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EXHIBIT 10.24
COMPETITIVE ADVANCE AND MULTI-CURRENCY
REVOLVING CREDIT FACILITY AGREEMENT dated as of
October [ ], 1996, among CHOICE HOTELS HOLDINGS,
INC., a Delaware corporation (the "Borrower"), the
lenders listed in Schedule 2.01 (the "Lenders"),
NATIONSBANK, N.A., as co-agent, and THE CHASE
MANHATTAN BANK, a New York banking corporation, as
agent for the Lenders (in such capacity, the
"Agent").
The Borrower has requested the Lenders to extend credit to
the Borrower in order to enable it to borrow on a standby revolving credit basis
on and after the date hereof and at any time and from time to time prior to the
Maturity Date (as herein defined) a principal amount not in excess of
$100,000,000 at any time outstanding. The Borrower has requested that up to
$75,000,000 of such principal amount be available to the Borrower in Alternative
Currencies (as herein defined). The Borrower has also requested the Lenders to
provide a procedure pursuant to which the Borrower may invite the Lenders to bid
on an uncommitted basis on short-term borrowings by the Borrower. The Borrower
has requested the Issuing Bank (as herein defined) to issue letters of credit,
in an aggregate face amount at any time outstanding not in excess of
$25,000,000, to support payment obligations incurred in the ordinary course of
business by the Borrower and its Subsidiaries (as herein defined). The proceeds
of the borrowings hereunder shall be used for general corporate purposes of the
Borrower and its Subsidiaries, including working capital, capital expenditures,
acquisitions and equity investments. The Lenders are willing to extend such
credit to the Borrower and the Issuing Bank is willing to issue letters of
credit for the account of the Borrower on the terms and subject to the
conditions herein set forth. Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings
specified below:
"ABR Borrowing" shall mean a Borrowing comprised
of ABR Loans.
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"ABR Loan" shall mean any Loan denominated in dollars bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Standby Loan" shall mean any Standby Loan denominated in
dollars bearing interest at a rate determined by reference to the Alternate Base
Rate in accordance with the provisions of Article II.
"Adjusted CD Rate" shall mean, with respect to any CD
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the sum of (a) a rate per annum
equal to the product of (i) the Fixed CD Rate in effect for such Interest Period
and (ii) Statutory Reserves, plus (b) the Assessment Rate. For purposes hereof,
the term "Fixed CD Rate" shall mean the arithmetic average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the prevailing rates per annum bid at or
about 10:00 a.m., New York City time, to the Agent on the first Business Day of
the Interest Period applicable to such CD Borrowing by three New York City
negotiable certificate of deposit dealers of recognized national standing
selected by the Agent for the purchase at face value of negotiable certificates
of deposit of major United States money center banks in a principal amount
approximately equal to the Reference Bank's portion of such CD Borrowing and
with a maturity comparable to such Interest Period.
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit B.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified. Following the Distribution, the Borrower and the Subsidiaries
shall not be deemed to be Affiliates of Manor Care or its subsidiaries merely by
virtue of such companies' having common shareholders or directors as a result of
the Distribution.
"Agent and Administrative Fees" shall have the meaning
assigned to such term in Section 2.06(b).
"Aggregate Principal Amount Outstanding" shall
mean, at any time, the sum of (i) the aggregate principal
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amount at such time of all outstanding Loans denominated in dollars and (ii) the
aggregate Equivalent Dollar Amount at such time of the principal amounts of all
outstanding Eurocurrency Loans.
"Aggregate Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate
of interest per annum publicly announced from time to time by the Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as effective. "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate. "Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from the New York City negotiable certificate of
deposit dealers of recognized national standing selected by it. "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from
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three Federal funds brokers of recognized national standing selected by it. If
for any reason the Agent shall have determined that it is unable to ascertain
the Base CD Rate or the Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clauses (b) or (c) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Three Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Alternative Currency" shall mean Sterling, French Francs,
Deutsche Marks and any other freely available currency (other than ECUs) that is
freely transferable and freely convertible into dollars and in which dealings in
deposits are carried on in the London interbank market, which shall be requested
by the Borrower and approved by the Lenders.
"Applicable Percentage" shall mean, with respect to any CD
Loan or Eurodollar Standby Loan or with respect to the Facility Fees, as the
case may be, the applicable percentage set forth in the table below under the
caption "Eurodollar Spread", "CD Spread" or "Facility Fee Percentage", as the
case may be, based upon the Consolidated Leverage Ratio as of the end of and for
the most recent period of four consecutive fiscal quarters for which financial
statements of the Borrower are required to have been delivered under Section
5.04(a) or (b), whether or not
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financial statements in respect of any subsequent period
shall have been delivered:
============================================================================================================================
Consolidated Facility Fee Euro- CD
Leverage Ratio Percentage dollar Spread
Spread
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Category 1 Less than or
equal to 0.50 to
1.00 .100% .200% .325%
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Category 2 Greater than
0.50 to 1.00,
but less than or
equal to 1.50 to
1.00 .125% .225% .350%
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Category 3 Greater than
1.50 to 1.00,
but less than or
equal to 2.50 to
1.00 .175% .275% .400%
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Category 4 Greater than
2.50 to 1.00,
but less than or
equal to 3.00 to
1.00 .200% .350% .475%
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Category 5 Greater than
3.00 to 1.00 .250% .500% .625%
============================================================================================================================
;provided that the Applicable Percentage for the period commencing on the date
hereof and ending on November 30, 1996, shall be determined by reference to
Category 4; provided further that at any time when financial statements required
to have been delivered under Section 5.04(a) or (b) have not been delivered, the
Applicable Percentage shall be determined by reference to Category 5.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) identified by the Agent
(or, if need be, reasonably estimated by the Agent) as the then current net
annual assessment rate that will be employed in determining amounts payable by
the Agent to the Federal Deposit Insurance Corporation (or any successor) for
insurance by
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such Corporation (or such successor) of time deposits made in dollars at the
Agent's domestic offices.
"Asset Sale" shall mean, with respect to the Borrower or any
Subsidiary, any sale, transfer or other disposition of any assets or other
properties (including individual business assets, patents, trademarks and other
intangibles) of the Borrower or such Subsidiary, including the sale, transfer or
disposition of any capital stock of or any merger or consolidation involving any
Subsidiary and any issuance or sale by any Subsidiary of shares of its capital
stock, other than (i) sales of inventory and used equipment in the ordinary
course of business of the person (whether the Borrower or a Subsidiary) owning
and selling such inventory or used equipment; (ii) sales, transfers and other
dispositions of any tangible assets by the Borrower or any Subsidiary if the
Borrower or such Subsidiary enters into an agreement to replace such assets with
a comparable asset as soon as practicable (and in no event later than three
months) after the disposition and, pending such replacement, diligently pursues
the replacement thereof, and the fair market value of the replacement asset is
substantially equivalent to or exceeds that of the asset so disposed of; (iii)
sales, transfers and other dispositions of any assets to the Borrower or any
Subsidiary; (iv) Sale and Lease-Back Transactions; (v) sales by the Borrower or
Subsidiaries of assets acquired from persons other than the Borrower or other
Subsidiaries, which sales occur not more than 12 months after the respective
dates on which such assets were acquired and (vii) the Distribution.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the Agent,
in the form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders (or, in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.03) on a
single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.04.
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"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that (i) when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market and (ii) when used in connection with a Eurocurrency
Loan, "Business Day" shall also exclude any day on which commercial banks are
not open for foreign exchange business in London or, if such reference relates
to the date on which any amount is to be paid or made available in an
Alternative Currency, in the principal financial center in the country of such
Alternative Currency.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
applied on a consistent basis and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount thereof
at such time determined in accordance with GAAP applied on a consistent basis.
"CD Borrowing" shall mean a Borrowing comprised of
CD Loans.
"CD Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
"CD Standby Borrowing" shall mean a Borrowing composed of CD
Standby Loans.
"CD Standby Loan" shall mean any Standby Loan bearing interest
at a rate determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
A "Change in Control" shall be deemed to have occurred if (a)
any person or group (within the meaning of Rule 13d-5 of the Securities and
Exchange Commission as in effect on the date hereof) other than Xxxxxxx Xxxxxx
and his family shall own directly or indirectly, beneficially or of record,
shares representing more than 15% of the aggregate
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ordinary voting power represented by the issued and outstanding capital stock of
the Borrower, except that such a person or group may own directly or indirectly,
beneficially or of record, shares representing not more than 20% of the
aggregate voting power represented by the issued and outstanding capital stock
of the Borrower if such person or group reports and continues to report such
ownership on Schedule 13G (filed pursuant to Rule 13d-1(b), Rule 13d- 1(c), or,
in the case of amendments, Rule 13d-2(b), of the Securities and Exchange
Commission as in effect on the date hereof); (b) a majority of the seats (other
than vacant seats) on the board of directors of the Borrower shall at any time
have been occupied by persons who were neither (i) nominated by the management
of the Borrower or by the Nominating Committee of the Borrower's board of
directors in connection with an annual meeting of the stockholders of the
Borrower, nor (ii) appointed by directors so nominated; or (c) any person or
group other than Xxxxxxx Xxxxxx and his family shall otherwise directly or
indirectly Control the Borrower. Notwithstanding the foregoing, if a trust or
foundation or other entity established by Xxxxxxx Xxxxxx or his family holds
shares representing in excess of 15% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower and
Xxxxxxx Xxxxxx or his family Controls such trust or foundation or such other
entity and the vote of such shares held by such trust or foundation or such
other entity and Xxxxxxx Xxxxxx and his family remain in Control of the
Borrower, there shall be no Change in Control for purposes of this Agreement;
provided, however, that any transfer of such shares by Xxxxxxx Xxxxxx, such
trust or such foundation or such other entity shall stand on its own merits for
purposes of this Agreement.
"Choice Hotels Franchising" shall mean Choice Hotels
International, Inc., a Delaware corporation, to be renamed Choice Hotels
Franchising, Inc. following the Distribution.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender hereunder as set forth in Schedule 2.01, as such
Lender's Commitment may be permanently terminated or reduced from time to time
pursuant to Section 2.11. The Commitments shall automatically and permanently
terminate on the Maturity Date.
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"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a
notification made by the Borrower pursuant to Section 2.03(d) in the form of
Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.03(b), (i) in the case of a Eurodollar
Competitive Loan, the Competitive Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Lender to the
Borrower pursuant to the bidding procedure described in Section 2.03. Each
Competitive Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Competitive Margin" shall mean, as to any Eurodollar
Competitive Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the LIBO Rate in order to determine the interest rate applicable
to such Loan, as specified in the Competitive Bid relating to such Loan.
"Consolidated EBITDA" shall mean, for any period, without
duplication, the sum for such period of (a) Consolidated Net Income, (b)
depreciation and amortization expense, (c) Consolidated Interest Expense, (d)
provisions for income tax expense, (e) restructuring charges incurred in
connection with the Distribution and (f) non-cash charges related to the
impairment of assets (pursuant to FAS 121), all as determined in accordance with
GAAP consistently applied.
"Consolidated Funded Indebtedness" means, as of any date of
determination, all obligations accounted for as
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indebtedness on a consolidated balance sheet of the Borrower on such date, in
accordance with GAAP consistently applied, whether such obligations are
classified as long-term or short-term.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period,
gross total expenses of the Borrower and its consolidated Subsidiaries accounted
for as interest expense (including capitalized interest determined in accordance
with GAAP consistently applied) for such period, including (i) the portion of
rental payments under Capital Lease Obligations deemed to represent interest in
accordance with GAAP consistently applied, (ii) the amortization of debt
discounts, (iii) the amortization of all fees (including fees with respect to
interest rate protection agreements) payable in connection with the incurrence
of Indebtedness to the extent included in interest expense, all as determined on
a consolidated basis in accordance with GAAP consistently applied. For purposes
of the foregoing, gross interest expense shall be determined after giving effect
to any net payments made or received with respect to interest rate protection
agreements entered in to as a hedge against interest rate exposure.
"Consolidated Leverage Ratio" shall mean the ratio of
Consolidated Funded Indebtedness to Consolidated EBITDA. In the event the
Borrower shall complete, directly or through a Subsidiary, an acquisition or
divestiture of any Person or business unit during any period, the Consolidated
Leverage Ratio as of the end of and for such period shall thereafter be
determined on a pro forma basis as if such acquisition or divestiture had been
completed on the first day of such period.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of the Borrower and its consolidated Subsidiaries for such
period, as determined on a consolidated basis in accordance with GAAP
consistently applied.
"Consolidated Net Worth" shall mean, as at any date of
determination, the consolidated stockholders' equity of the Borrower and its
consolidated Subsidiaries, as
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determined on a consolidated basis in accordance with GAAP consistently applied.
"Consolidated Total Assets" shall mean, as at any date of
determination, the total assets of the Borrower and its consolidated
Subsidiaries at such time, as determined on a consolidated basis in accordance
with GAAP consistently applied.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto; provided, however, the existence of a management contract by the
Borrower or one of its Affiliates to manage another entity shall not be deemed
to be Control.
"Credit Event" shall have the meaning assigned to
such term in Section 4.01.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Denomination Date" shall mean, in relation to any
Eurocurrency Borrowing, the date that is three Business Days before the date of
such Borrowing.
"Deutsche Marks" shall mean the lawful money of the Federal
Republic of Germany.
"Distribution" shall mean the distribution by Manor Care to
its shareholders of all the capital stock of the Borrower in the manner, on the
terms and with the results set forth in the Form 10.
"Distribution Agreement" shall mean the Distribution Agreement
dated as of [ ], 1996, by and between Manor Care and the Borrower.
"dollars" or "$" shall mean lawful money of the United States
of America.
"Effective Date" shall mean the date on which this Agreement
becomes effective in accordance with Section 4.02.
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"Equivalent Dollar Amount" shall mean, with respect to an
amount of any Alternative Currency on any date, the amount of dollars that may
be purchased with such amount of such Alternative Currency at the Spot Exchange
Rate on such date.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group of which the Borrower is a member
and which is treated as a single employer under Section 414 of the Code.
"Eurocurrency Borrowing" shall mean a Borrowing
comprised of Eurocurrency Loans.
"Eurocurrency Loan" shall mean any Loan denominated in an
Alternative Currency and bearing interest at a rate determined by reference to
the LIBO Rate in accordance with the provisions of Article II.
"Eurocurrency Sublimit" shall mean $75,000,000.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
denominated in dollars and bearing interest at a rate determined by reference to
the LIBO Rate in accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan
or Eurodollar Standby Loan.
"Eurodollar Standby Borrowing" shall mean a Borrowing
comprised of Eurodollar Standby Loans.
"Eurodollar Standby Loan" shall mean any Standby Loan
denominated in dollars and bearing interest at a rate determined by reference to
the LIBO Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
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"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Fees" shall mean the Facility Fee and the Agent
and Administrative Fees, the L/C Participation Fees and the
Issuing Bank Fees.
"Financial Officer of the Borrower" of any corporation shall
mean the chief financial officer, principal accounting officer, Treasurer or
Controller of such corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of a
decimal to no more than four decimal places) specified by the Lender making such
Loan in its Competitive Bid.
"Form 10" shall mean the registration statement on Form 10
under the Securities Exchange Act of 1934 of the Borrower filed with the
Securities and Exchange Commission on July 11, 1996, as amended and distributed
to the Lenders prior to the date hereof.
"French Francs" shall mean the lawful money of the
Republic of France.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring
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the owner of such Indebtedness of the payment of such Indebtedness or (c) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness; provided, however, that the term Guarantee shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Hotel Properties" shall mean the properties set forth on
Schedule 1.01, including fixtures and personalty associated therewith.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid, (d) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services,
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (j) all obligations of such person as an account
party in respect of letters of credit (other than (x) documentary letters of
credit (including commercial and trade letters of credit) issued to secure
payment obligations in respect of goods and services in the ordinary course of
business and (y) letters of credit and surety bonds with respect to obligations
of such person that are fully accounted for as liabilities in the financial
records of such person) and bankers' acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable thereto and, in the case of a
Eurocurrency Loan or Eurodollar Loan with an Interest Period of more than three
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months' duration or a Fixed Rate Loan or a CD Loan with an Interest Period of
more than 90 days' duration, each day that would have been an Interest Payment
Date for such Loan had successive Interest Periods of three months' duration or
90 days' duration, as the case may be, been applicable to such Loan and, in
addition, the date of any refinancing or conversion of such Loan with or to a
Loan of a different Type.
"Interest Period" shall mean (a) as to any Eurocurrency
Borrowing or Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the applicable Borrower may elect, (b) as to any
CD Borrowing, a period of 30, 60, 90 or 180 days' duration, as the Borrower may
elect, commencing on the date of such Borrowing, (c) as to any ABR Borrowing,
the period commencing on the date of such Borrowing and ending on the date 90
days thereafter or, if earlier, on the Maturity Date or the date of prepayment
of such Borrowing and (d) as to any Fixed Rate Borrowing, the period commencing
on the date of such Borrowing and ending on the date specified in the
Competitive Bids in which the offer to make the Fixed Rate Loans comprising such
Borrowing were extended, which shall not be earlier than seven days after the
date of such Borrowing or later than 360 days after the date of such Borrowing;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of Eurocurrency Loans and Eurodollar Loans
only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Interest Rate Determination Date" shall mean, with respect to
a Eurocurrency Borrowing or Eurodollar Borrowing, the date which is two Business
Days prior to the commencement of any Interest Period for such Borrowing.
"Issuing Bank" shall mean, as the context may require, (a) The
Chase Manhattan Bank, or (b) any other Lender that may become an Issuing Bank
pursuant to
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Section 2.20(i), with respect to Letters of Credit issued by such Lender.
"Issuing Bank Agreement" shall mean an agreement in
substantially the form of Exhibit E.
"Issuing Bank Fees" shall have the meaning assigned to such
term in Section 2.06(c).
"L/C Commitment" shall mean, with respect to any Issuing Bank,
the commitment of such Issuing Bank to issue Letters of Credit pursuant to
Section 2.20.
"L/C Disbursement" shall mean a payment or disbursement made
by an Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time, plus
(b) the aggregate principal amount of all L/C Disbursements that have not yet
been reimbursed at such time. The L/C Exposure of any Lender at any time shall
mean its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to
such term in Section 2.06(c)(i).
