administrative Agent for the account of such
Letter of Credit Issuer, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of the Letter of Credit Issuer at the
overnight Federal Funds Rate. The failure of any Participant to make available
to the Administrative Agent for the account of the respective Letter of Credit
Issuer its RL Percentage of any payment under any Letter of Credit issued by it
shall not relieve any other Participant of its obligation hereunder to make
available to the Administrative Agent for the account of such Letter of Credit
Issuer its RL Percentage of any payment under any such Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the Administrative
Agent for the account of such Letter of Credit Issuer such other Participant's
RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its RL Percentage thereof, in U.S. Dollars and in
same day funds, an amount equal to such RL Percentage of
17
the principal amount thereof and interest thereon accruing after the purchase of
the respective participations.
(e) Each Letter of Credit Issuer shall, promptly after each issuance
of, or amendment or modification to, a Standby Letter of Credit issued by it,
give the Administrative Agent and the Borrower written notice of the issuance
of, or amendment or modification to, such Standby Letter of Credit. Upon
receipt of any such written notice from the Letter of Credit Issuer, the
Administrative Agent shall promptly notify each Participant. Upon request from
a Participant, the Administrative Agent will furnish to such Participant copies
of each Letter of Credit issued and amendments or modifications, if any.
(f) Each Letter of Credit Issuer (other than BTCo) shall deliver to
the Administrative Agent, promptly on the first Business Day of each week, by
facsimile transmission, the aggregate daily Stated Amount available to be drawn
under the outstanding Trade Letters of Credit issued by such Letter of Credit
Issuer for the previous week. The Administrative Agent shall, within 10 days
after the last Business Day of each calendar month, deliver to each Participant
a report setting forth for such preceding calendar month the aggregate daily
Stated Amount available to be drawn under all outstanding Trade Letters of
Credit during such calendar month.
(g) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to Letters of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Arranger, any Letter of Credit Issuer, any Bank,
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower or
any of its Subsidiaries and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under the
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;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
18
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the respective Letter of Credit Issuer, by making
payment to the Administrative Agent in U.S. Dollars and in immediately available
funds at the Payment Office, for any payment or disbursement made by such Letter
of Credit Issuer under any Letter of Credit issued by it (each such amount so
paid or disbursed until reimbursed, an "Unpaid Drawing") immediately after, and
in any event on the date of such payment or disbursement, with interest on the
amount so paid or disbursed by such Letter of Credit Issuer, to the extent not
reimbursed prior to 2:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Applicable Margin for Revolving Loans maintained as Base Rate
Loans as in effect from time to time (plus an additional 2% per annum if not
reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand. Each Letter of
Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it; provided, that
--------
(i) the notices referred to above shall not be required to be given if a Default
or an Event of Default under such Section 10.05 shall have occurred and be
continuing (in which case the Unpaid Drawings shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by the Borrower) and (ii) the failure of, or delay in,
giving any such notice shall not release or diminish the obligations of the
Borrower under this Section 2.04(a) or under any other Section of this
Agreement.
(b) The Borrower's obligation under this Section 2.04 to reimburse the
respective Letter of Credit Issuer with respect to drawings on Letters of Credit
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or any of its Subsidiaries may have or
have had against any beneficiary named in any Letter of Credit, the Letter of
Credit Issuer, the Administrative Agent, any Arranger or any Bank or other
Person, including, without limitation, any defense based upon the failure of any
drawing under a Letter of Credit issued by it to conform to the terms of the
Letter of Credit, any nonapplication or misapplication by the beneficiary of the
proceeds of such drawing; provided, however, that the Borrower shall not be
-------- -------
obligated to reimburse such Letter of Credit Issuer for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit issued by it as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer as determined by a court of
competent jurisdiction; provided, further, that any reimbursement made by the
-----------------
Borrower shall be without prejudice to any claim it may have against such Letter
of Credit Issuer as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer.
2.05 Increased Costs. If after the Restatement Effective Date, any
---------------
Letter of Credit Issuer or any Participant determines that the adoption or
effectiveness of any applicable law, rule or regulation, order, guideline or
request or any change therein, or any
19
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Letter of Credit Issuer or any
Participant with any request or directive (whether or not having the force of
law) by any such authority, central bank or comparable agency shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such Letter of Credit
Issuer or such Participant's participation therein, or (ii) impose on any Letter
of Credit Issuer or any Participant any other conditions directly or indirectly
affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Participant of issuing, maintaining
or participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Participant
hereunder or reduce the rate of return on its capital (other than any increased
costs or reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or any similar charges) with
respect to Letters of Credit, then, upon written demand to the Borrower by such
Letter of Credit Issuer or such Participant (a copy of which notice shall be
sent by such Letter of Credit Issuer or such Participant to the Administrative
Agent), accompanied by the certificate described in the last sentence of this
Section 2.05, the Borrower agrees, subject to the provisions of Section 13.19
(to the extent applicable), to pay to such Letter of Credit Issuer or such
Participant such additional amount or amounts as will compensate such Letter of
Credit Issuer or such Participant for such increased cost or reduction. Any
Letter of Credit Issuer or any Participant, upon determining that any additional
amounts will be payable pursuant to this Section 2.05, will give prompt written
notice thereof to the Borrower, which notice shall include a certificate
submitted to the Borrower by such Letter of Credit Issuer or such Participant,
as the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the determination of such additional amount or
amounts necessary to compensate such Letter of Credit Issuer or such Participant
as aforesaid and such certificate, if delivered in good faith, shall be final
and conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section 2.05
upon subsequent receipt of such certificate.
2.06 Indemnification. The Banks agree to indemnify the Letter of
---------------
Credit Issuers in their capacity as such, ratably according to their respective
"percentages" as used in determining the Required Banks at such time or, if the
Revolving Loan Commitments have terminated and all Loans have been repaid in
full, as determined immediately prior to such termination and repayment (with
such "percentages" to be determined as if there are no Defaulting Banks), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Letter of Credit Issuers in any way relating to or arising
out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the
20
transactions contemplated hereby or any action taken or omitted to be taken by
the Letter of Credit Issuers under or in connection with any of the foregoing,
but only to the extent that any of the foregoing is not paid by the Borrower or
any of its Subsidiaries; provided, that no Bank shall be liable to the Letter of
--------
Credit Issuers for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting primarily from the gross negligence or willful
misconduct of the Letter of Credit Issuers. If any indemnity furnished to the
Letter of Credit Issuers for any purpose shall, in the opinion of the Letter of
Credit Issuers be insufficient or become impaired, the Letter of Credit Issuers
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The agreements
in this Section 2.06 shall survive the payment of all Obligations.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower shall pay to the Administrative Agent
----
for distribution to each Non-Defaulting Bank, a commitment fee (the "Commitment
Fee") for the period from the Restatement Effective Date to but not including
the Maturity Date (or such earlier date as the Total Revolving Loan Commitment
shall have been terminated), computed at a rate for each day equal to .50% per
annum on the daily average Unutilized Revolving Loan Commitment of such Non-
Defaulting Bank. Accrued Commitment Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Maturity Date (or such earlier
date upon which the Total Revolving Loan Commitment is terminated).
(b) The Borrower shall pay to the Administrative Agent for pro rata
--- ----
distribution to each Non-Defaulting Bank (based on its RL Percentage), a fee in
respect of each Letter of Credit (the "Letter of Credit Fee") computed at a rate
per annum equal to the Applicable Margin for Revolving Loans maintained as
Eurodollar Loans then in effect on the daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) The Borrower shall pay to each Letter of Credit Issuer a fee in
respect of each Letter of Credit issued by such Letter of Credit Issuer (the
"Facing Fee") computed at the rate of .25% per annum on the daily Stated Amount
of such Letter of Credit. Accrued Facing Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day on or
after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(d) The Borrower shall pay directly to each Letter of Credit Issuer
upon each issuance of, payment under, and/or amendment of, a Letter of Credit
issued by such
21
Letter of Credit Issuer such amount as shall at the time of such issuance,
payment or amendment be the administrative charge which such Letter of Credit
Issuer is generally charging for issuances of, payments under or amendments of,
letters of credit issued by it.
(e) The Borrower shall pay to the Arrangers, for their own accounts,
such other fees as may be agreed to in writing from time to time between the
Borrower and the Arrangers, when and as due.
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
----------------------------------------------------------------
Loan Commitment. (a) Upon at least three Business Days' prior notice to the
---------------
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the Total
Unutilized Revolving Loan Commitment, in integral multiples of $1,000,000 in the
case of partial reductions to the Total Unutilized Revolving Loan Commitment.
Each reduction to the Total Unutilized Revolving Loan Commitment pursuant to
this Section 3.02(a) shall apply to permanently reduce the Revolving Loan
Commitments of the various Banks pro rata based on their respective RL
--- ----
Percentages.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b), the Borrower shall have the right, subject to obtaining the consents
required by Section 13.12(b), upon five Business Days' prior written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks), to terminate the entire
Revolving Loan Commitment of such Bank, so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, owing to such Bank
(including all amounts, if any, owing pursuant to Section 1.11) are repaid
concurrently with the effectiveness of such termination (at which time Schedule
I shall be deemed modified to reflect such changed amounts) and at such time,
such Bank shall no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall
survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Revolving
----------------------------------
Loan Commitment (and the Revolving Loan Commitment of each Bank) shall terminate
in its entirety on the Maturity Date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be reduced from
time to time to the extent required by Section 4.02.
(c) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 3.03 (or pursuant to Section 4.02) shall apply to proportionally
and permanently reduce the Revolving Loan Commitment of each Bank (based on
their RL Percentages).
22
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, and the right to allocate such prepayments to Revolving Loans
and/or Swingline Loans, made to the Borrower as the Borrower elects, in whole or
in part, without premium or penalty except as otherwise provided in this
Agreement, from time to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent at its Notice
Office written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay the Loans, whether such Loans are Revolving Loans
or Swingline Loans, the amount of such prepayment, the Types of Loans to be
repaid and (in the case of Eurodollar Loans) the specific Borrowing or
Borrowings pursuant to which made, which notice (I) shall be given by the
Borrower prior to 12:00 Noon (New York time) (x) at least one Business Day
prior to the date of such prepayment in the case of Base Rate Loans, (y) on
the date of such prepayment in the case of Swingline Loans and (z) at least
three Business Days prior to the date of such prepayment in the case of
Eurodollar Loans and (II) shall, except in the case of Swingline Loans,
promptly be transmitted by the Administrative Agent to each of the Banks;
(ii) each prepayment (other than prepayments in full of (I) all
outstanding Base Rate Loans or (II) any outstanding Borrowing of Eurodollar
Loans) shall be in an aggregate principal amount of at least (x)
$1,000,000, in the case of Eurodollar Loans, (y) $500,000, in the case of
Revolving Loans maintained as Base Rate Loans and (z) $100,000, in the case
of Swingline Loans and, in each case, if greater, in integral multiples of
$100,000, provided, that no partial prepayment of Eurodollar Loans made
--------
pursuant to a Borrowing shall reduce the aggregate principal amount of the
Eurodollar Loans outstanding pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto;
(iii) at the time of any prepayment of Eurodollar Loans pursuant to
this Section 4.01 on any date other than the last day of the Interest
Period applicable thereto, the Borrower shall pay the amounts required
pursuant to Section 1.11;
(iv) except as provided in clause (v) below, each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
--- ----
among the Banks which make such Loans, provided, that at the Borrower's
--------
election in connection with any prepayment of Revolving Loans pursuant to
this Section 4.01, such prepayment shall not be applied to any Revolving
Loans of a Defaulting Bank;
(v) in the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in
Section 13.12(b), the Borrower may, upon five Business Days' prior written
notice to the Administrative Agent at its Notice Office (which notice the
Administrative Agent
23
shall promptly transmit to each of the Banks), repay all Loans of such Bank
(including all amounts, if any, owing pursuant to Section 1.11), together
with accrued and unpaid interest, Fees and all other amounts then owing to
such Bank in accordance with said Section 13.12(b), so long as (A), the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment (at which time Schedule I shall be deemed modified to reflect the
changed Revolving Loan Commitments) and (B) the consents required by
Section 13.12(b) in connection with the repayment pursuant to this clause
(v) shall have been obtained; and
4.02 Mandatory Repayments and Commitment Reductions. (a) If on any
----------------------------------------------
day the Aggregate Revolving Credit Exposure exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower shall prepay on such day the
principal of outstanding Swingline Loans and, after all Swingline Loans have
been repaid in full or if no Swingline Loans are outstanding, principal of
outstanding Revolving Loans in an amount equal to such excess. If, after giving
effect to the prepayment of all such outstanding Swingline Loans and Revolving
Loans, the sum of the outstanding Letter of Credit Outstandings exceeds the
Total Revolving Loan Commitment as then in effect, the Borrower shall pay to the
Administrative Agent cash and/or Cash Equivalents in an amount equal to such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower hereunder and under the other Credit Documents in a
cash collateral account to be established by the Administrative Agent.
(b) In addition to any other commitment reductions pursuant to this
Section 4.02, on each date on or after the Restatement Effective Date upon which
the Borrower or any of its Subsidiaries receives Net Sale Proceeds from any
Asset Sale, the Total Revolving Loan Commitment shall be reduced by an amount
equal to the Applicable Prepayment Percentage of the Net Sale Proceeds from such
Asset Sale, provided that (x) with respect to no more than $5,000,000 in the
--------
aggregate of such Net Sale Proceeds received by the Borrower or its Subsidiaries
in any fiscal year of the Borrower, such Net Sale Proceeds shall not give rise
to a mandatory commitment reduction on such date to the extent that no Default
or Event of Default then exists and the Borrower delivers a certificate to the
Administrative Agent on or prior to such date stating that such Net Sale
Proceeds shall be used or contractually committed to be used to purchase assets
used or to be used in the businesses permitted pursuant to Section 9.01
(including, without limitation (but only to the extent permitted by Section
9.02), the purchase of the capital stock of a Person engaged in such businesses)
within 270 days following the date of receipt of such Net Sale Proceeds from
such Asset Sale (which certificate shall set forth the estimates of the proceeds
to be so expended) and (y)(i) if all or any portion of such Net Sale Proceeds
are not so used (or contractually committed to be used) within such 270-day
period, the Total Revolving Loan Commitment shall be reduced by an amount equal
to such remaining portion as provided above and (ii) if all or any portion of
such Net Sale Proceeds are not so used within such 270-day period referred to in
clause (i) of this clause (y) because such amount is contractually committed to
be used and subsequent to such date
24
such contract is terminated or expires without such portion being so used, the
Total Revolving Loan Commitment shall be reduced by an amount equal to such
remaining portion as provided above.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 4.02, on each date on or after the Restatement Effective Date on
which the Borrower or any of its Subsidiaries receives any cash proceeds from
any incurrence of Indebtedness (other than Indebtedness permitted to be incurred
pursuant to Section 9.04 as in effect on the Restatement Effective Date) or
issuance of Preferred Stock (other than (w) Disqualified Preferred Stock to the
extent the proceeds therefrom are used to effect Permitted Acquisitions and (x)
Qualified Preferred Stock by the Borrower or any of its Subsidiaries), the Total
Revolving Loan Commitment shall be reduced by an amount equal to the Applicable
Prepayment Percentage of the Net Cash Proceeds of the respective incurrence of
Indebtedness or issuance of Preferred Stock.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 4.02, within 10 days following each date on or after the
Restatement Effective Date on which the Borrower or any of its Subsidiaries
receives any proceeds from any Recovery Event (other than proceeds from any
Excluded Recovery Event), the Total Revolving Loan Commitment shall be reduced
by an amount equal to 100% of the proceeds of such Recovery Event (net of
reasonable costs (including, without limitation, legal costs and expenses) and
taxes incurred in connection with such Recovery Event and the amount of such
proceeds required to be used to repay any Indebtedness (other than Indebtedness
of the Banks pursuant to this Agreement) which is secured by the respective
assets subject to such Recovery Event)); provided that (x) so long as no Default
--------
or Event of Default then exists and such proceeds do not exceed $5,000,000, the
Total Revolving Loan Commitment shall not be reduced on such date to the extent
that an Authorized Officer of the Borrower has delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used or shall be committed to be used to replace or restore any properties or
assets in respect of which such proceeds were paid within 360 days following the
date of such Recovery Event (which certificate shall set forth the estimates of
the proceeds to be so expended) and (y) so long as no Default or Event of
Default then exists and to the extent that (a) the amount of such proceeds
exceeds $5,000,000, (b) the amount of such proceeds, together with other cash
available to the Borrower and its Subsidiaries and permitted to be spent by them
on Capital Expenditures during the relevant period, equals at least 100% of the
cost of replacement or restoration of the properties or assets in respect of
which such proceeds were paid as determined by the Borrower and as supported by
such estimates or bids from contractors or subcontractors or such other
supporting information as the Administrative Agent may reasonably accept, (c) an
Authorized Officer of the Borrower has delivered to the Administrative Agent a
certificate on or prior to the date the application would otherwise be required
pursuant to this Section 4.02(d) in the form described in clause (x) above and
also certifying its determination as required by preceding clause (b) and
certifying the sufficiency of business interruption insurance as required by
succeeding clause (d), and (d) an Authorized Officer of the Borrower has
delivered to the Administrative Agent such evidence as the Administrative
25
Agent may reasonably request in form and substance reasonably satisfactory to
the Administrative Agent establishing that the Borrower has sufficient business
interruption insurance and that the Borrower will receive payment thereunder in
such amounts and at such times as are necessary to satisfy all obligations and
expenses of the Borrower (including, without limitation, all debt service
requirements, including pursuant to this Agreement), without any delay or
extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of respective
properties or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $5,000,000 shall be deposited with
the Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent whereby such proceeds shall be
disbursed to the Borrower from time to time as needed to pay or reimburse the
Borrower or such Subsidiary actual costs incurred by it in connection with the
replacement or restoration of the respective properties or assets (pursuant to
such certification requirements as may be established by the Administrative
Agent), provided further, that at any time while an Event of Default has
----------------
occurred and is continuing, the Required Banks may direct the Administrative
Agent (in which case the Administrative Agent shall, and is hereby authorized by
the Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations hereunder in
the same manner as proceeds would be applied pursuant to the Pledge Agreement,
and provided further, that if all or any portion of such proceeds not required
----------------
to cause a mandatory commitment reduction pursuant to the second preceding
proviso (whether pursuant to clause (x) or (y) thereof) are either (A) not so
used or committed to be so used within 360 days after the date of the respective
Recovery Event or (B) if committed to be used within 360 days after the date of
receipt of such net proceeds and not so used within 18 months after the date of
respective Recovery Event then, in either such case, the Total Revolving Loan
Commitment shall be reduced by an amount equal to such remaining portion not
used or committed to be used in the case of preceding clause (A) and not used in
the case of preceding clause (B) on the date occurring 360 days after the date
of the respective Recovery Event in the case of clause (A) above or the date
occurring 18 months after the date of the respective Recovery Event in the case
of clause (B) above.
(e) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant
to which made, provided that: (i) repayments of Eurodollar Loans pursuant to
--------
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless (x) all Eurodollar Loans with Interest Periods ending
on such date of required repayment and all Base Rate Loans have been paid in
full and/or (y) concurrently with such repayment, the Borrower pays all breakage
costs and other amounts owing to each Bank pursuant to Section 1.11; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto, such Borrowing shall
be converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii)
26
each repayment of Revolving Loans made pursuant to a Borrowing shall be applied
pro rata among the Banks which made such Revolving Loans. In the absence of a
--- ----
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11. Notwithstanding the foregoing provisions of this Section
4.02, if at any time the mandatory repayment of Loans pursuant to Section
4.02(a) (as a result of commitment reductions described in clauses (b), (c) or
(d)) would result, after giving effect to the procedures set forth in this
clause (i) above, in the Borrower incurring breakage costs under Section 1.11 as
a result of Eurodollar Loans being repaid other than on the last day of an
Interest Period applicable thereto (any such Eurodollar Loans, "Affected
Loans"), the Borrower may elect, by written notice to the Administrative Agent,
to have the provisions of the following sentence be applicable. At the time any
Affected Loans are otherwise required to be prepaid the Borrower may elect to
deposit 100% (or such lesser percentage elected by the Borrower as not being
repaid) of the principal amounts that otherwise would have been paid in respect
of the Affected Loans with the Administrative Agent to be held as security for
the obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance satisfactory to the
Administrative Agent, with such cash collateral to be released from such cash
collateral account (and applied to repay the principal amount of such Eurodollar
Loans) upon each occurrence thereafter of the last day of an Interest Period
applicable to Eurodollar Loans (or such earlier date or dates as shall be
requested by the Borrower), with the amount to be so released and applied on the
last day of each Interest Period to be the amount of such Eurodollar Loans to
which such Interest Period applies (or, if less, the amount remaining in such
cash collateral account).
(f) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Revolving Loans
shall be repaid in full on the Maturity Date.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the ratable account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) on the date when due and shall
be made in U.S. Dollars in immediately available funds at the appropriate
Payment Office of the Administrative Agent in respect of any obligation of the
Borrower under this Agreement. Any payments under this Agreement or under any
Note which are made later than 12:00 Noon (New York time) on any Business Day
shall be deemed to have been made on the next succeeding Business Day. Whenever
any payment to be made hereunder or under any Note shall be stated to be due on
a day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
27
4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Sections 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, in the case of each Bank, except as provided in the second succeeding
sentence, any tax, including any income, branch profits, franchise or similar
tax, which in each case is imposed on or measured by the net income, net profits
or capital of such Bank pursuant to the laws of the jurisdiction in which such
Bank is organized or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any political subdivision
or taxing authority thereof or therein) and all interest, penalties or similar
liabilities with respect to such nonexcluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such nonexcluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due by the Borrower under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence (any
such amounts, the "Gross-Up Amount"), the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for the net amount, if any, of any
taxes such Bank shall determine are incurred by such Bank (taking into account
in calculating such net amount any allowable credit, deduction or other benefit
available as a result of, or with respect to, the payment by the Borrower to
such Bank of (i) the Gross-Up Amount or (ii) any amount paid pursuant to this
sentence) that would not have been incurred in the absence of the payment by the
Borrower of (i) the Gross-Up Amount or (ii) any amount paid pursuant to this
sentence. The Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank in respect of any payments by or on behalf of the
Borrower.
(b) Each Bank party to this Agreement on the Restatement Effective
Date hereby represents that, as of the Restatement Effective Date, all payments
of principal, interest, and fees to be made to it by the Borrower pursuant to
this Agreement will be totally exempt from withholding of United States federal
tax. Each Bank that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes agrees to
deliver to the Borrower and the Administrative Agent on or prior to the
Restatement Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.04, on the date of such assignment or transfer to such Bank, (i) two accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001 (or
28
successor forms) certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Bank is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that (a) from time
to time after the Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, and (b) upon the Borrower's reasonable request after the
occurrence of any other event requiring the delivery of a Form 1001, Form 4224,
Form W-8, or any successor form in addition to or in replacement of the forms
previously delivered, it will deliver to the Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224, 1001, Form W-8 and a Section 4.04(b)(ii) Certificate, or any
successor form, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such form
or certificate in which case such Bank shall not be required to deliver any such
form or certificate pursuant to this Section 4.04(b). Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to the immediately
succeeding sentence, (x) the Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes to the
extent that such Bank has not provided to the Borrower U.S. Internal Revenue
Service forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to such Bank, or to indemnify and
hold harmless or reimburse such Bank, in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the Borrower
the Internal Revenue Service forms required to be provided to the Borrower
pursuant to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Bank described in clause (ii) above, to the extent that such
forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Bank in the
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Restatement Effective Date (or, if later,
after the date such Bank became a party to this Agreement) in any
29
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of such
Taxes. For purposes of the immediately preceding sentence, the final U.S.
Treasury regulations that were issued October 6, 1997 with respect to the
withholding of United States Federal income tax (the "New Withholding
Regulations") shall not be considered to constitute a change after the
Restatement Effective Date, or otherwise, in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of Taxes, notwithstanding that
the New Withholding Regulations generally are only effective for payments made
after December 31, 1999. The Borrower shall not be required to pay any
additional amounts or indemnification under Section 4.04(a) to any Bank to the
extent that the obligation to pay such additional amounts or indemnification
would not have arisen but for the representation set forth in the first sentence
of Section 4.04(b) above made by the Bank not being true.
