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EXHIBIT 10.14
CREDIT AGREEMENT
among
NRT INCORPORATED,
VARIOUS LENDING INSTITUTIONS,
THE CHASE MANHATTAN BANK,
AS ARRANGER
and
SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
AS ARRANGER
and
ADMINISTRATIVE AGENT
________________________________
Dated as of January 7, 1999
________________________________
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TABLE OF CONTENTS
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Page
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SECTION 1. Amount and Terms of Credit 2
1.01 Commitments.................................................................... 2
1.02 Minimum Borrowing Amounts, etc................................................. 5
1.03 Notice of Borrowing............................................................ 5
1.04 Disbursement of Funds.......................................................... 6
1.05 Notes.......................................................................... 7
1.06 Conversions.................................................................... 8
1.07 Pro Rata Borrowings............................................................ 9
1.08 Interest....................................................................... 9
1.09 Interest Periods............................................................... 10
1.10 Increased Costs; Illegality; etc............................................... 12
1.11 Compensation; Breakage......................................................... 13
1.12 Change of Lending Office....................................................... 14
1.13 Replacement of Banks........................................................... 16
(i)
SECTION 2. Letters of Credit.......................................................................18
2.01 Letters of Credit.......................................................................18
2.02 Letter of Credit Requests...............................................................20
2.03 Letter of Credit Participations.........................................................20
2.04 Agreement to Repay Letter of Credit Drawings............................................23
2.05 Increased Costs.........................................................................24
2.06 Indemnification..........................................................................25
SECTION 3. Fees; Commitments.......................................................................26
3.01 Fees....................................................................................26
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving Loan Commitment........27
3.03 Mandatory Reduction of Commitments......................................................28
SECTION 4. Payments................................................................................28
4.01 Voluntary Prepayments...................................................................28
4.02 Mandatory Repayments and Commitment Reductions..........................................30
4.03 Method and Place of Payment.............................................................34
4.04 Net Payments............................................................................34
SECTION 5. Conditions Precedent to Effective Date..................................................38
5.01 Execution of Agreement; Notes...........................................................38
5.02 Officer's Certificate...................................................................38
5.03 Opinions of Counsel.....................................................................38
5.04 Company Documents; Proceedings..........................................................38
5.05 Adverse Change, etc.....................................................................39
5.06 Litigation..............................................................................40
5.07 Approvals...............................................................................40
(ii)
5.08 Refinancing of Indebtedness...............................................................40
5.09 Pledge Agreement..........................................................................41
5.10 Subsidiaries Guaranty.....................................................................41
5.11 Employee Benefit Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Existing Indebtedness Agreements..............................................41
5.12 Solvency Certificate......................................................................42
5.13 Financial Statements; Balance Sheet.......................................................42
5.14 Payment of Fees...........................................................................43
SECTION 6. Conditions Precedent to All Credit Events................................................43
6.01 No Default; Representations and Warranties................................................43
6.02 Notice of Borrowing; Letter of Credit Request.............................................43
SECTION 7. Representations and Warranties...........................................................44
7.01 Company Status............................................................................44
7.02 Company Power and Authority...............................................................44
7.03 No Violation..............................................................................45
7.04 Litigation................................................................................45
7.05 Use of Proceeds; Margin Regulations.......................................................46
7.06 Governmental Approvals....................................................................46
7.07 Investment Company Act....................................................................46
7.08 Public Utility Holding Company Act........................................................46
7.09 True and Complete Disclosure..............................................................47
7.10 Financial Condition; Financial Statements.................................................47
7.11 Security Interests........................................................................48
7.12 Compliance with ERISA.....................................................................49
7.13 Capitalization............................................................................50
7.14 Subsidiaries..............................................................................50
7.15 Intellectual Property, etc................................................................50
(iii)
7.16 Compliance with Statutes, etc.............................................51
7.17 Environmental Matters.....................................................51
7.19 Labor Relations...........................................................52