"Letter of Credit" shall mean any letter of credit
issued pursuant to Section 2.20.
"LIBO Rate" shall mean, (a) with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the rate at which deposits in the
currency in which such Loan is denominated approximately equal in principal
amount to the Reference Bank's portion of such Eurocurrency Borrowing and for a
maturity comparable to such Interest Period are offered to the principal London
office of the Agent, in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, on the relevant Interest Rate
Determination Date, and (b) with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to (i) in the case of a Standby Borrowing, the
Reference Bank's portion of such Standby Borrowing and
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(ii) in the case of a Competitive Borrowing, a principal amount that would have
been the Reference Bank's portion of such Competitive Borrowing had such
Competitive Borrowing been a Standby Borrowing, and for a maturity comparable to
such Interest Period are offered to the principal London office of the Agent, in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, on the applicable Interest Rate Determination Date.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party (excluding rights of first refusal) with respect
to such securities.
"Loan" shall mean a Competitive Loan or a Standby Loan,
whether made as a Eurocurrency Loan, a Eurodollar Loan, a CD Loan, an ABR Loan
or a Fixed Rate Loan, as permitted hereby.
"Loan Documents" shall mean this Agreement and the Letters of
Credit.
"Manor Care" shall mean Manor Care, Inc., a Delaware
corporation.
"Manor Care Note" shall mean (a) Indebtedness of the Borrower
to MNR Finance Corp., a subsidiary of Manor Care, in an aggregate principal
amount not in excess of $225,722,500 having a three year term and bearing
interest at a rate equal to 9% per annum (the "Note), and (b) any Indebtedness
that renews, extends, refinances or replaces the Note; provided, however, that
the Indebtedness that extends, renews, refinances or replaces the Note has (i) a
maturity and schedule of principal or redemption payments no earlier than that
of the Note and (ii) an aggregate principal amount that is equal to or less than
the aggregate principal amount then outstanding (plus fees and expenses,
including any premium and defeasance costs) of the Note.
"Margin Stock" shall have the meaning given such term under
Regulation U.
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"Material Adverse Effect" shall mean a materially adverse
effect on the business, assets, property or condition, financial or otherwise,
of the Borrower and the Subsidiaries taken as a whole.
"Maturity Date" shall mean the third anniversary of the date
hereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Non-Recourse Hotel Indebtedness" shall mean Indebtedness,
incurred solely in respect of a Hotel Property, (i) as to which neither the
Borrower nor any Subsidiary (x) provides credit support (including any
undertaking, agreement or instrument which would constitute Indebtedness) or has
given or made other assurances regarding repayment, (y) is directly or
indirectly personally liable or (z) constitutes the lender and (ii) the obligees
of which will have recourse solely against the assets comprising such Hotel
Property for repayment of the principal of and interest on such Indebtedness and
any fees, indemnities, expense reimbursements or other amounts of whatever
nature accrued or payable in connection with such Indebtedness.
"Obligations" shall mean (a) the Borrower's obligations in
respect of the due and punctual payment of principal of and interest on the
Loans when and as due whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise, (b) all Fees, expenses, indemnities,
reimbursements and other obligations, monetary or otherwise, of the Borrower
under this Agreement or any other Loan Document and (c) all obligations,
monetary or otherwise, of each Subsidiary under each Loan Document to which it
is a party.
"Original Credit Agreement" shall have the meaning ascribed
thereto in the preamble to this Agreement.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America);
(b) investments in commercial paper having credit
ratings of at least A-2 from S&P and P-2 from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and
surplus and undivided profits of not less than $200,000,000;
(d) investments in the ordinary course of business in
customary repurchase agreements with respect to freely marketable,
short-term securities of the type customarily subject to repurchase
agreements; and
(e) other readily marketable debt and equity securities traded
on national securities exchanges or on other nationally recognized
markets, including over-the-counter markets.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
which is maintained for employees of the Borrower or any ERISA Affiliate.
"Proceeds" shall mean, with respect to any Asset Sale, (a) the
gross amount of consideration or other amounts payable to or receivable by the
Borrower or a Subsidiary in respect of such Asset Sale, less (b) the amount, if
any, of
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all estimated taxes payable with respect to such Asset Sale whether or not
payable during the taxable year in which such Asset Sale shall have occurred,
and less (c) reasonable and customary fees, commissions, costs and other
expenses (other than those payable to the Borrower or a Subsidiary or Affiliate
of the Borrower) which are incurred in connection with such Asset Sale and are
payable by the seller or the transferor of the assets or property to which such
Asset Sale relates, but only to the extent not already deducted in arriving at
the amount referred to in clause (a) above. For purposes of determining
Proceeds, the value of all noncash consideration payable or receivable by the
Borrower or any Subsidiary, as the case may be, shall be the fair market value
of such noncash consideration as determined in good faith by the Borrower and
the Borrower shall provide to the Agent a certificate of a Financial Officer of
the Borrower with respect to the fair market value of such consideration, in
form and substance reasonably satisfactory to the Agent.
"Pro Rata Percentage" of any Lender at any time shall mean the
percentage of the Total Commitment represented by such Lender's Commitment. In
the event the Commitments shall have expired or been terminated, the Pro Rata
Percentages shall be determined on the basis of the Commitments most recently in
effect (giving effect to any assignments under Section 9.04).
"Quality Hotels" shall mean Quality Hotels Europe, Inc., a
Subsidiary.
"Reference Bank" shall mean the Agent or, in the case where
the Agent's Commitment is not the largest of the Lenders' Commitments, the
Lender possessing the largest Commitment.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
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"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate which is considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing at least a majority of the Total Commitment or, if the
Commitments have been terminated, Lenders holding Loans and L/C Exposures
representing at least a majority of the sum of the aggregate amount of L/C
Exposures and aggregate principal amount of the Loans then outstanding.
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Standby Loans of such Lender denominated in dollars, plus the
Equivalent Dollar Amount at such time of the aggregate principal amount at such
time of all outstanding Standby Loans of such Lender that are Alternative
Currency Loans, plus the aggregate amount at such time of such Lender's L/C
Exposure.
"Sale and Lease-Back Transaction" shall mean any arrangement,
directly or indirectly, with any person whereby such person shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
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"Significant Subsidiary" shall mean at any time (a) Choice
Hotels Franchising, (b) any Subsidiary of the Borrower with revenues during the
fiscal year of the Borrower most recently ended greater than or equal to 5% of
the total revenues of the Borrower and its Subsidiaries during such year,
computed and consolidated in accordance with GAAP consistently applied
("Consolidated Revenues"), (c) any Subsidiary of the Borrower with assets as of
the last day of the Borrower's most recently ended fiscal year greater than or
equal to 5% of the total assets of the Borrower and its Subsidiaries at such
date, computed and consolidated in accordance with GAAP consistently applied
("Consolidated Assets"), (d) any Subsidiary with stockholder's equity as of the
last day of the Borrower's most recently ended fiscal year greater than or equal
to 5% of the stockholder's equity of the Borrower and the Subsidiaries at such
date, computed and consolidated in accordance with GAAP consistently applied
("Net Stockholders' Equity"), (e) any Subsidiary designated in writing by the
Borrower as a Significant Subsidiary, (f) any Subsidiary created or acquired by
the Borrower after the date hereof that falls within or that comes to meet one
of clauses (a) through (e) or (g) any Subsidiary in existence on the date hereof
which comes to meet one of clauses (a) through (e) after the date hereof;
provided, however, that if at any time (x) the aggregate revenues of all
Subsidiaries that are Significant Subsidiaries during any fiscal year of the
Borrower shall not equal or exceed 90% of Consolidated Revenues for such fiscal
year, (y) the aggregate assets of all Subsidiaries that are Significant
Subsidiaries as of the last day of any fiscal year of the Borrower shall not
equal or exceed 90% of Consolidated Assets at such date, or (z) the aggregate
stockholders' equity of all Subsidiaries that are Significant Subsidiaries as of
the last day of any fiscal year of the Borrower shall not equal or exceed 90% of
Net Stockholders' Equity at such date, then the term Significant Subsidiary
shall be deemed to include such Subsidiaries (as determined pursuant to the next
following sentence) of the Borrower as may be required so that none of clauses
(x), (y) and (z) above shall continue to be true. For purposes of the proviso to
the next preceding sentence, the Subsidiaries which shall be deemed to be
Significant Subsidiaries shall be determined based on the percentage that the
assets of each such Subsidiary are of Consolidated Assets, with the Subsidiary
with the highest such percentage being selected first, and each other Subsidiary
required to satisfy the requirements
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set forth in such proviso being selected in descending order of such percentage.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc.
"SPC" shall mean a special purpose corporation formed by the
Borrower as a wholly owned Subsidiary and possessing only Hotel Properties as
assets.
"Spot Exchange Rate" shall mean, on any day, with respect to
any Alternative Currency, the spot rate at which dollars are offered on such day
by The Chase Manhattan Bank in London for such Alternative Currency at
approximately 11:00 A.M. (London time).
"Standby Borrowing" shall mean a borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant
to Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.04. Each Standby Loan shall be a
Eurocurrency Loan, a Eurodollar Standby Loan, a CD Loan or an ABR Loan.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority to which
the Agent is subject for new negotiable nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to the applicable Interest
Period. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Sterling" or "(pound)" shall mean the lawful money of
the United Kingdom.
"Subordinated Indebtedness" shall mean Indebtedness of the
Borrower that is subordinated in right of payment to any of the Obligations.
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"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, or (b) which is, at the
time any determination is made, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Subsidiary" shall mean any subsidiary of the
Borrower.
"Total Commitment" shall mean at any time the aggregate amount
of the Lenders' Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to
such term in Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined and the currency in which such Loan or
the Loans comprising such Borrowing are denominated. For purposes hereof, "Rate"
shall include the LIBO Rate, the Adjusted CD Rate, the Alternate Base Rate and
the Fixed Rate, and "currency" shall include Dollars, French Francs, Deutsche
Marks, Sterling and any other Alternative Currency permitted hereunder.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall oth-
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erwise require. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP
consistently applied, as in effect from time to time; provided, however, that,
for purposes of determining compliance with any covenant set forth in Article
VI, such terms shall be construed in accordance with GAAP as in effect on the
date of this Agreement applied on a basis consistent with the application used
in preparing the Borrower's audited financial statements referred to in Section
3.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each
Lender agrees, severally and not jointly, to make Standby Loans (including
Eurocurrency Loans) to the Borrower, at any time and from time to time on and
after the date hereof and until the earlier of the Maturity Date and the
termination of the Commitment of such Lender, in an aggregate principal amount
at any time outstanding that will not result in such Lender's Revolving Credit
Exposure exceeding such Lender's Commitment minus the amount by which the
Competitive Loans outstanding at such time shall be deemed to have used such
Commitment pursuant to Section 2.16, subject, however, to the conditions that
(a) at no time shall any Loan be made if, immediately after giving effect
thereto and to the application of the proceeds thereof, the Aggregate Principal
Amount Outstanding would exceed the Total Commitment minus the L/C Exposure, (b)
at no time shall any Loan be made if, immediately after giving effect thereto
and to the application of the proceeds thereof, the aggregate Equivalent Dollar
Amount of all outstanding Eurocurrency Loans would exceed the Eurocurrency
Sublimit and (c) at all times the outstanding aggregate principal amount of all
Standby Loans made by each Lender shall equal the product of (i) the percentage
which its Commitment represents of the Total Commitment times (ii) the
outstanding aggregate principal amount of all Standby Loans made pursuant to
Section 2.04. Each Lender's Commitment is set forth opposite its respective name
in Schedule 2.01. Such Commitments may be terminated or reduced from time to
time pursuant to Section 2.11. Within the foregoing limits, the Borrower may
borrow, pay or prepay and reborrow hereunder, on and after the Effective Date
and prior to the Maturity
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Date, subject to the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their Commitments; provided, however, that the failure of any
Lender to make any Standby Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Each Competitive Loan shall be made
in accordance with the procedures set forth in Section 2.03. Except for Loans
deemed made pursuant to Section 2.02(e), the Standby Loans or Competitive Loans
comprising any Borrowing shall be (i) in the case of Competitive Loans, in an
aggregate principal amount which is an integral multiple of $1,000,000 and not
less than $5,000,000 and (ii) in the case of Standby Loans, in an aggregate
principal amount which is an integral multiple of $1,000,000 and not less than
$5,000,000 (or an aggregate principal amount equal to the remaining balance of
the available Commitments); provided, however, that if the Equivalent Dollar
Amount of any Eurocurrency Loan at the end of the Interest Period applicable
thereto does not exceed by more than 5%, and is not less than 95% of, the
Equivalent Dollar Amount of such Loan on the relevant Denomination Date, then
the applicable Borrower may (notwithstanding clauses (i) and (ii) above)
refinance such Loan with a new Loan denominated in the same Alternative Currency
and with the same principal amount (in such Alternative Currency) at the end of
such Interest Period, notwithstanding that the Equivalent Dollar Amount of the
new Loan is not an integral multiple of $1,000,000. For purposes of this
Section, any Eurocurrency Borrowing shall be deemed to be in an amount equal to
the Equivalent Dollar Amount of such Eurocurrency Borrowing determined as of its
Denomination Date.
(b) Each Standby Borrowing shall be comprised entirely of
Eurocurrency Loans, Eurodollar Standby Loans, CD Loans or ABR Loans and each
Competitive Borrowing shall be comprised entirely of Eurodollar Competitive
Loans or Fixed Rate Loans as the Borrower may request pursuant to Section 2.03
or 2.04, as applicable. Each Lender may at its option make any Eurocurrency Loan
or Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided, however, that (i) any exercise of such
option shall not affect the obligation of
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the applicable Borrower to repay such Loan in accordance with the terms of this
Agreement and (ii) in exercising such option, the Lender shall use its
reasonable efforts to minimize any increased costs to the applicable Borrower
resulting therefrom (which obligation of the Lender shall not require it to
take, or refrain from taking, actions that it determines would result in
increased costs for which it will not be compensated hereunder or that it
determines would be otherwise disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 2.13(c) shall apply). Borrowings of more than one Type may
be outstanding at the same time; provided, however, that the Borrower shall not
be entitled to request any Borrowing which, if made, would result in (A) an
aggregate of more than fifteen separate Standby Loans of any Lender being
outstanding hereunder at any one time, (B) there being Loans outstanding in an
aggregate of more than six currencies, (C) there being at any time more than
five Borrowers with Eurocurrency Loans outstanding or (D) there being more than
30 Eurocurrency Borrowings having an Interest Period of one month during any
twelve-month period. For purposes of the foregoing, Loans having different
Interest Periods, regardless of whether they commence on the same date, shall be
considered separate Loans.
(c) Subject to Section 2.05 and except with respect to Loans
made pursuant to Section 2.02(e), each Lender shall make each Loan to be made by
it hereunder on the proposed date thereof by wire transfer of immediately
available funds to such account as the Agent may designate, not later than 12:00
noon, New York City time, or, in the case of funds in an Alternative Currency,
12:00 noon, London time, and the Agent shall by 3:00 p.m., New York City time,
or, in the case of funds in an Alternative Currency, 3:00 p.m., London time,
credit the amounts so received to an account designated by the applicable
Borrower with the Agent or, if a Borrowing shall not occur on such date because
any condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders. Competitive Loans shall be made
by the Lender or Lenders whose Competitive Bids therefor are accepted pursuant
to Section 2.03 in the amounts so accepted and Standby Loans shall be made by
the Lenders pro rata in accordance with Section 2.16. Unless the Agent shall
have received notice from a Lender prior to (or, in the case of an ABR
Borrowing, on) the date of any Borrowing that such Lender shall not make
available to the Agent such Lender's
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portion of such Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date of such Borrowing in accordance with
this Section 2.02(c) and the Agent may, in reliance upon such assumption, make
available to the applicable Borrower on such date a corresponding amount. If the
Agent shall have so made funds available then, to the extent that such Lender
shall not have made such portion available to the Agent, such Lender and the
applicable Borrower severally agree to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the applicable Borrower until the date
such amount is repaid to the Agent at (i) in the case of the applicable
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate determined by the Agent to
represent its cost of overnight or short-term funds in the relevant currency
(which determination shall be conclusive absent manifest error). If such Lender
shall repay to the Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
(e) If the Issuing Bank shall not have received from the
Borrower the payment required to be made by Section 2.20(e) within the time
specified in such Section, the Issuing Bank will promptly notify the Agent of
the L/C Disbursement and the Agent will promptly notify each Lender of such L/C
Disbursement and its Pro Rata Percentage thereof. Each Lender shall pay by wire
transfer of immediately available funds to the Agent not later than 2:00 p.m.,
New York City time, on such date (or, if such Lender shall have received such
notice later than 12:00 (noon), New York City time, on any day, not later than
10:00 a.m., New York City time, on the immediately following Business Day), an
amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement (it
being understood that such amount shall be deemed to constitute an ABR Loan of
such Lender and such payment shall be deemed to have reduced the L/C Exposure),
and the Agent will promptly pay to the Issuing Bank amounts so received by it
from the Lenders. The Agent will promptly pay to the Issuing Bank any amounts
received by it from the Borrower pursuant to
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Section 2.20(e) prior to the time that any Lender makes any payment pursuant to
this paragraph (e); any such amounts received by the Agent thereafter will be
promptly remitted by the Agent to the Lenders that shall have made such payments
and to the Issuing Bank, as their interests may appear. If any Lender shall not
have made its Pro Rata Percentage of such L/C Disbursement available to the
Agent as provided above, such Lender and the Borrower severally agree to pay
interest on such amount, for each day from and including the date such amount is
required to be paid in accordance with this paragraph to but excluding the date
such amount is paid, to the Agent for the account of the Issuing Bank at (i) in
the case of the Borrower, the Alternate Base Rate, and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.