(c) If the Borrower pays any additional amount under this Section 4.04
with respect to taxes imposed on any payments made to or on behalf of a Bank and
such Bank determines in its sole discretion that it has actually received or
realized in connection therewith any refund of tax, or any reduction of, or
credit against, its tax liabilities (a "Tax Benefit"), such Bank shall pay to
the Borrower an amount that the Bank shall, in its sole discretion, determine is
equal to the net benefit, after tax, which was obtained by the Bank as a
consequence of such refund, reduction or credit; provided, however, that (i) any
-------- -------
Bank may determine, in its sole discretion consistent with the policies of such
Bank, whether to seek a Tax Benefit and (ii) nothing in this Section 4.04(c)
shall require the Bank to disclose any confidential information to the Borrower
(including, without limitation, its tax returns).
(d) Each Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions and subject to overall policy considerations of such
Bank) (i) to file any certificate or document or to furnish any information as
reasonably requested by the Borrower pursuant to any applicable treaty, law or
regulation or (ii) to designate a different applicable lending office of such
Bank, if the making of such filing or the furnishing of such information or the
designation of such other lending office would avoid the need for or reduce the
amount of any additional amounts payable by the Borrower and would not, in the
sole discretion of such Bank, be disadvantageous to such Bank.
(e) The provisions of this Section 4.04 are subject to the provisions
of Section 13.19 (to the extent applicable).
SECTION 5. Conditions Precedent to Restatement Effective Date. The occurrence
--------------------------------------------------
of the Restatement Effective Date pursuant to Section 13.10, and the obligation
of each Bank to make Loans hereunder, and the obligation of the Letter of Credit
Issuer to issue Letters of Credit hereunder, in each case on the Restatement
Effective Date, are subject at the time of the occurrence of the Restatement
Effective Date to the satisfaction of the following conditions:
30
5.01 Execution of Agreement; Notes. On or prior to the Restatement
-----------------------------
Effective Date, (i) this Agreement shall have been executed and delivered as
provided in Section 13.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each Bank that requests same, the
appropriate Revolving Note and to BTCo the Swingline Note, in each case executed
by the Borrower and in the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On or prior to the Restatement Effective
---------------------
Date, the Administrative Agent shall have received a certificate dated such date
signed by an appropriate officer of the Borrower stating that all of the
applicable conditions set forth in Sections 5.05 through 5.08, inclusive, and
6.01 (other than such conditions that are subject to the satisfaction of the
Arrangers and/or the Required Banks), have been satisfied on such date.
5.03 Opinions of Counsel. On or prior to the Restatement Effective
-------------------
Date, the Administrative Agent shall have received opinions, addressed to each
Arranger, the Administrative Agent, the Collateral Agent and each of the Banks
and dated the Restatement Effective Date, from Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special New York counsel to the Credit Parties, which opinion shall
cover the matters contained in Exhibit E and such other matters incident to the
transactions contemplated herein as the Arrangers and the Required Banks may
reasonably request and be in form and substance reasonably satisfactory to the
Arrangers.
5.04 Company Documents; Proceedings. (a) On or prior to the
------------------------------
Restatement Effective Date, the Administrative Agent shall have received from
the Borrower and each other Credit Party a certificate, dated the Restatement
Effective Date, signed by an Authorized Officer of such Credit Party, and
attested to by the secretary or any assistant secretary of such Credit Party, in
the form of Exhibit F with appropriate insertions, together with copies of the
certificate of incorporation, by-laws or equivalent organizational documents of
such Credit Party and the resolutions of such Credit Party referred to in such
certificate and all of the foregoing (including each such certificate of
incorporation, by-laws or other organizational document) shall be reasonably
satisfactory to the Arrangers.
(b) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received a certificate from each Credit Party (x) to the effect
that such Credit Party is in good standing in its respective state of
organization and in those states where such Credit Party conducts business and
(y) providing the resolutions adopted by such Credit Party with respect to the
actions contemplated by this Agreement and the other Credit Documents, and all
of the foregoing shall be acceptable to the Arrangers.
(c) On the Restatement Effective Date, all Company and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Arrangers, and the
Administrative Agent shall
31
have received all information and copies of all certificates, documents and
papers, including good standing certificates, bring-down certificates and any
other records of Company proceedings and governmental approvals, if any, which
any Arranger reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper Company or
governmental authorities.
(d) On the Restatement Effective Date, the Cendant Documents, the
Stockholders Agreement and the Existing Preferred Stock shall all be in full
force and effect and shall be in the form delivered to the Arrangers prior to
the Restatement Effective Date.
5.05 Adverse Change, etc. (a) On the Restatement Effective Date,
--------------------
since December 31, 1998, nothing shall have occurred which (i) either Arranger
shall reasonably determine has had, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Banks or the
Administrative Agent, or on the ability of any Credit Party to perform its
obligations to them hereunder or under any other Credit Document or (ii) has had
a Material Adverse Effect.
(b) On the Restatement Effective Date, there shall not have occurred
and be continuing any material adverse change to the syndication market for
credit facilities similar in nature to this Agreement and there shall not have
occurred and be continuing a material disruption or a material adverse change in
financial, banking or capital markets that would have a material adverse effect
on the syndication, in each case as determined by the Arrangers in their
reasonable discretion.
5.06 Litigation. On the Restatement Effective Date, there shall be
----------
no actions, suits, proceedings or investigations pending or to the Borrower's
knowledge threatened (a) with respect to this Agreement or any other Document,
(b) with respect to any Existing Indebtedness or (c) which either the Arranger
or the Required Banks shall determine could reasonably be expected to have (i) a
Material Adverse Effect or (ii) a material adverse effect on the rights or
remedies of the Banks, the Administrative Agent or the Arrangers hereunder or
under any other Credit Document or on the ability of any Credit Party to perform
its respective obligations to the Banks, the Administrative Agent or the
Arrangers hereunder or under any other Credit Document.
5.07 Approvals. On the Restatement Effective Date, (i) all necessary
---------
governmental (domestic and foreign), regulatory and third party approvals in
connection with any Existing Indebtedness, the Cendant Documents, the
Stockholders Agreement, the Existing Preferred Stock, the transactions
contemplated by the Credit Documents and otherwise referred to herein or therein
shall have been obtained and remain in full force and (ii) all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon the making of the Loans and the transactions contemplated by the
Credit Documents or otherwise referred to herein or therein. Additionally, there
shall not exist any judgment, order, injunction or other restraint issued or
filed or a hearing seeking injunctive relief or
32
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
making of the Loans.
5.08 Refinancing of Indebtedness; Existing Credit Agreement. (a) On
-------------------------------------------------------
the Restatement Effective Date, the Borrower and its Subsidiaries shall have no
Indebtedness or Preferred Stock outstanding other than (i) the Loans, (ii) the
Existing Preferred Stock, and (iii) certain other indebtedness existing on the
Restatement Effective Date as listed on Schedule III (with the Indebtedness
described in this sub-clause (iii) being herein called the "Existing
Indebtedness"). On and as of the Restatement Effective Date, all of the
Existing Indebtedness shall remain outstanding without any default or event of
default existing thereunder or arising as a result of the transactions
contemplated hereby (except to the extent amended or waived by the parties
thereto on terms and conditions satisfactory to the Arrangers).
(b) On the Restatement Effective Date, (i) each Continuing Bank shall
convert its Original Revolving Loans as contemplated by Section 1.01, (ii) each
Continuing Bank whose Original Loans outstanding on the Restatement Effective
Date exceed the aggregate principal amount of Loans to be made available by such
Continuing Bank on such date shall have received payment in full of all amounts
then due and owing to it as provided in Section 13.18(c), and (iii) the Borrower
shall have paid all interest and Fees owing under the Existing Credit Agreement
through the Restatement Effective Date.
(c) The Administrative Agent shall have received evidence in form,
scope and substance reasonably satisfactory to it that the matters set forth in
Sections 5.08(a) and (b) have been satisfied on the Restatement Effective Date.
5.09 Pledge Agreement. On the Restatement Effective Date, each of
-----------------
the Credit Parties shall have duly authorized, executed and delivered an
acknowledgment to the Pledge Agreement in the form of Exhibit G, together with
such changes (or with such other documents) as may be requested by the
Collateral Agent (the "Pledge Agreement Acknowledgment") and shall have
delivered to the Collateral Agent, as pledgee thereunder, all of the Pledged
Securities referred to therein then owned by such Credit Parties and required to
be pledged pursuant to the terms thereof, endorsed in blank in the case of
promissory notes or accompanied by executed and undated stock powers in the case
of capital stock, along with evidence that all other actions necessary or, in
the reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Pledge Agreement have been
taken, and the Pledge Agreement as so modified by the Pledge Agreement
Acknowledgment and such other documents shall be in full force and effect.
5.10 Subsidiaries Guaranty. On the Restatement Effective Date, each
---------------------
Guarantor shall have duly authorized, executed and delivered an acknowledgment
to the Subsidiaries Guaranty in the form of Exhibit H (the "Subsidiaries
Guaranty Acknowledgment"), and the Subsidiaries Guaranty as so modified by the
Subsidiary Guaranty Acknowledgment shall be in full force and effect.
33
5.11 Employee Benefit Plans; Shareholders' Agreements; Management
------------------------------------------------------------
Agreements; Employment Agreements; Existing Indebtedness Agreements. (a) On or
-------------------------------------------------------------------
prior to the Restatement Effective Date, there shall have been delivered to the
Administrative Agent true and correct copies, certified as true and complete by
an appropriate officer of the Borrower of the following documents (in each case
except to the extent already delivered to or made available for review by the
Administrative Agent on or prior to the Restatement Effective Date), in each
case as same will be in effect on the Restatement Effective Date after the
transactions contemplated hereby:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report and any other "employee benefit plans," as defined in
Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of the
Borrower or any of its Subsidiaries or any ERISA Affiliate (collectively,
the "Employee Benefit Plans");
(ii) all agreements (including, without limitation, shareholders'
agreements, subscription agreements and registration rights agreements)
entered into by the Borrower or any of its Subsidiaries governing the terms
and relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements");
(iii) all material agreements with members of, or with respect to,
the management of the Borrower or any of its Subsidiaries after giving
effect to the transactions contemplated hereby (collectively, the
"Management Agreements");
(iv) any material employment agreements entered into by the Borrower
or any of its Subsidiaries after giving effect to the transactions
contemplated hereby (collectively, the "Employment Agreements"); and
(v) all agreements evidencing or relating to Existing Indebtedness of
the Borrower or any of its Subsidiaries, which on an individual basis
evidence Indebtedness greater than $2,000,000 (collectively, the "Existing
Indebtedness Agreements").
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, and Existing Indebtedness Agreements shall be
in form and substance reasonably satisfactory to the Arrangers and the Required
Banks and shall be in full force and effect on the Restatement Effective Date.
(b) On or prior to the Restatement Effective Date, the Administrative
Agent shall have received (i) a certification from the appropriate officer of
the Borrower that all agreements and plans referenced in Section 5.11 of the
Existing Credit Agreement previously delivered to the Administrative Agent,
remain in full force and effect and (ii)
34
any amendments to the agreements and plans referred to in Section 5.11 of the
Existing Credit Agreement to the extent not delivered pursuant to Section
5.11(a).
5.12 Solvency Certificate. On or before the Restatement Effective
--------------------
Date, the Administrative Agent shall have received a solvency certificate in the
form of Exhibit I from the chief financial officer of the Borrower, dated the
Restatement Effective Date, and supporting the conclusion that, after giving
effect to the incurrence of all financings contemplated herein, the Borrower (on
a stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis), in each case, are not insolvent and will not be rendered insolvent by
the indebtedness incurred in connection herewith, will not be left with
unreasonably small capital with which to engage in its or their respective
businesses and will not have incurred debts beyond its or their ability to pay
such debts as they mature and become due.
5.13 Financial Statements; Balance Sheet. (a) On or prior to the
-----------------------------------
Restatement Effective Date, there shall have been delivered to the
Administrative Agent (i) true and correct copies of the financial statements
referred to in Section 7.10(b) and (ii) an unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as of December 31, 1998, which financial
statements, unaudited consolidated balance sheet and funds flow statement shall
be reasonably satisfactory to the Arrangers.
(b) On or prior to the Restatement Effective Date, there shall have
been delivered to the Administrative Agent, and the Administrative Agent hereby
acknowledges receipt of, detailed projected consolidated financial statements of
the Borrower and its Subsidiaries (the "Projections"), satisfactory in form and
substance to the Arrangers.
5.14 Payment of Fees. On the Restatement Effective Date, all costs,
---------------
fees and expenses, and all other compensation due to the Agents or the Banks
(including, without limitation, legal fees and expenses) shall have been paid to
the extent due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Bank to make Loans (including Loans made on the Restatement Effective
Date but excluding Mandatory Borrowings made thereafter, which shall be made as
provided in Section 1.01(c)), and the obligation of a Letter of Credit Issuer to
issue any Letter of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
35
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Loan (excluding Swingline Loans and Mandatory Borrowings),
the Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03(a). Prior to the making of any Swingline Loan,
BTCo shall have received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the respective Letter of Credit Issuer shall have received a Letter of
Credit Request meeting the requirements of Section 2.02(a).
The occurrence of the Restatement Effective Date and the acceptance of
the benefits or proceeds of each Credit Event shall constitute a representation
and warranty by the Borrower to each of the Arrangers and each of the Banks that
all the conditions specified in Section 5 and in this Section 6 and applicable
to such Credit Event (other than such conditions that are subject to the
satisfaction of the Arrangers and/or the Required Banks) exist as of that time.
All of the Notes, certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be in form and substance
satisfactory to the Banks.
SECTION 7. Representations and Warranties. In order to induce the
------------------------------
Banks to enter into this Agreement and to make the Loans and issue and/or
participate in the Letters of Credit provided for herein, the Borrower makes the
following representations and warranties to the Banks, all of which shall
survive the execution and delivery of this Agreement, the making of the Loans
and the issuance of the Letters of Credit (with the occurrence of the
Restatement Effective Date and each Credit Event on and after the Restatement
Effective Date being deemed to constitute a representation and warranty by the
Borrower that the matters specified in this Section 7 are true and correct in
all material respects on and as of the Restatement Effective Date and the date
of each such Credit Event, unless stated to relate to a specific earlier date in
which case such representations and warranties shall be true and correct in all
material respects only as of such earlier date):
7.01 Company Status. The Borrower and each of its Subsidiaries (i)
--------------
is a duly organized and validly existing Company in good standing under the laws
of the jurisdiction of its organization, (ii) has the Company power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified or in
good standing would have a Material Adverse Effect.
7.02 Company Power and Authority. Each Credit Party has the Company
---------------------------
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is a party and has taken all necessary
Company action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each
36
Credit Party has duly executed and delivered each Credit Document to which it is
a party and each such Credit Document constitutes the legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Credit Documents to which it is a party, nor compliance
by any Credit Party with the terms and provisions thereof, nor the consummation
of the transactions contemplated herein or therein, (i) will contravene any
material provision of any applicable law, statute, rule or regulation, or any
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict or be inconsistent with or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or (other than pursuant to the Pledge Agreement) result in the creation
or imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of such Credit Party or any of its Subsidiaries pursuant
to the terms of any material indenture, mortgage, deed of trust, loan agreement,
credit agreement or any other material agreement or instrument to which such
Credit Party or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject (including, without
limitation, the Existing Indebtedness), or (iii) will violate any provision of
the certificate of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of limited liability company, limited
liability company agreement or equivalent organizational document, as the case
may be, of such Credit Party or any of its Subsidiaries.
7.04 Litigation. There are no actions, suits, proceedings or
----------
investigations pending or, to the knowledge of the Borrower, threatened (i) with
respect to any Credit Document, (ii) with respect to the Cendant Documents, the
Stockholders Agreement, the Existing Preferred Stock or any other Document that
could reasonably be expected to have a Material Adverse Effect or (iii) with
respect to the Borrower or any of its Subsidiaries (x) that are likely to have a
Material Adverse Effect (after giving effect to projected reserves for
remediation expenses, the anticipated timing of remediation expenses, potential
insurance and indemnification recoveries and tax savings) or (y) that could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Arrangers, the Administrative Agent or the Banks or on the
ability of any Credit Party to perform its respective obligations to the
Arrangers, the Administrative Agent or the Banks hereunder and under the other
Credit Documents to which it is, or will be, a party. Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon the occurrence of any Credit Event.
7.05 Use of Proceeds; Margin Regulations.
-----------------------------------
(a) The proceeds of all Revolving Loans and Swingline Loans shall be
utilized for the general corporate and working capital purposes of the Borrower
and its Subsidiaries (including, but not limited to, Permitted Acquisitions).
37
(b) Neither the making of any Loan, nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
7.06 Governmental Approvals. Except as may have been obtained or
----------------------
made on or prior to the Restatement Effective Date (and which remain in full
force and effect on the Restatement Effective Date), no order, consent,
approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic governmental or
public body or authority, or any subdivision thereof, is required to authorize
or is required in connection with (i) the execution, delivery and performance by
the Credit Parties of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
7.07 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to any Arranger or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of any such Persons in writing to any
Arranger or any Bank will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in light of the circumstances under which
such information was provided, it being understood and agreed that for purposes
of this Section 7.09, such factual information shall not include the Projections
or any pro forma financial information.
--- -----
7.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Restatement Effective Date, after giving effect to all Indebtedness
(including the Loans) incurred, and to be incurred, and Liens created, and to be
created, by each Credit Party in connection therewith, with respect to the
Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis), (x) the sum of the assets, at a fair
38
valuation, of the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated basis), will exceed its or their debts, (y) it
has or they have not incurred nor intended to, nor believes or believe that it
or they will, incur debts beyond its or their ability to pay such debts as such
debts mature and (z) it or they will have sufficient capital with which to
conduct its or their business. For purposes of this Section 7.10, "debt" means
any liability on a claim, and "claim" means (i) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. 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.
(b) Prior to the Restatement Effective Date, the Borrower has
delivered to the Banks the consolidated balance sheets of the Borrower and its
consolidated Subsidiaries at December 31, 1996, December 31, 1997 and December
31, 1998, and the related statements of income and cash flows and changes in
shareholders' equity of the Borrower for the fiscal years ended as of said
dates. All such financial statements have been prepared in accordance with GAAP
consistently applied except to the extent provided in the notes to said
financial statements.
(c) Since December 31, 1998, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described in
Section 7.10(b) and the Indebtedness incurred under this Agreement, (i) there
were as of the Restatement Effective Date (and after giving effect to any Loans
made on such date), no liabilities or obligations (excluding current obligations
incurred in the ordinary course of business) with respect to the Borrower or any
of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
the aggregate, could reasonably be expected to be material to the Borrower and
its Subsidiaries taken as a whole and (ii) the Borrower knows of no basis for
the assertion against it or any of its Subsidiaries of any such liability or
obligation which, either individually or in the aggregate, are or would be
reasonably likely to have, a Material Adverse Effect.
(e) On and as of the Restatement Effective Date, the Projections have
been prepared on a basis consistent with the financial statements referred to in
Section 7.10(b), and have been prepared in good faith and are based on
reasonable assumptions under the then known facts and circumstances. On the
Restatement Effective Date, the management of the Borrower believes that the
Projections are reasonable and attainable based upon the then known facts and
circumstances (it being understood that nothing contained in this Section
7.10(e) shall constitute a representation that the results forecasted
39
in such Projections will in fact be achieved). On and as of the Restatement
Effective Date, there is no fact known to the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection with
the transactions contemplated hereby.
7.11 Security Interests. On and after the Restatement Effective
------------------
Date, the Security Documents create (or after the execution and delivery thereof
will create), as security for the Obligations, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto, superior
to and prior to the rights of all third Persons, and subject to no other Liens
(except that such Collateral may be subject to Permitted Liens). No filings or
recordings are required in order to perfect and/or render enforceable as against
third parties the security interests created under the Security Documents except
for filings or recordings required in connection with the Security Documents
which shall have been made on or prior to the Restatement Effective Date with
respect to the Pledge Agreement as contemplated by Section 5.09 or on or prior
to the execution and delivery thereof as contemplated by Sections 8.11, 8.13 and
9.13.
7.12 Compliance with ERISA. Part A of Schedule IV sets forth each
---------------------
Plan and each Multiemployer Plan; each Plan (and each related trust, insurance
contract or fund) is in substantial compliance with its terms and with all
applicable laws, including without limitation ERISA and the Code; each Plan (and
each related trust, if any) which is intended to be qualified under Section
401(a) of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of Sections 401(a) and
501(a) of the Code; except as described in item (i) set forth on Part B of
Schedule IV, all contributions required to be made with respect to a Plan have
been timely made by the Borrower and each Subsidiary of the Borrower; neither
the Borrower nor any Subsidiary of the Borrower has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Plan pursuant to Section 409, 502(i) or 502(l) of ERISA or Section
4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan; no condition exists which presents
a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a material liability to or on account of a Plan pursuant
to the foregoing provisions of ERISA and the Code; no action, suit, proceeding
or hearing with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, expected
or, to the best knowledge of the Borrower threatened; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
maintained by the Borrower or any Subsidiary which covers or has covered
employees or former employees of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate has at all times been operated in material compliance with
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of
the Code; no lien imposed under the Code or ERISA on the assets of the Borrower
or any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and, except as described in item (ii) set forth on
Part B of Schedule IV, the Borrower and its Subsidiaries
40
may cease contributions to or terminate any employee benefit plan maintained by
any of them without incurring any material liability.
7.13 Capitalization. On the Restatement Effective Date, the
--------------
authorized capital stock of the Borrower shall consist of (i) 50,000,000 shares
of common stock, $.01 par value per share (such authorized shares of common
stock, together with any subsequently authorized shares of common stock of the
Borrower, the "Borrower Common Stock"), 10,000,000 of which shares shall be
issued and outstanding and (ii) 405,000 shares of preferred stock, $.01 par
value per share, (x) 260,000 of which shares are authorized to be the Borrower's
9.00% Series A Cumulative Senior Redeemable Preferred Stock (the "Series A
Preferred Stock"), of which 157,591 shares shall be issued and outstanding, (y)
25,000 of which shares are authorized to be the Borrower's 5.00% Series B
Cumulative Convertible Redeemable Preferred Stock (the "Series B Preferred
Stock"), of which 24,000 shares shall be issued and outstanding, and (z) 125,000
of which shares are authorized to be the Borrower's 18.00% Series C Cumulative
Junior Redeemable Preferred Stock (the "Series C Preferred Stock", and together
with the Series A Preferred Stock and the Series B Preferred Stock, the
"Existing Preferred Stock"), of which 68,510 shares shall be issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable and have been issued free of preemptive rights.
Except as set forth on Schedule V hereto, the Borrower does not have outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
7.14 Subsidiaries. (a) On and as of the Restatement Effective Date,
------------
the Borrower has no Subsidiaries other than those Subsidiaries listed on
Schedule VI. Schedule VI correctly sets forth, as of the Restatement Effective
Date, the percentage ownership (direct and indirect) of the Borrower in each
class of capital stock or other equity interests of each of its Subsidiaries and
also identifies the direct owner thereof. All outstanding shares of capital
stock of each Subsidiary of the Borrower have been duly and validly issued, are
fully paid and non-assessable and have been issued free of preemptive rights.
Except as set forth on Schedule V hereto, no Subsidiary of the Borrower has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any right to subscribe for or to purchase, or any options
or warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
7.15 Intellectual Property, etc. Each of the Borrower and each of
---------------------------
its Subsidiaries owns, licenses or has the right to use all patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and other
rights with respect to the foregoing reasonably necessary for the conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, would result in a Material Adverse
Effect.
41
7.16 Compliance with Statutes, etc. Each of the Borrower and each of
------------------------------
its Subsidiaries is in compliance with all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such non-compliance as is not
reasonably likely to, individually or in the aggregate, have a Material Adverse
Effect.