7.20 Tax Returns and Payments..................................................53
7.21 Existing Indebtedness.....................................................53
7.22 Insurance.................................................................53
7.23 Year 2000 Representation..................................................53
SECTION 8. Affirmative Covenants....................................................54
8.01 Information Covenants.....................................................54
8.02 Books, Records and Inspections............................................58
8.03 Insurance.................................................................58
8.04 Payment of Taxes..........................................................58
8.07 Compliance with Environmental Laws........................................59
8.08 ERISA.....................................................................60
8.09 Good Repair...............................................................61
8.10 End of Fiscal Years; Fiscal Quarters......................................61
8.11 Additional Security; Further Assurances...................................61
8.12 Ownership of Subsidiaries.................................................62
8.13 Permitted Acquisitions....................................................63
8.14 Maintenance of Company Separateness.......................................65
8.15 Performance of Obligations................................................65
8.16 Use of Proceeds...........................................................66
SECTION 9. Negative Covenants.......................................................66
9.01 Changes in Business.......................................................66
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc....................66
9.03 Liens.....................................................................70
9.04 Indebtedness..............................................................73
(iv)
Page
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9.05 Advances; Investments; Loans............................................................. 76
9.06 Dividends; etc........................................................................... 79
9.07 Transactions with Affiliates and Unrestricted Subsidiaries............................... 81
9.08 Consolidated Adjusted Interest Coverage Ratio............................................ 82
9.09 Total Leverage Ratio..................................................................... 82
9.10 Limitation on Voluntary Payments and Modifications of Indebtedness; Modifications
of Certificate of Incorporation, By-Laws and Certain Other Agreements; Issuances of
Capital Stock; etc....................................................................... 83
9.11 Limitation on Issuance of Capital Stock.................................................. 84
9.12 Limitation on Certain Restrictions on Subsidiaries....................................... 85
9.13 Limitation on the Creation of Subsidiaries, Joint Ventures and Unrestricted
Subsidiaries............................................................................. 86
9.14 De Minimis Subsidiaries.................................................................. 87
9.15 Burnet Realty, Inc. Title Insurance Business............................................. 88
SECTION 10. Events of Default........................................................................ 88
10.01 Payments................................................................................. 88
10.02 Representations, etc..................................................................... 88
10.03 Covenants................................................................................ 88
10.04 Default Under Other Agreements........................................................... 88
10.05 Bankruptcy, etc.......................................................................... 89
10.06 ERISA.................................................................................... 89
10.07 Security Documents....................................................................... 90
10.08 Guaranties............................................................................... 91
10.09 Judgments................................................................................ 91
10.10 Ownership................................................................................ 91
10.11 Franchise Agreements..................................................................... 91
(v)
Page
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SECTION 11. Definitions.............................................................................. 92
SECTION 12. The Administrative Agent................................................................. 128
12.01 Appointment.............................................................................. 128
12.02 Delegation of Duties..................................................................... 128
12.03 Exculpatory Provisions................................................................... 128
12.04 Reliance by the Administrative Agent..................................................... 129
12.05 Notice of Default........................................................................ 130
12.06 Nonreliance on Administrative Agent and Other Banks...................................... 130
12.07 Indemnification.......................................................................... 131
12.08 Administrative Agent in its Individual Capacity.......................................... 131
12.09 Holders.................................................................................. 132
12.10 Resignation of the Administrative Agent.................................................. 132
12.11 Syndication Agent ^??^
SECTION 13. Miscellaneous............................................................................ 133
13.01 Payment of Expenses, etc................................................................. 133
13.02 Right of Setoff.......................................................................... 134
13.03 Notices.................................................................................. 134
13.04 Benefit of Agreement..................................................................... 135
13.05 No Waiver; Remedies Cumulative........................................................... 137
13.06 Payments Pro Rata........................................................................ 138
13.07 Calculations; Computations............................................................... 138
13.08 Governing Law; Submission to Jurisdiction; Venue......................................... 140
13.09 Counterparts............................................................................. 140
13.10 Effectiveness............................................................................ 141