SECTION 2.03. Competitive Bid Procedure. (a) In order to
request Competitive Bids, the Borrower shall hand deliver, telex or telecopy to
the Agent a duly completed Competitive Bid Request in the form of Exhibit A-1,
to be received by the Agent (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 a.m., New York City time, four Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing. No Eurocurrency Loan, CD Loan or ABR
Loan shall be requested in, or made pursuant to, a Competitive Bid Request. A
Competitive Bid Request that does not conform substantially to the format of
Exhibit A-1 may be rejected in the Agent's sole discretion, and the Agent shall
promptly notify the Borrower of such rejection by telex or telecopier. Such
request shall in each case refer to this Agreement and specify (x) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing, (y) the date of such Borrowing (which shall be a Business Day) and
the aggregate principal amount thereof which shall be in a minimum principal
amount of $5,000,000 and in an integral multiple of $1,000,000, and (z) the
Interest Period with respect thereto (which may not end after the Maturity
Date). Promptly after its receipt of a Competitive Bid Request that is not
rejected as aforesaid, the Agent shall invite by telex or telecopier (in the
form of Exhibit A-2) the Lenders to bid, on the terms and conditions of this
Agreement, to make Competitive Loans pursuant to such Competitive Bid Request.
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(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Agent via telex or
telecopier, in the form of Exhibit A-3, (i) in the case of a Eurodollar
Competitive Borrowing, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing and (ii) in the case of a
Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the day
of a proposed Competitive Borrowing. Multiple bids shall be accepted by the
Agent. Competitive Bids that do not conform substantially to the format of
Exhibit A-3 may be rejected by the Agent after conferring with, and upon the
instruction of, the Borrower, and the Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Competitive Bid
shall refer to this Agreement and specify (x) the principal amount (which shall
be in a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower) of the Competitive Loan or Loans that the
Lender is willing to make to the Borrower, (y) the Competitive Bid Rate or Rates
at which the Lender is prepared to make the Competitive Loan or Loans and (z)
the Interest Period and the last day thereof. If any Lender shall elect not to
make a Competitive Bid, such Lender shall so notify the Agent via telex or
telecopier (I) in the case of Eurodollar Competitive Loans, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing and (II) in the case of Fixed Rate Loans, not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive Borrowing; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Lender pursuant to this Section
2.03(b) shall be irrevocable.
(c) The Agent shall promptly notify the Borrower by telex or
telecopier of all the Competitive Bids made, the Competitive Bid Rate and the
principal amount of each Competitive Loan in respect of which a Competitive Bid
was made and the identity of the Lender that made each bid. The Agent shall send
a copy of all Competitive Bids to the Borrower for its records as soon as
practicable after completion of the bidding process set forth in this Section.
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(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this Section 2.03(d), accept or reject any
Competitive Bid referred to in Section 2.03(c). The Borrower shall notify the
Agent by telephone, confirmed by telex or telecopier in the form of a
Competitive Bid Accept/Reject Letter substantially in the form set forth in
Exhibit A-4, whether and to what extent it has decided to accept or reject any
of or all the bids referred to in Section 2.03(c), (y) in the case of a
Eurodollar Competitive Borrowing, not later than 10:30 a.m., New York City time,
three Business Days before a proposed Competitive Borrowing and (z) in the case
of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the
day of a proposed Competitive Borrowing; provided, however, that (i) the failure
by the Borrower to give such notice shall be deemed to be a rejection of all the
bids referred to in Section 2.03(c), (ii) the Borrower shall not accept a bid
made at a particular Competitive Bid Rate if the Borrower has decided to reject
a bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal amount
specified in the Competitive Bid Request, (iv) if the Borrower shall accept a
bid or bids made at a particular Competitive Bid Rate but the amount of such bid
or bids shall cause the total amount of bids to be accepted by the Borrower to
exceed the amount specified in the Competitive Bid Request, then the Borrower
shall accept a portion of such bid or bids in an amount equal to the amount
specified in the Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive Bid Request, which
acceptance, in the case of multiple bids at such Competitive Bid Rate, shall be
made pro rata in accordance with the amount of each such bid at such Competitive
Bid Rate, and (v) except pursuant to clause (iv) above, no bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; provided further,
however, that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) above the amounts shall be rounded
to integral multiples of $1,000,000 in a manner which shall be in the discretion
of the Borrower. A notice given by the Borrower pursuant to this Section 2.03(d)
shall be irrevocable.
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(e) The Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telex or telecopier sent by the Agent, and
each successful bidder shall thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its bid has been accepted.
(f) A Competitive Bid Request shall not be made within three
Business Days after the date of any previous Competitive Bid Request.
(g) If the Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at which the other Lenders are
required to submit their bids to the Agent pursuant to Section 2.03(b).
(h) All Notices required by this Section shall be given in
accordance with Section 9.01.
SECTION 2.04. Standby Borrowing Procedure. In order to request
a Borrowing (other than a Competitive Borrowing or a deemed Borrowing pursuant
to Section 2.02(e), as to which this Section 2.04 shall not apply), the Borrower
shall hand deliver, telex or telecopy to the Agent a duly completed Standby
Borrowing Request in the form of Exhibit A-5 (a) in the case of a Eurocurrency
Borrowing, not later than 10:30 a.m., London time, three Business Days before a
proposed borrowing, (b) in the case of a Eurodollar Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a proposed borrowing,
(c) in the case of a CD Borrowing, not later than 10:30 a.m., New York City
time, one Business Day before a proposed borrowing and (d) in the case of an ABR
Borrowing, not later than 10:30 a.m., New York City time, on the day of a
proposed borrowing. No Fixed Rate Loan shall be requested or made pursuant to a
Borrowing Request. Such notice shall be irrevocable and shall in each case
specify (i) whether the Borrowing then being requested is to be a Eurocurrency
Borrowing, a Eurodollar Borrowing, a CD Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day) and the amount thereof,
which, in the case of a Eurocurrency Borrowing, shall be expressed in the
Equivalent Dollar Amount; (iii) if such Borrowing is to be a Eurocurrency
Borrowing, the Alternative Currency in which
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such Borrowing is to be denominated and the number and location of the account
to which funds are to be disbursed; and (iv) if such Borrowing is to be a
Eurocurrency Borrowing, Eurodollar Borrowing or CD Borrowing, the Interest
Period with respect thereto. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurocurrency Borrowing,
Eurodollar Borrowing or CD Borrowing is specified in any such notice, then the
applicable Borrower shall be deemed to have selected an Interest Period of one
month's duration, in the case of a Eurocurrency Borrowing or a Eurodollar
Borrowing, or 30 days' duration, in the case of a CD Borrowing. If the
applicable Borrower shall not have given notice in accordance with this Section
of its election to refinance a Borrowing prior to the end of the Interest Period
in effect for such Borrowing, then the applicable Borrower shall (unless such
Borrowing is repaid at the end of such Interest Period) be deemed to have given
notice of an election to refinance such Borrowing with an ABR Borrowing. The
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section and of each Lender's portion of the requested Borrowing.
SECTION 2.05. Refinancings. A Borrower may refinance all or
any part of any Borrowing with a Borrowing of the same or a different Type made
pursuant to Section 2.03 or Section 2.04, subject to the conditions and
limitations set forth herein and elsewhere in this Agreement, including
refinancings of Competitive Borrowings with Standby Borrowings and Standby
Borrowings with Competitive Borrowings. Any Borrowing or part thereof so
refinanced with a Borrowing denominated in the same currency shall be deemed to
be repaid in accordance with Section 2.07 with the proceeds of a new Borrowing
hereunder and the proceeds of the new Borrowing, to the extent they do not
exceed the principal amount of the Borrowing being refinanced, shall not be paid
by the Lenders to the Agent or by the Agent to the applicable Borrower pursuant
to Section 2.02(c); provided, however, that (i) if the principal amount extended
by a Lender in a refinancing is greater than the principal amount extended by
such Lender in the Borrowing being refinanced, then such Lender shall pay such
difference to the Agent for distribution to the Lenders described in (ii) below,
(ii) if the principal amount extended by a Lender in the Borrowing being
refinanced is greater than the principal amount being extended by such Lender in
the refinancing, the Agent shall return the
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difference to such Lender out of amounts received pursuant to (i) above, and
(iii) to the extent any Lender fails to pay the Agent amounts due from it
pursuant to (i) above, any Loan or portion thereof being refinanced shall not be
deemed repaid in accordance with Section 2.07 and shall be payable by the
applicable Borrower.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to each
Lender, through the Agent, on each March 31, June 30, September 30 and December
31, on the date on which the Commitment of such Lender shall be terminated as
provided herein and on the Maturity Date, a facility fee (a "Facility Fee")
equal to the Applicable Percentage per annum in effect from time to time on the
amount of the Commitment of such Lender, whether used or unused, in effect from
time to time during the preceding quarter (or shorter period commencing with the
date hereof or ending with the Maturity Date or any date on which the Commitment
of such Lender shall be terminated). The Facility Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The Facility
Fee due to each Lender shall commence to accrue on the date hereof and shall
cease to accrue on the earlier of (i) the termination of the Commitment of such
Lender and (ii) the Maturity Date.
(b) The Borrower shall pay to the Agent, for its own account,
agent and administrative fees (the "Agent and Administrative Fees") at the times
and in the amounts agreed upon in the letter agreement dated August 20, 1996,
between the Borrower and the Agent.
(c) The Borrower agrees to pay (i) to each Lender, through the
Agent, on the last day of March, June, September and December of each year and
on the date on which the Commitment of such Lender shall be terminated as
provided herein, a fee (an "L/C Participation Fee") calculated on such Lender's
Pro Rata Percentage of the average daily aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements) during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Commitments of all Lenders shall have been
terminated) at a rate equal to the Applicable Percentage from time to time used
to determine the interest rate on Standby Borrowings comprised of Eurodollar
Standby Loans pursuant to Section 2.08, and (ii) to the Issuing Bank with
respect to each Letter of Credit the standard fronting,
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issuance and drawing fees, if any, as may be specified in the Issuing Bank
Agreement (the "Issuing Bank Fees"). All L/C Participation Fees and Issuing Bank
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Lenders except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances
unless such Fees were paid in error.
SECTION 2.07. Evidence of Indebtedness; Repayment
of Loans. (a) The Borrower hereby unconditionally promises
to pay to the Agent for the account of each Lender the then
unpaid principal amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to
properly repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if
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requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Agent.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions
of Section 2.09, the Loans comprising each Eurocurrency Borrowing and Eurodollar
Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 360 days) at a rate per annum equal to (i) in the
case of each Eurocurrency Loan or Eurodollar Standby Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Percentage, and
(ii) in the case of each Eurodollar Competitive Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Competitive Margin offered
by the Lender making such Loan and accepted by the Borrower pursuant to Section
2.03. Interest on each Eurocurrency Borrowing and Eurodollar Borrowing shall be
payable on each applicable Interest Payment Date. The LIBO Rate for each
Interest Period shall be determined by the Agent in accordance with the
definition of LIBO Rate herein. The Agent shall promptly advise the applicable
Borrower and each Lender, as appropriate, of such determination.
(b) Subject to the provisions of Section 2.09, the Loans
comprising each CD Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted CD Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage. Interest on each CD Borrowing shall be payable
on each applicable Interest Payment Date. The Adjusted CD Rate for each Interest
Period shall be determined by the Agent in accordance with the definition of
Adjusted CD Rate herein. The Agent shall promptly advise the Borrower and each
Lender of such determination.
(c) Subject to the provisions of Section 2.09, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of (i) 365 or 366 days, as the case
may be, during any period in which the Alternate Base Rate is based on the Prime
Rate, and (ii) 360 days, during any period in which the Alternate Base Rate is
based on the Base CD Rate or the Federal Funds Effective Rate) at a rate per
annum equal to the Alternate Base Rate. Interest on each ABR Borrowing shall be
payable on each applicable Interest Payment Date. The Alternate Base Rate shall
be determined
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by the Agent in accordance with the definition of Alternate Base Rate herein.
(d) Subject to the provisions of Section 2.09, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each Fixed Rate Loan shall be payable on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement.
SECTION 2.09. Default Interest. If the Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, such Borrower shall on demand from time to time from
the Agent pay interest, to the extent permitted by law, on such defaulted amount
up to (but not including) the date of actual payment (after as well as before
judgment) at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the Alternate Base Rate plus 2%.
SECTION 2.10. Alternate Rate of Interest. (a) In the event,
and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurocurrency Borrowing or a Eurodollar
Borrowing the Agent shall have determined (i) that deposits in the principal
amounts of the Loans comprising such Borrowing and in the currency in which such
Loan is to be denominated are not generally available in the relevant market, or
that the rates at which such deposits are being offered will not adequately and
fairly reflect the cost to any Lender of making or maintaining its Eurocurrency
Loan or Eurodollar Loan, as applicable, during such Interest Period, or that
reasonable means do not exist for ascertaining the LIBO Rate, or (ii) in the
case of a Eurocurrency Borrowing, that there shall have occurred any change in
national or international financial, political or economic conditions (including
the imposition of or any change in exchange controls) or currency exchange rates
which would make it impracticable to make Loans denominated in the applicable
Alternative Currency, the Agent shall, as promptly as practicable, give written,
telex or telecopy notice of such determination to the Borrower and the Lenders.
In the event of any such determination, until the Agent shall have
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advised the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (A) any request by the Borrower for a Eurodollar
Competitive Borrowing pursuant to Section 2.03 shall be of no force and effect
and shall be denied by the Agent, (B) any request by the Borrower for a
Eurodollar Standby Borrowing pursuant to Section 2.04 shall be deemed to be a
request for an ABR Borrowing and (C) any request by a Borrower for a
Eurocurrency Borrowing pursuant to Section 2.04 shall be deemed to be a request
by the Borrower for an ABR Borrowing.
(b) In the event, and on each occasion, that on or before the
day on which the Adjusted CD Rate for a CD Borrowing is to be determined the
Agent shall have determined that such Adjusted CD Rate cannot be determined for
any reason, including the inability of the Agent to obtain sufficient bids in
accordance with the terms of the definition of Fixed CD Rate, or the Agent shall
determine that the Adjusted CD Rate for such CD Borrowing will not adequately
and fairly reflect the cost to any Lender of making or maintaining its CD Loan
during such Interest Period, the Agent shall, in a timely manner, give written
or telex notice of such determination to the Borrower and the Lenders. In the
event of any such determination, any request by the Borrower for a CD Borrowing
pursuant to Section 2.04 shall, until the Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, be deemed to be a request for an ABR Borrowing.
SECTION 2.11. Termination and Reduction of Commitments. (a)
The Commitments and the L/C Commitments shall be automatically terminated on the
Maturity Date.
(b) Upon at least five Business Days' prior irrevocable
written or telex notice to the Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment; provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $10,000,000 and (ii) no such termination or reduction shall
be made which would reduce the Total Commitment to an amount less than the
aggregate outstanding principal amount of the Competitive Loans. If, following
any partial reduction of the Total Commitment, the Total Commitment (as so
reduced) shall be less than the Eurocurrency Sublimit, the
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Eurocurrency Sublimit shall be automatically reduced so as to equal the Total
Commitment.
(c) In the event that the aggregate Proceeds from all Asset
Sales after the date of this Agreement shall exceed 30% of Consolidated Total
Assets as of the end of the preceding fiscal year, then at the time of each
Asset Sale (including the Asset Sale that results in the aggregate Proceeds from
Asset Sales exceeding 30% of Consolidated Total Assets as of the end of the
preceding fiscal year) the Commitments shall be automatically and permanently
reduced by an amount equal to 50% of the Proceeds of such Asset Sale in excess
of 30% of Consolidated Total Assets as of the end of the preceding fiscal year
aggregate amount. If any reduction of the Commitments required by this paragraph
would result in the Total Commitment being less than the aggregate principal
amount of the outstanding Competitive Loans, such reduction shall be deferred
for the minimum period necessary to avoid such result.
(d) Each reduction in the Total Commitment hereunder shall be
made ratably among the Lenders in accordance with their respective Commitments.
The Borrower shall pay to the Agent for the accounts of the Lenders, on the date
of each termination or reduction, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.12. Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Standby Borrowing, in
whole or in part, upon giving written or telex notice (or telephone notice
promptly confirmed by written or telex notice) to the Agent before 10:00 a.m.,
New York City time (or, in the case of any Eurocurrency Borrowing, 10:00 a.m.,
London time), three Business Days prior to prepayment; provided, however, that
each partial prepayment shall be in an amount which is (or the Equivalent Dollar
Amount of which is) an integral multiple of $1,000,000 and not less than
$5,000,000. The Borrower shall not have the right to prepay any Competitive
Borrowing.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.11, the Borrower shall pay or prepay so much
of the Standby Borrowings as shall be necessary in order that the Aggregate
Revolving Credit Exposure shall not exceed the Total Commitment after giving
effect to such termination or reduction.
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(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the applicable Borrower to prepay
such Borrowing (or portion thereof) by the amount stated therein on the date
stated therein. All prepayments under this Section shall be subject to Section
2.15 but otherwise without premium or penalty. All prepayments under this
Section shall be accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or Issuing
Bank of the principal of or interest on any Eurocurrency Loan, Eurodollar Loan,
CD Loan or Fixed Rate Loan made by such Lender or any Fees or other amounts
payable hereunder (other than changes in respect of taxes imposed on the overall
net income of such Lender or Issuing Bank by any jurisdiction or any political
subdivision thereof) or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Lender or such Issuing Bank (except
any such reserve requirement which is already reflected in the definition of the
applicable Rate), or shall impose on such Lender or such Issuing Bank or the
London interbank market any other condition affecting this Agreement or any
Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed Rate Loan made by such
Lender or any Letter of Credit or participation therein, and the result of any
of the foregoing shall be to increase the cost to such Lender or Issuing Bank of
making or maintaining any Eurocurrency Loan, Eurodollar Loan, CD Loan or Fixed
Rate Loan or increase the cost to any Lender of issuing or maintaining any
Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or such Issuing Bank to be material, then the
applicable Borrower shall pay to such Lender or such Issuing Bank, as the case
may be, upon demand such additional amount or amounts as will compensate such
Lender or such Issuing Bank, as the case may be, for such
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additional costs incurred or reduction suffered. Notwithstanding the foregoing,
no Lender shall be entitled to request compensation under this paragraph with
respect to any Competitive Loan if it should have been aware of the change
giving rise to such request at the time of submission of the Competitive Bid
pursuant to which such Competitive Loan shall have been made.