7.17 Environmental Matters. (a) Each of the Borrower and its
---------------------
Subsidiaries on the date of each Credit Event is in material compliance with,
all applicable Environmental Laws and the requirements of any permits issued
under such Environmental Laws and none of the Borrower or any of its
Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing. There are no pending unresolved
past or, to the knowledge of the Borrower, threatened Environmental Claims
against the Borrower or any of its Subsidiaries, or against any Real Property
owned or operated by the Borrower, any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of the Borrower or any of its Subsidiaries or any Real Property at
any time owned or operated by the Borrower or any of its Subsidiaries that would
reasonably be expected (i) to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any of their currently owned or
operated Real Property or (ii) to cause any such currently owned or operated
Real Property to be subject to any restrictions on the ownership, occupancy, use
or transferability of such Real Property by the Borrower or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported by the Borrower or any of its Subsidiaries
or by any Person acting for or under contract to the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person, to or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries except in material compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. Hazardous Materials have not at any time been Released by the Borrower
or any of its Subsidiaries or by any Person acting for or under contract to the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person on or from any Real Property owned or operated by the Borrower or
any of its Subsidiaries except in compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. There are not now any underground storage tanks owned or operated by
the Borrower or any of its Subsidiaries, or to the knowledge of the Borrower, by
any other Person, located on any Real Property owned or operated by the Borrower
or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.17, the
representations made in this Section 7.17 shall only be untrue if the aggregate
effect of all conditions, failures, noncompliances, Environmental Claims,
Releases and presence of
42
underground storage tanks, in each case of the types described above, would
reasonably be expected to have a Material Adverse Effect (after giving effect to
projected reserves for remediation expenses, the anticipated timing of
remediation expenses, potential insurance and indemnification recoveries and tax
savings).
7.18 Properties. Each of the Borrower and each of its Subsidiaries
----------
has good and marketable title to, or a validly subsisting leasehold interest in,
all material properties owned or leased by it except where failure to do so
would not be reasonably likely to have a Material Adverse Effect.
7.19 Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower and its Subsidiaries, threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower and its Subsidiaries, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower
and its Subsidiaries, threatened against the Borrower or any of its Subsidiaries
and (iii) no union representation question existing with respect to the
employees of the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower and its Subsidiaries, no union organizing activities are taking
place, except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as is not reasonably likely
to have a Material Adverse Effect.
7.20 Tax Returns and Payments. Each of the Borrower and each of its
------------------------
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and fully provided for on the financial statements
of the Borrower and its Subsidiaries in accordance with GAAP. Each of the
Borrower and each of its Subsidiaries has provided adequate reserves (in the
good faith judgment of the management of the Borrower) for the payment of all
federal, state and foreign income taxes which have not yet become due. There is
no material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of the Borrower or any of its Subsidiaries, threatened by
any authority regarding any taxes relating to the Borrower or any of its
Subsidiaries. Neither the Borrower nor any of its Subsidiaries has entered into
an agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of the Borrower or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of the
Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations, in each case except to the extent the liability of the
Borrower or such
43
Subsidiary giving rise to any extension of any such normally applicable statute
of limitation is not material.
7.21 Existing Indebtedness. Schedule III sets forth a true and
---------------------
complete list of all Existing Indebtedness of the Borrower and its Subsidiaries
as of the Restatement Effective Date, in each case showing the aggregate
principal amount thereof and the name of the Borrower and any other entity which
directly or indirectly guaranteed such debt.
7.22 Insurance. Set forth on Schedule VII hereto is a true, correct
---------
and complete summary of all insurance carried by each Credit Party on and as of
the Restatement Effective Date, with the amounts insured set forth therein.
7.23 Year 2000 Representation. Any reprogramming required to permit
------------------------
the proper functioning, in and following the year 2000, of (i) the Borrower's
and its Subsidiaries' computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's and its Subsidiaries' systems interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed by December 31,
1999, except to the extent the failure to complete such reprogramming could not
reasonably be expected to result in a Default, an Event of Default or a Material
Adverse Effect. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) could not
reasonably be expected to result in a Default, an Event of Default or a Material
Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower and its Subsidiaries to conduct their
respective businesses without a Material Adverse Effect.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
---------------------
agrees that as of the Restatement Effective Date and thereafter for so long as
this Agreement is in effect and until the Total Commitment has terminated, no
Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each Bank:
---------------------
(a) Quarterly Financial Statements. Within 50 days after the close of
------------------------------
the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and of cash flows for
such quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period and the budgeted
figures for such quarterly period as set forth in the respective budget
delivered
44
pursuant to Section 8.01(c) and (ii) management's discussion and analysis of
significant operational and financial developments during such quarterly period,
all of which shall be in reasonable detail and certified by the chief financial
officer or other Authorized Officer of the Borrower that they fairly present in
all material respects the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their operations and
changes in their cash flows for the periods indicated, subject to normal year-
end audit adjustments and the absence of footnotes.
(b) Annual Financial Statements. Within 95 days after the close of
---------------------------
each fiscal year of the Borrower, the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year and setting forth comparative consolidated figures for the
preceding fiscal year and comparable budgeted figures for such fiscal year as
set forth in the respective budget delivered pursuant to Section 8.01(c) and
(except for such comparable budgeted figures) certified by such independent
certified public accountants of recognized national standing as shall be
reasonably acceptable to the Administrative Agent, in each case to the effect
that such statements fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years, together with a certificate of such accounting firm stating that in the
course of its regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, no Default or Event of Default which has occurred and is
continuing has come to their attention or, if such a Default or an Event of
Default has come to their attention, a statement as to the nature thereof.
(c) Budgets, etc. Not more than 60 days after the commencement of
-------------
each fiscal year of the Borrower, consolidated budgets of the Borrower and its
Subsidiaries (x) in reasonable detail for each of the four fiscal quarters of
such fiscal year and (y) in summary form for each of the two fiscal years
immediately following such fiscal year, in each case as customarily prepared by
management for its internal use setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based. Together with each
delivery of financial statements pursuant to Sections 8.01(a) and (b), a
comparison of the current year to date financial results against the budgets
required to be submitted pursuant to this clause (c) shall be presented.
(d) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(a) and (b), a certificate of
the chief financial officer or other Authorized Officer of the Borrower to the
effect that, to the best of such officer's knowledge, no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall, if delivered in connection
with the financial statements in respect of a period ending on the last day of a
fiscal quarter or fiscal year of the Borrower, set forth (x) the calculations
required to establish whether the Borrower and its Subsidiaries were in
compliance with
45
the provisions of Sections 4.02, 9.02, 9.04(d), 9.05(g), (k) and (s), 9.08 and
9.09 as at the end of such fiscal quarter or year, as the case may be, and (y)
the calculation of the Total Leverage Ratio as at the last day of the respective
fiscal quarter or fiscal year of the Borrower, as the case may be.
(e) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within five Business Days after a senior officer of the Borrower or any of its
Subsidiaries obtains actual knowledge thereof, notice of (i) the occurrence of
any event which constitutes a Default or an Event of Default, which notice shall
specify the nature and period of existence thereof and what action the Borrower
proposes to take with respect thereto, (ii) any litigation or proceeding pending
or threatened (x) against the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, (y) with respect to
any material Indebtedness of the Borrower or any of its Subsidiaries or (z) with
respect to any Document and (iii) any other event which could reasonably be
expected to have a Material Adverse Effect.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy of each
-----------------
report or "management letter" submitted to the Borrower or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower or any of its
Subsidiaries.
(g) Environmental Matters. Promptly and in any event within five
---------------------
Business Days after a senior officer of the Borrower or any of its Subsidiaries
obtains actual knowledge of any of the following (but only to the extent that
any of the following, either individually or in the aggregate, could reasonably
be expected to (x) have a Material Adverse Effect, (y) result in a remedial cost
to the Borrower or any of its Subsidiaries not previously disclosed to the
Arrangers and the Banks prior to the Effective Date in excess of $500,000 or (z)
result in a remedial cost to the Borrower or any of its Subsidiaries in excess
of $1,000,000 over and above the established reserve for remediation costs as
set forth in the Projections), written notice of:
(i) any pending or threatened Environmental Claim against the Borrower
or any of its Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property at any time
owned or operated by the Borrower or any of its Subsidiaries that (x)
results in noncompliance by the Borrower or any of its Subsidiaries with
any applicable Environmental Law or (y) could reasonably be anticipated to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property currently
owned or operated by the Borrower or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by the
Borrower or such Subsidiary, as
46
the case may be, of its interest in such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's response or proposed response thereto. In addition, the Borrower
agrees to provide the Banks with copies of all material communications by the
Borrower or any of its Subsidiaries with any Person, government or governmental
agency relating to Environmental Laws or to any of the matters set forth in
clauses (i)-(iv) above, and such reasonably detailed reports relating to any of
the matters set forth in clauses (i)-(iv) above as may reasonably be requested
by the Administrative Agent or the Required Banks.
(h) Annual Meetings with Banks. At the written request of the
--------------------------
Administrative Agent, the Borrower shall within 120 days after the close of each
of its fiscal years, hold a meeting (at a mutually agreeable location and time)
open to all of the Banks at which meeting shall be reviewed the financial
results of the previous fiscal year and the financial condition of the Borrower
and its Subsidiaries and the budgets presented for the current fiscal year of
the Borrower and its Subsidiaries.
(i) Notice of Commitment Reductions. On or prior to the date of any
-------------------------------
reduction to the Total Revolving Loan Commitment, the Borrower shall provide
written notice of the amount of the reduction to the Total Revolving Loan
Commitment, and the calculation thereof (in reasonable detail).
(j) Other Information. Promptly upon transmission thereof, copies of
-----------------
any filings and registrations with, and reports to, the SEC by the Borrower or
any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as the Borrower or any of its Subsidiaries shall
send generally to analysts and, with reasonable promptness, such other
information or documents (financial or otherwise) as any Arranger on its own
behalf or on behalf of the Required Banks may reasonably request from time to
time.
8.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit, upon reasonable notice to the chief financial officer
or other Authorized Officer of the Borrower, officers and designated
representatives of either Arranger or any Bank to visit and inspect under the
guidance of officers of the Borrower any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever's possession, and to examine
the books of account of the Borrower and any of its Subsidiaries and discuss the
affairs, finances and accounts of the Borrower and of any of
47
its Subsidiaries with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as such Arranger or Bank may desire, provided that so long as
--------
no Default or Event of Default is then in existence, the Borrower shall have the
right to participate in any discussions of the Arrangers or the Banks with any
independent accountants of the Borrowers.
8.03 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to (i) maintain, with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as is consistent and in accordance with industry practice and
(ii) furnish to the Administrative Agent and each of the Banks, upon request,
full information as to the insurance carried. In addition to the requirements of
the immediately preceding sentence, the Borrower will at all times cause
insurance of the types described in Schedule VII to be maintained (with the same
scope of coverage as that described in Schedule VII) at levels which are
consistent with its practices immediately before the Restatement Effective Date.
Such insurance shall include physical damage insurance on all real and personal
property (whether now owned or hereafter acquired) on an all risk basis and
business interruption insurance.
8.04 Payment of Taxes. The Borrower will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any material properties belonging to it, prior to the
date on which penalties attach thereto, and all material lawful claims for sums
that have become due and payable which, if unpaid, might become a Lien not
otherwise permitted under Section 9.03(a); provided, that neither the Borrower
--------
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
8.05 Corporate Franchises. The Borrower will do, and will cause each
--------------------
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, authority to do business, licenses and patents, except for rights,
franchises, authority to do business, licenses and patents the loss of which
(individually or in the aggregate) could not reasonably be expected to have a
Material Adverse Effect; provided, however, that any transaction permitted by
-------- -------
Section 9.02 will not constitute a breach of this Section 8.05.
8.06 Compliance with Statutes; etc. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except for such noncompliances as
would not, either individually or in the aggregate, have a Material Adverse
Effect or a material adverse effect on the ability of any Credit Party to
perform its obligations under any Credit Document to which it is a party.
48
8.07 Compliance with Environmental Laws. (i) The Borrower will
----------------------------------
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to their businesses or the
ownership or use of its Real Property now or hereafter owned or operated by the
Borrower or any of its Subsidiaries, will promptly pay or, with respect to any
of its Subsidiaries, cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental Laws
and (ii) none of the Borrower or any of its Subsidiaries will generate, use,
treat, store, Release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Real Property owned
or operated by the Borrower or any of its Subsidiaries other than in compliance
with Environmental Laws and as required in connection with the normal business
operations of the Borrower or its Subsidiaries, or transport or permit the
transportation of Hazardous Materials other than in compliance with
Environmental Laws and as required in connection with the normal business
operations of the Borrower or its Subsidiaries, unless the failure to comply
with the requirements specified in clause (i) or (ii) above, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. If the Borrower or any of its Subsidiaries or any tenant or occupant of
any Real Property owned or operated by the Borrower or any of its Subsidiaries
causes or permits any intentional or unintentional act or omission resulting in
the presence or Release of any Hazardous Material in a quantity or concentration
sufficient to require reporting or to trigger an obligation to undertake clean-
up, removal or remedial action under applicable Environmental Laws, the Borrower
agrees to undertake, and/or to cause any of its Subsidiaries, tenants or
occupants to undertake, at their sole expense, any clean up, removal, remedial
or other action required pursuant to Environmental Laws to remove and clean up
any Hazardous Materials from any Real Property except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect; provided
--------
that none of the Borrower or any of its Subsidiaries shall be required to comply
with any such order or directive which is being contested in good faith and by
proper proceedings so long as it has maintained adequate reserves with respect
to such compliance to the extent required in accordance with GAAP.
Notwithstanding any provision of this Section 8.07, the Borrower shall be
required by this Section to exercise any degree of control over the operations
of any of its Subsidiaries that could reasonably be construed under applicable
Environmental Law to make the Borrower liable for Environmental Claims arising
from or causally related to the Real Property or operations of such Subsidiary
as an owner or an operator or upon any other basis.
8.08 ERISA. As soon as possible and, in any event, within fifteen
-----
Business Days after the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrower will deliver to each of the Banks a certificate of the chief
financial officer of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or an
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC or any other governmental agency, or a
Plan; that any contribution required to be made by the Borrower, any Subsidiary
or any ERISA Affiliate
49
with respect to a Plan has not been timely made; that the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate will or is reasonably expected
to incur any material liability (including any indirect, contingent, or
secondary liability) to or on account; Section 4980 of the Code or with respect
to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code; that the Borrower or
any Subsidiary of the Borrower will or is reasonably expected to incur any
material liability (including any indirect, contingent, or secondary liability)
with respect to a Plan under Section 4975 of the Code or Section 409, 502 (i) or
502(1) of ERISA; or that the Borrower or any Subsidiary of the Borrower will or
is reasonably expected to incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA). The Borrower will deliver to each of the Banks at the
request of any Bank on ten Business Days' notice a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan (including,
to the extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information) required to be filed with the Internal Revenue Service. In addition
to any certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of any material documents or other information required
to be furnished to the PBGC, and any material notices received by the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan
shall be delivered to the Banks no later than ten Business Days after the date
such documents and/or information has been furnished to the PBGC or such notice
has been received by the Borrower, such Subsidiary or such ERISA Affiliate, as
applicable.
8.09 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, ordinary wear and
tear excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the manner
useful or customary for companies in similar businesses.
8.10 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
8.11 Additional Security; Further Assurances. (a) The Borrower
---------------------------------------
will, and will cause each of its Wholly-Owned Subsidiaries to, grant to the
Collateral Agent security interests in such assets of the Borrower and its
Subsidiaries which are of the type required to be pledged, assigned or
hypothecated pursuant to the Pledge Agreement to the extent requested from time
to time by the Administrative Agent or the Required Banks (collectively, the
"Additional Security Documents"). All such security interests shall be granted
pursuant to documentation reasonably satisfactory in form and substance to the
50
Collateral Agent and shall constitute valid and enforceable perfected security
interests and hypothecations superior to and prior to the rights of all third
Persons and enforceable as against third parties and subject to no other Liens
except for Permitted Liens. The Additional Security Documents or instruments
related thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens in favor of the Collateral Agent required to be granted pursuant to
the Additional Security Documents and all taxes, fees and other charges payable
in connection therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral covered by
the Security Documents as the Collateral Agent may reasonably require.
Furthermore, the Borrower shall cause to be delivered to the Collateral Agent
such opinions of counsel and other related documents as may be reasonably
requested by the Collateral Agent to assure itself that this Section 8.11 has
been complied with.
(c) The Borrower agrees that each action required above by this
Section 8.11 shall be completed as soon as possible, but in no event later than
90 days after such action is either requested to be taken by the Administrative
Agent, the Collateral Agent or the Required Banks or required to be taken by the
Borrowers and their respective Subsidiaries pursuant to the terms of this
Section 8.11; provided that in no event will the Borrower or any of its
--------
Subsidiaries be required to take any action, other than using its commercially
reasonable efforts, to obtain consents from third parties with respect to its
compliance with this Section 8.11.
8.12 Ownership of Subsidiaries. Except to the extent expressly
-------------------------
permitted herein, by applicable law or as otherwise expressly consented in
writing by the Required Banks, and except as set forth on Schedule VI each
Credit Party shall directly or indirectly own 100% of the capital stock or other
equity interests of each of their respective Subsidiaries.
8.13 Permitted Acquisitions. (a) Subject to the provisions of this
----------------------
Section 8.13 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and any of its Wholly-Owned Domestic Subsidiaries may
from time to time effect Permitted Acquisitions, so long as (in each case except
to the extent the Required Banks otherwise specifically agree in writing in the
case of a specific Permitted Acquisition): (A) no Default or Event of Default
shall be in existence at the time of the consummation of the proposed Permitted
Acquisition or immediately after giving effect thereto, and (B) if the aggregate
consideration (which shall include, without limitation, cash or the fair market
value of assets transferred, the principal amount of assumed Indebtedness and
the principal amount of all issued promissory notes and, without
51
duplication, the amount of Preferred Stock canceled or retired) exceeds
$5,000,000 in the case of any Permitted Acquisition (or series of related
Permitted Acquisitions) paid, transferred, assumed, issued or cancelled by the
Borrower and its Subsidiaries (net of amounts paid to the Borrower or its
Subsidiaries by Cendant and its Subsidiaries in connection with such Permitted
Acquisition) (i) the Borrower shall have given the Administrative Agent and the
Banks at least 5 Business Days' prior written notice of any Permitted
Acquisition; (ii) calculations are made by the Borrower of compliance with the
covenants contained in Sections 9.08 and 9.09 (in each case, giving effect to
the last sentence appearing therein) for the period of four consecutive fiscal
quarters (taken as one accounting period) most recently ended prior to the date
of such Permitted Acquisition (each, a "Calculation Period"), on a Pro Forma
--- -----
Basis as if the respective Permitted Acquisition (as well as all other Permitted
Acquisitions theretofore consummated after the first day of such Calculation
Period) had occurred on the first day of such Calculation Period, and such
recalculations shall show that such financial covenants would have been complied
with if the Permitted Acquisition had occurred on the first day of such
Calculation Period (for this purpose, if the first day of the respective
Calculation Period occurs prior to the Restatement Effective Date, calculated as
if the covenants contained in said Sections 9.08 and 9.09 (in each case, giving
effect to the last sentence appearing therein) had been applicable from the
first day of the Calculation Period); (iii) based on good faith projections
prepared by the Borrower for the period from the date of the consummation of the
Permitted Acquisition to the date which is one year thereafter, the level of
financial performance measured by the covenants set forth in Sections 9.08 and
9.09 (in each case, giving effect to the last sentence appearing therein) shall
be better than or equal to such level as would be required to provide that no
Default or Event of Default would exist under the financial covenants contained
in Sections 9.08 and 9.09 (in each case, giving effect to the last sentence
appearing therein) of this Agreement as compliance with such covenants would be
required through the date which is one year from the date of the consummation of
the respective Permitted Acquisition; (iv) calculations are made by the Borrower
demonstrating compliance with a Total Leverage Ratio not to exceed 2.0:1.0 on
the last day of the relevant Calculation Period, on a Pro Forma Basis as if the
--- -----
respective Permitted Acquisition (as well as all other Permitted Acquisitions
theretofore consummated after the first day of such Calculation Period) had
occurred on the first day of such Calculation Period; (v) all representations
and warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; (vi) the Borrower provides to the Administrative Agent and the
Banks as soon as available but not later than 5 Business Days after the
execution thereof, a copy of any executed purchase agreement or similar
agreement with respect to such Permitted Acquisition; (vii) after giving effect
to each Permitted Acquisition (and the payment of all post-closing purchase
price adjustments required (in the good faith determination of the Borrower) in
connection therewith, the Total Unutilized Revolving Loan Commitment shall equal
or exceed $10,000,000; and (viii) the Borrower shall have delivered to the
Administrative Agent an officer's certificate
52
executed by an Authorized Officer of the Borrower, certifying to the best of his
knowledge, compliance with the requirements of preceding clauses (i) through
(v), inclusive, and (vii) and containing the calculations required by the
preceding clauses (ii), (iii), (iv) and (vii); provided however, that so long as
-------- -------
the aggregate consideration (which shall include without limitation, cash or the
fair market value of assets transferred, assumed Indebtedness and the principal
amount of all issued promissory notes and the amount of all Preferred Stock
canceled or retired) payable by the Borrower and its Subsidiaries in connection
with the proposed Permitted Acquisition (or series of related Permitted
Acquisitions) (net of amounts paid to the Borrower or its Subsidiaries by
Cendant and its Subsidiaries in connection with such Permitted Acquisition)
shall not exceed $30,000,000.
(b) Within 10 days of each Permitted Acquisition involving the
creation or acquisition of a Subsidiary (other than a Regulated Subsidiary and,
within 60 days of such Permitted Acquisition with respect to a De Minimis
Subsidiary), or the acquisition of capital stock or other equity interest of any
Person, the capital stock or other equity interests thereof created or acquired
in connection with such Permitted Acquisition shall be pledged for the benefit
of the Secured Creditors pursuant to the Pledge Agreement in accordance with the
requirements of Section 9.13.
(c) Within 10 days of each Permitted Acquisition, the Borrower shall
cause each Subsidiary (other than a Regulated Subsidiary and, within 60 days of
the Permitted Acquisition with respect to a De Minimis Subsidiary) which is
formed to effect, or is acquired pursuant to, such Permitted Acquisition to
comply with, and to execute and deliver, all of the documentation required by,
Sections 8.11 and 9.13, to the satisfaction of the Administrative Agent.
(d) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by the Borrower that the certifications by the
Borrower (or by one or more of its Authorized Officers) pursuant to Section
8.13(a)(A) are true and correct and that all conditions thereto have been
satisfied and that same is permitted in accordance with the terms of this
Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 10.
8.14 Maintenance of Company Separateness. The Borrower will, and
-----------------------------------
will cause each of its Subsidiaries and Unrestricted Subsidiaries to, satisfy
customary Company formalities, including, as applicable, the holding of regular
board of directors' and shareholders' meetings or action by directors or
shareholders without a meeting and the maintenance of Company offices and
records. Neither the Borrower nor any of its Subsidiaries shall make any
payment to a creditor of any Unrestricted Subsidiary in respect of any liability
of any Unrestricted Subsidiary, and no bank account of any Unrestricted
Subsidiary shall be commingled with any bank account of the Borrower or any of
its Subsidiaries. Any financial statements distributed to any creditors of any
Unrestricted Subsidiary shall clearly establish or indicate the Company
separateness of such Unrestricted Subsidiary from the Borrower and its
Subsidiaries. Finally, neither the
53
Borrower nor any of its Subsidiaries shall take any action, or conduct its
affairs in a manner, which is likely to result in the Company existence of the
Borrower or any of its Subsidiaries or Unrestricted Subsidiaries being ignored,
or in the assets and liabilities of the Borrower or any of its Subsidiaries
being substantively consolidated with those of any other such Person or any
Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency
proceeding.
8.15 Performance of Obligations. The Borrower will, and will cause
--------------------------
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, deed of trust, indenture, loan agreement or credit agreement and
each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.16 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 7.05.
SECTION 9. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that as of the Restatement Effective Date and thereafter for so long as
this Agreement is in effect and until the Total Commitment has terminated, no
Letters of Credit or Notes are outstanding and the Loans, together with
interest, Fees and all other Obligations (other than any indemnities described
in Section 13.13 which are not then due and payable) incurred hereunder, are
paid in full:
9.01 Changes in Business. (a) The Borrower will not, nor will the
-------------------
Borrower permit any of its Subsidiaries to, engage directly or indirectly in any
business other than a Permitted Business.
(b) No Unrestricted Subsidiary shall engage (directly or indirectly)
in any business other than a Permitted Business.
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc. The
-------------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of merger,
amalgamation or consolidation, or convey, sell, lease or otherwise dispose of
all or any part of its property or assets (other than inventory in the ordinary
course of business), or enter into any sale-leaseback transactions, or purchase
or otherwise acquire (in one or a series of related transactions) any part of
the property or assets (other than purchases or other acquisitions of inventory,
materials, general intangibles and equipment in the ordinary course of business)
of any Person or agree to do any of the foregoing at any future time, except
that the following shall be permitted:
(a) the Borrower and its Subsidiaries may, as lessee, enter into
operating leases in the ordinary course of business with respect to real,
personal, movable or immovable property;
54
(b) the Borrower and its Subsidiaries may make purchases, sales and
other transfers and transactions pursuant to the Acquisition Cooperation
Agreement and agreements entered into with Cendant or one of its
Subsidiaries to effectuate such transactions; provided that Permitted
Acquisitions shall be subject to the requirements of Section 8.13;
(c) the Borrower and its Subsidiaries may enter into license and
sublicense agreements of software, customer lists, trademarks and other
intellectual property with Cendant or one or more of its Subsidiaries and
otherwise in the ordinary course of business;
(d) the Borrower and its Subsidiaries may make (i) investments in the
Hunneman Mortgage Corporation in connection with the residential mortgage
business or (ii) investments in connection with Cash Secured Loans;
(e) Investments permitted pursuant to Section 9.05 and the disposition
or liquidation of Cash Equivalents in the ordinary course of business;
(f) the Borrower and any of its Subsidiaries may sell or otherwise
dispose of assets (excluding capital stock of, or other equity interests
in, Subsidiaries, Joint Ventures and Unrestricted Subsidiaries) which, in
the reasonable opinion of such Person, are obsolete, uneconomic or no
longer useful in the conduct of such Person's business, provided that
--------
except with respect to asset dispositions or transfers arising out of, or
in connection with, the events described in clauses (i) and (ii) of the
definition of Recovery Event, (w) each such sale or disposition shall be
for an amount at least equal to the fair market value thereof (as
determined in good faith by senior management of the Borrower in cases of
sales in excess of $1,000,000), (x) each such sale or disposition (I)
results in consideration at least 80% of which (taking the amount of cash,
the principal amount of any promissory notes and the fair market value, as
determined by the Borrower in good faith, of any other consideration) shall
be in the form of cash or (II) results in the assumption of all of the
Capitalized Lease Obligations or other purchase money obligations of the
Borrower or such Subsidiary in respect of such asset by the purchaser
thereof, (y) the aggregate Net Sale Proceeds from all assets sold or
otherwise disposed of pursuant to this clause (d), when added to the
aggregate amount of all Capitalized Lease Obligations and all other
purchase money obligations assigned in connection with all assets sold or
otherwise disposed of pursuant to this clause (d), shall not exceed
$10,000,000 in the aggregate in any fiscal year of the Borrower and (z) the
Net Sale Proceeds therefrom are applied to reduce the Total Revolving Loan
Commitment to the extent required by Section 4.02(b) or reinvested in
replacement assets or retained to the extent permitted by Section 4.02(b)
and/or the other relevant provisions of this Agreement;
(g) the Borrower or any Subsidiary of the Borrower may convey, lease,
license, sell or otherwise transfer all or any part of its business,
properties and
55
assets to the Borrower or any other Guarantor, so long as any security
interests granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Documents in the assets so transferred
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such transfer) and all actions
required to maintain said perfected status have been taken;
(h) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, the Borrower or any Guarantor, so long as (i)
the Borrower or such Guarantor is the surviving corporation of any such
merger, dissolution or liquidation and (ii) any security interests granted
to the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets of such Subsidiary shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such merger, dissolution or liquidation) and
all actions required to maintain said perfected status have been taken;
(i) any Foreign Subsidiary may be merged or amalgamated with and into,
or be dissolved or liquidated into, or transfer any of its assets to, any
other Wholly-Owned Foreign Subsidiary of the Borrower, so long as (i) a
Wholly-Owned Foreign Subsidiary of the Borrower is the surviving
corporation of any such merger, amalgamation, dissolution or liquidation
and (ii) any security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Wholly-Owned Foreign Subsidiary and such Foreign Subsidiary
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, amalgamation,
dissolution, liquidation or transfer) and all actions required to maintain
said perfected status have been taken;
(j) the Borrower and its Domestic Subsidiaries may transfer assets to
Wholly-Owned Foreign Subsidiaries, so long as (x) no Default or Event of
Default exists as the time of the respective transfer and (y) the aggregate
fair market value of all such assets so transferred (determined in good
faith by the Board of Directors or senior management of the Borrower) to
all such Foreign Subsidiaries does not exceed the sum of (i) $5,000,000
plus (ii) the aggregate fair market value of all assets of Foreign
----
Subsidiaries of the Borrower (as determined in good faith by senior
management of the Borrower) transferred by such Foreign Subsidiaries to the
Borrower and any Guarantor, pursuant to Section 9.02(g);
(k) the Borrower and its Subsidiaries may lease, as lessor, or
sublease, as sublessor, equipment, machinery or Real Property in the
ordinary course of business, so long as such lease is for fair
consideration (determined in good faith by the Board of Directors or senior
management of the Borrower);
56
(l) the Borrower and any of its Subsidiaries may sell or otherwise
dispose of the capital stock of, or other equity interests in, any of their
respective Subsidiaries, Unrestricted Subsidiaries and Joint Ventures
which, in the reasonable opinion of such Person, are uneconomic or no
longer useful in the conduct of such Person's business, provided that (v)
--------
in the case of a sale or other disposition of the capital stock or other
equity interests of any Wholly-Owned Subsidiary of the Borrower, 100% of
the capital stock or other equity interests of such Subsidiary shall be so
sold or disposed of, (w) each such sale or disposition shall be for an
amount at least equal to the fair market value thereof (as determined in
good faith by senior management of the Borrower), (x) each such sale
results in consideration at least 80% of which (taking the amount of cash,
the principal amount of any promissory notes and the fair market value, as
determined by the Borrower in good faith, of any other consideration) shall
be in the form of cash, (y) the aggregate Net Sale Proceeds of all assets
sold or otherwise disposed of pursuant to this clause (l) after the
Restatement Effective Date shall not exceed $10,000,000 in the aggregate
and (z) the Net Sale Proceeds therefrom are either applied to reduce the
Total Revolving Loan Commitment as required by Section 4.02(b) or
reinvested in replacement assets or retained to the extent permitted by
Section 4.02(b) and/or the other relevant provisions of this Agreement;
(m) the Borrower and its Subsidiaries may enter into agreements to
effect acquisitions and dispositions of stock or assets, so long as the
respective transaction is permitted pursuant to the provisions of this
Section 9.02; provided that the Borrower and its Subsidiaries may enter
--------
into agreements to effect acquisitions and dispositions of capital stock or
assets in transactions not permitted by the provisions of this Section 9.02
at the time the respective agreement is entered into, so long as in the
case of each such agreement, such agreement shall be expressly conditioned
upon obtaining the requisite consent of the Required Banks under this
Agreement or the repayment of all Obligations hereunder as a condition
precedent to the consummation of the respective transaction and, if for any
reason the transaction is not consummated because of a failure to obtain
such consent, the aggregate liability of the Borrower and its Subsidiaries
under any such agreement shall not exceed $1,000,000; and
(n) the Borrower or any of its Subsidiaries may effect Permitted Sale-
Leaseback Transactions in accordance with the definition thereof; provided
--------
that the aggregate amount of all proceeds received by the Borrower and its
Subsidiaries from all Permitted Sale-Leaseback Transactions consummated on
and after the Restatement Effective Date shall not exceed $10,000,000.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 9.02, such Collateral
(unless transferred to the Borrower or a Subsidiary thereof) shall (except as
otherwise provided above) be sold or otherwise disposed of free and clear of the
Liens created by the Security Documents and
57
the Administrative Agent shall take such actions (including, without limitation,
directing the Collateral Agent to take such actions) as are appropriate in
connection therewith.
9.03 Liens. The Borrower will not, nor will any Borrower permit any
-----
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible, movable or immovable) of such Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable or
notes with recourse to such Borrower or any of its Subsidiaries) or assign any
right to receive income, except for the following (collectively, the "Permitted
Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', materialmen's, warehousemen's and mechanics'
Liens, statutory and common law landlord's Liens, and other similar Liens
arising in the ordinary course of business, and which either (x) do not in
the aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business of
the Borrower or any of its Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such
Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Restatement Effective Date which are
listed, and the property subject thereto described, in Schedule VIII,
without giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees, awards or attachments in
circumstances not constituting an Event of Default under Section 10.09,
provided that the amount of cash and property (determined on a fair market
--------
value basis) deposited or delivered to secure the respective judgment or
decree or subject to attachment shall not exceed $3,000,000 at any time;
(f) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrower and its
Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the performance
by the Borrower
58
and its Subsidiaries of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of
money bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) or (z) to secure the performance by the Borrower
and its Subsidiaries of leases of Real Property, to the extent incurred or
made in the ordinary course of business consistent with past practices,
provided that the aggregate amount of deposits at any time pursuant to sub-
--------
clause (y) and sub-clause (z) shall not exceed $3,000,000 in the aggregate;
(g) licenses, sublicenses, leases or subleases granted to third
Persons in the ordinary course of business not interfering in any material
respect with the business of the Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title, encroachments and other similar charges or
encumbrances, in each case not securing Indebtedness and not interfering in
any material respect with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 9.04(d), provided that (x) such Liens only serve to secure the
--------
payment of Indebtedness arising under such Capitalized Lease Obligation
(and other Indebtedness permitted by Section 9.04(d) and incurred from the
same Person as such Indebtedness) and (y) the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any other
asset of the Borrower or any of its Subsidiaries (other than other assets
subject to Capitalized Lease Obligations and/or Indebtedness incurred
pursuant to Section 9.04(d), in each case owing to the same Person as such
Capitalized Lease Obligation);
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Restatement Effective Date, provided
--------
that (i) any such Liens attach only to the assets so purchased, upgrades
thereon and, if the asset so purchased is an upgrade, the original asset
itself (and such other assets financed by the same financing source), (ii)
the Indebtedness (other than Indebtedness incurred from the same financing
source to purchase other assets and excluding Indebtedness representing
obligations to pay installation and delivery charges for the property so
purchased) secured by any such Lien does not exceed 100% of the lesser of
the fair market value or the purchase price of the property being purchased
at the time of the
59
incurrence of such Indebtedness and (iii) the Indebtedness secured thereby
is permitted to be incurred pursuant to Section 9.04(d);
(m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 9.04(d), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(n) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business;
(o) Liens incurred by the Borrower and its Subsidiaries, so long as
the value of the property subject to such Liens, and the Indebtedness and
other obligations secured thereby, do not exceed $2,000,000;
(p) Liens securing the Indebtedness permitted under Sections 9.04(j)
and (k) and encumbering the assets financed with such Indebtedness; and
(q) Liens securing seller Indebtedness and other Indebtedness
permitted to exist under Section 9.04(d).
9.04 Indebtedness. The Borrower will not, nor will the Borrower
------------
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except (without duplication):
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Restatement Effective
Date and listed on Schedule III (as reduced by any repayments thereof
before, on or after the Restatement Effective Date);
(c) Indebtedness under (i) Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations otherwise permitted under this Agreement or (ii)
Other Hedging Agreements providing protection against fluctuations in
currency values in connection with the Borrower's or any of its
Subsidiaries' operations, so long as management of the Borrower or such
Subsidiary, as the case may be, has determined that the entering into of
any such Other Hedging Agreement is a bona fide hedging activity (and is
not for speculative purposes) and is in the ordinary course of business and
consistent with its past practices;
60
(d) (w) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed by the Borrower or any Wholly-Owned
Domestic Subsidiary pursuant to a Permitted Acquisition as a result of a
merger or consolidation or the acquisition of an asset securing such
Indebtedness) (the "Permitted Acquired Debt"), so long as (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (ii) such Indebtedness
does not constitute debt for borrowed money (except to the extent such
Indebtedness cannot be repaid in accordance with its terms at the time of
its assumption pursuant to such Permitted Acquisition and the aggregate
principal amount of all such Indebtedness for borrowed money permitted
pursuant to this parenthetical does not exceed $15,000,000), it being
understood and agreed that Capitalized Lease Obligations and purchase money
Indebtedness shall not constitute debt for borrowed money for purposes of
this clause (ii), (x) Capitalized Lease Obligations and Indebtedness of the
Borrower and its Subsidiaries representing purchase money Indebtedness
secured by Liens permitted pursuant to Section 9.03(l), (y) Indebtedness
issued by the Borrower or its Subsidiaries to the seller of an asset or
entity constituting a Permitted Acquisition and (z) other Indebtedness of
the Borrower and its Subsidiaries, provided, that the sum of (I) the
--------
aggregate principal amount of all Permitted Acquired Debt at any time
outstanding plus (II) the aggregate amount of Capitalized Lease Obligations
----
incurred on and after the Restatement Effective Date and outstanding at any
time (including Indebtedness evidenced by Capitalized Lease Obligations
arising from Permitted Sale-Leaseback Transactions) plus (III) the
----
aggregate principal amount of all such purchase money Indebtedness incurred
on and after the Restatement Effective Date and outstanding at any time
plus (IV) the aggregate principal amount of Indebtedness permitted under
----
clauses (y) and (z) above, shall not exceed $75,000,000 (provided the
aggregate amount of Indebtedness under clauses (I), (II) and (III) which is
secured by a Lien or any assets of the Borrower and/or its Subsidiaries
shall not exceed $25,000,000);
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f);
(f) Indebtedness of the Borrower or any of its Subsidiaries which may
be deemed to exist in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations in
connection with acquisitions or sales of assets and/or businesses effected
in accordance with the requirements of this Agreement (so long as any such
obligations are those of the Person making the respective acquisition or
sale, and are not guaranteed by any other Person);
(g) Contingent Obligations of (x) the Borrower or any of its
Subsidiaries as a guarantor (A) of the lessee under any lease pursuant to
which the Borrower or any of its Wholly-Owned Subsidiaries is the lessee so
long as such lease is otherwise permitted hereunder or (B) of indemnity or
similar obligations under agreements for acquisitions or dispositions of
stock or assets so long as such
61
agreements are otherwise permitted hereunder, (y) the Borrower or any of
its Subsidiaries as a guarantor of any Capitalized Lease Obligation to
which a Joint Venture or Unrestricted Subsidiary is a party or any contract
entered into by such Joint Venture or Unrestricted Subsidiary in the
ordinary course of business; provided that the maximum liability of the
--------
Borrower or any of its Subsidiaries in respect of any obligations as
described pursuant to preceding clause (y) is permitted as an Investment on
such date pursuant to the requirements of Section 9.05(k) and (z) the
Borrower which may be deemed to exist pursuant to acquisition agreements
entered into in connection with Permitted Acquisitions (including any
obligation to pay the purchase price therefor and any indemnification,
purchase price adjustment and similar obligations);
(h) Indebtedness with respect to performance bonds, surety bonds,
appeal bonds or customs bonds required in the ordinary course of business
or in connection with the enforcement of rights or claims of the Borrower
or any of its Subsidiaries or in connection with judgments that do not
result in a Default or an Event of Default, provided that the aggregate
--------
outstanding amount of all such performance bonds, surety bonds, appeal
bonds and customs bonds permitted by this subsection (h) shall not at any
time exceed $5,000,000;
(i) (x) Permitted Subordinated Indebtedness incurred in accordance
with the requirements of the definition thereof, so long as the aggregate
principal amount of all Indebtedness permitted by this clause (i), when
added to the aggregate liquidation preference for all Disqualified
Preferred Stock issued after the Restatement Effective Date pursuant to
Section 9.11(c), does not exceed $75,000,000 at any time outstanding;
(j) Indebtedness incurred with respect to Cash Secured Loans entered
into from time to time by the Borrower and/or its Subsidiaries; and
(k) Indebtedness in connection with mortgage warehousing lines of
credit between Hunneman Mortgage Corporation and First Union National Bank,
and any exhibitions or refinancing thereof on substantially similar terms
so long as such Indebtedness does not exceed $30,000,000.
9.05 Advances; Investments; Loans. The Borrower will not, nor will
----------------------------
the Borrower permit any of its Subsidiaries to, lend money or extend credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract (any of the foregoing, an "Investment"), except:
(a) the Borrower and its Subsidiaries may invest in cash and Cash Equivalents;
62
(b) the Borrower and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations and equity securities) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements and Other Hedging Agreements
entered into in compliance with Section 9.04(c) shall be permitted;
(e) advances, loans and investments in existence on the Restatement
Effective Date and listed on Schedule IX shall be permitted, without giving
effect to any additions thereto or replacements thereof, it being
understood that any additional Investments made with respect to such
existing Investments shall be permitted only if independently justified
under the other provisions of this Section 9.05;
(f) any Credit Party may make intercompany loans and advances to any
other Credit Party and any Credit Party may make intercompany loans and
advances to any Foreign Subsidiary that is not a Credit Party
(collectively, "Intercompany Loans"), provided, that (w) at no time shall
--------
the aggregate outstanding principal amount of all Intercompany Loans made
pursuant to this clause (f) by the Credit Parties to Foreign Subsidiaries,
when added to the amount of contributions, capitalizations and forgiveness
theretofore made pursuant to Section 9.05(o) exceed $5,000,000 (determined
without regard to any write-downs or write-offs of such loans and
advances), (x) each Intercompany Loan in excess of $500,000 shall be
evidenced by an Intercompany Note, (y) each such Intercompany Note shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement;
(g) loans and advances by the Borrower and its Subsidiaries to
employees, officers and directors of the Borrower and its Subsidiaries in
connection with relocations, purchases by such employees of Borrower Common
Stock or options or similar rights to purchase Borrower Common Stock and
other ordinary course of business purposes (including travel and
entertainment expenses) shall be permitted, so long as the aggregate
principal amount thereof at any time outstanding (determined without regard
to any write-downs or write-offs of such loans and advances) shall not
exceed $3,000,000;
(h) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Borrower Common Stock, so long as no cash is actually advanced by the
Borrower or any of its Subsidiaries to
63
such officers or employees in connection with the acquisition of any such
obligations;
(i) the Borrower and any of its Subsidiaries may make Permitted
Acquisitions in accordance with the relevant requirements of Section 8.13
and the component definitions as used therein;
(j) the Borrower and its Subsidiaries may own the capital stock of
their respective Subsidiaries created or acquired in accordance with the
terms of this Agreement;
(k) so long as no Default or Event of Default exists or would exist
immediately after giving effect to the respective Investment, the Borrower
and its Wholly-Owned Domestic Subsidiaries shall be permitted to make
Investments in (x) any Joint Venture on any date in an amount not to exceed
the Available Basket Amount on such date and (y) any Unrestricted
Subsidiary on any date in an amount not to exceed the Available Basket Sub-
Limit on such date (after giving effect to all prior and contemporaneous
adjustments thereto, except as a result of such Investment), it being
understood and agreed that, to the extent the Borrower or one or more other
Credit Parties (after the respective Investment has been made) receives a
cash return from the respective Joint Venture or Unrestricted Subsidiary of
amounts previously invested pursuant to this clause (k) (which cash return
may be made by way of repayment of principal in the case of loans and cash
equity returns (whether as a distribution, dividend or redemption) in the
case of equity investments) or a return in the form of an asset
distribution from the respective Joint Venture or Unrestricted Subsidiary
of any asset previously contributed pursuant to this clause (k) then the
amount of such cash return of investment or the fair market value of such
distributed asset (as determined in good faith by senior management of the
Borrower), as the case may be, shall, upon the Administrative Agent's
receipt of a certification of the amount of the return of investment from
an Authorized Officer, apply to increase the Available Basket Amount and/or
the Available Basket Sub-Limit, as applicable, provided that the aggregate
--------
amount of increases to the Available Basket Amount and/or the Available
Basket Sub-Limit described above shall not exceed the amount of returned
investment and, in no event, shall the amount of the increases made to the
Available Basket Amount and/or the Available Basket Sub-Limit in respect of
any Investment exceed the amount previously invested pursuant to this
clause (k);
(l) the Borrower and its Subsidiaries may receive and hold promissory
notes and other non-cash consideration received in connection with any
asset sale permitted by Sections 9.02(d), (f) and (l);
(m) the Borrower and its Subsidiaries may convey, lease, license, sell
or otherwise transfer assets and properties to the extent permitted by
Sections 9.02(b), (d), (g), (i), (j), (k) and (n);
64
(n) the Borrower and its Subsidiaries may make advances in the form of
a prepayment of expenses, so long as such expenses were incurred in the
ordinary course of business and are being paid in accordance with customary
trade terms of the Borrower or such Subsidiary;
(o) the Borrower and its Domestic Subsidiaries may make cash capital
contributions to Foreign Subsidiaries, and may capitalize or forgive any
Indebtedness owed to them by a Foreign Subsidiary and outstanding under
clause (f) of this Section 9.05, provided that the aggregate amount of such
--------
contributions, capitalizations and forgiveness on and after the Restatement
Effective Date, when added to the aggregate outstanding principal amount of
Intercompany Loans made to Foreign Subsidiaries under such clause (f)
(determined without regard to any write-downs or write-offs thereof) shall
not exceed an amount equal to $10,000,000;
(p) the Borrower and its Subsidiaries may make the investments listed
on, and in the amounts described on Schedule IX hereto;
(q) the Borrower and any Guarantor may make cash equity contributions
to any Guarantor;
(r) the Borrower and its Subsidiaries may make investments in
connection with any joint venture with Cendant or affiliates thereof
involving the residential mortgage business; and
(s) in addition to investments permitted by clauses (a) through (r) of
this Section 9.05, the Borrower and its Subsidiaries may make additional
loans, advances and Investments to or in a Person in an aggregate amount
for all loans, advances and Investments made pursuant to this clause (s)
(determined without regard to any write-downs or write-offs thereof), net
of cash repayments of principal in the case of loans, sale proceeds in the
case of Investments in the form of debt instruments and cash equity returns
(whether as a distribution, dividend, redemption or sale) in the case of
equity investments, not to exceed $10,000,000.