(b) If any Lender or Issuing Bank shall have determined that
the applicability of any law, rule, regulation or guideline adopted pursuant to
or arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any other law, rule, regulation or guideline regarding capital
adequacy, or any change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
(or any lending office of such Lender) or any Issuing Bank or any Lender's or
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, has or would have the effect of reducing the rate of return on such
Lender's or Issuing Bank's capital or on the capital of such Lender's or Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participations in Letters of Credit purchased by such Lender pursuant
hereto or the Letters of Credit issued by such Issuing Bank pursuant hereto to a
level below that which such Lender or Issuing Bank or such Lender's or Issuing
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or Issuing Bank's policies
and the policies of such Lender's or Issuing Bank's holding company with respect
to capital adequacy) by an amount deemed by such Lender or Issuing Bank to be
material, then from time to time the Borrower shall pay to such Lender or
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank or such Lender's or Issuing Bank's
holding company for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth
such amount or amounts as shall be necessary to compensate such Lender or
Issuing Bank, as applicable, as specified in paragraph (a) or (b) above, as the
case may be,
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shall be delivered to the Borrower. The Borrower shall pay each Lender or
Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after the receipt of the same. In the event any Lender delivers
such a certificate, the Borrower may, at its sole expense and effort, require
such Lender to transfer and assign, without recourse (in accordance with Section
9.04) all its interests, rights and obligations under this Agreement to an
assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided, however, that
(i) such assignment shall not conflict with any law, rule or regulation or order
of any Governmental Authority, (ii) the Borrower shall have received a written
consent of the Agent in the case of an assignee that is not a Lender, which
consent shall not unreasonably be withheld, and (iii) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder.
(d) Failure on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to any period shall
not constitute a waiver of such Lender's or Issuing Bank's right to demand
compensation with respect to such period or any other period.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
SECTION 2.14. Change in Legality. (a) Notwithstanding any
other provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurocurrency Loan or Eurodollar Loan or to give effect
to its obligations as contemplated hereby with respect to any Eurocurrency Loan
or Eurodollar Loan, then, by written notice to the Borrower and to the Agent,
such Lender may:
(i) declare that Eurocurrency Loans or Eurodollar Loans, as
the case may be, shall not thereafter be made
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by such Lender hereunder, whereupon such Lender shall not submit a
Competitive Bid in response to a request for Eurodollar Competitive
Loans and any request by the Borrower for a Eurocurrency Loan or
Eurodollar Standby Borrowing, as the case may be, shall, as to such
Lender only, be deemed a request for an ABR Loan to the Borrower unless
such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurocurrency Loans or
Eurodollar Loans, as the case may be, made by it be converted to ABR
Loans, in which event all such Eurocurrency Loans or Eurodollar Loans,
as the case may be, shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below
(such conversion to be made, in the case of a Eurocurrency Loan, into
dollars at the applicable Spot Exchange Rate).
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurocurrency Loans or Eurodollar Loans, as the case may be, that would
have been made by such Lender or the converted Eurocurrency Loans or Eurodollar
Loans of such Lender shall instead be applied to repay the ABR Loans made by
such Lender in lieu of, or resulting from the conversion of, such Eurocurrency
Loans or Eurodollar Loans.
(b) For purposes of this Section, a notice to the Borrower by
any Lender shall be effective as to each Eurocurrency Loan or Eurodollar Loan,
as the case may be, if lawful, on the last day of the Interest Period then
applicable to such Eurocurrency Loan or Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by the Borrower to borrow or to refinance any Loan hereunder after
irrevocable notice of such borrowing or refinancing has been given pursuant to
Section 2.03 or 2.04, (c) any payment, prepayment, assignment pursuant to
Section 2.13(c), conversion of a Eurocurrency Loan or Eurodollar Loan pursuant
to
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Section 2.14(a) or conversion of a Eurocurrency Loan, Eurodollar Loan, CD Loan
or Fixed Rate Loan required by any other provision of this Agreement or
otherwise made or deemed made on a date other than the last day of the Interest
Period applicable thereto, (d) any default in payment or prepayment of the
principal amount of any Loan or any part thereof or interest accrued thereon, as
and when due and payable at the due date thereof (whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Event of Default, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurocurrency Loan, Eurodollar Loan,
CD Loan or Fixed Rate Loan. Such loss or reasonable expense shall include an
amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid, prepaid, assigned,
converted or not borrowed (based on the LIBO Rate or Adjusted CD Rate or, in the
case of a Fixed Rate Loan, the fixed rate of interest applicable thereto) for
the period from the date of such payment, prepayment, assignment, conversion or
failure to borrow to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid, assigned, converted or not borrowed for
such period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section and evidencing a loss suffered by such Lender of such
amount or amounts shall be delivered to the Borrower.
SECTION 2.16. Pro Rata Treatment. Except as required under
Section 2.14, each Standby Borrowing, each payment or prepayment of principal of
any Standby Borrowing, each payment of interest on the Standby Loans, each
payment of the Facility Fees, each reduction of the Commitments and each
refinancing of any Borrowing with a Standby Borrowing of any Type, shall be
allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Standby
Loans). Each payment of principal of any Competitive Borrowing shall be
allocated pro rata among
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the Lenders participating in such Borrowing in accordance with the respective
principal amounts of their outstanding Competitive Loans comprising such
Borrowing. Each payment of interest on any Competitive Borrowing shall be
allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders which shall not have made
Loans as part of such Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Agent may, in its discretion,
round each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower , or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means (other than an assignment pursuant to Section 2.13(c) or 10.04),
obtain payment (voluntary or involuntary) in respect of any Standby Loan or L/C
Disbursement as a result of which the unpaid principal portion of its Standby
Loans and participations in L/C Disbursements shall be proportionately less than
the unpaid principal portion of the Standby Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Standby Loans and
L/C Exposure of such other Lender, so that the aggregate unpaid principal amount
of the Standby Loans and L/C Exposure and participations in the Standby Loans
and L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Standby Loans and L/C Exposure then
outstanding as the principal amount of its Standby Loans and L/C Exposure prior
to such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Standby Loans outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event; provided, however, that,
if
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any such purchase or purchases or adjustments shall be made pursuant to this
Section and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Standby Loan or L/C
Disbursement deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by such Borrower to such Lender by reason thereof as fully as if such Lender had
made a Standby Loan directly to such Borrower in the amount of such
participation.
SECTION 2.18. Payments. (a) The Borrower shall make each
payment (including principal of or interest on the Loans or any L/C Disbursement
or any Fees or other amounts) hereunder and under any other Loan Document to
such account of the Agent as the Agent shall have specified, not later than
10:30 a.m., local time, at the place of payment, on the date when due, in the
currency in which such Loan was made and in federal funds or such other
immediately available funds as may then be customary for the settlement of
international transactions in the relevant currency at such place. The Borrower
shall make each payment of Fees not later than 12:00 noon, New York time, on the
date when due in dollars in immediately available funds to the Agent at its
address referred to in Section 9.01.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may (except as otherwise provided in the definition
of "Interest Period") be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all present or future taxes, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the Agent's or any Lender's or any Issuing Bank's (or any
transferee's or assignee's, including a participation holder's (any such
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entity a "Transferee")) net income and franchise taxes imposed on the Agent or
any Lender or any Issuing Bank (or Transferee) by any jurisdiction or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Lenders or any Issuing Bank
(or any Transferee) or the Agent, (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) such Lender
or such Issuing Bank (or Transferee) or the Agent (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender, Issuing Bank (or
Transferee) and the Agent for the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by such Lender or such Issuing Bank (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and reasonable out-of-pocket expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within 30 days after the date any
Lender or Issuing Bank (or Transferee) or the Agent, as the case may be, makes
written demand therefor, which demand may be made after such Lender, Issuing
Bank (or Transferee) or the Agent, in its sole discretion (reasonably exercised)
and at the sole expense of the applicable Borrower, determines to challenge or
contest such assertion of Taxes or Other Taxes. After the Borrower makes full
payment to the Lender, Issuing Bank (or Transferee) or the Agent with
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respect to such indemnification for Taxes or Other Taxes asserted, if such
Lender, Issuing Bank (or Transferee) or the Agent believes in its sole
discretion that reasonable grounds exist to challenge or contest the Taxes or
Other Taxes imposed, then such Lender, Issuing Bank (or Transferee) or the
Agent, as the case may be, shall so contest or challenge in good faith the Taxes
or Other Taxes asserted, which contest or challenge shall be at the sole expense
of such Borrower. If a Lender, Issuing Bank (or Transferee) or the Agent shall
become aware that it is entitled to receive a refund in respect of Taxes or
Other Taxes, it shall promptly notify the Borrower of the availability of such
refund and shall, within 30 days after receipt of a request by such Borrower,
apply for such refund at the Borrower's reasonable out-of-pocket expense. If any
Lender, Issuing Bank (or Transferee) or the Agent receives a refund in respect
of any Taxes or Other Taxes for which such Lender, Issuing Bank (or Transferee)
or the Agent has received payment from the Borrower hereunder it shall promptly
notify such Borrower of such refund and shall promptly upon receipt repay such
refund to such Borrower, net of all out-of-pocket expenses of such Lender or
Issuing Bank and without interest; provided, however, that such Borrower, upon
the request of such Lender, Issuing Bank (or Transferee) or the Agent, agrees to
return such refund (plus penalties, interest or other charges) to such Lender,
Issuing Bank (or Transferee) or the Agent in the event such Lender, Issuing Bank
(or Transferee) or the Agent is required to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Lender,
Issuing Bank (or Transferee) or the Agent, such Borrower will furnish to the
Agent, at its address referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) On or before the date it becomes a party to this Agreement
and from time to time thereafter as renewals are due and upon any change in
status rendering any certificate or documents previously delivered pursuant to
this Section 2.19(f) invalid or inaccurate, each Lender,
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Issuing Bank or Transferee that is organized outside the United States or
Germany shall (but (x) in the case of a Transferee or (y) in the case of a
Lender or Issuing Bank with respect to any renewal or change in status, only if
legally able to do so) upon written request of a Borrower, deliver to such
Borrower such certificates, documents or other evidence, as specified by such
Borrower and, as the case may be, required by (A) in the case of a Borrower
organized in the United States and a non-United States Lender or Issuing Bank,
the Code or Treasury Regulations issued pursuant thereto, including Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, or (B) in the case of a Borrower
in Germany and a non-German Lender or Issuing Bank, such forms that may be
required under the laws, regulations, official interpretations or treaties (the
"Controlling Tax Laws") enacted by, made or entered into with Germany, in each
case properly completed and duly executed by such Lender (or Transferee)
establishing that such payment is, as the case may be, (i) not subject to
withholding under the Code because such payment is effectively connected with
the conduct by such Lender, Issuing Bank or Transferee of a trade or business in
the United States, (ii) totally exempt from United States tax under a provision
of an applicable tax treaty or (iii) exempt from German withholding tax under
the Controlling Tax Laws of Germany. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that payments
hereunder are not subject to United States or German withholding tax, as the
case may be, or are subject to such tax at a rate reduced by an applicable tax
treaty, the Borrower or the Agent shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for any Lender, Issuing
Bank or Transferee or assignee organized under the laws of a jurisdiction
outside the United States or Germany, as the case may be.
(g) A Borrower shall not be required to pay any additional
amounts to any Lender, Issuing Bank or Transferee in respect of United States
withholding tax or German withholding tax pursuant to Section 2.19(a) if the
obligation to pay such additional amounts would not have arisen but for a
failure by such Lender, Issuing Bank or Transferee to comply with the provisions
of Section 2.19(f) unless such failure results from (i) a change in applicable
law, regulation or official interpretation thereof or
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(ii) an amendment, modification or revocation of any applicable tax treaty or a
change in official position regarding the application or interpretation thereof,
in each case after the Effective Date (and, in the case of a Transferee, after
the date of assignment or transfer); provided, however, that the Borrower shall
be required to pay those amounts to any Lender, Issuing Bank or Transferee that
it was required to pay hereunder prior to the failure of such Lender, Issuing
Bank or Transferee to comply with the provisions of Section 2.19(f).
(h) Any Lender, Issuing Bank or Transferee claiming any
additional amounts payable pursuant to this Section shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document in a timely manner requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue and would not, in the sole and reasonable
determination of such Lender, Issuing Bank or Transferee be otherwise
disadvantageous to such Lender, Issuing Bank or Transferee.
SECTION 2.20. Letters of Credit. (a) General. The Borrower may
request the issuance of a Letter of Credit for its own account, in a form
reasonably acceptable to the Agent and the Issuing Bank, at any time and from
time to time while the Commitments remain in effect. Each Letter of Credit shall
be denominated in dollars. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or telecopy to the Issuing Bank and the Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare such
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Letter of Credit. Following receipt of such notice and prior to the issuance of
the requested Letter of Credit or the applicable amendment, renewal or
extension, the Agent shall notify the Borrower and the Issuing Bank of the
amount of the Aggregate Revolving Credit Exposure and the aggregate principal
amount of the outstanding Competitive Borrowings after giving effect to (i) the
issuance, amendment, renewal or extension of such Letter of Credit, (ii) the
issuance or expiration of any other Letter of Credit that is to be issued or
will expire prior to the requested date of issuance of such Letter of Credit and
(iii) the borrowing or repayment of any Standby Loans or Competitive Loans that
(based upon notices delivered to the Agent by the Borrower) are to be borrowed
or repaid prior to the requested date of issuance of such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) the L/C Exposure shall not exceed
$25,000,000 and (B) the sum of the Aggregate Revolving Credit Exposure and the
aggregate principal amount of outstanding Competitive Borrowings shall not
exceed the Total Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Maturity Date, unless such Letter of Credit expires by its terms on an
earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each such Lender hereby acquires
from the Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Agent, for the account of the Issuing
Bank, such Lender's Pro Rata Percentage of each L/C Disbursement made by such
Issuing Bank and not reimbursed by the Borrower forthwith on the date due as
provided in Section 2.02(e). Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect
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of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default or the termination of the Commitments, and that
each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from such Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to
reimburse L/C Disbursements as provided in paragraph (e) above shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under any and all circumstances
whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or
provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any
Letter of Credit or this Agreement;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any
Letter of Credit, any Issuing Bank, the Agent or any Lender or any
other person, whether in connection with this Agreement or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
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(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
any Issuing Bank, the Lenders, the Agent or any other person or any
other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and unconditional obligation
of the Borrower hereunder to reimburse L/C Disbursements will not be excused by
the gross negligence or wilful misconduct of any Issuing Bank. However, the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
such Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that each Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) an Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of an Issuing Bank.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall as promptly
as possible give telephonic notification, confirmed by telecopy, to the Agent
and the Borrower of such demand for payment and whether such Issuing Bank has
made or will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such L/C Disbursement. The Agent shall promptly give each Lender notice thereof.
(h) Interim Interest. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(e), at the rate per annum that would
apply to such amount if such amount were an ABR Loan.
(i) Resignation or Removal of an Issuing Bank. An Issuing Bank
may resign at any time by giving 180 days' prior written notice to the Agent,
the Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Agent and the Lenders. Subject to the next
succeeding paragraph, upon the acceptance of any appointment as an Issuing Bank
hereunder by a Lender that shall agree to serve as successor Issuing Bank, such
successor shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit hereunder.
At the time such removal or resignation shall become effective, the Borrower
shall pay all accrued and unpaid fees pursuant to Section 2.06(c)(ii). The
acceptance of any appointment as an Issuing Bank hereunder by a successor Lender
shall be evidenced by an agreement entered into by such successor, in a form
satisfactory to the Borrower and the Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and (ii)
references herein to the term "Issuing Bank" shall be
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deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require. After
the resignation or removal of an Issuing Bank hereunder, the retiring Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, the Borrower shall, on the Business Day it receives
notice from the Agent or the Required Lenders (or, if the maturing of the Loans
has been accelerated, Lenders holding participations in outstanding Letters of
Credit representing greater than 50% of the aggregate undrawn amount of all
outstanding Letters of Credit) thereof and of the amount to be deposited,
deposit in an account with the Agent, for the benefit of the Lenders, an amount
in cash equal to the L/C Exposure as of such date. Such deposit shall be held by
the Agent as collateral for the payment and performance of the obligations of
the Borrower under this Agreement. The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be made at the option and sole discretion
of the Agent, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall (i) automatically be applied by the Agent to reimburse the Issuing
Bank for L/C Disbursements for which they have not been reimbursed, (ii) be held
for the satisfaction of the reimbursement obligations of the Borrower for the
L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
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SECTION 2.21 Extension of Maturity Date. (a) The Borrower may,
by notice to the Agent (which shall promptly deliver a copy to each of the
Lenders) given not more than 60 days prior to any anniversary of the date hereof
while the Commitments remain in effect, request that the Lenders extend the
Maturity Date for an additional one year period (but in no event beyond the
fifth anniversary of the Closing Date) from the Maturity Date then in effect
(the "Existing Maturity Date"). Each Lender shall, by notice to the Borrower and
the Agent given not later than the 10th Business Day after the date of the
Borrower's notice, advise the Borrower whether or not such Lender agrees to such
extension (and any Lender that does not so advise the Borrower on or before such
day shall be deemed to have advised the Borrower that it will not agree to such
extension).
(b) If (and only if) Lenders holding Commitments that
represent at least 60% of the total Commitments on the 60th day prior to the
applicable anniversary of the date hereof shall have agreed to extend the
Existing Maturity Date (such Lenders being called the "Continuing Lenders"),
then (i) the Maturity Date shall be extended to the first anniversary of the
Existing Maturity Date (provided, that if such date is not a Business Day, then
the Maturity Date as so extended shall be the next following Business Day), and
(ii) the Commitment of each Lender that is not a Continuing Lender shall
terminate on the Existing Maturity Date (with the result that the total
Commitments will decrease by the amount of such Commitment), and all Loans of
each such Lender shall become due and payable, together with all interest
accrued thereon and all other amounts owed to such Lender hereunder, on the
Existing Maturity Date.
Notwithstanding the foregoing, no extension of the Maturity
Date shall be effective with respect to any Lender unless, on and as of the
Existing Maturity Date, the conditions set forth in paragraphs (b) and (c) of
Section 4.01 shall be satisfied (with all references to a Borrowing being deemed
to be references to such extension) and the Agent shall have received a
certificate to that effect dated the Existing Maturity Date and executed by a
Financial Officer of the Borrower.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders
that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
the Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its business
as now conducted and as proposed to be conducted, (c) is qualified to do
business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect,
and (d) has the power and authority to execute, deliver and perform its
obligations under this Agreement and each other agreement or instrument
contemplated hereby and to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by the Borrower of this Agreement and the borrowings hereunder by
the Borrower (collectively, the "Transactions") (a) have been duly authorized by
all requisite action, including, if required, stockholder action on the part of
the Borrower, as the case may be, and (b) will not (i) violate (A) any provision
of law, statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any indenture, agreement or other instrument to which the Borrower or any
Subsidiary is a party or by which any of them or any of their property is or may
be bound, (ii) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (iii) result in the creation or imposition of
any Lien upon or with respect to any property or assets now owned or hereafter
acquired by the Borrower or any Subsidiary.