9.06 Dividends; etc. The Borrower will not, nor will the Borrower
---------------
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in common stock of such Borrower or any such
Subsidiary, as the case may be) or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock, now or hereafter outstanding (or any warrants for or options
or stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, and the Borrower will not permit any of
its Subsidiaries to purchase or otherwise acquire for consideration any shares
of any class of the capital stock of the Borrower or any other Subsidiary, as
the case may be, now or hereafter outstanding (or any options or warrants or
stock appreciation rights issued by such Person with respect to its
65
capital stock) or enter into any derivatives or other transaction with any
financial institution, commodities or stock exchange or clearinghouse (a
"Derivatives Counterparty") obligating it to make payments to such Derivatives
Counterparty as a result of any change in market value of its capital stock (all
of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends (directly or
indirectly) to the Borrower or any Guarantor;
(ii) the Borrower may redeem or purchase shares of Borrower Common
Stock or options to purchase Borrower Common Stock, as the case may be,
held by former employees or directors of the Borrower or any of its
Subsidiaries following the termination of their employment (by death,
disability or otherwise), provided that (w) the only consideration paid by
--------
the Borrower in respect of such redemptions and/or purchases shall be cash,
forgiveness of liabilities and/or Shareholder Subordinated Notes, (x) the
sum of (A) the aggregate amount paid by the Borrower in cash in respect of
all such redemptions and/or purchases plus (B) the aggregate amount of
liabilities so forgiven and (C) the aggregate amount of all cash principal
and interest payments made on Shareholder Subordinated Notes, in each case
after the Restatement Effective Date, shall not exceed $5,000,000, and (y)
at the time of any cash payment or forgiveness of liabilities permitted to
be made pursuant to this Section 9.06(ii), including any cash payment under
a Shareholder Subordinated Note, no Default or Event of Default shall then
exist or result therefrom;
(iii) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may pay regularly accruing cash Dividends on
Disqualified Preferred Stock issued pursuant to Section 9.11(c), with such
Dividends to be paid in accordance with the terms of the respective
certificate of designation therefor;
(iv) any non-Wholly-Owned Subsidiary of the Borrower may pay cash
Dividends to its shareholders or partners generally, so long as the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holdings of equity
interest in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity
interests in such Subsidiary or the terms of any agreements applicable
thereto);
(v) so long as no Default or Event of Default exists or would arise
therefrom, the Borrower may pay special dividends in an amount equal to the
sum of (i) $15,000,000 plus (ii) cash received by the Borrower from Cendant
and/or its Subsidiaries in the first six months after the Restatement
Effective Date in connection with the Cendant Documents;
66
(vi) so long as no Default or Event of Default exists or would result
therefrom, the Borrower may, after the Qualified IPO, redeem the Existing
Preferred Stock with the proceeds received therefrom;
(vii) (x) the Borrower may pay regularly scheduled Dividends on
Existing Preferred Stock pursuant to the terms thereof solely through the
issuance of additional shares of such Existing Preferred Stock and (y) so
long as no Default or Event of Default exists or would result therefrom,
the Borrower may (A) pay cash Dividends on the Existing Preferred Stock
payable in accordance with the terms thereof and (B) redeem or repurchase
shares of Existing Preferred Stock previously issued as pay-in-kind
Dividends in accordance with the terms thereof;
(viii) so long as no Default or Event of Default exists or would
result therefrom, after a Qualified IPO, the Borrower may pay additional
Dividends, not to exceed an amount equal to (x) the Consolidated Cumulative
Net Income Amount at the time of such payment minus (y) all Dividends paid
pursuant to this Section 9.06(viii) prior to such payment;
(ix) the Borrower may cancel the Existing Preferred Stock held by
Cendant in connection with transactions under, and pursuant to the
provisions of the Acquisition Cooperation Agreement;
(x) to the extent constituting Dividends, all payments or transfers
made by the Borrower and/or its Subsidiaries pursuant to the Cendant
Documents;
(xi) so long as no Default or Event of Default exists or would result
therefrom, the Borrower may redeem or purchase shares of Borrower Common
Stock and Existing Preferred Stock in an aggregate amount not to exceed
$25,000,000; and
(xii) the Borrower may increase or decrease the liquidation
preference of the Existing Preferred Stock.
9.07 Transactions with Affiliates and Unrestricted Subsidiaries. The
----------------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
enter into any transaction or series of transactions with any Affiliate of
the Borrower or any of its Subsidiaries or any of its Unrestricted
Subsidiaries other than on terms and conditions substantially as favorable
to the Borrower or such Subsidiary as would be reasonably expected to be
obtainable by the Borrower or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate; provided,
--------
that the following shall in any event be permitted: (i) the Borrower may
pay fees, royalties, and any and all other amounts payable under the
Franchise Agreements and the other Cendant Documents; (ii) intercompany
transactions among the Borrower and its Subsidiaries to the extent
expressly permitted by Sections 9.02, 9.04, 9.05 and 9.06 shall be
permitted; (iii) so long as no Default or Event of Default is then in
existence or would result therefrom,
67
payments due to Apollo in an aggregate amount not to exceed $1,000,000 in
any fiscal quarter of the Borrower pursuant to, and in accordance with the
terms of, the Advisory Services Agreement, provided that, if during any
--------
fiscal quarter of the Borrower, a Default or Event of Default is in
existence and such fees cannot be paid as provided above, such fees shall
continue to accrue and may be paid at such time as all Defaults and Events
of Default have been cured or waived and so long as no Default or Event of
Default will exist immediately after giving effect to the payment thereof;
(iv) customary fees to non-officer directors of the Borrower and its
Subsidiaries; (v) the Borrower and its Subsidiaries may enter into
employment arrangements with respect to the procurement of services with
their respective officers and employees in the ordinary course of business;
(vi) the reimbursement of Apollo and Cendant for their out-of-pocket
expenses incurred in connection with performing management services to the
Borrower and its Subsidiaries or in connection with this Agreement, the
Cendant Documents or the Stockholders Agreement and the transactions
contemplated thereby; (vii) the payment of consulting, management or other
fees to the Borrower or any Guarantor by any of their respective
Subsidiaries in the ordinary course of business; (viii) the payment of
marketing fees to the Borrower by Cendant Mortgage for mortgage origination
services under the Marketing Agreement; (ix) payments relating to any joint
venture between Cendant and the Borrower and its Subsidiaries pursuant to
Section 9.05(r); and (x) the transactions set forth on Schedule XI hereto.
In no event shall any management, consulting or similar fee be paid or
payable by the Borrower or any of its Subsidiaries to any Person except in
compliance with this Section 9.07.
9.08 Consolidated Adjusted Interest Coverage Ratio. The Borrower
---------------------------------------------
will not permit the Consolidated Adjusted Interest Coverage Ratio for any Test
Period ending after the Restatement Effective Date to be less than 2.00:1.00.
Notwithstanding anything to the contrary contained in this Agreement, all
calculations of compliance with this Section 9.08 shall be made on a Pro Forma
--- -----
Basis.
9.09 Total Leverage Ratio. The Borrower will not permit the Total
--------------------
Leverage Ratio on the last day of any fiscal quarter ending after the
Restatement Effective Date to exceed 2.00:1.00.
Notwithstanding anything contrary contained above or elsewhere in this
Agreement, all calculations of compliance with this Section 9.09 shall be made
on a Pro Forma Basis.
--- -----
9.10 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; Issuances of Capital Stock; etc. Except as set forth in
--------------------------------------------------
Schedule XII in connection with the Qualified IPO, the Borrower will not, nor
will the Borrower permit any of its Subsidiaries to:
68
(i) (a) amend or modify, or permit the amendment or modification of,
any Permitted Subordinated Indebtedness in a manner that could reasonably
be expected to in any way be adverse to the interest of the Banks, or (b)
amend or modify, or permit the amendment or modification of any provision
of, any Shareholder Subordinated Note, any Existing Preferred Stock, or,
after the incurrence or issuance thereof, any Qualified Preferred Stock or
Permitted Acquired Debt or of any agreement (including, without limitation,
any purchase agreement, indenture, loan agreement, security agreement or
certificate of designation) relating thereto in a manner that could
reasonably be expected to in any way be adverse to the interests of the
Banks in any material respect;
(ii) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption, repurchase or acquisition for value
of, or any prepayment or redemption as a result of any asset sale, change
of control or similar event of, after the incurrence thereof, any Permitted
Debt, or enter into any derivative or other transaction with any
Derivatives Counterparty obligating it to make payments to such Derivatives
Counterparty as a result of any change in market value of any of the
foregoing agreements;
(iii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of, any
Shareholder Subordinated Note (except to the extent permitted by Section
9.06(ii)); and
(iv) amend, modify or change in any way which could reasonably be
expected to be adverse to the interests of the Banks in any material
respect any Management Agreement, any Cendant Document, its certificate of
incorporation (including, without limitation, by the filing or modification
of any certificate of designation other than any certificates of
designation relating to Qualified Preferred Stock or Disqualified Preferred
Stock issued as permitted herein), by-laws, certificate of partnership,
partnership agreement, certificate of limited liability company, limited
liability company agreement or any agreement entered into by it, with
respect to its capital stock or other equity interest (including any
Shareholders' Agreement) or enter into any new Management Agreement or
agreement with respect to its capital stock or other equity interest which
could reasonably be expected to in any way be adverse to the interests of
the Banks in any material respect; provided that the foregoing clause shall
--------
not restrict the ability of the Borrower and its Subsidiaries to amend
their respective certificates of incorporation to authorize the issuance of
capital stock otherwise permitted to be issued pursuant to the terms of
this Agreement.
9.11 Limitation on Issuance of Capital Stock. (a) The Borrower will
---------------------------------------
not, nor will the Borrower permit any of its Subsidiaries to, issue (i) any
Preferred Stock (other than (x) the Existing Preferred Stock or Preferred Stock
issued pursuant to clauses (c) and (d) below, respectively and (y) Preferred
Stock issued pursuant to capital calls under Section 5.7 of the Stockholders
Agreement) or any options, warrants or rights to purchase
69
Preferred Stock or (ii) any redeemable common stock unless, in either case, the
issuance thereof is, and all terms thereof are, satisfactory to the Required
Banks in their sole discretion.
(b) The Borrower shall not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and additional issuances which do not decrease
the percentage ownership of the Borrower or any of its Subsidiaries in any class
of the capital stock of such Subsidiaries, (iii) to qualify directors, officers
or brokers of record to the extent required by applicable law, (iv) Subsidiaries
formed after the Restatement Effective Date pursuant to Section 9.13 may issue
capital stock in accordance with the requirements of Section 9.13 and (v) that
Subsidiaries may issue common stock in connection with any transaction permitted
by Section 9.05(q). All capital stock issued in accordance with this Section
9.11(b) shall, to the extent required by the Pledge Agreement, be delivered to
the Collateral Agent for pledge pursuant to such Pledge Agreement.
(c) The Borrower may issue Disqualified Preferred Stock so long as (i)
no Default or Event of Default then exists or would exist immediately after
giving effect to the respective issuance, (ii) the aggregate liquidation
preference for all Disqualified Preferred Stock issued after the Restatement
Effective Date pursuant to this Section 9.11(c) shall not exceed, when combined
with the aggregate principal amount of all then outstanding Indebtedness
permitted by Section 9.04(i), $75,000,000 (iii) with respect to each issue of
Disqualified Preferred Stock, the gross cash proceeds therefrom (or in the case
of Disqualified Preferred Stock directly issued as consideration for a Permitted
Acquisition, the fair market value thereof (as determined in good faith by the
Borrower) of the assets received therefor) shall not exceed the liquidation
preference thereof at the time of issuance, (iv) calculations are made by the
Borrower of compliance with the covenants contained in Sections 9.08 and 9.09
for the Calculation Period most recently ended prior to the date of the
respective issuance of Disqualified Preferred Stock, on a Pro Forma Basis after
--- -----
giving effect to the respective issuance of Disqualified Preferred Stock, and
such calculations shall show that such financial covenants would have been
complied with if such issuance of Disqualified Preferred Stock had been
consummated on the first day of the respective Calculation Period, and (v) the
Borrower shall furnish to the Administrative Agent a certificate by an
Authorized Officer of the Borrower certifying to the best of his or her
knowledge as to compliance with the requirements of this Section 9.11(c) and
containing the pro forma calculations required by the preceding clause (iv).
--- -----
(d) The Borrower may issue Qualified Preferred Stock so long as, with
respect to each issue of Qualified Preferred Stock, the Borrower receives
reasonably equivalent consideration (as determined in good faith by the
Borrower).
9.12 Limitation on Certain Restrictions on Subsidiaries. The
--------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
directly or indirectly, create or
70
otherwise cause or suffer to exist or become effective, any encumbrance or
restriction on the ability of any such Subsidiary to (x) pay dividends or make
any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any Subsidiary of the
Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of the
Borrower, (y) make loans or advances to the Borrower or any Subsidiary of the
Borrower or (z) transfer any of its properties or assets to the Borrower or any
of its Subsidiaries, except for such encumbrances or restrictions existing under
or by reason of (i) applicable law, (ii) this Agreement, the other Credit
Documents and the Cendant Documents, (iii) the provisions contained in the
Existing Indebtedness, (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower, (v) customary provisions restricting assignment of
any contract entered into by the Borrower or any Subsidiary of the Borrower in
the ordinary course of business, (vi) any agreement or instrument governing
Permitted Acquired Debt, which encumbrance or restriction is not applicable to
any Person or the properties or assets of any Person, other than the Person or
the properties or assets of the Person acquired pursuant to the respective
Permitted Acquisition and so long as the respective encumbrances or restrictions
were not created (or made more restrictive) in connection with or in
anticipation of the respective Permitted Acquisition, (vii) customary provisions
restricting subletting or assignments of leases and/or customary provisions
restricting subletting or assignments of leases and/or non-assignment provisions
entered into in the ordinary course of business and consistent with past
practices; (viii) customary provisions restricting the assignment of licensing
agreements, management agreements or franchise agreements entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business; (ix)
restrictions applicable to any Joint Venture that is a Subsidiary existing at
the time of the acquisition thereof as a result of an Investment pursuant to
Section 9.05 or a Permitted Acquisition effected in accordance with Section
8.13, provided that the restrictions applicable to the respective such Joint
--------
Venture are not made worse, or more burdensome, from the perspective of the
Borrower and its Subsidiaries, than those as in effect immediately before giving
effect to the consummation of the respective Investment or Permitted
Acquisition, (x) any restriction or encumbrance with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, so long as such sale or disposition of all or substantially all of
the capital stock or assets of such Subsidiary is permitted under this Agreement
and (xi) the documentation governing Permitted Debt (other than Permitted
Acquired Debt).
9.13 Limitation on the Creation of Subsidiaries, Joint Ventures and
--------------------------------------------------------------
Unrestricted Subsidiaries. (a) Notwithstanding anything to the contrary
-------------------------
contained in this Agreement, the Borrower will not, and will not permit any of
its Subsidiaries to, establish, create or acquire after the Restatement
Effective Date any Subsidiary or Unrestricted Subsidiary (other than Joint
Ventures permitted to be established in accordance with the requirements of
Section 9.05(k)); provided that (A) the Borrower, any of its Wholly-Owned
--------
Domestic Subsidiaries and any Unrestricted Subsidiary shall be permitted to
establish or create an Unrestricted Subsidiary, so long as (i) if a Domestic
Unrestricted Subsidiary of the Borrower, all of the capital stock or other
equity interests of such new
71
Domestic Unrestricted Subsidiary owned by the Borrower or any such Wholly-Owned
Domestic Subsidiary shall be pledged pursuant to the Pledge Agreement to the
extent then required thereunder and the certificates representing such stock or
other equity interests, together with appropriate powers duly executed in blank,
shall be delivered to the Collateral Agent and (ii) if a Foreign Unrestricted
Subsidiary of the Borrower, all of the capital stock or other equity interests
of such new Foreign Unrestricted Subsidiary owned by the Borrower or any such
Wholly-Owned Domestic Subsidiary (except that not more than 65% of the
outstanding voting stock of any Foreign Unrestricted Subsidiary need be so
pledged, except in the circumstances contemplated by Section 8.11) shall be
pledged pursuant to the Pledge Agreement and the certificates representing such
stock or other equity interests, together with appropriate powers duly executed
in blank, shall be delivered to the Collateral Agent, (B) the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as, in each case, (i) at least 10 days' prior written
notice thereof is given to the Administrative Agent (or such shorter period of
time as is acceptable to the Administrative Agent), (ii) the capital stock or
other equity interests of such new Subsidiary (other than any Regulated
Subsidiary) are promptly pledged pursuant to, and to the extent required by,
this Agreement and the Pledge Agreement and the certificates, if any,
representing such stock or other equity interests, together with stock or other
appropriate powers duly executed in blank, are delivered to the Collateral
Agent, (iii) in the case of a Domestic Subsidiary (other than any Regulated
Subsidiary), such new Domestic Subsidiary promptly executes a counterpart of the
Subsidiaries Guaranty and the Pledge Agreement, (C) Subsidiaries may be acquired
pursuant to Permitted Acquisitions so long as, in each such case (i) with
respect to each Wholly-Owned Subsidiary acquired pursuant to a Permitted
Acquisition, the actions specified in preceding clauses (B) and (C), as
applicable, shall be taken and (ii) with respect to each Subsidiary which is not
a Wholly-Owned Subsidiary and is acquired pursuant to a Permitted Acquisition,
all capital stock or other equity interests thereof owned by any Credit Party
shall be pledged pursuant to the Pledge Agreement, and (D) the Borrower and any
of its Wholly-Owned Subsidiaries shall be permitted to establish or create
Wholly-Owned Subsidiaries with Cendant principally involved in the residential
mortgage business. In addition, each new Subsidiary that is required to execute
any Credit Document shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in Section 5.
(b) The Borrower will not, nor permit any of its Subsidiaries to,
enter into any Joint Venture, except to the extent permitted by Sections 9.05(k)
and (r).
9.14 De Minimis Subsidiaries. Notwithstanding anything to the
-----------------------
contrary stated herein, a De Minimis Subsidiary of the Borrower shall not be
required to comply with any of the covenants set forth in Section 8, Section 9
(other than Sections 9.01, 9.04, 9.08 and 9.09) or the representations and
warranties set forth in Section 7 until such De Minimis Subsidiaries become
Credit Parties as required under this Agreement and the other Credit Documents;
provided, however, that (i) the value of assets held in all De Minimis
-------- -------
Subsidiaries shall not exceed $35,000,000 and (ii) the gross revenues of all De
72
Minimis Subsidiaries at any time shall not exceed 7.5% of the gross revenues of
the Borrower and its Subsidiaries at such time.
9.15 Burnet Realty, Inc. Title Insurance Business. Notwithstanding
---------------------------------------------
anything to the contrary stated herein or in any other Credit Document, Burnet
Realty, Inc., will be permitted to transfer all of its assets which relate to
its title insurance business to a Subsidiary after the Restatement Effective
Date. Such title insurance subsidiary will be a Regulated Subsidiary (as such
term is defined herein) and treated as a Regulated Subsidiary hereunder.
SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
10.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(e)(i), 8.10, 8.12, 8.13 or 9, or (b) default in the due performance
or observance by it of any term, covenant or agreement (other than those
referred to in Section 10.01, 10.02 or clause (a) of this Section 10.03)
contained in this Agreement and such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting party by the
Administrative Agent or the Required Banks; or
10.04 Default Under Other Agreements. (a) The Borrower or any of
------------------------------
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created or
(ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity; or (b) any Indebtedness (other than the Obligations) of the
Borrower or any of its Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment (unless such required prepayment or
mandatory prepayment results from a default thereunder or an
73
event of the type that constitutes an Event of Default), prior to the stated
maturity thereof; provided, that it shall not constitute an Event of Default
--------
pursuant to clause (a) or (b) of this Section 10.04 unless the principal amount
of any one issue of such Indebtedness, or the aggregate amount of all such
Indebtedness referred to in clauses (a) and (b) above, exceeds $2,500,000 at any
one time; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted within
20 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries; or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries; or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) (i) Any Plan shall fail to satisfy the minimum
-----
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, (ii) a Reportable Event shall have occurred, (iii)
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
within the following 30 days, (iv) any Plan which is subject to Title IV of
ERISA shall have had or is likely to have a trustee appointed to administer such
Plan, (v) any Plan which is subject to Title IV of ERISA is, shall have been or
is likely to be terminated or to be the subject of termination proceedings under
ERISA, (vi) any Plan shall have an Unfunded Current Liability, (vii) a
contribution required to be made by the Borrower or any Subsidiary of the
Borrower with respect to a Plan has not been timely made, (viii) the Borrower or
any Subsidiary of the Borrower has incurred or is likely to incur any liability
to or on account of a Plan under Section 409, 502(i) or 502(1) of ERISA or
Section 4975 of the Code, (ix) the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate has incurred or is
74
likely to incur any liability to or on account of a Plan under Section 4062,
4063, 4064, 4069 of ERISA or Section 401(a)(29) or 4971 of the Code or on
account of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, ; or (x) the Borrower
or the Subsidiary of the Borrower has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or pursuant to any
Plan; (b) there shall result from any such event or events the imposition of a
lien, the granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the reasonable opinion of the Required
Banks, has had, or could reasonably be expected to have, a Material Adverse
Effect; or
10.07 Security Documents. (a) The Pledge Agreement, or after the
------------------
execution and delivery thereof, any Additional Security Document, shall cease to
be in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in favor of
the Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.03), and subject to no other Liens (except as
permitted by Section 9.03), or (b) any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to such security Documents and such default shall
continue beyond any cure or grace period specifically applicable thereto
pursuant to the terms of the Pledge Agreement; or
10.08 Guaranties. The Subsidiaries Guaranty or any provision thereof
----------
shall cease to be in full force and effect, or any Guarantor or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the Subsidiaries Guaranty or any Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to the Subsidiaries Guaranty;
or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against the Borrower or any of its Subsidiaries involving a liability (to the
extent not paid or not fully covered by insurance) in excess of $10,000,000 for
all such judgments and decrees and all such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 60 days from
the entry thereof; or
10.10 Ownership. A Change of Control Event shall have occurred; or
---------
10.11 Franchise Agreements. A (i) termination of any Franchise
--------------------
Agreement or (ii) default which would enable the franchisor to terminate any
Franchise Agreement or receive liquidated damage payments applicable to
substantially all of the Borrower's offices, under, any of the Franchise
Agreements shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required
75
Banks, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any Bank
to enforce its claims against any Guarantor or the Borrower, except as otherwise
specifically provided for in this Agreement (provided, that if an Event of
--------
Default specified in Section 10.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Revolving Loan
Commitment terminated, whereupon the Revolving Loan Commitment of each Bank
shall forthwith terminate immediately and any Commitment Fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans and all
Obligations owing hereunder (including Unpaid Drawings) to be, whereupon the
same shall become, forthwith due and payable by the Borrower without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct the
Collateral Agent to enforce), any or all of the Liens and security interests
created pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; (v) direct the Borrower to
pay (and the Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 10.05, to pay) to the
Collateral Agent at the Payment Office such additional amounts of cash, to be
held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding, equal to the aggregate Stated Amount of all
Letters of Credit then outstanding; and (vi) apply any cash collateral as
provided in Section 4.02.
SECTION 11. Definitions. As used herein, the following terms shall
-----------
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquired Business" shall mean any Person or business, division or
product line acquired pursuant to a Permitted Acquisition.
"Acquired Person" shall have the meaning provided in the definition of
Permitted Acquisition.
"Acquired Revenues" shall mean, with respect to any Acquired Business,
the gross revenues of such Acquired Business for the twelve-month period most
recently ended prior to the date of the acquisition of such Acquired Business as
set forth in the financial statements for such Acquired Business delivered to
the Borrower and the Banks in connection with such acquisition.
"Acquisition Cooperation Agreement" shall mean the Acquisition
Cooperation Agreement dated as of February 9, 1999 by and between the Borrower,
Apollo Investment Fund III, L.P., Apollo Overseas Partners III, L.P., Apollo
(UK) Partners III, L.P. and, for purposes of Section 3.9 only, Apollo
Management, L.P. and Cendant.
76
"Acquisition Services Agreement" shall mean the Acquisition Services
Agreement, dated as of February 9, 1999, by and between the Borrower and
Cendant.
"Additional Royalty Agreement" shall mean the Additional Royalty
Agreement dated as of August 11, 1997 by and among the Borrower, Coldwell Banker
Real Estate Corporation, Century 21 Real Estate Corporation and HFS
Incorporated.
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.10.
"Advisory Services Agreement" shall mean the Advisory Services
Agreement, dated as of August 11, 1997, by and between the Borrower and Apollo
Management, L.P.
"Affected Loans" shall have the meaning provided in Section 4.02(e).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person; provided, however, that for purposes of Section 9.07,
-------- -------
an Affiliate of the Borrower shall include any Person that directly or
indirectly owns more than 5% of any class of the capital stock of the Borrower
and any officer or director of the Borrower or any such Person.
"Aggregate Revolving Credit Exposure" shall mean, at any time, the sum
of (I) the aggregate principal amount of all Revolving Loans then outstanding
plus (II) the aggregate principal amount of all Swingline Loans then outstanding
plus (III) the aggregate amount of all Letter of Credit Outstandings at such
time.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Margin" shall mean a percentage equal to (i) in the case
of Loans maintained as (x) Base Rate Loans, 0.75% and (y) Eurodollar Loans,
1.75%.
"Applicable Prepayment Percentage" shall mean, at any time, 100%.
"Apollo Group" shall mean Apollo Management, L.P., Apollo Advisors,
L.P., Apollo Investment Fund, L.P., Apollo Investment Fund III, L.P., Apollo
Overseas Partners III, L.P., Apollo (U.K.) Partners III, L.P., AIF II, L.P., and
Apollo Advisors II, L.P., all Delaware limited partnerships (except that Apollo
(U.K.) Partners III, L.P. is a limited partnership organized under the laws of
England).
77
"Arranger" shall have the meaning provided in the first paragraph of
this Agreement.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Borrower or
such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business, (ii) dispositions or
transfers arising out of, or in connection with, the events described in clauses
(i) and (ii) of the definition of Recovery Event, (iii) any sale or other
disposition of Cash Equivalents in the ordinary course of business, (iv) any
merger, consolidation or liquidation permitted by Sections 9.02(f) and (g), (v)
any transfer of assets permitted pursuant to Section 9.02(e), (g), (i) or (j),
(vi) any transaction permitted pursuant to Section 9.02(m), (vii) sales,
transfers and other dispositions made pursuant to the Acquisition Cooperation
Agreement or one or more agreements entered into with Cendant or one of its
subsidiaries to effectuate same and (viii) other sales and dispositions that
generate Net Sale Proceeds of less than $2,500,000 in the aggregate in any
fiscal year of the Borrower.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Authorized Officer" shall mean, with respect to (i) the delivery of
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, the chief operating officer, any treasurer or other financial
officer of the Borrower, (ii) delivery of financial information and officer's
certificates pursuant to this Agreement, the chief operating officer, any
treasurer or other financial officer of the Borrower and (iii) any other matter
in connection with this Agreement or any other Credit Document, any officer (or
a person or persons so designated by any two officers) of the Borrower, in each
case to the extent reasonably acceptable to the Administrative Agent.
"Available Basket Amount" shall mean, on any date of determination, an
amount equal to the sum of (i) $15,000,000 minus (ii) the aggregate amount of
-----
Investments made pursuant to Section 9.05(k) after the Restatement Effective
Date minus (iii) the aggregate amount of Indebtedness or other obligations
-----
(whether absolute, accrued, contingent or otherwise and whether or not due) of
any Joint Venture or Unrestricted Subsidiary for which the Borrower or any of
its Subsidiaries (other than the respective Joint Venture or Unrestricted
Subsidiary) is liable, minus (iv) all payments made by the Borrower or any of
-----
its Subsidiaries (other than the respective Joint Venture) in respect of
Indebtedness or other obligations of the respective Joint Venture or
Unrestricted Subsidiary (including, without limitation, payments in respect of
obligations described in preceding clause (iii)) after the Restatement Effective
Date, plus (v) the amount of any increase to the Available Basket Amount made
----
after the Restatement Effective Date in accordance with the provisions of
Section 9.05(k). In connection with the foregoing, it is understood that the
acquisition of an Acquired Person which has ownership interests in one or more
Joint
78
Ventures, pursuant to a Permitted Acquisition effected in accordance with the
relevant requirements of this Agreement shall not be deemed to constitute an
Investment pursuant to Section 9.05(k) and the Available Basket Amount shall not
be reduced as a result of the payment of consideration owing to effect the
Permitted Acquisition (although the Available Basket Amount would be affected to
the extent preceding clauses (iii) or (iv) apply with respect to the Joint
Venture so acquired or to the extent additional Investments are made in the
respective Joint Venture pursuant to Section 9.05(k)).
"Available Basket Sub-Limit" shall mean, on any date of determination,
an amount equal to the sum of (i) $5,000,000 minus (ii) the aggregate amount of
-----
Investments made in Unrestricted Subsidiaries pursuant to Section 9.05(k) after
the Restatement Effective Date, minus (iii) the aggregate amount of Indebtedness
-----
or other obligations (whether absolute, accrued, contingent or otherwise and
whether or not due) of any Unrestricted Subsidiary for which the Borrower or any
of its Subsidiaries is liable, minus (iv) all payments made by the Borrower or
-----
any of its Subsidiaries in respect of Indebtedness or other obligations of the
respective Unrestricted Subsidiary (including, without limitation, payments in
respect of obligations described in preceding clause (iii)) after the
Restatement Effective Date, plus (v) the amount of any increase to the Available
----
Basket Sub-Limit made after the Restatement Effective Date in accordance with
the provisions of Section 9.05(k); provided that the Available Basket Sub-Limit
--------
shall not exceed at any time the Available Basket Amount as then in effect.
"Bank" shall mean each financial institution with a Revolving Loan
Commitment listed on Schedule I (as amended from time to time), as well as any
Person which becomes a "Bank" hereunder pursuant to Section 1.13 and/or
13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.03 or (ii) a Bank having notified the Administrative Agent
and/or the Borrower that it does not intend to comply with the obligations under
Section 1.01(a), 1.01(c) or 2.03.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Federal Funds Rate and (y) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Benefitted Bank" shall have the meaning provided in Section 13.06(b).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
79
"Borrower Common Stock" shall have the meaning provided in Section
7.13.
"Borrowing" shall mean the borrowing of one Type of Loan by the
Borrower from all the Banks (or from BTCo in the case of Swingline Loans) on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period; provided that, Base
--------
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York or London interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section 8.13.
"Capital Expenditures" shall mean, with respect to any Person, for any
period, all expenditures by such Person which should be capitalized in
accordance with GAAP during such period, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with GAAP)
and, without duplication, the amount of all Capitalized Lease Obligations
incurred by such Person during such period.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
--------
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits, certificates of
deposit and bankers' acceptances of any Bank or any commercial bank having, or
which is the principal banking subsidiary of a bank holding company organized
under the laws of the United States, any State thereof, the District of Columbia
80
or any foreign jurisdiction having capital, surplus and undivided profits
aggregating in excess of $200,000,000 and having a long-term unsecured debt
rating of at least "A" or the equivalent thereof from S&P or "A2" or the
equivalent thereof from Xxxxx'x, with maturities of not more than six months
from the date of acquisition by such Person, (iii) repurchase agreements with a
term of not more than 30 days, involving securities of the types described in
preceding clause (i), and entered into with commercial banks meeting the
requirements of preceding clause (ii), (iv) commercial paper issued by any
Person incorporated in the United States rated at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x and in each
case maturing not more than six months after the date of acquisition by such
Person, (v) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (i) through (iv)
above and (vi) overnight deposits and demand deposit accounts (in the respective
local currencies) maintained in the ordinary course of business.
"Cash Secured Loans" shall mean any loan incurred in the ordinary
course of business, in connection with title insurance and escrow operations to
the extent that the principal and interest thereon is secured by an amount of
cash or U.S. governmental securities to ensure the full payment of principal and
interest after giving effect to the interest income earned thereon.
"Cendant" shall mean Cendant Corporation.
"Cendant Documents" shall mean, collectively, (i) the Advisory
Services Agreement, (ii) the Development Advance Promissory Note, (iii) the
Franchise Override Agreement, (iv) the Incremental Royalty Agreement, (v) the
Additional Royalty Agreement, (vi) the Support Agreement, (vii) the Franchise
Agreements, (viii) the Subscription Agreement, (ix) the Subordination Agreement,
(x) the Dividend Guarantee, (xi) the Indemnification Agreement, (xii) the
Acquisition Services Agreement, (xiii) the Program Outsourcing Agreement, (xiv)
the Acquisition Cooperation Agreement, (xv) the License Agreement and (xvi) the
Master Letter Agreement.
"Change of Control Event" shall mean, (I) at any time prior to the
consummation of a Qualified IPO, (a) Apollo Group, Cendant and their Affiliates
shall cease to own on a fully diluted basis in the aggregate at least 30% of the
economic and voting interest in the Borrower's capital stock (for such purposes,
excluding any Qualified Preferred Stock and any Disqualified Preferred Stock, in
each case to the extent same is not Voting Stock) or (b) Apollo Group, Cendant
and their Affiliates, together with the Management Participants and other
investors which own shares of Borrower Common Stock on the Restatement Effective
Date, shall cease to own on a fully diluted basis in the aggregate at least a
majority of the outstanding Voting Stock of the Borrower or (c) any Person or
"group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as in effect on the Restatement Effective Date, other than
the Permitted Holders, shall (A) have acquired beneficial ownership of 30% or
more on a fully diluted basis of the voting and/or economic interest in the
Borrower's capital stock or (B) obtained the power (whether or not exercised) to
elect a majority of the Borrower's
81
directors or (d) the Board of Directors of the Borrower shall cease to consist
of a majority of Continuing Directors or shall not be nominees of Apollo and/or
Cendant or (e) a "change of control" or similar event shall occur as provided in
any Existing Indebtedness, Permitted Debt, Disqualified Preferred Stock,
Qualified Preferred Stock or Existing Preferred Stock to the extent the
outstanding principal amount or liquidation preference, as the case may be, of
such Existing Indebtedness, Permitted Debt, Disqualified Preferred Stock,
Qualified Preferred Stock or Existing Preferred Stock exceeds $10,000,000 (II)
at any time after a Qualified IPO, (a) any Person or "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect
on the Restatement Effective Date), other than the Permitted Holders, shall have
acquired beneficial ownership of 25% or more on a fully diluted basis of the
voting and/or economic interest in the Borrower's capital stock and Apollo
Group, Cendant and their Affiliates shall own less than such Person or "group"
on a fully diluted basis of the economic and voting interest in the Borrower's
capital stock or (b) the Board of Directors of the Borrower shall cease to
consist of a majority of Continuing Directors or (c) a "change of control" or
similar event shall occur as provided in any Cendant Documents, Existing
Indebtedness, Permitted Debt, Disqualified Preferred Stock, Qualified Preferred
Stock or Existing Preferred Stock to the extent the outstanding principal amount
or liquidation preference, as the case may be, of such Existing Indebtedness,
Permitted Debt, Disqualified Preferred Stock, Qualified Preferred Stock or
Existing Preferred Stock exceeds $10,000,000.
"Chase" shall mean The Chase Manhattan Bank, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Co-Agent" shall have the meaning provided in the first paragraph of
this agreement.
"Co-Arranger" shall have the meaning provided in the first paragraph
of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect at the date of this Agreement and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all property (whether real or personal,
movable or immovable) with respect to which any security interests have been
granted (or purported to be granted) pursuant to any Security Document,
including, without limitation, all Pledge Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to any Credit Document.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
82
"Common Stock" shall mean the Common Stock, par value $0.01 per share
of the Borrower.
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Consolidated Adjusted Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Interest Expense for such
period.
"Consolidated Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of the Borrower ending after the Initial
Borrowing Date and for which the related financial statements required to be
delivered pursuant to Section 8.01(a) or (b), as the case may be, have
theretofore been delivered.
"Consolidated Cumulative Net Income Amount" shall mean, at any date an
amount determined on a cumulative basis equal to (i) the sum of 15% of
Consolidated Net Income for all Consolidated Cumulative Net Income Periods
ending after the Initial Borrowing Date and prior to such date of determination
for which Consolidated Net Income was a positive number, minus (ii) 100% of
Consolidated Net Income (expressed as a positive number) for all Consolidated
Cumulative Net Income Periods ending after the last day of the Initial Borrowing
Date and prior to such date of determination for which Consolidated Net Income
was a negative number, in each case after adding back the amortization of costs
relating to the acquisition of (a) open real estate listing contracts and (b)
pending real estate sales contracts to the extent deducted in the calculation of
net income.
"Consolidated Debt" shall mean, at any time, the sum of (without
duplication) (i) all Indebtedness of the Borrower and its Subsidiaries as would
be required to be reflected on the liability side of a balance sheet of such
Person in accordance with GAAP as determined on a consolidated basis (other than
(A) Indebtedness permitted under Section 9.04(k), (B) Indebtedness permitted
under Section 9.04(j) and (C) Indebtedness in connection with the Development
Advance Promissory Note and Security Agreement, so long as, in the case of (A)
and (B) above, there is a corresponding asset reflected on the balance sheet),
(ii) all Indebtedness of the Borrower and its Subsidiaries of the type described
in clauses (iii) and (vii) of the definition of Indebtedness and (iii) all
Contingent Obligations of the Borrower and its Subsidiaries in respect of
Indebtedness of other Persons (i.e., Persons other than the Borrower or any of
----
its Subsidiaries) of the type referred to in preceding clauses (i) and (ii) of
this definition; provided, that for purposes of this definition, any
--------
Disqualified Preferred Stock of the Borrower and any Preferred Stock of any of
its Subsidiaries shall be treated as Indebtedness, with an amount equal to the
greater of the liquidation preference or the maximum mandatory fixed repurchase
price of any such outstanding Preferred Stock deemed to be a component of
Consolidated Debt.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of the Borrower and its Subsidiaries, determined on a consolidated basis,
before Consolidated Interest Expense (to the extent deducted in arriving at
Consolidated Net
83
Income) and provision for taxes based on income or gains or losses from sales of
assets other than inventory sold in the ordinary course of business, in each
case that were included in arriving at Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of (i) all amortization and depreciation
and other non-cash items, (ii) the portion of acquisition related costs which
have been or will be paid by Cendant and/or its Subsidiaries pursuant to the
Acquisition Cooperation Agreement, and (iii) any management fees and consulting
fees paid pursuant to, and in accordance with the requirements of, clause (iv)
of Section 9.07 that were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, (i) that portion of Capitalized Lease Obligations of
----
the Borrower and its Subsidiaries representing the interest factor for such
period, and capitalized interest expense, (ii) the amount of all cash Dividend
requirements (whether or not declared or paid) on Disqualified Preferred Stock
of the Borrower, and on any Preferred Stock of any of its Subsidiaries paid,
accrued or scheduled to paid or accrued during such period, and the amount of
all cash Dividends paid on Existing Preferred Stock during such period, which
amounts described in preceding clause (ii) shall be treated as interest expense
of the Borrower and its Subsidiaries for purposes of this definition regardless
of the treatment of such amounts under GAAP, in each case net of the total
consolidated cash interest income of the Borrower and its Subsidiaries for such
period, but excluding the amortization of any deferred financing costs or of any
costs in respect of any Interest Rate Protection Agreement.
"Consolidated Net Income" shall mean, for any period, the net after-
tax income of the Borrower and its Subsidiaries determined on a consolidated
basis, without giving effect to any after-tax non-recurring gains or losses or
after-tax items classified as extraordinary gains or losses, any other non-cash
expenses incurred or payments made in connection with the transactions
contemplated by the Agreement, and without giving effect to gains and losses
from the sale or disposition of assets (other than sales or dispositions of
inventory, equipment, raw materials and supplies) by the Borrower and its
Subsidiaries; provided that the following items shall be excluded in computing
--------
Consolidated Net Income (without duplication): (i) the net income or net losses
of any Person in which any other Person or Persons (other than the Borrower and
its Wholly-Owned Domestic Subsidiaries) has an equity interest or interests,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or such Wholly-Owned Subsidiaries by such Person during
such period, (ii) except for determinations expressly required to be made on a
Pro Forma Basis, the net income (or loss) of any Person accrued prior to the
--- -----
date it becomes a Wholly-Owned Subsidiary or all or substantially all of the
property or assets of such Person are acquired by a Wholly-Owned Subsidiary and
(iii) the net income of any Subsidiary to the extent that the declaration or
payment of dividends or similar
84
distributions by such Subsidiary of such net income is not at the time permitted
by the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Subsidiary.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
-------- -------
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Bank" shall mean each Existing Bank with a Revolving Loan
Commitment under this Agreement.
"Continuing Directors" shall mean the directors of the Borrower on the
Restatement Effective Date and each other director if such director's nomination
for the election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean the Borrower and each Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
85
"De Minimis Subsidiary" shall mean each Subsidiary of the Borrower to
the extent that (i) it holds no capital stock of any other Subsidiary that is
not a De Minimis Subsidiary, (ii) its revenues at any time represents less than
1% of the total revenues of the Borrower and its Subsidiaries at such time and
(iii) its assets have a value of less than $5,000,000.
"Derivatives Counterparty" shall have the meaning provided in Section
9.06.
"Development Advance Promissory Note" shall mean the Development
Advance Promissory Note, dated as of September 1, 1997, between NRT and Coldwell
Banker Real Estate Corporation.
"Disqualified Preferred Stock" shall mean any Preferred Stock of the
Borrower other than Qualified Preferred Stock and Existing Preferred Stock.
"Dividend" shall have the meaning provided in Section 9.06.
"Dividend Guarantee" shall mean the Guarantee dated August 11, 1997,
by and among Xxxxx Referral Network, Inc., Xxxxxxxxx Referral Associates, Inc.,
Coldwell Banker Xxx X. Xxxxx, Inc., Coldwell Banker Real Estate, Inc., Coldwell
Banker Real Estate Services, Inc., Coldwell Banker Residential Brokerage
Company, Coldwell Banker Residential Brokerage Corporation, Coldwell Banker
Residential Real Estate, Coldwell Banker Residential Real Estate Services of
Wisconsin, Inc., Coldwell Banker Residential Referral Network, Coldwell Banker
Residential Referral Network, Inc., Contempo Holdings, Contempo Realty, Inc.,
Contempo Relocation, Inc., Del Monte Realty Company, Xxxxxxx and Xxxx Xxxxxxxxx,
Inc., Forest X. Xxxxx, Inc., Fox Realty Corporation, Grey City Graphics, Inc.,
Xxxx Realty Companies, Inc., Referral Network, Inc. (FL), Referral Network, Inc.
(TX), Relocation Chicago, Inc., Valley of California, Inc., in favor of Apollo
Group, guarantying certain obligations of the Borrower to make additional
Dividend payments to Apollo.
"Documents" shall mean and include the Credit Documents, the
Stockholders Agreement and all Cendant Documents.
"Dollar Equivalent" of an amount denominated in a currency other than
U.S. Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of U.S. Dollar which could be purchased with
the amount of the Other Currency involved in such computation at the spot
exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M.
(New York time) on the date two Business Days prior to the date of any
determination thereof for purchase on such date.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
86
"Domestic Unrestricted Subsidiary" shall mean any Unrestricted
Subsidiary which is not a Foreign Unrestricted Subsidiary.
"Eligible Transferee" shall mean and include a commercial bank, mutual
fund, financial institution, a "qualified institutional buyer" (as defined in
Rule 144A of the Securities Act), any fund that invests in bank loans or any
other "accredited investor" (as defined in Regulation D of the Securities Act)
(other than an individual).
"Employee Benefit Plans" shall have the meaning set forth in Section
5.11.
"Employment Agreements" shall have the meaning set forth in Section
5.11.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by the Borrower or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued to the Borrower or any of its Subsidiaries under any such law, including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any federal, state, provincial, foreign
or local policy, statute, law, rule, regulation, ordinance, code or rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment (for purposes of this
definition (collectively, "Laws")), relating to the environment, or Hazardous
Materials or health and safety to the extent such health and safety issues arise
under the Occupational Safety and Health Act of 1970, as amended, or any such
similar Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
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"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the rate per annum determined by the Administrative
Agent, at approximately 11:00 A.M. (London time) on the date which is two
Business Days prior to the beginning of the relevant Interest Period (as
specified in the applicable Notice of Borrowing or Notice of Conversion) by
reference to the British Bankers' Association Interest Settlement Rates for
deposits in U.S. Dollars (as set forth by any service which has been nominated
by the British Bankers' Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period
(provided that, to the extent that an interest rate is not ascertainable
---------
pursuant to the foregoing provision of this definition, the "Eurodollar Rate"
shall be the interest rate per annum, determined by the Administrative Agent to
be the average of the rates per annum at which deposits in U.S. Dollars are
offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately 11:00
A.M. (London time) on the date which is two Business Days prior to the beginning
of such Interest Period) divided (and rounded upward to the next whole multiple
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of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excluded Recovery Event" shall mean (i) any Recovery Event resulting
in the receipt of proceeds by the Borrower or any of its Subsidiaries of less
than $1,000,000 and (ii) any receipt of insurance proceeds by the Borrower or
any of its Subsidiaries payable under an insurance policy covering environmental
liabilities, to the extent (and only to the extent) (x) the Borrower or such
Subsidiary has, prior to the date of its receipt of such proceeds, used monies
to remediate or restore properties in respect of which such proceeds were paid,
(y) the amount of the insurance proceeds included for purposes of this clause
(ii) does not exceed the amount of the monies so used to remediate or restore
properties as provided in the immediately preceding clause (x) and (z) within 10
days following receipt by the Borrower or such Subsidiary of such insurance
proceeds, an Authorized Officer of the Borrower has delivered to the
Administrative Agent an officer's certificate, certifying the Borrower's
compliance with preceding clauses (x) and (y) and attaching invoices and such
other supporting information as the Administrative Agent may reasonably request.
For avoidance of doubt, the parties hereto acknowledge and agree that the
receipt by the Borrower or any of its Subsidiaries of any proceeds from a single
Recovery Event of the type described in clause (ii) above not entitled to
inclusion in said clause (ii) by virtue of the qualification contained in clause
(y) thereof shall be subject to the provisions of Section 4.02(d) as if such
receipt of proceeds were a separate and distinct Recovery Event.
88
"Existing Bank" shall mean each Person which was a Bank under, and as
defined in, the Existing Credit Agreement.
"Existing Credit Agreement" shall have the meaning provided in the
recitals to this Agreement.
"Existing Indebtedness" shall have the meaning provided in Section
5.08(a).
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.11.
"Existing Preferred Stock" shall have the meaning provided in Section
7.13.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published 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 which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower other
than a Domestic Subsidiary.
"Foreign Unrestricted Subsidiary" shall mean each Unrestricted
Subsidiary that is incorporated under the laws of any jurisdiction other than
the United States of America, any State thereof, the United States Virgin
Islands or Puerto Rico.
"Franchise Agreements" shall mean (i) the Master Real Estate Franchise
Agreement, dated as of February 9, 1999, by and between the Borrower and Century
21 Real Estate Corporation, (ii) the ERA Franchise Systems, Inc. Master
Membership Agreement, dated as of February 9, 1999, by and between ERA Franchise
Systems, Inc. and the Borrower and (iii) the Master Real Estate Franchise
Agreement, dated as of February 9, 1999, by and between Coldwell Banker Real
Estate Corporation and the Borrower.
"Franchise Override Agreement" shall mean the Franchise Override
Agreement dated as of August 11, 1997, between the Borrower and Coldwell Banker
Real Estate Corporation, ERA Franchise Systems, Inc. and Century 21 Real Estate
Corporation.
89
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 13.07(a).
"Gross-Up Amount" shall have the meaning provided in Section 4.04(a).
"Guarantors" shall mean and include each Wholly-Owned Subsidiary
(excluding (i) Regulated Subsidiaries, and (ii) in the case of De Minimis
Subsidiaries existing on the Restatement Effective Date, such De Minimis
Subsidiaries for a period of 120 days from the Restatement Effective Date, and
in the case of De Minimis Subsidiaries created or acquired after the Restatement
Effective Date, excluding such De Minimis Subsidiaries for a period of 60 days
after such date) of the Borrower.
"HFS, Inc." shall mean HFS Incorporated, a Delaware corporation and
predecessor to Cendant.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic pollutants," "contaminants" or
"pollutants" under any Environmental Law, or words of similar meaning and
regulatory effect.
"Incremental Royalty Agreement" shall mean the Incremental Royalty
Agreement dated as of August 11, 1997, by and among the Borrower, Coldwell
Banker Real Estate Corporation, ERA Franchise Systems, Inc., Century 21 Real
Estate Corporation and HFS Incorporated.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
----
obligations, (vii) all obligations under Interest Rate Protection Agreements and
Other Hedging Agreements and (viii) all Contingent Obligations of such Person,
provided, that Indebtedness shall not include trade payables and accrued
--------
expenses, in each case arising in the ordinary course of business.