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document when executed and delivered by the Borrower will constitute, a legal,
valid and binding obligation of the Borrower enforceable against the Borrower
including against the Borrower in accordance with its terms.
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SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except
such as have been made or obtained and are in full force and effect.
SECTION 3.05. Financial Statements. The Borrower has
heretofore furnished to the Lenders the combined balance sheets and statements
of income and cash flow of the Borrower as of and for the fiscal year ended May
31, 1996, audited by and accompanied by the opinion of Xxxxxx Xxxxxxxx & Co.,
independent public accountants, and the unaudited combined balance sheets and
statements of income and cash flow of the Borrower as of and for the fiscal
quarter ended August 31, 1996, each certified by the chief financial officer
(or, in the absence of such a position, comptroller) of the Borrower or Manor
Care. Such financial statements and monthly summaries of pretax income or loss
present fairly the financial condition and results of operations of the Borrower
and its combined subsidiaries as of such dates and for such periods. Such
balance sheets and the notes thereto disclose all material liabilities, direct
or contingent, of the Borrower and its combined subsidiaries as of the dates
thereof. Such financial statements and monthly summaries of pretax income or
loss were prepared in accordance with GAAP applied on a consistent basis.
SECTION 3.06. No Material Adverse Change. As of the date
hereof, there has been no material adverse change in the business, assets,
property or condition, financial or otherwise, of the Borrower and the
Subsidiaries, taken as a whole, since May 31, 1996 (it being understood that
changes in general economic conditions shall not be deemed to constitute such a
material adverse change).
SECTION 3.07. Title to Properties; Possession Under Leases.
(a) Each of the Borrower and the Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and assets, except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes. All such material properties and assets are free and
clear of Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of the Borrower and the Subsidiaries has complied
with all material obligations under all material
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leases to which it is a party and all such leases are in full force and effect.
Each of the Borrower and the Subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
(c) On and as of the date of the initial Credit Event under
this Agreement, the Borrower will own all of the assets, business and operations
currently conducted by the Lodging Business (as defined in the Distribution
Agreement), (other than assets since disposed of prior to the date of such
Borrowing in the ordinary course of business and assets described on Schedule
3.07).
SECTION 3.08. Subsidiaries. Schedule 3.08 sets
forth as of the date hereof a list of all Subsidiaries of
the Borrower and the percentage ownership interest of the
Borrower therein.
SECTION 3.09. Litigation; Compliance with Laws. (a) There are
not any actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary or any business,
property or rights of any such person (i) which involve any Loan Document or the
Transactions (excluding any such actions, suits or proceedings threatened by the
Lenders or the Agent) or (ii) as to which there is a reasonable probability of
an adverse determination and which, if such probable adverse determination
occurred, could, individually or in the aggregate, reasonably be anticipated to
result in a Material Adverse Effect.
(b) To the best knowledge of the Borrower, neither the
Borrower nor any of the Subsidiaries is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be anticipated to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) Neither the Borrower nor any of
the Subsidiaries is a party to any agreement or instrument or subject to any
corporate or other restriction that has resulted or could reasonably be
anticipated to result in a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in
default in any manner under any provision of any
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indenture or other agreement or instrument evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets are or may be bound, where such default could
reasonably be anticipated to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the
Borrower nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or (ii) for any
purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. Neither the Borrower nor any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the
proceeds of the Loans and will request the issuance of Letters of Credit only
for the purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns required to have been filed by it and has paid or caused to
be paid all taxes shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Subsidiary shall
have set aside on its books adequate reserves.
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SECTION 3.15. No Material Misstatements. No information,
report, financial statement, exhibit or schedule furnished by or on behalf of
the Borrower to the Agent or any Lender in connection with the negotiation of
any Loan Document or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were, are or will be made,
not misleading.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which the Borrower or any
ERISA Affiliate was required to file a report with the PBGC, and the present
value of all benefit liabilities under each Plan (based on those assumptions
used to fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed by more than $5,000,000 the value of the assets of such Plan.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability which remains unpaid and that could result in a Material Adverse
Effect. Neither the Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and to the best knowledge of
the Borrower no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, where such reorganization or termination has
resulted or could reasonably be expected to result, through increases in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Effect.
SECTION 3.17. Environmental Matters. The Borrower and each
Subsidiary has complied in all material respects with all Federal, state, local
and other statutes, ordinances, orders, judgments, rulings and regulations
relating to environmental pollution or to environmental regulation or control or
to employee health or safety. Neither the Borrower nor any Subsidiary has
received notice of any failure so to comply. The Borrower's and the Subsid-
iaries' facilities do not manage any hazardous wastes, hazardous substances,
hazardous materials, toxic substances, toxic pollutants or substances similarly
denominated, as those terms or similar terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environ-
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mental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law, in material violation of any such
law or any regulations promulgated pursuant thereto.
SECTION 3.18. Solvency. As of the Effective Date
and after giving effect to the Distribution:
(a) The fair salable value of the assets of the Borrower and
each Significant Subsidiary will exceed the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities of such Borrower or Significant Subsidiary as such debts
and liabilities become absolute and mature.
(b) The assets of the Borrower and each Significant Subsidiary
will not constitute unreasonably small capital for such Borrower or
Significant Subsidiary to carry out its businesses as now conducted and
as proposed to be conducted including the capital needs of such
Borrower or Significant Subsidiary, taking into account the particular
capital requirements of the business conducted by such Borrower or
Significant Subsidiary and projected capital requirements and capital
availability thereof.
(c) Neither the Borrower nor any Significant Subsidiaries
intends to incur debts or liabilities beyond its ability to pay such
debts and liabilities as they mature, taking into account the timing
and amounts of cash to be received by it, and of amounts to be payable
on or in respect of its debts and liabilities. The cash flow of the
Borrower and each Significant Subsidiary, after taking into account all
anticipated uses of the cash of such Borrower or such Significant
Subsidiary, will at all times be sufficient to pay all such amounts on
or in respect of debt and liabilities of such Borrower or such
Significant Subsidiary when such amounts are required to be paid.
SECTION 3.19. Distribution. As of the Effective Date, the
Distribution will have been effected in a manner not materially different from
the description thereof in the Form 10 (including but not limited to the tax
consequences of the Distribution) that will not materially adversely effect the
rights or interests of the Lenders or the creditworthiness of the Borrower.
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ARTICLE IV. CONDITIONS OF LENDING
The effectiveness of this Agreement and the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder are subject to the satisfaction of the following conditions:
SECTION 4.01. All Credit Events. On the date of each
Borrowing, including on the date of each issuance of a Letter of Credit (each
event being called a "Credit Event"):
(a) The Agent shall have received a notice of such Borrowing
as required by Section 2.03 or Section 2.04, as applicable (or such
notice shall have been deemed given in accordance with Section 2.04)
including on the date of each issuance of a Letter of Credit.
(b) The representations and warranties set forth in Article
III hereof (except (i) in the case of a refinancing of a Standby
Borrowing with a new Standby Borrowing that does not increase the
aggregate principal amount of the Loans of any Lender outstanding, the
representation set forth in Section 3.09(a), and (ii) in the case of a
refinancing of a Competitive Borrowing with a Standby Borrowing that
does not increase the aggregate principal amount of the Loans
outstanding, the representation set forth in Section 3.09(a), provided
that the exception contained in this clause (ii) shall be applicable
only if, on the date of the applicable Competitive Borrowing, the
Borrower satisfied all conditions for the making of a new Standby
Borrowing that did not refinance an existing Standby Borrowing) shall
be true and correct in all material respects on and as of the date of
such Credit Event with the same effect as though made on and as of such
date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) The Borrower shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and at the time of and immediately after
such Credit Event, no Event of Default or Default shall have occurred
and be continuing.
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Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the
Effective Date:
(a) All legal matters incident to this Agreement and the
borrowings hereunder shall be satisfactory to the Lenders and their
counsel and to the Issuing Bank and to Cravath, Swaine & Xxxxx, counsel
for the Agent.
(b) The Agent shall have received (i) a copy of the
certificate or articles of incorporation (or analogous documents) and
all amendments thereto of the Borrower, certified as of a recent date
by the Secretary of State (or other appropriate Governmental Authority)
of the state (or country) of its organization or such other evidence as
is reasonably satisfactory to the Agent; (ii) a certificate as to the
good standing (or other analogous certification to the extent
available) of the Borrower as of a recent date, from the appropriate
Secretary of State (or other appropriate Governmental Authority) or
such other evidence as is reasonably satisfactory to the Agent; (iii) a
certificate of the Secretary or Assistant Secretary of the Borrower
dated the Effective Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws (or such other analogous
documents to the extent available) of the Borrower as in effect on the
Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents and the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and
are in full force and effect, (C) that the certificate or articles of
incorporation (or analogous documents) of the Borrower have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing (or other analogous certification or such
other evidence reasonably satisfactory to the Agent) furnished pursuant
to clause (i) or (ii) above, and (D) as to the incumbency and specimen
signature of each officer executing any
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Loan Document or any other document delivered in connection herewith on
behalf of the Borrower; (iv) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (iii) above; and (v)
such other documents as the Lenders or their counsel, the Issuing Bank
or Cravath, Swaine & Xxxxx, counsel for the Agent, may reasonably
request.
(c) The Agent shall have received a certificate of the
Borrower, dated the Effective Date and signed by a Financial Officer of
the Borrower confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 4.01.
(d) The Agent shall have received all Fees and other amounts
due and payable on or prior to the Effective Date.
(e) The Agent shall have received a favorable written opinion
of the General Counsel for Manor Care, dated the Effective Date and
addressed to the Lenders and the Issuing Bank, to the effect set forth
in Exhibit D, and the Borrower hereby instructs such counsel to deliver
such opinion to the Agent.
(f) The Agent shall have received evidence of the receipt by
the Borrower of all governmental and third party approvals necessary or
advisable, if any, in connection with the transactions contemplated by
this Agreement.
(g) The Lenders shall have received copies of the Form 10
(including the Distribution Agreement attached as an exhibit thereto).
(h) The Distribution shall have been effected and regular way
trading in the common stock of the Borrower shall have commenced on The
New York Stock Exchange.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect or the principal of or interest on
any Loan, any Fees or any other expenses or amounts payable under any Loan
Document shall be unpaid, and until all Letters of Credit have been
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canceled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, the
Borrower shall, and shall cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under
Section 6.05.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names material to the conduct of its business; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated (except for the Distribution); comply in all material respects with all
applicable laws, rules, regulations and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties owned,
occupied or controlled by it; and maintain such other insurance as may be
required by law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become
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delinquent or in default, as well as all lawful and valid claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto.
SECTION 5.04. Financial Statements, Reports, etc. In the case
of the Borrower, furnish to the Agent and each Lender:
(a) within 100 days after the end of each fiscal year, its
audited consolidated balance sheets and related statements of income
and cash flow, showing the financial condition of the Borrower and its
consolidated subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such subsidiaries
during such year, all audited by Xxxxxx Xxxxxxxx & Co. or other
independent public accountants of recognized national standing
acceptable to the Required Lenders and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the
Borrower on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, its unaudited consolidated balance
sheets and related statements of income and cash flow, showing the
financial condition of the Borrower and its consolidated subsidiaries
as of the close of such fiscal quarter and the results of its
operations and the operations of such subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified
by one of the Financial Officers of the Borrowers as fairly presenting
the financial condition and results of operations of the Borrower on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments;
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(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of the accounting firm or
Financial Officer of the Borrower opining on or certifying such
statements (which certificate, when furnished by an accounting firm,
may be limited to accounting matters and disclaim responsibility for
legal interpretations) (i) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii)
setting forth computations in reasonable detail satisfactory to the
Agent demonstrating compliance with the covenants contained in Sections
6.06, 6.13, 6.14 and 6.15;
(d) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by it with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of or all the functions of
said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
as to which there is a reasonable probability of an adverse
determination and which, if such probable
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adverse determination occurred, could reasonably be anticipated to
result in a Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably
be anticipated to result in, a Material Adverse Effect.
SECTION 5.06. ERISA. (a) Comply in all material respects with
the applicable provisions of ERISA and (b) furnish to the Agent and each Lender
(i) as soon as possible, and in any event within 30 days after any Responsible
Officer of the Borrower or any ERISA Affiliate either knows or has reason to
know that any Reportable Event has occurred that alone or together with any
other Reportable Event could reasonably be expected to result in liability of
the Borrower or any ERISA Affiliate to the PBGC in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer of the Borrower setting forth
details as to such Reportable Event and the action proposed to be taken with
respect thereto, together with a copy of the notice, if any, of such Reportable
Event given to the PBGC, (ii) promptly after receipt thereof, a copy of any
notice the Borrower or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate which is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a
trustee to administer any Plan or Plans, (iii) within 10 days after the due date
for filing with the PBGC pursuant to Section 412(n) of the Code of a notice of
failure to make a required installment or other payment with respect to a Plan,
a statement of a Financial Officer of the Borrower setting forth details as to
such failure and the action proposed to be taken with respect thereto, together
with a copy of such notice given to the PBGC and (iv) promptly and in any event
within 30 days after receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by the
Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability in excess of $500,000 or (B) a determination that a Multiemployer Plan
is, or is expected to be, terminated or in reorganization, in each case within
the meaning of Title IV of ERISA.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP consistently
applied and upon reasonable notice by any Lender permit any representatives
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designated by such Lender, subject to Section 9.17 of this Agreement, to visit
and inspect the financial records and the properties of the Borrower or any
Subsidiary at reasonable times and as often as requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by any Lender to discuss the affairs, finances and condition of the
Borrower or any Subsidiary with the officers thereof and independent accountants
therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
and request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
SECTION 5.09. Ownership. Subject to Section 6.05, maintain
Quality Hotels as a wholly owned Subsidiary, except that shares representing up
to 10% of the shares of any class of the capital stock of Quality Hotels (but
not representing more than 10% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Quality Hotels) may
be sold to certain members of management, and maintain Choice Hotels Franchising
as a Subsidiary in which the Borrower owns shares representing not less than
88.9% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Choice Hotels Franchising. Continue to own,
directly or indirectly, the operations of Choice Hotels Franchising
substantially as they exist on the date hereof.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender, the
Issuing Bank and the Agent that, so long as this Agreement shall remain in
effect or the principal of or interest on any Loan, any Fees or any other
expenses or amounts payable under any Loan Document shall be unpaid, and until
all Letters of Credit have been cancelled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
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otherwise consent in writing, the Borrower shall not, and shall not cause or
permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to
exist any Indebtedness, except (without duplication):
(a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01(a) and any extensions, renewals or replacements of
existing mortgages and Capital Lease Obligations; provided, however,
that (i) the principal amount of any such extension, renewal or
replacement shall not exceed the principal amount of the mortgage or
Capital Lease Obligation so extended, renewed or replaced, (ii) the
mortgage or Capital Lease Obligation so extended, renewed or replaced
shall not be secured by any property or asset that was not already
pledged to secure the existing mortgage or Capital Lease Obligation,
and (iii) such extension, renewal or replacement is not on terms
materially more restrictive to the Borrower or its Subsidiaries or
materially less favorable to the Lenders than the mortgage or Capital
Lease Obligation so extended, renewed or replaced;
(b) Indebtedness represented by the Loan Documents; provided,
however, that Indebtedness consisting of commercial paper of the
Borrower may also be incurred pursuant to this clause (b) to the extent
the sum of such Indebtedness and the aggregate principal amount of
Loans then outstanding do not exceed the Total Commitment at such time
(subject to Section 6.01(n) to the extent in excess of $100,000,000).
(c) Indebtedness incurred upon the acquisition of any property
or asset secured by Liens on such property or asset in accordance with
Section 6.02(b); provided, however, that the amount of such
Indebtedness shall not exceed the purchase price of any such property
or asset;
(d) Indebtedness secured by Liens permitted under Section
6.02(i), 6.02(j) or 6.02(m);
(e) Indebtedness of Subsidiaries existing at the time they are
acquired by the Borrower and not incurred in contemplation of such
acquisition;
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(f) other Indebtedness of Subsidiaries not prohibited by
Section 6.09;
(g) Indebtedness of (i) the Borrower to any wholly owned
Subsidiary, Choice Hotels Franchising or Quality Hotels; (ii) any
wholly owned Subsidiary, Choice Hotels Franchising or Quality Hotels to
the Borrower; and (iii) any Subsidiary, Choice Hotels Franchising or
Quality Hotels to any wholly owned Subsidiary (or to Choice Hotels
Franchising or Quality Hotels)(for the purposes of this clause (g),
"wholly owned Subsidiary" includes any wholly owned subsidiary of
Choice Hotels Franchising and/or Quality Hotels, any Subsidiary that
would otherwise constitute a wholly owned Subsidiary but for directors'
qualifying shares or similar matters, and any Subsidiary the only
direct shareholders, members or participants in which are wholly owned
Subsidiaries, Choice Hotels Franchising or Quality Hotels);
(h) Indebtedness represented by notes or letters of credit
issued for the account of the Borrower or any Subsidiary in connection
with insurance policies and in a form substantially similar to the
notes or letters of credit issued for the account of the Borrower or
any Subsidiary set forth in Schedule 6.01(h) issued in connection with
existing insurance policies of the Borrower or such Subsidiary;
(i) Indebtedness represented by utility bonds, performance
bonds, state self insurance bonds and miscellaneous other bonds other
than those existing on the date hereof and listed in Schedule 6.01(a)
(including any extensions, renewals and replacements), the aggregate
principal amount of such Indebtedness at any one time not to exceed
$20,000,000 (subject to Section 6.01(n) to the extent in excess of
$20,000,000);
(j) Indebtedness of the Borrower consisting of Guarantees in
connection with pension and deferred compensation arrangements arising
in connection with the Distribution; provided, however, that the
aggregate amount of such Indebtedness shall not exceed $40,000,000;
(k) Indebtedness consisting of the Manor Care Note;
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(l) Non-Recourse Hotel Indebtedness; provided, that, so long
as the Manor Care Note remains in effect or any principal, interest or
any other expenses or amounts payable thereunder shall be unpaid, the
proceeds of the incurrence of such Non-Recourse Hotel Indebtedness
shall be applied solely to prepay amounts outstanding under the Manor
Care Note;
(m) Indebtedness consisting of Sale and Lease-back
Transactions permitted under Section 6.03; and
(n) other unsecured Indebtedness of the Borrower in an
aggregate principal amount at any one time outstanding not to exceed
$100,000,000; provided, however, that the covenants and events of
default contained in any such Indebtedness with an aggregate principal
amount in excess of $10,000,000 shall not be more restrictive of the
Borrower and its Subsidiaries than those in this Agreement; and
provided further, that the aggregate amount of Guarantees by the
Borrower may not exceed $50,000,000.