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"Indemnification Agreement" shall mean the Indemnification Agreement
dated August 11, 1997, by and between HFS, Inc. and the Borrower.
"Initial Borrowing Date" shall mean the date on which the initial
Credit Event occurs.
"Intercompany Loan" shall have the meaning provided in Section
9.05(f).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investment" shall have the meaning provided in the preamble to
Section 9.05.
"Joint Venture" shall mean any Person, other than an individual or a
Wholly-Owned Subsidiary of the Borrower, (i) in which the Borrower or a
Subsidiary of the Borrower holds or acquires an ownership interest (whether by
way of capital stock, partnership or limited liability company interest, or
other evidence of ownership) and (ii) which is engaged in a Permitted Business.
"L/C Supportable Obligations" shall mean obligations of the Borrower
or its Wholly-Owned Subsidiaries incurred in the ordinary course of business and
otherwise permitted to exist pursuant to the terms of this Agreement.
"Lead Arranger" shall have the meaning provided in the first paragraph
of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b).
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"Letter of Credit Issuer" shall mean BTCo and any other Bank which, at
the request of the Borrower and with the consent of the Administrative Agent,
agrees in such Bank's sole discretion to become a Letter of Credit Issuer for
purposes of issuing Letters of Credit pursuant to Section 2. The sole Letter of
Credit Issuer on the Restatement Effective Date shall be BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"License Agreement" shall mean the License Agreement dated as of
February 9, 1999, by and between Cendant and the Borrower.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, hypothecation or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any similar recording or notice statute, and any lease having substantially the
same effect as the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in Section
5.11.
"Management Participants" shall mean those employees, members of
management and directors of the Borrower eligible for awards under the 1997
Equity Participation Plan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Marketing Agreement" shall mean the Marketing Agreement, dated as of
August 11, 1997, by and between Cendant Mortgage Corporation and the Borrower.
"Master Letter Agreement" shall mean that Master Letter Agreement
dated as of February 9, 1999, by and among the Borrower, Apollo Management L.P.,
Apollo Investment Fund III, L.P., Apollo Overseas Partners III, L.P., Apollo
(UK) Partners III, L.P., Cendant Corporation and Cendant Operations, Inc.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower, and its Subsidiaries taken as a whole.
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"Maturity Date" shall mean May 29, 2001.
"Maximum Swingline Amount" shall mean $2,500,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Cash Proceeds" shall mean for any event requiring a reduction of
the Total Revolving Loan Commitment pursuant to Sections 3.03 or 4.02, as the
case may be, the gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such event, net of reasonable
transaction costs (including, as applicable, any underwriting, brokerage or
other customary commissions and reasonable legal, advisory and other fees and
expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from any
sale of assets, net of (i) reasonable transaction costs (including, without
limitation, any underwriting, brokerage or other customary selling commissions
and reasonable legal, advisory and other fees and expenses, including title and
recording expenses, associated therewith) and payments of unassumed liabilities
relating to the assets sold at the time of, or within 30 days after, the date of
such sale, (ii) the amount of such gross cash proceeds required to be used to
repay any Indebtedness (other than Indebtedness of the Banks pursuant to this
Agreement) which is secured by the respective assets which were sold, and (iii)
the estimated marginal increase in income taxes which will be payable by the
Borrower's consolidated group with respect to the fiscal year in which the sale
occurs as a result of such sale; provided, however, that such gross proceeds
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shall not include any portion of such gross cash proceeds which the Borrower
determines in good faith should be reserved for post-closing adjustments
(including indemnification payments) (to the extent the Borrower delivers to the
Banks a certificate signed by its chief financial officer or treasurer,
controller or chief accounting officer as to such determination), it being
understood and agreed that on the day that all such post-closing adjustments
have been determined (which shall not be later than six months following the
date of the respective asset sale), the amount (if any) by which the reserved
amount in respect of such sale or disposition exceeds the actual post-closing
adjustments payable by the Borrower or any of its Subsidiaries shall constitute
Net Sale Proceeds on such date received by the Borrower and/or any of its
Subsidiaries from such sale, lease, transfer or other disposition. The parties
hereto acknowledge and agree that Net Sale Proceeds shall not include any trade-
in-credits or purchase price reductions received by the Borrower or any of its
Subsidiaries in connection with an exchange of equipment for replacement
equipment that is the functional equivalent of such exchanged equipment.
"New Bank" shall mean each Bank on the Restatement Effective Date
which is not an Existing Bank.
"New Withholding Regulations" shall have the meaning provided in
Section 4.04(b).
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Non-Wholly Owned Entity" shall have the meaning provided in the
definition of Permitted Acquisition.
"Note" shall mean each Revolving Note and/or the Swingline Note, as
the context may require.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
or such other office as the Administrative Agent may designate to the Borrower
and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, the Collateral Agent or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Original Loans" shall mean the Loans under, and as defined in, the
Existing Credit Agreement.
"Original Revolving Loans" shall mean the Revolving Loans under, and
as defined in, the Existing Credit Agreement.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
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"Permitted Acquired Debt" shall have the meaning set forth in Section
9.04(d).
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Wholly-Owned Domestic Subsidiaries of assets constituting a business,
division or product line of any Person not already a Subsidiary of the Borrower
or any of its Wholly-Owned Subsidiaries or of 100% of the capital stock or other
equity interests of any such Person, provided that (A) the consideration paid by
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the Borrower or such Wholly-Owned Subsidiary consists solely of cash (including
proceeds of Revolving Loans), the issuance of the Borrower Common Stock, the
issuance of any Qualified Preferred Stock or Disqualified Preferred Stock
otherwise permitted in Section 9.11, the issuance of Indebtedness otherwise
permitted in Section 9.04 (including Permitted Subordinated Indebtedness) and
the assumption/acquisition of any Permitted Acquired Debt (calculated in
accordance with GAAP) relating to such business, division, product line or
Person which is permitted to remain outstanding in accordance with the
requirements of Section 9.04, or the cancellation of Preferred Stock held by
Cendant pursuant to the Acquisition Cooperation Agreement (B) those acquisitions
that are structured as stock acquisitions shall be effected through a purchase
of 100% of the capital stock or other equity interests of such Person by the
Borrower or such Wholly-Owned Domestic Subsidiary or through a merger between
such Person and a Wholly-Owned Domestic Subsidiary of the Borrower, so that
after giving effect to such merger, 100% of the capital stock of the surviving
corporation of such merger is owned by the Borrower or a Wholly-Owned Domestic
Subsidiary, (C) in the case of the acquisition of 100% of the capital stock or
other equity interests of any Person, such Person (the "Acquired Person") shall
own no capital stock or other equity interests of any other Person unless either
(x) the Acquired Person owns 100% of the capital stock or other equity interests
of such other Person or (y) if the Acquired Person owns capital stock or equity
interests in any other Person which is not a Wholly-Owned Subsidiary of the
Acquired Person (a "Non-Wholly Owned Entity"), both (1) the Acquired Person
shall not have been created or established in contemplation of, or for purposes
of, the respective Permitted Acquisition and (2) any Non-Wholly Owned Entity of
the Acquired Person shall have been non-wholly-owned prior to the date of the
respective Permitted Acquisition and not created or established in contemplation
thereof, (D) substantially all of the business, division or product line
acquired pursuant to the respective Permitted Acquisition, or the business of
the Person acquired pursuant to the respective Permitted Acquisition and its
Subsidiaries taken as a whole, is in the United States, (E) the assets acquired,
or the business of the Person whose stock is acquired, shall be in a Permitted
Business and (F) all applicable requirements of Sections 8.13 and 9.02
applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the definition
of "Permitted Acquisition" shall constitute a Permitted Acquisition if, and to
the extent, the Required Banks agree in writing that such acquisition shall
constitute a Permitted Acquisition for purposes of this Agreement.
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"Permitted Acquisition Additional Cost Savings" shall mean, in
connection with each Permitted Acquisition, those demonstrable cost-savings
adjustments (in each case not included pursuant to clause (iii) or (iv) of the
definition of Pro Forma Basis contained herein) reasonably anticipated by the
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Borrower to be achieved in connection with such Permitted Acquisition for the 12
month period following the consummation of such Permitted Acquisition, which
cost-savings adjustments shall be estimated on a good faith basis by the
Borrower and, if requested by the Administrative Agent, be verified by a
nationally recognized accounting firm or as otherwise agreed to by the
Administrative Agent.
"Permitted Business" shall mean any business principally engaged in or
related to real estate brokerage services, mortgage, title, escrow and
relocation services and other products and services pursuant to the Program
Outsourcing Agreement and reasonable extensions of the foregoing.
"Permitted Debt" shall mean and include Permitted Acquired Debt and
Permitted Subordinated Indebtedness.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances,
hypothecations and other matters affecting title to any Real Property and found
reasonably acceptable by the Administrative Agent, (ii) as to any particular
Real Property at any time, such easements, encroachments, covenants, rights of
way, minor defects, irregularities or encumbrances on title which would
reasonably be expected to materially impair such Real Property for the purpose
for which it is held by the mortgagor or grantor thereof, (iii) zoning and other
municipal ordinances which are not violated in any material respect by the
existing improvements and the present use made by the mortgagor or grantor
thereof of the premises, (iv) general real estate taxes and assessments not yet
delinquent, and (v) such other similar items as the Administrative Agent may
consent to (such consent not be unreasonably withheld).
"Permitted Holders" shall mean Apollo Group, Cendant and their
Affiliates and the Management Participants.
"Permitted Liens" shall have the meaning provided in Section 9.03.
"Permitted Subordinated Indebtedness" shall mean subordinated
Indebtedness of the Borrower incurred in connection with a Permitted Acquisition
and in accordance with Section 8.13, which Permitted Subordinated Indebtedness
and all terms and conditions thereof (including, without limitation, the
maturity thereof, the interest rate applicable thereto, amortization, defaults,
remedies, voting rights, subordination provisions, etc.), and the documentation
therefor, shall be reasonably satisfactory to the Arrangers, provided, that in
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any event, unless the Required Banks otherwise expressly consent in writing
prior to the incurrence thereof, (i) no such Indebtedness shall be guaranteed by
any Subsidiary of the Borrower and (ii) no such Indebtedness shall be secured by
any asset of the Borrower or any of its Subsidiaries. The incurrence of
Permitted Subordinated Indebtedness shall be deemed to be a representation and
warranty
96
by the Borrower that all conditions thereto have been satisfied in all material
respects and that same is permitted in accordance with the terms of this
Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 10.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan but excluding all Multiemployer Plans.
"Pledge Agreement" shall have the meaning provided in the Existing
Credit Agreement.
"Pledge Agreement Acknowledgment" shall have the meaning provided in
Section 5.09.
"Pledge Agreement Collateral" shall mean all of the Collateral as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement, and shall exclude in any event (i) all Regulated
Subsidiaries, (ii) for the period starting on the Restatement Effective Date
until the date which is 120 days thereafter, all De Minimis Subsidiaries
existing on the Restatement Effective Date and (iii) for a period of 60 days
after the creation or acquisition of De Minimis Subsidiaries after the
Restatement Effective Date, all such De Minimis Subsidiaries.
"Preferred Stock," as applied to the capital stock of any Person,
means capital stock of such Person (other than common stock of such Person) of
any class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include the Existing
Preferred Stock and any Qualified Preferred Stock, and Disqualified Preferred
Stock.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
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"Pro Forma Basis" shall mean, in connection with any calculation of
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compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (v) if the relevant period
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to be tested includes any period prior to the Restatement Effective Date, the
consummation of the transactions contemplated by this Agreement as if the same
had occurred on the first day of such period (for such purpose, without giving
pro forma effect to synergies and cost savings which have been, or may be
--- -----
realized, such synergies and cost savings having been independently accounted
for in the proviso to the definition of "Consolidated EBITDA"), (x) the
incurrence of any Indebtedness (other than revolving Indebtedness, except to the
extent same is incurred to finance the transactions contemplated by this
Agreement, to refinance other outstanding Indebtedness or to finance Permitted
Acquisitions) or Preferred Stock (other than Qualified Preferred Stock of the
Borrower) after the first day of the relevant Calculation Period as if such
Indebtedness or Preferred Stock had been incurred or issued (and the proceeds
thereof applied) on the first day of the relevant Calculation Period, (y) the
permanent repayment of any Indebtedness (other than revolving Indebtedness
except to the extent paid with Permitted Debt or Disqualified Preferred Stock)
or Preferred Stock (other than Qualified Preferred Stock of the Borrower) after
the first day of the relevant Calculation Period as if such Indebtedness or
Preferred Stock had been retired or redeemed on the first day of the relevant
Calculation Period and (z) the Permitted Acquisition, if any, then being
consummated as well as any other Permitted Acquisition consummated after the
first day of the relevant Calculation Period and on or prior to the date of the
respective Permitted Acquisition then being effected, with the following rules
to apply in connection therewith:
(i) all Indebtedness and Preferred Stock (other than Qualified
Preferred Stock of the Borrower) (x) (other than revolving Indebtedness, except
to the extent same is incurred to finance the transactions contemplated by this
Agreement, to refinance other outstanding Indebtedness, or to finance Permitted
Acquisitions) incurred or issued after the first day of the relevant Calculation
Period (whether incurred to finance a Permitted Acquisition, to refinance
Indebtedness or otherwise) shall be deemed to have been incurred or issued (and
the proceeds thereof applied) on the first day of the respective Calculation
Period and remain outstanding through the date of determination (and thereafter
in the case of projections pursuant to Section 8.13(a)(B)(iii)) and (y) (other
than revolving Indebtedness except to the extent paid with Permitted Debt or
Disqualified Preferred Stock) permanently retired or redeemed after the first
day of the relevant Calculation Period shall be deemed to have been retired or
redeemed on the first day of the respective Calculation Period and remain
retired through the date of determination (and thereafter in the case of
projections pursuant to Section 8.13(a)(B)(iii));
(ii) all Indebtedness or Preferred Stock (other than Qualified
Preferred Stock of the Borrower) assumed to be outstanding pursuant to preceding
clause (i) shall be deemed to have borne interest or accrued dividends, as the
case may be, at (x) the rate applicable thereto, in the case of fixed rate
indebtedness or Preferred Stock or (y) the rates which would have been
applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness or Preferred Stock
(although
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interest expense with respect to any Indebtedness or Preferred Stock for periods
while same was actually outstanding during the respective period shall be
calculated using the actual rates applicable thereto while same was actually
outstanding); provided that for purposes of calculations pursuant to
--------
Section 8.13(a)(B)(iii), all Indebtedness or Preferred Stock (whether actually
outstanding or deemed outstanding) bearing interest at a floating rate of
interest shall be tested on the basis of the rates applicable at the time the
determination is made pursuant to said provisions;
(iii) in making any determination of Consolidated EBITDA, pro forma
--- -----
effect shall be given to any Permitted Acquisition consummated after the first
day of the respective period being tested, taking into account, for any portion
of the relevant period being tested occurring prior to the consummation of such
Permitted Acquisition, demonstrable cost savings actually achieved
simultaneously with the closing of the respective Permitted Acquisition, as if
such cost-savings were realized on the first day of the relevant period;
(iv) without duplication of adjustments provided above, in case of any
Permitted Acquisition consummated after the first day of the relevant period
being tested, pro forma effect shall be given to the termination or replacement
--- -----
of operating leases with Capitalized Lease Obligations or other Indebtedness,
and to any replacement of Capitalized Lease Obligations or other Indebtedness
with operating leases, in each case effected at the time of the consummation of
such Permitted Acquisition or thereafter, in each case if effected after the
first day of the period being tested and prior to the date the respective
determination is being made, as if such termination or replacement had occurred
on the first day of the relevant period; and
(v) in making any determination of Consolidated EBITDA for purposes of
any calculation of the Total Leverage Ratio or the only, (x) for any Permitted
Acquisition which occurred during the last two fiscal quarters comprising the
respective Test Period (and, in the case of Section 8.13, thereafter and on or
prior to the relevant date of determination), there shall be added to
Consolidated EBITDA the amount of Permitted Acquisition Additional Cost Savings,
determined in accordance with the definition thereof contained herein, expected
to be realized with respect to such Permitted Acquisition, (y) for any Permitted
Acquisition effected in the second fiscal quarter of the respective Test Period,
the Consolidated EBITDA shall be increased by 75% of the Permitted Acquisition
Additional Cost Savings estimated to arise in connection with the respective
Permitted Acquisition and (z) for any Permitted Acquisition effected in the
first fiscal quarter of the respective Test Period, the Consolidated EBITDA
shall be increased by 37.5% of the Permitted Acquisition Additional Cost Savings
estimated to arise in connection with the respective Permitted Acquisition;
provided that the aggregate additions to Consolidated EBITDA, for any period
being tested, pursuant to this clause (v) shall not exceed 15% of the amount
which would have been Consolidated EBITDA in the absence of the adjustment
pursuant to this clause (v).
99
Notwithstanding anything to the contrary contained above, (x) for purposes of
Sections 9.08 and 9.09 and, for purposes of all determinations of the Applicable
Margins, pro forma effect (as otherwise provided above) shall only be given for
--- -----
events or occurrences which occurred during the respective Test Period but not
thereafter and (y) for purposes of Section 8.13, pro forma effect (as otherwise
--- -----
provided above) shall be given for events or occurrences which occurred during
the respective Test Period and thereafter but on or prior to the respective date
of determination.
"Program Outsourcing Agreement" shall mean the Program Outsourcing
Agreement, dated as of February 9, 1999, by and between the Borrower and
Cendant.
"Projections" shall have the meaning provided in Section 5.13(b).
"Qualified IPO" shall mean an underwritten public offering of Borrower
Common Stock which generates cash proceeds of at least $50,000,000.
"Qualified Preferred Stock" shall mean any Preferred Stock of the
Borrower, the express terms of which shall provide that dividends thereon shall
not be required to be paid at any time (and to the extent) that such payment
would be prohibited by the terms of this Agreement or any other agreement of the
Borrower relating to outstanding indebtedness and which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (including any Change of
Control Event), cannot mature and is not mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, and is not redeemable, or required to be
repurchased, at the sole option of the holder thereof (including, without
limitation, upon the occurrence of a Change of Control Event), in whole or in
part, on or prior to the date occurring one year after the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, immovable property, improvements and
fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
theft, physical destruction or damage or any other similar event with respect to
any properties or assets of the Borrower or any of its Subsidiaries, (ii) by
reason of any condemnation, taking, seizing or similar event with respect to any
properties or assets of the Borrower or any of its Subsidiaries and (iii) under
any policy of insurance required to be maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.17.
100
"Regulated Subsidiaries" shall mean Subsidiaries of the Borrower
engaged solely in the title, escrow and similar businesses, which Subsidiaries
are regulated by State or local governmental authorities and which either (x)
would be prohibited from being a party to the Guaranty or having its capital
stock pledged pursuant to the Pledge Agreement or (y) it could be unreasonably
burdensome in the good faith opinion of the Borrower to have such Subsidiary
become a party to the Guaranty or have its capital stock pledged pursuant to the
Pledge Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to all or
any portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentage of Swingline Loans and Letter of
Credit Outstandings) represent an amount greater than 50% of the sum of the
Total Revolving Loan Commitment (or after the termination thereof, the sum of
the then total outstanding Revolving Loans of Non-Defaulting Banks and the
aggregate RL Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time.
"Restatement Effective Date" shall have the meaning provided in
Section 13.10.
"Revolving Credit Exposure" shall mean, for any Bank at any time, the
sum of (i) the aggregate principal amount of all Revolving Loans made by such
Bank plus (ii)
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the product of (A) such Bank's RL Percentage and (B) the sum of (x) the
aggregate amount of all Letter of Credit Outstandings at such time and (y) the
aggregate principal amount of all Swingline Loans then outstanding.
"Revolving Loan" shall have the meaning provided in Section
1.01(a)(II).
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Part A of Schedule I directly
below the column entitled "Revolving Loan Commitment," as the same may be
reduced from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or Section
10.
"Revolving Loan Conversion" shall have the meaning provided in Section
1.01(a)(I).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the
aggregate amount of Revolving Loan Commitments of all Banks at such time.
Notwithstanding anything to the contrary contained above, if the RL Percentage
of any Bank is to be determined after the Total Revolving Loan Commitment has
been terminated, then the RL Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination (and without
giving effect to the termination of the Revolving Loan Commitments).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Documents" shall mean and include the Pledge Agreement and
each Additional Security Document, if any.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported in any
way by the Borrower or any of its Subsidiaries) in the form of Exhibit L.
"Shareholders' Agreements" shall have the meaning provided in Section
5.11.
102
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stockholders Agreement" shall mean the Stockholders Agreement, dated
as of August 11, 1997, by and among the Borrower, Apollo Management, L.P. and
the stockholders of the Borrower as amended prior to the date hereunder.
"Subordination Agreement" shall mean the Subordination Agreement dated
August 11, 1997, by and between HFS Inc. and Apollo Group.
"Subscription Agreement" shall mean the Subscription Agreement dated
August 11, 1997, by and among the Borrower, Apollo Group and HFS, Inc.
"Subsidiaries Guaranty" shall have the meaning provided in the
Existing Credit Agreement.
"Subsidiaries Guaranty Acknowledgment" shall have the meaning provided
in 5.10.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time. Notwithstanding the foregoing (and except for purposes of Sections 7.01,
7.04, 7.12, 7.16, 7.17, 7.20, 8.01(g), 8.07, 8.08, 10.05, 10.06 and 10.09, and
the definitions of Unrestricted Subsidiary and Wholly-Owned Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to
be a Subsidiary of the Borrower or any of its other Subsidiaries for purposes of
this Agreement.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the percentage "50%" contained therein were changed to "66-2/3%".
"Support Agreement" shall mean the Support Agreement, dated as of
August 11, 1997, by and between Cendant and the Borrower.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Maturity Date.
103
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters ended on the last day of the then most recently ended fiscal quarter of
the Borrower.
"Total Leverage Ratio" shall mean on any date the ratio of (i)
Consolidated Debt on such date to (ii) Consolidated EBITDA for the Test Period
most recently ended on or prior to such date. All calculations of the Total
Leverage Ratio shall be made on a Pro Forma Basis, it being understood and
--- -----
agreed that, as provided in the definition of Pro Forma Basis, the adjustments
--- -----
contained in clause (v) thereof shall not be taken into account in determining
the Total Leverage Ratio.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of (I)
----
the aggregate principal amount of all Revolving Loans then outstanding, (II) the
aggregate principal amount of Swingline Loans then outstanding plus (III) the
Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning set forth in Section
2.01(a).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
104
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that is acquired or created after the Restatement Effective Date and designated
by the Borrower as an Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent, provided that the Borrower shall only be permitted to so
--------
designate a new Unrestricted Subsidiary after the Restatement Effective Date and
so long as (i) no Default or Event of Default exists or would result therefrom,
(ii) in the case of any Unrestricted Subsidiary directly owned by the Borrower
or any of its Wholly-Owned Domestic Subsidiaries, 100% of the capital stock of
such newly-designated Unrestricted Subsidiary is owned by the Borrower or such
Wholly-Owned Domestic Subsidiary and (iii) all of the provisions of Section 9.13
shall have been complied with in respect of such newly-designated Unrestricted
Subsidiary and such Unrestricted Subsidiary shall be capitalized (to the extent
capitalized by the Borrower or any of its Subsidiaries) through Investments as
permitted by, and in compliance with, Section 9.05(k), with any assets owned by
such Unrestricted Subsidiary at the time of the initial designation thereof to
be treated as Investments pursuant to Section 9.05(k), provided that at the time
--------
of the initial Investment by the Borrower or any Wholly-Owned Domestic
Subsidiary in such Subsidiary, the Borrower shall designate such entity as an
Unrestricted Subsidiary in a written notice to the Administrative Agent.