SECTION 6.02. Liens. Create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights (excluding rights of first refusal) in respect
of any thereof, except (without duplication):
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule
6.02; provided, however, that such Liens shall secure only those
obligations which they secure on the date hereof except as otherwise
permitted hereunder;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided,
however, that (i) such Lien is not created in contemplation of or in
connection with such acquisition and (ii) such Lien does not apply to
any other property or assets of the Borrower or any Subsidiary;
(c) Liens for taxes not yet due or which are being contested
in compliance with Section 5.03;
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(d) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due or which are being
contested in compliance with Section 5.03;
(e) statutory liens of landlords in respect of property leased
by the Borrower or any Subsidiary;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(i) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary and
liens securing refinancings of existing mortgages; provided, however,
that the aggregate principal amount of the Indebtedness secured by such
security interests does not exceed $50,000,000; and provided further,
that (i) such security interests are incurred, and the Indebtedness
secured thereby is created, within 120 days after such acquisition, or
construction or refinancing, (ii) the Indebtedness secured thereby does
not exceed 80% of the fair market value of the subject real property,
improvements or equipment at the time of such acquisition, construction
or refinancing, and (iii) such security interests do not apply to the
subject property or assets of the Borrower or any Subsidiary other than
the purchased property or assets
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or the property or assets subject to the mortgage being refinanced,
as the case may be;
(j) mortgages on properties listed on Schedule 6.02(j);
provided, however, that (i) such mortgages do not apply to the
property or assets of the Borrower or any Subsidiary other than the
scheduled properties and (ii) the aggregate principal amount of the
Indebtedness secured by such security interests does not exceed
$100,000,000;
(k) Liens created in favor of the Lenders;
(l) Liens securing Indebtedness incurred pursuant to
Sections 6.01(l) or 6.09(ii); and
(m) other Liens to secure Indebtedness of the Borrower or
any Subsidiary; provided, however, that the aggregate principal
amount of the Indebtedness so secured at any time, when added to the
net book value of all property the subject of Sale and Lease-Back
Transactions (other than Sale and Lease-back Transactions referred to
in the proviso to Section 6.03) at such time, does not exceed 15% of
Consolidated Total Assets at such time.
SECTION 6.03. Sale and Lease-Back Transactions.
Enter into any Sale and Lease-Back Transaction unless immediately thereafter the
net book value of all property the subject of Sale and Lease-Back Transactions,
when added to the aggregate principal amount of Indebtedness of the Borrower or
any Subsidiary secured at such time by Liens permitted only under Section
6.02(m), does not exceed 10% of Consolidated Total Assets at such time;
provided, however, that this Section 6.03 shall be deemed not to apply to any
Sale and Lease-back Transaction entered into by an SPC so long as (i) neither
the Borrower nor any other Subsidiary (x) provides credit support (including any
undertaking, agreement or instrument which would constitute Indebtedness) or has
given or made other assurances regarding repayment, (y) is directly or
indirectly personally liable or (z) is the lessor and (ii) the obligees will
have recourse solely against the assets of such SPC for repayment of the amounts
owed in connection with such Sale and Lease-back Transaction and any fees,
indemnities, expense reimbursements or other amounts of whatever nature accrued
or payable in connection with such Sale and Lease-back Transaction; and provided
further, that, so long as the Manor Care Note remains in
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effect or any principal, interest or any other expenses or amounts payable
thereunder shall be unpaid, the proceeds of such Sale and Lease-back Transaction
shall be applied solely to prepay amounts outstanding under the Manor Care Note.
SECTION 6.04. Investments, Loans and Advances.
Purchase, hold or acquire any capital stock, comparable ownership interests,
evidences of indebtedness or other securities of, make or permit to exist any
loans or advances to, or make or permit to exist any investment or any other
interest in, any other person, except:
(a) the investments and guarantees existing on the date
hereof set forth on Schedule 6.04 and investments by the Borrower or
any Subsidiary in the capital stock or comparable ownership interests
of the Subsidiaries, including by means of contributions by any
Subsidiary of Hotel Properties to the Borrower or a Subsidiary;
(b) loans or advances by the Borrower to Subsidiaries or by
Subsidiaries to the Borrower or other Subsidiaries;
(c) purchases by the Borrower of the capital stock of
Quality Hotels held by Xxxxx Xxxxx;
(d) Guarantees permitted under Section 6.01(j);
(e) Permitted Investments; and
(f) other investments, capital contributions, loans and
advances not to exceed at any time 15% of Consolidated Total Assets
at such time.
SECTION 6.05. Mergers and Consolidations. Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all its
assets whether now owned or hereafter acquired, except that:
(a) (i) the Borrower may merge or consolidate with a
Subsidiary or (ii) a Subsidiary may merge or consolidate with the
Borrower so long as the Borrower is the surviving entity;
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(b) any Subsidiary may merge or consolidate with any
Subsidiary;
(c) the Borrower or any Subsidiary may merge or consolidate
with another person; provided, however, that:
(i) the Borrower or such Subsidiary is the
surviving entity;
(ii) no Event of Default or event which, with notice
or the passage of time or both, would constitute an Event
of Default exists after giving effect to such merger or
consolidation; and
(iii) the Agent shall receive a certificate signed by
a Financial Officer of the Borrower of the Borrower,
confirming compliance with clause (ii) above;
(e) the Borrower and the Subsidiaries may consummate the
Distribution.
SECTION 6.06. Asset Sales. Consummate any Asset
Sale, other than (i) sales of receivables for collection (and not for financing
or factoring purposes) in the ordinary course of business, (ii) Asset Sales
which, when added to the Proceeds from all other Asset Sales previously
consummated in the same fiscal year, would not exceed 10% of Consolidated Total
Assets as of the end of the preceding fiscal year, and (iii) Asset Sales, in a
single transaction or series of transactions, of Hotel Properties or the SPC;
provided that no Asset Sale referenced in clause (iii) above shall be permitted
if (a) a Default has occurred or would occur after giving effect to such Asset
Sale, or (b) so long as the Manor Care Note remains in effect or any principal,
interest or any other expenses or amounts payable thereunder shall be unpaid,
the net proceeds of such Asset Sale are used other than to prepay (x) amounts
outstanding under the Manor Care Note or (y) Indebtedness secured by Liens on
the Hotel Properties that are the subject of such Asset Sale.
SECTION 6.07. Transactions with Affiliates. Sell
or transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except that as long as no Default or Event of Default shall have
occurred and be continuing, the Borrower or any Subsidiary
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may (a) consummate the Distribution or (b) engage in any of the foregoing
transactions (i) in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties or (ii) between
or among the Borrower and its wholly owned Subsidiaries.
SECTION 6.08. Business of Borrower and
Subsidiaries. Engage at any time in any business or business activity other than
the business currently conducted by it or related or collateral activities in
the hospitality, travel or franchise-related industries.
SECTION 6.09. Subsidiary Indebtedness. Permit any
Subsidiary to create, incur, assume or permit to exist any Indebtedness except:
(i) any Indebtedness permitted by Section 6.01;
(ii) Indebtedness of any SPC in the form of collateralized
mortgage obligations or obligations under a real estate investment
trust; provided, however, that, in respect of such Indebtedness, (i)
neither the Borrower nor any other Subsidiary (x) provides credit
support (including any undertaking, agreement or instrument which
would constitute Indebtedness) or has given or made other assurances
regarding repayment, (y) is directly or indirectly personally liable
or (z) is the lender and (ii) the obligees will have recourse solely
against the assets of SPC for repayment of the principal of and
interest on such Indebtedness and any fees, indemnities, expense
reimbursements or other amounts of whatever nature accrued or payable
in connection with such Indebtedness; and provided further, that, so
long as the Manor Care Note remains in effect or any principal,
interest or any other expenses or amounts payable thereunder shall be
unpaid, the proceeds of the incurrence of such Indebtedness shall be
applied solely to prepay amounts outstanding under the Manor Care
Note; and
(iii) other Indebtedness of any Subsidiary; provided, however,
that the aggregate principal amount (the "Subsidiary Debt Amount")
outstanding of all such other Indebtedness of all Subsidiaries
(excluding amounts permitted under clause (i) above) may not
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exceed 15% of Consolidated Total Assets at such time; provided
further, however, that, at any time during which the Manor Care Note
remains in effect or any principal, interest or any other expenses or
amounts payable thereunder shall be unpaid, the Subsidiary Debt
Amount may not exceed 5% of Consolidated Total Assets at such time.
SECTION 6.10. Agreements. Permit any Subsidiary
to enter into any agreement or incur any obligation the terms of which would
impair the ability of any Subsidiary to pay dividends, to make intercompany
loans or advances or to make distributions (it being agreed that this Section
shall not be breached by any such agreement or obligation binding upon a
Subsidiary at the time it becomes a Subsidiary and not incurred in contemplation
of its becoming a Subsidiary).
SECTION 6.11. Fiscal Year and Accounting Practices. Change
its fiscal year end or accounting practices from those in effect at May 31,
1996, other than as required by GAAP.
SECTION 6.12. No Further Negative Pledges.
Except with respect to prohibitions against other encumbrances on specific
property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific property, and improvements and
accretions thereto, and is otherwise permitted hereby), enter into any agreement
prohibiting the creation or assumption of any Lien upon the properties or assets
of the Borrower or any Subsidiary, whether now owned or hereafter acquired, or
requiring an obligation to be secured if some other obligation is secured.
SECTION 6.13. Minimum Consolidated Net Worth. In
the case of the Borrower, permit its Consolidated Net Worth at any time to be
less than the greater of (i) the sum of (x) $75,000,000, (y) 50% of the
Borrower's Consolidated Net Income accrued during the period (treated as one
accounting period) commencing on the date of the Distribution and ending on the
last day of the most recent fiscal quarter for which financial statements have
been delivered pursuant to Section 5.04 (which amount shall not include
Consolidated Net Income for any fiscal quarter in which the Borrower's
Consolidated Net Income is negative) and (z) the aggregate net cash proceeds
received by the Borrower from the issuance or sale of its capital stock since
the date hereof, and (ii) the sum of (W) the amount that is equal to 75% of the
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Borrower's Consolidated Net Worth as of the last day of the month in which the
Distribution occurs plus (X) 50% of the Borrower's Consolidated Net Income
accrued during the period (treated as one accounting period) commencing on the
date on which the Distribution occurs, and ending on the last day of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 5.04 (which amount shall not include Consolidated Net Income
for any fiscal quarter in which the Borrower's Consolidated Net Income is
negative), plus (Y) the aggregate net cash proceeds received by the Borrower
from the issuance or sale of its capital stock since the date hereof, minus (Z)
an amount equal to the decrease, if any, in the Borrower's Consolidated Net
Worth (as measured at the date of the Distribution) resulting from the sale,
transfer or other disposition of Hotel Properties or an SPC.
SECTION 6.14. Consolidated Leverage Ratio. In the case of
the Borrower, permit the Consolidated Leverage Ratio as of the last day of and
for any period of four fiscal quarters ending during the period from and
including the date hereof through the Maturity Date to exceed (i) 3.75 to 1.0,
at any time during which the Manor Care Note remains in effect or any principal,
interest or any other expenses or amounts payable thereunder shall be unpaid,
and (ii) 3.25 to 1.0, at any other time. The Consolidated Leverage Ratio shall
be calculated as of the end of each fiscal quarter based on the period of the
four consecutive fiscal quarters ending on such date.
SECTION 6.15. Consolidated Interest Coverage Ratio. In the
case of the Borrower, permit its Consolidated Interest Coverage Ratio at any
time during the period from and including the date hereof through the Maturity
Date to be less than (i) 3.25 to 1.0, at any time during which the Manor Care
Note remains in effect or any principal, interest or any other expenses or
amounts payable thereunder shall be unpaid, and (ii) 3.75 to 1.0, at any other
time. The Consolidated Interest Coverage Ratio shall be calculated as of the end
of each fiscal quarter based on the period of the four consecutive fiscal
quarters ending on such date.
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ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made
(such representation or warranty being deemed made as provided in
Section 4.01) in or in connection with any Loan Document or the
borrowings or issuances of Letter of Credit hereunder, or any
representation, warranty, statement or information contained in any
report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall
prove to have been false or misleading in any material respect when
so made, deemed made or furnished;
(b) default shall be made in the payment of any principal
of any Loan or the reimbursement with respect to any L/C Disbursement
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or L/C Disbursement or any other amount (other
than an amount referred to in clause (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five Business Days;
(d) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a) or 5.05 or in
Article VI;
(e) default shall be made in the due observance or
performance by the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than
those specified in clauses (b), (c) and (d) above) and such default
shall continue unremedied for a period of five Business Days after
notice thereof from the Agent or any Lender to the Borrower;
(f) the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount,
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due in respect of any Indebtedness in an aggregate principal amount
in excess of $10,000,000, when and as the same shall become due and
payable, or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument
evidencing or governing any Indebtedness in an aggregate principal
amount in excess of $10,000,000 if the effect of any failure referred
to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to
cause, such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary, or of a substantial part of the property or assets of the
Borrower or a Subsidiary, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other Federal, state
or foreign bankruptcy, insolvency, receivership or similar law, (ii)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of the Borrower or
any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering
any of the foregoing shall be entered;
(h) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in
clause (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part
of the property or assets of the Borrower or any Subsidiary, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general
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assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any
of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 60 consecutive days during
which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment;
(j) a Reportable Event or Reportable Events, or a failure
to make a required installment or other payment (within the meaning
of Section 412(n)(l) of the Code), shall have occurred with respect
to any Plan or Plans that reasonably could be expected to result in
liability of the Borrower to the PBGC or to a Plan in an aggregate
amount exceeding $5,000,000 and, within 30 days after the reporting
of any such Reportable Event to the Agent or after the receipt by the
Agent of the statement required pursuant to Section 5.06, the Agent
shall have notified the Borrower in writing that (i) the Required
Lenders have made a determination that, on the basis of such
Reportable Event or Reportable Events or the failure to make a
required payment, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for the
appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of
a lien in favor of a Plan and (ii) as a result thereof an Event of
Default exists hereunder; or a trustee shall be appointed by a United
States District Court to administer any such Plan or Plans; or the
PBGC shall institute proceedings to terminate any Plan or Plans;
(k) (i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such
Withdrawal Liability in a timely and
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appropriate manner and (iii) the amount of the Withdrawal Liability
specified in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection with
Withdrawal Liabilities (determined as of the date or dates of such
notification), exceeds $5,000,000 or requires payments exceeding
$1,000,000 in any year;
(l) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if solely as a result of
such reorganization or termination the aggregate annual contributions
of the Borrower and its ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have been or are being terminated
have been or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most recently
completed plan years by an amount exceeding $1,000,000; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) above), and at any time thereafter during the
continuance of such event, the Agent, at the request of the Required Lenders,
shall, by notice to the Borrower, take any or all of the following actions, at
the same or different times: (i) terminate forthwith the Commitments or L/C
Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding and (iii) require cash
collateral as contemplated by Section 2.20(j); and in any event with respect to
the Borrower described in clause (g) or (h) above, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable,
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without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII. THE AGENT
In order to expedite the transactions contemplated
by this Agreement, The Chase Manhattan Bank is hereby appointed to act as Agent
on behalf of the Lenders and the Issuing Bank. Each of the Lenders hereby
irrevocably authorizes the Agent to take such actions on behalf of such Lender
or Issuing Bank and to exercise such powers as are specifically delegated to the
Agent by the terms and provisions hereof, together with such actions and powers
as are reasonably incidental thereto. The Agent is hereby expressly authorized
by the Lenders and the Issuing Bank, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Issuing Bank all
payments of principal of and interest on the Loans, all payments in respect of
L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or Issuing Bank its proper share of each
payment so received; (b) to give notice on behalf of each of the Lenders to the
Borrower of any Event of Default specified in this Agreement of which the Agent
has actual knowledge acquired in connection with its agency hereunder; and (c)
to distribute to each Lender copies of all notices, financial statements and
other materials delivered pursuant to this Agreement as received by the Agent.
Neither the Agent nor any of its directors, offi-
cers, employees or agents shall be liable to the Lenders as such for any action
taken or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith (other than any statement, representation or warranty relating to the
Agent or relating to the functions of the Agent hereunder), or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agent shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements. The
Agent may deem and treat the
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payee of any note referred to in Section 2.07 as the owner thereof for all
purposes hereof until it shall have received from the payee of such note notice,
given as provided herein, of the transfer thereof. The Agent shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Lender or Issuing Bank of any of its obligations hereunder or to any Lender or
Issuing Bank on account of the failure of or delay in performance or breach by
any other Lender or Issuing Bank or the Borrower of any of their respective
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. The Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.
The Lenders hereby acknowledge that the Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor
Agent as provided below, the Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor subject to the written consent of the
Borrower to such successor (which consent will not be unreasonably withheld). If
no successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a bank with offices in New York, New
York and London, England, having a combined capital and surplus of at
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least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Agent's resignation hereunder, the provisions
of this Article and Section 9.05 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
With respect to the Loans made by it hereunder, the Agent
in its individual capacity and not as Agent shall have the same rights and
powers as any other Lender and may exercise the same as though it were not the
Agent, and the Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower or any Subsidiary
or other Affiliate thereof as if it were not the Agent.
Each Lender agrees (i) to reimburse the Agent, on demand,
in the amount of its pro rata share (based on its Commitment hereunder or, if
the Commitments shall have been terminated, on its Commitment most recently in
effect) of any expenses incurred for the benefit of the Lenders by the Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which the Borrower shall be
obligated to reimburse under Section 9.05 but which shall not have been
reimbursed by the Borrower and (ii) to indemnify and hold harmless the Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against it in its capacity as the Agent or any of
them in any way relating to or arising out of the Agent's role under this
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Borrower; provided, however, that no
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Agent or any of its directors, officers, employees or agents.
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Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
The Co-Agent shall not have any responsibilities or
obligations as Co-Agent under any of the Loan Documents.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telex, graphic scanning or other
telegraphic communications equipment of the sending party, as follows:
(a) if to the Borrower, at 00000 Xxxxxxxx Xxxx, Xxxxxx
Xxxxxx, XX 00000, Attention of General Counsel, with a copy to the
Chief Financial Officer of the Borrower (Telecopy No. 301-979-4007);
(b) if to the Agent, to it at The Chase Manhattan Bank,
Agent Bank Services Group, Grand Central Tower, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, XX 00000. Attention of Xxxxx Xxxxxx, (Telecopy No. (212)
270-0002), with a copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of [Xxxxx X. Xxx, III], (Telecopy
No. 212-270-3279) and Chase Manhattan International Limited, Trinity
Tower, 9 Xxxxxx Xxxx Street, London, England E19YT, Attention of
Xxxxxx Xxxxxxx (Telecopy No. 011 44 71 777 2360); and
(c) if to a Lender, to it at its address (or telecopy
number) set forth in Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
Except as otherwise provided in Section 9.15(c), all notices and other
communications given to any party hereto in
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accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, each other Borrower
and the Agent and when the Agent shall have received copies hereof which, when
taken together, bear the signatures of each Lender, and thereafter shall be
binding upon and inure to the benefit of the Borrower, each other Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower may not assign or delegate its rights or obligations hereunder or
any interest herein without the prior consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Agent, the Issuing
Bank or the Lenders that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or
a portion of its interests, rights and obligations under this Agreement
(including all or a portion
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of its Commitment and the Loans at the time owing to it); provided, however,
that (i) except in the case of an assignment to a Lender or an Affiliate of such
Lender, the Borrower and the Agent (and, in the case of any assignment of a
Commitment, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) the amount
of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall not be less than $5,000,000 and the
amount of the Commitment of such Lender remaining after such assignment shall
not be less than $5,000,000 or shall be zero, (iii) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with a processing and recordation fee of $2,000 and (iv) the assignee,
if it shall not be a Lender, shall deliver to the Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to Section 9.04(e), from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto (but shall continue to be entitled to the
benefits of Sections 2.13, 2.15, 2.19 and 10.05, as well as to any Fees accrued
for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim
and that its Commitment, and the outstanding balances of its Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Lender makes no representation or warranty and
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assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto or the financial condition of the Borrower or any Subsidiary or
the performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive in the absence of manifest error and the Borrower,
the Agent, the Issuing Bank and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
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(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee together with an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in Section 9.04(b) and, if required, the written consent of the
Borrower, the Issuing Bank and the Agent to such assignment, the Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders and
the Issuing Bank.
(f) Each Lender may without the consent of the Borrower,
the Issuing Bank or the Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.13, 2.15 and 2.19 to the same extent as if
they were Lenders but not in excess of those cost protections to which the
Lender from which it purchased its participation would be entitled to under
Sections 2.13, 2.15 and 2.19 and (iv) the Borrower, the Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender (and shall not be required to deal with any participating bank or other
entity, notwithstanding any other provision contained herein) in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder, increasing the Commitment of such
Lender or decreasing the amount of principal of or the rate at which interest is
payable on the Loans, or extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment
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or participation pursuant to this Section 9.04, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower; provided,
however, that, prior to any such disclosure of information designated by the
Borrower as confidential, each such assignee or participant or proposed assignee
or participant shall execute an agreement whereby such assignee or participant
shall agree to preserve the confidentiality of such confidential information
(subject to those exceptions set forth in Section 9.17). It is understood that
confidential information relating to the Borrower would not ordinarily be
provided in connection with assignments or participations of Competitive Loans.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank; provided, however,
that no such assignment shall release a Lender from any of its obligations
hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees
to pay all reasonable out-of-pocket expenses incurred by each of the Agent and
the Issuing Bank and its Affiliates in connection with the preparation of this
Agreement and the other Loan Documents and the syndication of the facilities
provided for herein or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby contemplated shall be consummated) or incurred by the Agent or any Lender
in connection with the enforcement or protection of their rights (as such rights
may relate to the Borrower or any Subsidiary) in connection with this Agreement
and the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder and under the Issuing Bank Agreements, as applicable,
including the reasonable fees and disbursements of Cravath, Swaine & Xxxxx,
counsel for the Agent, any other counsel for the Agent and counsel for any
Lender, including the allocated costs of in-house counsel.
(b) The Borrower agrees to indemnify the Agent, each
Lender, and the Issuing Bank, and their respective directors, officers,
employees, agents and Affiliates (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or
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asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated thereby, the performance by
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, or (iii) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indemnitee is a party thereto;
provided, however, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the negligence or misconduct of
such Indemnitee. Promptly after receipt by an Indemnitee of notice of any
complaint or the commencement of any action or proceeding with respect to which
indemnification is being sought hereunder, such person shall notify the Borrower
of such complaint or of the commencement of such action or proceeding, but
failure so to notify the Borrower will relieve the Borrower from any liability
which such Borrower may have hereunder only if, and to the extent that such
failure results in the forfeiture by such Borrower of substantial rights and
defenses, and shall not in any event relieve such Borrower from any other
obligation or liability that such Borrower may have to any Indemnitee otherwise
than under this Agreement. If the Borrower so elects or is requested by such
Indemnitee, such Borrower shall assume the defense of such action or proceeding,
including the employment of counsel reasonably satisfactory to the Indemnitee
and the payment of the reasonable fees and disbursements of such counsel. In the
event, however, such Indemnitee reasonably determines in its judgment that
having common counsel would present such counsel with a conflict of interest or
if the defendant in, or targets of, any such action or proceeding include both
the Indemnitee and such Borrower, and such Indemnitee reasonably concludes that
there may be legal defenses available to it or other Indemnitees that are
different from or in addition to those available to such Borrower or if such
Borrower fails to assume the defense of the action or proceeding or to employ
counsel reasonably satisfactory to such Indemnitee, in either case in a timely
manner, then the Indemnitee may employ separate counsel to represent or defend
it in any such action or proceeding and such Borrower shall pay the reasonable
fees and disbursements of such counsel. In any action or proceeding
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the defense of which the Borrower assumes, the Indemnitee shall have the right
to participate in such litigation and to retain its own counsel at the
Indemnitee's own expense. The Borrower further agrees that it shall not, without
the prior written consent of the Indemnitee, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not an Indemnitee is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes (i) an
unconditional release of each Indemnitee hereunder from all liability arising
out of such claim, action, suit or proceeding or (ii) a covenant not to xxx each
Indemnitee, or another similar alternative which is consented to by each
Indemnitee party to such claim, action, suit or proceeding, which covenant not
to xxx or other approved alternative has the effect of an unconditional release
of each Indemnitee hereunder from all liability arising out of such claim,
action, suit or proceeding.
(c) The provisions of this Section shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Agent or
any Lender or any Issuing Bank. All amounts due under this Section shall be
payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
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SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PRINCIPLES OR PROVISIONS. EACH LETTER
OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES
ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay
of the Agent or any Lender or any Issuing Bank in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agent, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by Section 9.08(b),
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on the Borrower in any
case shall entitle such Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest on any Loan or any date for reimbursement of an L/C
Disbursement, or Fees, or waive or excuse any such payment or any part thereof,
or decrease the rate of interest on any Loan or L/C Disbursement, without the
prior written consent of each Lender affected thereby, (ii) increase the
Commitment or change the Facility Fees of any Lender without the prior written
consent of such Lender, or (iii) amend or modify the
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provisions of Section 2.16, the provisions of this Section or the definition of
the "Required Lenders", without the prior written consent of each affected
Lender; provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Agent or any Issuing Bank hereunder without
the prior written consent of the Agent or such Issuing Bank.
(c) Notwithstanding the foregoing, any Issuing Bank
Agreement may be waived, amended or modified by the parties thereto with the
written approval of the Agent if and to the extent that such waiver, amendment
or modification would be permitted in connection with the execution and delivery
of a replacement of such agreement.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate or
participation in any L/C Disbursement, together with all fees and charges which
are treated as interest or such Loan or participation in any L/C Disbursement
under applicable law (collectively the "Charges"), as provided for herein or in
any other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, together
with all Charges payable to such Lender, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the
other Loan Documents and the letter agreement referred to in Section 2.06(b)
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 9.11. Waiver of Jury Trial; Punitive Damages. Each
party hereto hereby waives, to the fullest extent permitted by applicable law,
(a) any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with
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this Agreement or any of the other Loan Documents and (b) any claims for
punitive damages (to the extent such claims arise from the use of proceeds of
the Loans for the purpose of acquisitions). Each party hereto (i) certifies that
no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement and
the other Loan Documents, as applicable, by, among other things, the mutual
waivers and certifications in this Section .
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process;
Judgment Currency. (a) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or
99
99
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Agent, any Issuing Bank, or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against the Borrower or its properties in the courts of any
jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) The Borrower and each other party hereto consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(d) If for the purpose of obtaining judgment in any court
it is necessary to convert a sum due hereunder in one currency into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so under applicable law, that the rate of exchange used shall be
the spot rate at which in accordance with normal banking procedures the first
currency could be purchased in New York City with such other currency by the
person obtaining such judgment on the Business Day preceding that on which final
judgment is given.
(e) The parties agree, to the fullest extent that they may
effectively do so under applicable law, that the obligations of the Borrower to
make payments in any currency of the principal of and interest on the Loans of
such Borrower and any other amounts due from such Borrower hereunder to the
Agent as provided in Section 2.16 (i) shall not be discharged or satisfied by
any tender, or any recovery pursuant to any judgment (whether or not entered in
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100
accordance with Section 9.15(d)), in any currency other than the relevant
currency, except to the extent that such tender or recovery shall result in the
actual receipt by the Agent at its relevant office as provided in Section 2.16
on behalf of the Lenders of the full amount of the relevant currency expressed
to be payable in respect of the principal of and interest on the Loans and all
other amounts due hereunder (it being assumed for purposes of this clause (i)
that the Agent will convert any amount tendered or recovered into the relevant
currency on the date of such tender or recovery), (ii) shall be enforceable as
an alternative or additional cause of action for the purpose of recovering in
the relevant currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the relevant currency so expressed to be
payable and (iii) shall not be affected by an unrelated judgment being obtained
for any other sum due under this Agreement.
SECTION 9.16. Confidentiality. Unless otherwise agreed to
in writing by the Borrower, the Issuing Bank, the Agent and each Lender hereby
agree to keep all Proprietary Information (as defined below) confidential and
not to disclose or reveal any Proprietary Information to any person other than
the Agent's or such Lender's directors, officers, employees, Affiliates and
agents and to actual or potential assignees and participants, and then only on a
confidential basis; provided, however, that the Agent, the Issuing Bank or any
Lender may disclose Proprietary Information (a) as required by law, rule,
regulation or judicial process, (b) to its attorneys and accountants, (c) as
requested or required by any state or Federal or foreign authority or examiner
regulating banks or banking or (d) subject to appropriate confidentiality
protections, in any legal proceedings between the Agent, the Issuing Bank or
such Lender and the Borrower arising out of this Agreement. For purposes of this
Agreement, the term "Proprietary Information" shall include all information
about the Borrower or any of their Affiliates which has been furnished by the
Borrower or any of its Affiliates, whether furnished before or after the date
hereof, and regardless of the manner in which it is furnished; provided,
however, that Proprietary Information does not include information which (x) is
or becomes generally available to the public other than as a result of a
disclosure by the Agent, the Issuing Bank or any Lender not permitted by this
Agreement, (y) was obtained or otherwise became available to the Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure to
the Agent, the Issuing Bank or such
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Lender by the Borrower or any of its Affiliates or (z) becomes available to the
Agent, the Issuing Bank or any Lender on a nonconfidential basis from a person
other than the Borrower or its Affiliates who, to the best knowledge of the
Agent, the Issuing Bank or such Lender, as the case may be, is not otherwise
bound by a confidentiality agreement with the Borrower or any of its Affiliates,
or is not otherwise
102
prohibited from transmitting the information to the Agent, the Issuing Bank or
such Lender.
IN WITNESS WHEREOF, the Borrower, the Agent, the Issuing
Bank and the Lenders have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
CHOICE HOTELS HOLDINGS, INC., as a
Borrower,
by_________________________________
Name:
Title:
by_________________________________
Name:
Title:
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103
THE CHASE MANHATTAN BANK, individually
and as Issuing Bank and Agent,
by____________________________________
Name:
Title:
[OTHER LENDERS]
104
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc. (the
"Borrower"), refers to the Competitive Advance and Multi-Currency Revolving
Credit Facility Agreement dated as of October [ ], 1996, among Choice Hotels
Holdings, Inc. (subsequently renamed Choice Hotels International Inc.), the
lenders listed in Schedule 2.01 thereto, Nationsbank, N.A., as co-agent, and The
Chase Manhattan Bank, as agent for the lenders (the "Credit Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives you notice pursuant to Section 2.03(a) of the Credit Agreement that it
requests a Competitive Borrowing under the Credit Agreement, and in that
connection sets forth below the terms on which such Competitive Borrowing is
requested to be made:
(A) Date of Competitive Borrowing
(which is a Business Day) ______________________
(B) Principal Amount of
Competitive Borrowing(1) ______________________
(C) Interest rate basis(2) ______________________
--------
(1) In Dollars not less than $5,000,000 (and in integral multiples of
$1,000,000) or greater than the Total Commitment then available.
(2) Eurodollar Loan or Fixed Rate Loan.
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(D) Interest Period and the last
day thereof(3) ______________________
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Borrower shall be deemed to have
represented and warranted that the conditions to lending specified in Section
4.01(b) and (c) of the Credit Agreement have been satisfied.
Very truly yours,
by__________________________________
Title: [Responsible Officer]
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
--------
(3) Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
106
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Bank]
[Address]
New York, NY
Attention:
[Date]
Dear Sirs:
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October [ ], 1996, among Choice
Hotels Holdings, Inc., a Delaware corporation (the "Borrower"), the lenders
listed in Schedule 2.01 thereto, Nationsbank, N.A., as co-agent, and The Chase
Manhattan Bank, as agent for the lenders (the "Credit Agreement"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The Borrower made a Competitive
Bid Request on , 19 , pursuant to Section 2.03(a) of the Credit Agreement, and
in that connection you are invited to submit a Competitive Bid by
[Date]/[Time].(4) Your Competitive Bid must comply with Section 2.03(b) of the
Credit Agreement and the terms set forth below on which the Competitive Bid
Request was made:
(A) Date of Competitive Borrowing ____________________
(B) Principal amount of
Competitive Borrowing ____________________
(C) Interest rate basis ____________________
--------
(4) The Competitive Bid must be received by the Agent (i) in the case of
Eurodollar Loans, not later than 9:30 a.m., New York City time, three Business
Days before a proposed Competitive Borrowing and (ii) in the case of Fixed Rate
Loans, not later than 9:30 a.m., New York City time, on the Business Day of a
proposed Competitive Borrowing.
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(D) Interest Period and the
last day thereof ____________________
Very truly yours,
THE CHASE MANHATTAN BANK,
as Agent,
by______________________________
Title:
108
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, [Name of Bank], refers to the
Competitive Advance and Multi-Currency Revolving Credit Facility Agreement dated
as of October [ ], 1996, among Choice Hotels Holdings, Inc., a Delaware
corporation (the "Borrower"), the lenders listed in Schedule 2.01 thereto,
Nationsbank, N.A., as co-agent, and The Chase Manhattan Bank, as agent for the
lenders (the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The undersigned hereby makes a Competitive Bid pursuant to
Section 2.03(b) of the Credit Agreement, in response to the Competitive Bid
Request made by the Borrower on , 19 , and in that connection sets forth below
the terms on which such Competitive Bid is made:
(A) Principal Amount(5) ____________________
(B) Competitive Bid Rate(6) ____________________
(C) Interest Period and last
day thereof ____________________
--------
(5) In Dollars not less than $5,000,000 or greater than the requested
Competitive Borrowing and in integral multiples of $1,000,000. Multiple bids
will be accepted by the Agent.
(6) I.e., LIBO Rate + or - %, in the case of Eurodollar Loans
or %, in the case of Fixed Rate Loans.
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The undersigned hereby confirms that it is prepared,
subject to the conditions set forth in the Credit Agreement, to extend credit to
the Borrower upon acceptance by the Borrower of this bid in accordance with
Section 2.03(d) of the Credit Agreement.
Very truly yours,
[NAME OF LENDER,]
by____________________________
Title:
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
110
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc.
(the "Borrower"), refers to the Competitive Advance and Multi-Currency Revolving
Credit Facility Agreement dated as of October [ ], 1996, among Choice Hotels
Holdings, Inc. (as subsequently renamed Choice Hotels International, Inc.), a
Delaware corporation (the "Borrower"), the lenders listed in Schedule 2.01
thereto, Nationsbank, N.A., as co-agent, and The Chase Manhattan Bank, as agent
for the lenders (the "Credit Agreement").
In accordance with Section 2.03(c) of the Credit
Agreement, we have received a summary of bids in connection with our Competitive
Bid Request dated and in accordance with Section 2.03(d) of the Credit
Agreement, we hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%]/[+/-. %]
$
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2
The $ should be deposited in Chemical Bank
account number [ ] on [date].
Very truly yours,
CHOICE HOTELS INTERNATIONAL,
INC.,
by_________________________________
Name:
Title:
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
112
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
The Chase Manhattan Bank, as Agent for
the Lenders referred to below,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention of Xx. Xxxxx Xxxxxx
[Date]
Dear Sirs:
The undersigned, Choice Hotels International, Inc.