"Unutilized Revolving Loan Commitment" with respect to any Bank at any
time shall mean such Bank's Revolving Loan Commitment at such time less the sum
----
of (i) the aggregate outstanding principal amount of all Revolving Loans made by
such Bank and (ii) such Bank's RL Percentage of the Letter of Credit
Outstandings at such time.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's, officer's or
brokers of record qualifying shares and/or other nominal amounts of shares
required to be held other than by such Person under applicable law) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time; provided that (x) other
--------
105
than in the definition of Wholly-Owned Unrestricted Subsidiary, no Unrestricted
Subsidiary shall be considered a Wholly-Owned Subsidiary.
"Wholly-Owned Unrestricted Subsidiary" shall mean any Wholly-Owned
Subsidiary which is an Unrestricted Subsidiary.
"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, telegraph or cable.
SECTION 12. The Administrative Agent.
------------------------
12.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints BTCo as Administrative Agent of such Bank (for purposes of this Section
12, the term "Administrative Agent" shall mean BTCo in its capacity as
Administrative Agent hereunder and Collateral Agent pursuant to the Security
Documents), and each such Bank hereby irrevocably authorizes the Administrative
Agent, to take such action on its behalf under the provisions of this Agreement
and the other Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. The Administrative Agent agrees to act as
such upon the express conditions contained in this Section 12. Notwithstanding
any provision to the contrary elsewhere in this Agreement or in any other Credit
Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this Section 12 are solely for the benefit of the
Administrative Agent and the Banks, and neither the Borrower nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Subsidiaries.
12.02 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
12.03 Exculpatory Provisions. The Administrative Agent nor any of
----------------------
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person in its capacity as Administrative Agent, under or in connection
with this Agreement or the other Credit Documents (except for its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Banks for any recitals, statements,
106
representations or warranties made by the Borrower, any of its respective
Subsidiaries or any of their respective officers contained in this Agreement or
the other Credit Documents, any other Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Document or for any failure of the Borrower or any of its Subsidiaries or any of
their respective officers to perform its obligations hereunder or thereunder.
The Administrative Agent shall be under no obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or the other Documents, or to
inspect the properties, books or records of the Borrower or any of its
Subsidiaries. The Administrative Agent shall not be responsible to any Bank for
the effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent, to the Banks or by or on behalf
of any Borrower or any of its Subsidiaries to the Administrative Agent, or any
Bank or be required to ascertain or inquire as to the performance or observance
of any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of the
existence or possible existence of any Default or Event of Default.
12.04 Reliance by the Administrative Agent. The Administrative Agent
------------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks.
12.05 Notice of Default. The Administrative Agent shall be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has actually received notice from a Bank or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Banks. The Administrative
107
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Banks; provided, that, unless and
--------
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
12.06 Nonreliance on Administrative Agent and Other Banks. Each Bank
---------------------------------------------------
expressly acknowledges that the Administrative Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of the Borrower or
any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Bank. Each Bank represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Administrative Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrower and its Subsidiaries. The Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Borrower or any of its
Subsidiaries which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
12.07 Indemnification. The Banks agree to indemnify the
---------------
Administrative Agent in its capacity as such, ratably according to their
respective "percentages" as used in determining the Required Banks at such time
or, if the Revolving Loan Commitments have terminated and all Loans have been
repaid in full, as determined immediately prior to such termination and
repayment (with such "percentages" to be determined as if there are no
Defaulting Banks), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other
Credit Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Borrower or any
of its Subsidiaries;
108
provided, that no Bank shall be liable to the Administrative Agent for the
--------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Administrative
Agent. If any indemnity furnished to the Administrative Agent for any purpose
shall, in the opinion of the Administrative Agent be insufficient or become
impaired, the Administrative Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section 12.07 shall survive the
payment of all Obli gations.
12.08 Administrative Agent in its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower and its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to the Loans made by it and all Obligations owing
to it, the Administrative Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though it were not the
Administrative Agent and the terms "Bank" and "Banks" shall include the
Administrative Agent in its individual capacity.
12.09 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.10 Resignation of the Administrative Agent. (a) The
---------------------------------------
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
30 Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 Business Day period, the Administrative Agent, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
109
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.
12.11 Co-Arranger, Syndication Agent, Co-Agent. Each Bank hereby
----------------------------------------
irrevocably designates and appoints Chase as Co-Arranger and Syndication Agent
hereunder, and BankBoston, N.A. as Co-Agent hereunder, it being understood and
agreed that neither Chase nor BankBoston, N.A. shall have any duties or
obligations in such capacity hereunder.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
-------------------------
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Arrangers (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Arrangers' syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of each Arranger, the Administrative
Agent, each Letter of Credit Issuer and each of the Banks in connection with the
enforcement of the Credit Documents and the documents and instruments referred
to therein and, after an Event of Default shall have occurred and be continuing,
the protection of the rights of each Arranger, the Administrative Agent, each
Letter of Credit Issuer and each of the Banks thereunder (including, without
limitation, the reasonable fees and disbursements of counsel (including in-house
counsel) for each Arranger, the Administrative Agent, for each Letter of Credit
Issuer and for each of the Banks); (iii) pay and hold each of the Banks harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Bank) to pay such
taxes; and (iv) indemnify each Arranger, the Administrative Agent, the
Collateral Agent, each Letter of Credit Issuer and each Bank, their respective
officers, directors, employees, representatives, trustees and agents from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Arranger, the Administrative Agent, the
Collateral Agent, any Letter of Credit Issuer or any Bank is a party thereto and
whether or not any such investigation, litigation or other proceeding is between
or among any Arranger, the Administrative Agent, the Collateral Agent, any
Letter of Credit Issuer, any Bank, any Credit Party or any third Person or
otherwise) related to the entering into and/or performance of this Agreement or
any other Document or the use of the proceeds of any
110
Loans hereunder or any drawing on any Letter of Credit or the consummation of
any other transactions contemplated in any Document (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified), or (b) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface of any
Real Property or any Environmental Claim, in each case, including, without
limitation, the reasonable fees and disbursements of counsel and independent
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Arranger, each
Letter of Credit Issuer and each Bank is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or any of its Subsidiaries or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at any time
held or owing by such Arranger, such Letter of Credit Issuer or such Bank
(including, without limitation, by branches and agencies of such Arranger, such
Letter of Credit Issuer and such Bank wherever located) to or for the credit or
the account of the Borrower or any of its Subsidiaries against and on account of
the Obligations of the Borrower or any of its Subsidiaries to such Arranger,
such Letter of Credit Issuer or such Bank under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations of the Borrower or any of its Subsidiaries purchased by such Bank
pursuant to Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Arranger, such Letter of Credit Issuer or
such Bank shall have made any demand hereunder and although said Obligations
shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Schedule II; or, at such other address as shall be designated
by any party in a written notice to the other parties hereto. All such notices
and communications shall be mailed, telegraphed, telexed, telecopied or cabled
or sent by overnight courier, and shall be effective when received.
13.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, the Borrower may not
-------- -------
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of each of the
Banks, except as provided in clause (v) of the first
111
proviso to Section 13.12(a), and, provided further, that, although any Bank may
----------------
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion of
its Revolving Loan Commitment or Loans hereunder except as provided in Section
13.04(b)) and the participant shall not constitute a "Bank" hereunder and,
provided further, that no Bank shall transfer or grant any participation under
----------------
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Maturity Date) in which such participant is participating, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Revolving Loan Commitment or of a mandatory repayment of
Loans shall not constitute a change in the terms of such participation, that an
increase in any Revolving Loan Commitment or Loan shall be permitted without the
consent of any participant if the participant's participation is not increased
as a result thereof and that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in any rate of
interest or fees for purposes of this clause (i)), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement (except as provided in clause (v) of the first proviso to
Section 13.12(a)) or (iii) release all or substantially all of the Collateral
under the Security Documents (except as expressly provided in the Security
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (ii) in the case of any
Bank that is a fund that invests in bank loans, any other fund that invests in
bank loans and is managed by the same investment advisor of such Bank or by an
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Revolving Loan Commitments (and related outstanding
Obligations hereunder) to one or more Eligible Transferees (treating (x) any
fund that invests in bank loans and (y) any other fund that invests in bank
loans and is managed by the same investment advisor as such fund or by an
Affiliate of such investment advisor, as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption
112
Agreement, provided that, (i) any assignment of all or any portion of the
--------
Revolving Loan Commitment and related outstanding Obligations (or, if the
Revolving Loan Commitment has terminated, any assignment of Obligations
originally extended pursuant to the Revolving Loan Commitments) shall be made on
a basis such that the respective assignee participates in Revolving Loans, and
in Letter of Credit Outstandings, in accordance with the Revolving Loan
Commitment so assigned (or if the Revolving Loan Commitment has been terminated,
on the same basis as participated in by the Banks with Revolving Loan
Commitments prior to the termination thereof), (ii) at such time Schedule I
shall be deemed modified to reflect the Revolving Loan Commitments of such new
Banks and of the existing Banks (and their respective Affiliates), (iii) upon
surrender of the old Notes (or the furnishing of a standard indemnity letter
from the respective assigning Bank in respect of any lost Notes), new Notes will
be issued, at the Borrower's expense, to such new Bank and to the assigning
Bank, such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Revolving Loan Commitments, (iv) the consent of the Administrative Agent and, so
long as no Default or Event of Default is then in existence, the Borrower shall
be required in connection with any assignment to an Eligible Transferee pursuant
to clause (y) of this Section 13.04(b) (which consent, in each case, shall not
be unreasonably withheld or delayed), (v) the Administrative Agent shall receive
at the time of each assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500 and, provided further, that such
----------------
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.17. To the extent of
any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitments. At the time of each assignment pursuant to this Section
13.04(b) to a Person which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes, the respective assignee Bank shall provide to the U.S. Borrower and
the Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To
the extent that an assignment of all or any portion of a Bank's Revolving Loan
Commitment and outstanding Obligations pursuant to Section 1.13 or this Section
13.04(b) would, due to circumstances existing at the time of such assignment,
result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from those
being charged by the respective assigning Bank prior to such assignment, then
the Borrowers shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment). Notwithstanding anything to the contrary contained above, at any
time after the termination of the Total Revolving Loan Commitment, if any
Revolving Loans or Letters of Credit remain outstanding, assignments may be made
as provided above, except that the respective assignment shall be of a portion
of the outstanding Revolving Loans of the respective Bank and its participation
in Letters of Credit and its obligation to make Mandatory Borrowings, although
any such assignment effected after the termination of the Total Revolving Loan
Commitment shall not release the assigning Bank from its obligations as a
Participant with respect to outstanding Letters of Credit or to fund its share
113
of any Mandatory Borrowing (although the respective assignee may agree, as
between itself and the respective assigning Bank, that it shall be responsible
for such amounts).
(c) Nothing in this Agreement shall prevent or prohibit any Bank or
BTCo from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may pledge all
or any portion of its Notes or Loans to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Bank from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Administrative Agent, the Collateral Agent or any Bank in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between any Credit Party and the Administrative Agent, the
Collateral Agent or any Bank shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Administrative Agent, the Collateral Agent
or any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent or the Banks to any other or further
action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) The Administrative Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its pro rata share
--- ----
of such payment) pro rata based upon their respective shares, if any, of the
--- ----
Obligations with respect to which such payment was received.
(b) Except to the extent that this Agreement provides for payments to
be allocated to the Banks with particular Obligations, if any Bank (a
"Benefitted Bank") shall at any time receive any payment of all or part of its
Loans or the other Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 10.05, or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's Loans or the
other Obligations owing to such other Bank, or interest thereon, such Benefitted
Banks shall purchase for cash from the other Banks a participating interest in
such portion of each such other Bank's Loans and/or other Obligations owing to
each such other Banks, or shall provide such other Banks with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefitted Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks; provided, however, that if all
-------- -------
114
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Bank, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided, that except as otherwise specifically
--------
provided herein, all computations determining compliance with Sections 4.02,
8.14 and 9, including definitions used therein shall, in each case, utilize
accounting principles and policies in effect at the time of the preparation of,
and in conformity with those used to prepare, the December 31, 1998 financial
statements of the Borrower delivered to the Banks pursuant to Section 7.10(b);
provided further, that (i) to the extent expressly required pursuant to the
----------------
provisions of this Agreement, certain calculations shall be made on a Pro Forma
--- -----
Basis, (ii) to the extent compliance with any of Section 9.08 and 9.09 would
include periods occurring prior to the Restatement Effective Date, such
calculation shall be adjusted on a Pro Forma Basis to give effect to the
--- -----
transactions contemplated by the Agreement as if same had occurred on the first
day of the respective period, (iii) in the case of any determinations of
Consolidated Interest Expense or Consolidated EBITDA for any portion of any Test
Period which ends prior to the Restatement Effective Date, all computations
determining compliance with Sections 9.08 and 9.09 and all determinations of the
Total Leverage Ratio shall be calculated in accordance with the definition of
Test Period contained herein and (iv) for purposes of calculating financial
terms, all covenants and related definitions, all such calculations based on the
operations of the Borrower and its Subsidiaries on a consolidated basis shall be
made without giving effect to the operations of any Unrestricted Subsidiaries.
(b) For purposes of determining compliance with any incurrence or
expenditure tests set forth in Sections 8 and/or 9 (excluding Sections 9.08 and
9.09), any amounts so incurred or expended (to the extent incurred or expended
in a currency other than U.S. Dollars) shall be converted into U.S. Dollars on
the basis of the Dollar Equivalent of the respective such amounts as in effect
on the date of such incurrence or expenditure under any provision of any such
Section that has an aggregate Dollar limitation provided for therein (and to the
extent the respective incurrence or expenditure test regulates the aggregate
amount outstanding or made at any time and it is expressed in terms of U.S.
Dollars, all amounts originally incurred or spent in currencies other that U.S.
Dollars shall be converted into U.S. Dollars on the basis of the Dollar
Equivalent of the respective such amounts as in effect on the date any new
incurrence or expenditures made under any provision of any such Section that
regulates the Dollar amount outstanding or made at any time).
(c) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
115
13.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
------------------------------------------------
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Borrower, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Agreement or any other Credit Document
brought in any of the aforesaid courts, that any such court lacks jurisdiction
over such Borrower. The Borrower further irrevocably consents to the service of
process in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such Borrower, at its address
for notices pursuant to Section 13.03, such service to become effective 30 days
after such mailing. The Borrower hereby irrevocably waives any objection to
such service of process and further irrevocably waives and agrees not to plead
or claim in any action or proceeding commenced hereunder or under any other
Credit Document that service of process was in any way invalid or ineffective.
Nothing herein shall affect the right of the Administrative Agent, the
Collateral Agent, any Bank or the holder of any Note to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Credit Party in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Restatement Effective Date") on which (i) the Borrower, the
Administrative Agent, and each of the Banks shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same (including by way of facsimile transmission) to the Administrative Agent
and (ii) the conditions contained in Sections 5 and 6 are met to the
satisfaction of the Administrative Agent and the Required Banks (determined
immediately after the occurrence of the Restatement Effective Date). Unless the
Administrative Agent has received actual notice from any Bank that the
conditions
116
contained in Sections 5 and 6 have not been met to its satisfaction, upon the
satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon the Administrative Agent's good faith determination
that the conditions described in clause (ii) of the immediately preceding
sentence have been met, then the Restatement Effective Date shall have been
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met (although the occurrence of the
Restatement Effective Date shall not release the Borrower from any liability for
failure to satisfy one or more of the applicable conditions contained in Section
5 or 6). The Administrative Agent will give the Borrower and each Bank prompt
written notice of the occurrence of the Restatement Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Maturity Date, or reduce the
rate or extend the time of payment of interest or Fees thereon, or reduce the
principal amount thereof (it being understood that any amendment or modification
to the financial definitions in this Agreement shall not constitute a reduction
in any rate of interest or fees for purposes of this clause (i)), (ii) release
all or substantially all of the Collateral (except as expressly provided in the
Security Documents) under the Security Documents, (iii) amend, modify or waive
any provision of this Section 13.12 (it being understood that with the Consent
of the Required Banks, additional extensions of credit pursuant to the Agreement
may provide for additional voting or consent rights with respect thereto), (iv)
reduce the percentage specified in the definition of Required Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of Revolving
Loan Commitments are included on the Restatement Effective Date), (v) consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement, except that the Borrower may assign or otherwise transfer
its rights, obligations and interests hereunder or under the other Credit
Documents to any Wholly-Owned Domestic Subsidiary of the Borrower to the extent
(but only to the extent) that (i) the Borrower guarantees all of the Obligations
of such assignee Subsidiary pursuant to a guaranty in form and substance
satisfactory to the Required Banks and (ii) the Required Banks shall have
consented to such assignment or transfer, or (vi) release all or substantially
all of the Guarantors; provided further, that no such change, waiver, discharge
----------------
or termination shall (u) increase the Revolving Loan Commitments of any Bank
over the amount thereof then in effect
117
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Bank, and that an
increase in the available portion of any Revolving Loan Revolving Loan
Commitment of any Bank shall not constitute an increase in the Revolving Loan
Commitment of such Bank), (v) without the consent of each Letter of Issuer,
amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (w) without the consent of BTCo,
alter its rights or obligations with respect to Swingline Loans, (x) without the
consent of the Administrative Agent, amend, modify or waive any provision of
Section 12 as same applies to the Administrative Agent or any other provision as
same relates to the rights or obligations of the Administrative Agent, (y)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent and (z)
without the consent of the Supermajority Banks, release any Guarantor
constituting 10% or more of the assets of the Company and its Subsidiaries
(except as expressly set forth in the Subsidiaries Guaranty).
(b) If, in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment and/or repay outstanding Loans of such Bank which gave rise to
the need to obtain such Bank's consent and/or cash collateralize its applicable
RL Percentage of the Letter of Credit of Outstandings, in accordance with
Sections 3.02(b) and/or 4.01(v), provided that, unless the Revolving Loan
--------
Commitments which are terminated and Loans which are repaid pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Revolving Loan Commitments and/or
outstanding Loans of existing Banks (who in each case must specifically consent
thereto), then in the case of any action pursuant to preceding clause (B), the
remaining Banks (determined after giving effect to the proposed action) shall
specifically consent thereto, provided further, that the Borrower shall not have
----------------
the right to replace a Bank, terminate its Revolving Loan Commitment or repay
its Loans solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second proviso
to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 12.07 and 13.01, shall, subject
to the provisions of Section 13.19 (to the extent applicable), survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
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13.14 Domicile of Loans and Commitments. Each Bank may transfer and
---------------------------------
carry its Loans and/or Revolving Loan Commitments at, to or for the account of
any branch office, subsidiary or affiliate of such Bank; provided, that the
--------
Borrower shall not be responsible for costs arising under Section 1.10, 1.11,
2.05 or 4.04 resulting from any such transfer (other than a transfer pursuant to
Section 1.12) to the extent such costs would not otherwise be applicable to such
Bank in the absence of such transfer.
13.15 Confidentiality. (a) Each of the Banks agrees that it will
---------------
use its reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its directors, trustees, employees, auditors, counsel or
other professional advisors, to affiliates or to another Bank if the Bank or
such Bank's holding or parent company in its sole discretion determines that any
such party should have access to such information) any information with respect
to the Borrower or any of its Subsidiaries which is furnished pursuant to this
Agreement; provided, that any Bank may disclose any such information (a) as has
--------
become generally available to the public, (b) as may be required or appropriate
(x) in any report, statement or testimony submitted to any municipal, state or
Federal regulatory body having or claiming to have jurisdiction over such Bank
or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors or (y) in connection with any request or requirement of any such
regulatory body (including any securities exchange or self-regulatory
organization), (c) as may be required or appropriate in response to any summons
or subpoena or in connection with any litigation, (d) to comply with any law,
order, regulation or ruling applicable to such Bank, and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, that such prospective transferee
--------
agrees to be bound by this Section 13.15 to the same extent as such Bank.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that such Persons shall be subject to the provisions of
--------
this Section 13.15 to the same extent as such Bank.
13.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
--------------------
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.17 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as such Borrower's agent, solely for purposes of this Section
13.17, to maintain a register (the "Register") on which it will record the
Revolving Loan Commitments from time to time of each of the Banks, the Loans
made by each of the Banks and each repayment in respect of the principal amount
of the Loans of each Bank. Failure to make any such recordation, or any error
in such recordation shall not affect the Borrower's
119
obligations in respect of such Loans. With respect to any Bank, the transfer of
any Revolving Loan Commitment of such Bank and the rights to the principal of,
and interest on, any Loan shall not be effective until such transfer is recorded
on the Register maintained by the Administrative Agent with respect to ownership
of such Revolving Loan Commitment and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Revolving Loan Commitment
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Revolving Loan Commitment and Loans shall be
recorded by the Administrative Agent on the Register only upon the acceptance by
the Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a
Revolving Loan Commitment and/or Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Revolving
Loan Commitment and/or Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Bank
and/or the new Bank. The Borrower jointly and severally agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
13.17.
13.18 Additions of New Banks; Conversion of Original Loans of
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Continuing Banks; Surrender of Notes. (a) On and as of the occurrence of the
---------- -------------------------
Restatement Effective Date in accordance with Section 13.10 hereof, each New
Bank shall become a "Bank" under, and for all purposes of, this Agreement and
the other Credit Documents.
(b) The parties hereto acknowledge that each Existing Bank has been
offered the opportunity to participate in this Agreement, after the occurrence
of the Restatement Effective Date, as a Continuing Bank hereunder, but that no
Existing Bank is obligated to be a Continuing Bank.
(c) Notwithstanding anything to the contrary contained in the Existing
Credit Agreement, this Agreement or any other Credit Document, the Borrower
agrees and each of the Banks hereby agree that on the Restatement Effective
Date, each Bank with a Revolving Loan Commitment as set forth on Schedule I
(after giving effect to the Restatement Effective Date) shall make or maintain
(including by way of conversion) that principal amount of Revolving Loans to the
Borrower as is required by Section 1.01, provided that if the Original Loans of
any Continuing Bank outstanding on the Restatement Effective Date (immediately
before giving effect thereto) exceed the aggregate principal amount of Loans
required to be made available by such Bank on such date (after giving effect to
the Restatement Effective Date), then Original Loans of such Continuing Bank in
an amount equal to such excess shall be repaid on the Restatement Effective
Date, together with interest thereon, to such Continuing Bank. Notwithstanding
anything to the contrary contained in the Existing Credit Agreement, this
Agreement or
120
any other Credit Document, the parties hereto hereby consent to the repayments
and reductions required above.
(d) On the Restatement Effective Date, each Existing Bank shall have
surrendered to the Administrative Agent for cancellation the promissory notes
issued to it pursuant to the Existing Credit Agreement in respect of its
Original Loans.
13.19 Limitation on Additional Amounts, etc. Notwithstanding
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anything to the contrary contained in Section 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under such Section within six months after the later of (x) the
date the Bank incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Bank has actual knowledge of its incurrence of the
respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such Bank
shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be, to the
extent of the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital that are incurred or
suffered on or after the date which occurs six months prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be. This
Section 13.19 shall have no applicability to any Section of this Agreement other
than said Sections 1.10, 1.11, 2.05 and 4.04.
121
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
NRT INCORPORATED
By
------------------------------------------------
Title:
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
and Arranger
By
------------------------------------------------
Title:
By
------------------------------------------------
Title:
THE CHASE MANHATTAN BANK,
Individually and as Syndication Agent
and Arranger
By
------------------------------------------------
Title:
122
PARIBAS
By
------------------------------------------------
Title:
123
CITY NATIONAL BANK
By
------------------------------------------------
Title:
124
BANKBOSTON, N.A.
By
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Title:
125
SCHEDULE I
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LIST OF BANKS AND COMMITMENTS
-----------------------------
Revolving
Bank Loan Commitment
---- ---------------
Bankers Trust Company $25,000,000
The Chase Manhattan Bank $25,000,000
BankBoston, N.A. $25,000,000
Paribas $15,000,000
City National Bank $ 5,000,000
Total $95,000,000
SCHEDULE II
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ADDRESSES
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Bank Address
---- -------
Bankers Trust Company Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
The Chase Manhattan Bank 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx Xxxxxxxx
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
BankBoston, N.A. Real Estate Capital Markets
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Paribas 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Zoro
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
City National Bank 000 Xxxxx Xxxxxxx xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