(the "Borrower"), refers to the Competitive Advance and Multi-Currency Revolving
Credit Facility Agreement dated as of October [ ], 1996, among Choice Hotels
Holdings, Inc. (subsequently renamed Choice Hotels International, Inc.), a
Delaware corporation (the "Borrower"), the lenders listed in Schedule 2.01
thereto, Nationsbank, N.A., as co-agent, and The Chase Manhattan Bank, as agent
for the lenders (the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The Borrower hereby gives you notice pursuant to Section 2.04
of the Credit Agreement that it requests a Standby Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Standby Borrowing is requested to be made:
(A) Date of Standby Borrowing
(which is a Business Day) ____________________
(B) Principal Amount of
Standby Borrowing(7) ____________________
(C) Interest rate basis(8) ____________________
--------
(7) Not less than $5,000,000 (and in integral multiples of $1,000,000) or
greater than the Total Commitment then available. For Eurocurrency Borrowings,
express in Equivalent Dollar Amount.
(8) Eurocurrency Loan, Eurodollar Loan, CD Loan or ABR Loan.
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(D) Interest Period and the last
day thereof(9) ____________________
(E) For Eurocurrency Borrowings:
(1) Type of Alternative Currency ____________________
(2) Funds are requested to be
disbursed to the following:
Bank Name:_________________________________________________
Bank Address:______________________________________________
For Credit to:
Account Name:______________________________________________
Account Number:____________________________________________
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the Credit Agreement have been satisfied.
Very truly yours,
by____________________________
Title: [Responsible Officer]
Copy to:
Chase Manhattan International Limited (London),
on behalf of the Agent for the
Lenders referred to below
Xxxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxx X00XX
Attention of Xx. Xxxxx Xxxxxxx
--------
(9) Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
114
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
MANOR CARE, INC.
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via FAX to the
attention of Xxxxxxxxx Xxxx at The Chase Manhattan Bank as soon as possible.
FAX NUMBER: 000-000-0000
LEGAL NAME TO APPEAR IN DOCUMENTATION:
--------------------------------------------------------------------------------
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:
---------------------------------------------------------
Street Address:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
---------------------------------------------------------
Street Address:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:
---------------------------------------------------------
000
0
Xxxxxx Xxxxxxx:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
Phone Number:
---------------------------------------------------------
FAX Number:
---------------------------------------------------------
Backup Contact:
---------------------------------------------------------
Street Address:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
Phone Number:
---------------------------------------------------------
FAX Number:
---------------------------------------------------------
TAX WITHHOLDING:
Non Resident Alien _____________________Y* _____________________N
*Form 4224 Enclosed
Tax ID Number _________________________________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
---------------------------------------------------------
Street Address:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
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Phone Number:
---------------------------------------------------------
FAX Number:
---------------------------------------------------------
BID LOAN NOTIFICATION:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
---------------------------------------------------------
Street Address:
---------------------------------------------------------
City, State, Zip Code:
---------------------------------------------------------
Phone Number:
---------------------------------------------------------
FAX Number:
---------------------------------------------------------
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
----------------------------------------------------------------------------
Routing Transit/ABA number of Bank where funds are to be transferred:
----------------------------------------------------------------------------
Name of Account, if applicable:
----------------------------------------------------------------------------
Account Number:
----------------------------------------------------------
Additional Information:
----------------------------------------------------------
MAILINGS:
Please specify who should receive financial information:
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4
Name:
----------------------------------------------------------
Street Address:
----------------------------------------------------------
City, State, Zip Code:
----------------------------------------------------------
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire. If you have any questions, please
call me on 000-000-0000.
118
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October [ ], 1996, among Choice
Hotels Holdings, Inc., a Delaware corporation (the "Borrower"), the lenders
listed in Schedule 2.01, Nationsbank, N.A., as co-agent, and The Chase Manhattan
Bank, a New York banking corporation, as agent for the Lenders (the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitment of the Assignor on the Effective Date and the Competitive Loans and
Standby Loans owing to the Assignor which are outstanding on the Effective Date.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agreements set forth in Section 9.04(c) of
the Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (i) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
2. This Assignment and Acceptance is being delivered to the Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.19(f) of the Credit
Agreement, duly completed and executed by such Assignee, (ii) if the Assignee is
not already a Lender under the Credit Agreement, an Administrative Questionnaire
in the form of Exhibit B to the Credit Agreement and (iv) a processing and
recordation fee of $2,000.
3. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York without reference to its
conflicts of laws principles or provisions.
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2
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of
Facility and Commitment
Thereunder (as set forth, to
at least 8 decimals, as a
percentage of the Facility and
the aggregate Commitments of
Facility Principal Amount Assigned all Lenders thereunder)
-------- ------------------------- ------------------------------
ABR Loans:
CD Loans:
Eurocurrency Loans:
Eurodollar Competitive
Loans:
Eurodollar Standby Loans:
Fixed Rate Competitive
Loans:
The terms set forth above and on the
reverse side hereof are hereby agreed to: Accepted:
____________________________, as Assignor THE CHASE MANHATTAN BANK, as agent
By:_________________________ By:__________________________
Name: Name:
Title: Title:
____________________________, as Assignee [Name of Borrower]
By:_________________________ By:___________________________
Name: Name:
Title Title:
120
EXHIBIT D
FORM OF OPINION
OF [ ], ESQ.
GENERAL COUNSEL FOR THE BORROWER
1. The Borrower (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect, and (d) has the power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and each other
agreement or instrument contemplated thereby to which it is or will be a party
and to borrow under the Loan Documents.
2. The execution, delivery and performance by the Borrower of each of
the Loan Documents and the borrowings under the Loan Documents by the Borrower
(collectively, the "Transactions") (a) have been duly authorized by all
requisite action, including, if required, stockholder action on the part of the
Borrower and (b) will not (i) violate (A) to my best knowledge after due
inquiry, any provision of law, statute, rule or regulation, (B) any provision of
the certificate or articles of incorporation or other constitutive documents or
by-laws of the Borrower, (C) to my best knowledge after due inquiry, any order
of any Governmental Authority or (D) to my best knowledge after due inquiry, any
provision of any indenture, agreement or other instrument to which the Borrower
is a party or by which any of them or any of their property is or may be bound,
(ii) to my best knowledge after due inquiry, be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) result
in the creation or imposition of any Lien upon or with respect to any property
or assets now owned or hereafter acquired by the Borrower.
3. The Credit Agreement has been duly executed and delivered by the
Borrower and constitutes, and each of the other Loan Documents when executed and
delivered by the Borrower will constitute, a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms.
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2
4. No action, consent or approval of, registration or filing with or
any other action by any Governmental Authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
5. (a) There are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
business, property or rights of any such person (i) which involve any Loan
Document or the Transactions (excluding any such actions, suits or proceedings
threatened by the Lenders or the Agent) or (ii) as to which there is a
reasonable probability of any adverse determination and which, if such probable
adverse determination occurred, could reasonably be anticipated to result in a
Material Adverse Effect.
(b) The Borrower is not in violation of any law, rule or regulation,
or in default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
anticipated to result in a Material Adverse Effect.
6. The Borrower is not (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
122
EXHIBIT E
[FORM OF ISSUING BANK AGREEMENT]
ISSUING BANK AGREEMENT dated as of [ ] between CHOICE
HOTELS HOLDINGS, INC., a Delaware corporation (the "Borrower"), and
the financial institution identified on Schedule I hereto as the
Issuing Bank (the "Issuing Bank").
Reference is made to the Competitive Advance and Multi-Currency
Revolving Credit Facility Agreement dated as of October [ ], 1996 (as amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
the Borrower, the Lenders named therein and The Chase Manhattan Bank, as Agent.
The Borrower and the Issuing Bank desire to enter into this Agreement in order
to provide for Letters of Credit to be issued by the Issuing Bank as
contemplated by the Credit Agreement. Accordingly, the parties hereto agree as
follows:
SECTION 1. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings specified in the
Credit Agreement. The provisions of Section 1.02 of the Credit Agreement shall
apply to this Agreement as though set forth herein.
SECTION 2. Letter of Credit Commitment. The Issuing Bank hereby
agrees to be an "Issuing Bank" under, and, subject to the terms and conditions
hereof and of the Credit Agreement, to issue Letters of Credit under, the Credit
Agreement; provided, however, that Letters of Credit issued by the Issuing Bank
hereunder shall be subject to the limitations, if any, set forth on Schedule I
hereto, in addition to the limitations set forth in the Credit Agreement.
SECTION 3. Issuance Procedure. In order to request the issuance of a
Letter of Credit hereunder, the Borrower shall hand deliver or telecopy a notice
(specifying the information required by Section 2.20(b) of the Credit Agreement)
to the Issuing Bank, as its address or telecopy number specified on Schedule I
hereto (or such other address or telecopy number as the Issuing Bank may specify
by notice to the Borrower), not later than the time of day (local time at such
address) specified on Schedule I hereto prior to the proposed date of issuance
of such Letter of Credit. A copy of such notice shall be sent, concurrently, by
the Borrower
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2
to the Agent in the manner specified for borrowing requests under the Credit
Agreement. Upon receipt of such notice, the Issuing Bank shall consult the Agent
by telephone in order to determine (i) whether the conditions specified in the
last sentence of Section 2.20(b) of the Credit Agreement will be satisfied in
connection with the issuance of such Letter of Credit and (ii) whether the
requested expiration date for such Letter of Credit complies with Section
2.20(c) of the Credit Agreement.
SECTION 4. Issuing Bank Fees, Interest and Payments. The Issuing Bank
Fees payable to the Issuing Bank in respect of Letters of Credit issued
hereunder are specified on Schedule I hereto (and such fees shall be in addition
to the Issuing Bank's customary documentary and processing charges in connection
with the issuance, amendment or transfer of any Letter of Credit issued
hereunder). Each payment of Issuing Bank Fees payable hereunder shall be made
not later than 12:00 (noon), local time at the place of payment, on the date
when due, in immediately available funds, to the account of the Issuing Bank
specified on Schedule I hereto or to such other Lender specified on Schedule I
hereto (or to such other account of the Issuing Bank as it may specify by notice
to the Borrower).
SECTION 5. Credit Agreement Terms. Notwithstanding any provision
hereof which may be construed to the contrary, it is expressly understood and
agreed that (a) this Agreement is supplemental to the Credit Agreement and is
intended to constitute an Issuing Bank Agreement, as defined therein (and, as
such, constitutes an integral part of the Credit Agreement as though the terms
of this Agreement were set forth in the Credit Agreement), (b) each Letter of
Credit issued hereunder and each and L/C Disbursement made under any such Letter
of Credit shall constitute a "Letter of Credit" and an "L/C Disbursement",
respectively, for all purposes of the Credit Agreement, (c) the Issuing Bank's
commitment to issue Letters of Credit hereunder, and each and every Letter of
Credit requested or issued hereunder, shall in each case be subject to the terms
and conditions and entitled to the benefits of the Credit Agreement and (d) the
terms and conditions of the Credit Agreement are hereby incorporated herein as
though set forth herein in full and shall supersede any contrary provisions
hereof.
SECTION 6. Assignment. The Issuing Bank may not assign its commitment
to issue Letters of Credit hereunder without the consent of the Borrower and
prior notice to the
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Agent. In the event of an assignment by the Issuing Bank of all its other
interests, rights and obligations under the Credit Agreement, then the Issuing
Bank's commitment to issue Letters of Credit hereunder shall terminate unless
the Issuing Bank, the Borrower and the Agent otherwise agree.
SECTION 7. Effectiveness. This Agreement shall not be effective until
counterparts hereof executed on behalf of each of the Borrower and the Issuing
Bank have been delivered to and accepted by the Agent.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
CHOICE HOTELS HOLDINGS, INC.,
by
---------------------
Name:
Title:
[ISSUING BANK],
by
--------------------
Name:
Title:
Accepted:
THE CHASE MANHATTAN BANK, as Agent,
by
---------------------
Name:
Title:
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Schedule I to the
Issuing Bank Agreement
Issuing Bank:
Letters of Credit:
Issuing Bank's Address
and Telecopy Number for
Notice:
Time of Day by which
Notices must be received: A notice requesting the issuance of a Letter of Credit
must be received by the Issuing Bank by 11:00 a.m. not less than three Business
Days prior to the proposed date of issuance.
Issuing Bank Fees: [ ]% per annum on the average daily undrawn amount of each
Letter of Credit issued hereunder, payable on the dates that L/C Participation
Fees are payable pursuant to Section 2.06 of the Credit Agreement.
Issuing Bank's Account
for Payment of Issuing
Bank Fees:
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TABLE OF CONTENTS
ARTICLE I Page
Definitions
SECTION 1.01. Defined Terms................................... 1
SECTION 1.02. Terms Generally................................. 25
ARTICLE II
The Credits
SECTION 2.01. Commitments..................................... 25
SECTION 2.02. Loans........................................... 26
SECTION 2.03. Competitive Bid Procedure....................... 30
SECTION 2.04. Standby Borrowing Procedure..................... 33
SECTION 2.05. Refinancings.................................... 34
SECTION 2.06. Fees............................................ 34
SECTION 2.07. Evidence of Indebtedness;
Repayment of Loans......................... 36
SECTION 2.08. Interest on Loans............................... 36
SECTION 2.09. Default Interest................................ 38
SECTION 2.10. Alternate Rate of Interest...................... 38
SECTION 2.11. Termination and Reduction of
Commitments................................ 39
SECTION 2.12. Prepayment...................................... 40
SECTION 2.13. Reserve Requirements;
Change in Circumstances.................... 41
SECTION 2.14. Change in Legality.............................. 43
SECTION 2.15. Indemnity....................................... 45
SECTION 2.16. Pro Rata Treatment.............................. 46
SECTION 2.17. Sharing of Setoffs.............................. 46
SECTION 2.18. Payments........................................ 47
SECTION 2.19. Taxes........................................... 48
SECTION 2.20. Letters of Credit............................... 51
SECTION 2.21. Extension of Maturity Date...................... 51
ARTICLE III
Representations And Warranties
SECTION 3.01. Organization; Powers............................ 57
SECTION 3.02. Authorization................................... 58
SECTION 3.03. Enforceability.................................. 58
SECTION 3.04. Governmental Approvals.......................... 58
SECTION 3.05. Financial Statements............................ 59
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SECTION 3.06. No Material Adverse Change...................... 59
SECTION 3.07. Title to Properties; ...........................
Possession Under Leases......................... 59
SECTION 3.08. Subsidiaries.................................... 59
SECTION 3.09. Litigation; Compliance with Laws................ 60
SECTION 3.10. Agreements...................................... 60
SECTION 3.11. Federal Reserve Regulations..................... 60
SECTION 3.12. Investment Borrower Act;
Public Utility Holding Borrower Act........ 61
SECTION 3.13. Use of Proceeds................................. 61
SECTION 3.14. Tax Returns..................................... 61
SECTION 3.15. No Material Misstatements....................... 61
SECTION 3.16. Employee Benefit Plans.......................... 62
SECTION 3.17. Environmental Matters........................... 62
SECTION 3.18. Solvency........................................ 62
SECTION 3.19. Distribution.................................... 62
ARTICLE IV
Conditions Of Lending
SECTION 4.01. All Credit Events............................... 63
SECTION 4.02. First Credit Event.............................. 64
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties............ 66
SECTION 5.02. Insurance....................................... 67
SECTION 5.03. Obligations and Taxes........................... 67
SECTION 5.04. Financial Statements, Reports, etc. ............ 67
SECTION 5.05. Litigation and Other Notices.................... 69
SECTION 5.06. ERISA........................................... 69
SECTION 5.07. Maintaining Records;
Access to Properties
and Inspections............................ 70
SECTION 5.08. Use of Proceeds................................. 70
SECTION 5.09. Ownership....................................... 70
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness.................................... 71
SECTION 6.02. Liens........................................... 74
SECTION 6.03. Sale and Lease-Back Transactions................ 76
SECTION 6.04. Investments, Loans and Advances................. 76
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SECTION 6.05. Mergers and Consolidations...................... 77
SECTION 6.06. Asset Sales..................................... 78
SECTION 6.07. Transactions with Affiliates.................... 78
SECTION 6.08. Business of Borrower and Subsidiaries........... 79
SECTION 6.09. Subsidiary Indebtedness......................... 79
SECTION 6.10. Agreements...................................... 79
SECTION 6.11. Fiscal Year Accounting Practices................ 79
SECTION 6.12. No Further Negative Pledges..................... 79
SECTION 6.11. Minimum Consolidated Net Worth.................. 80
SECTION 6.12. Consolidated Leverage Ratio..................... 80
SECTION 6.13. Consolidated Interest Coverage Ratio............ 81
ARTICLE VII
Events of Default
ARTICLE VIII
The Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices......................................... 88
SECTION 9.02. Survival of Agreement........................... 89
SECTION 9.03. Binding Effect.................................. 90
SECTION 9.04. Successors and Assigns.......................... 90
SECTION 9.05. Expenses; Indemnity............................. 94
SECTION 9.06. Right of Setoff................................. 96
SECTION 9.07. Applicable Law.................................. 96
SECTION 9.08. Waivers; Amendment.............................. 96
SECTION 9.09. Interest Rate Limitation........................ 97
SECTION 9.10. Entire Agreement................................ 98
SECTION 9.11. Waiver of Jury Trial;
Punitive Damages........................... 98
SECTION 9.12. Severability.................................... 98
SECTION 9.13. Counterparts.................................... 99
SECTION 9.14. Headings........................................ 99
SECTION 9.15. Jurisdiction; Consent to Service
of Process; Judgment Currency.............. 99
SECTION 9.16. Confidentiality................................. 101
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Exhibit A-1 Form of Competitive Bid Request
Exhibit A-2 Form of Notice of Competitive Bid Request
Exhibit A-3 Form of Competitive Bid
Exhibit A-4 Form of Competitive Bid
Acceptance/Rejection
Exhibit A-5 Form of Standby Borrowing Request
Exhibit B Form of Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Opinion of Counsel
Exhibit E Form of Issuing Bank Agreement
Schedule 1.01 Hotel Properties
Schedule 2.01 Commitments
Schedule 3.01 Asset Dispositions
Schedule 3.08 Subsidiaries
Schedule 6.01(a) Permitted Indebtedness
Schedule 6.01(i) Insurance Programs
Schedule 6.01(j) Existing Bonds
Schedule 6.02 Permitted Liens
Schedule 6.02(j) Permitted Mortgages
Schedule 6.04 Permitted Investments
iv