13.11 Headings Descriptive..................................................................... 141
13.12 Amendment or Waiver; etc................................................................. 141
(vi)
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13.13 Survival................................................................................. 143
13.14 Domicile of Loans and Commitments........................................................ 143
13.15 Confidentiality.......................................................................... 143
13.16 Waiver of Jury Trial..................................................................... 144
13.17 Register................................................................................. 144
13.18 Limitation on Additional Amounts, etc.................................................... 145
(vii)
CREDIT AGREEMENT, dated as of January 7, 1999 among NRT Incorporated, a
Delaware corporation (the "Borrower"), the Banks from time to time party hereto,
BANKERS TRUST COPANY ("BTCo") and THE CHASE MANHATTAN BANK ("Chase" and,
together with BTCo, each an "Arranger" and, collectively, the "Arrangers") and
BTCo, as Administrative Agent (in such capacity, the "Administrative Agent") and
Chase, as Syndication Agent (in such capacity, the "Syndication Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as so defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions set forth herein, the
Banks are willing to make available to the Borrower the credit facility provided
for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitments. (a) Subject to and upon the terms and conditions herein
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set forth, each Bank severally agrees to make a revolving loan or revolving
loans to the Borrower, which revolving loans shall be made and maintained in
U.S. Dollars (each, a "Revolving Loan" and, collectively, the "Revolving Loans")
and which Revolving Loans:
(i) shall be made at any time and from time to time on and after the
Effective Date and prior to the Maturity Date;
(ii) shall, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that (x)
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except as otherwise specifically provided in Section 1.10(b), all Revolving
Loans made as part of the same Borrowing shall at all times be of the same
Type;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
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(iv) shall not be made (or be required to be made) by any Bank on any
date if, after giving effect thereto, the Revolving Credit Exposure of such Bank
would exceed the Revolving Loan Commitment of such Bank at such time; and
(v) shall not, in the case of all Revolving Loans, be made at any time
if, after giving effect thereto, the Aggregate Revolving Credit Exposure
(exclusive of Unpaid Drawings and Swingline Loans which are to be repaid with
the proceeds of and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) would exceed the Total Revolving Loan Commitment
at such time.
(b) Subject to and upon the terms and conditions herein set forth, BTCo
in its individual capacity agrees to make at any time and from time to time on
and after the Effective Date and prior to the Swingline Expiry Date, a loan or
loans to the Borrower (each, a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans:
(i) shall be denominated in U.S. Dollars;
(ii) shall be made and maintained as Base Rate Loans;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not be made (or be required to be made) on any date, if after
giving effect thereto, the Aggregate Revolving Credit Exposure would exceed the
Total Revolving Loan Commitment at such time; and
(v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount.
BTCo shall not be obligated to make any Swingline Loans at a time when a Bank
Default exists unless BTCo has entered into arrangements satisfactory to it and
the Borrower to eliminate BTCo's risk with respect to the Defaulting Bank's or
Banks' participation in such Swingline Loans, including by cash collateralizing
such Defaulting Bank's or Banks' RL Percentage of the outstanding Swingline
Loans. BTCo will not make a Swingline Loan after it has received written notice
from the Borrower or the Required Banks stating that a Default or an Event of
Default exists until such time as BTCo shall have received a written notice of
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(i) rescission of such notice from the party or parties originally
delivering the same or (ii) a waiver of such Default or Event of Default
from the requisite Banks hereunder.
(c) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that each such notice shall
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be deemed to have been automatically given upon the occurrence of a Default
or an Event of Default under Section 10.05 or upon the exercise of any of
the remedies provided in the last paragraph of Section 10), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such
Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all Banks pro rata based on each Bank's RL
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Percentage, and the proceeds thereof shall be applied directly to repay
BTCo for such outstanding Swingline Loans. Each Bank hereby irrevocably
agrees to make Revolving Loans upon one Business Day's notice pursuant to
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5 or 6 are then satisfied,
(iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing and (v) the amount of
the Total Revolving Loan Commitment or such Bank's Revolving Loan
Commitment at such time. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under
the Bankruptcy Code or any other bankruptcy, reorganization, dissolution,
insolvency, receivership, liquidation or similar law with respect to the
Borrower), each Bank (other than BTCo) hereby agrees that it shall
forthwith purchase from BTCo (without recourse or warranty) such assignment
of the outstanding Swingline Loans as shall be necessary to cause the Banks
to share in such Swingline Loans ratably based upon their respective RL
Percentages, provided that (x) all interest payable on the Swingline Loans
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shall be for the account of BTCo until the date the respective assignment
is purchased and, to the extent attributable to the purchased assignment,
shall be payable to the Bank purchasing same from and after such date of
purchase and (y) at the time any purchase of assignments pursuant to this
sentence is actually made, the purchasing Bank shall be required to pay
BTCo interest on the principal amount of assignment purchased for each day
from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
assignment, at the rate otherwise applicable to Revolving Loans maintained
as Base Rate Loans hereunder for each day thereafter.
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1.02 Minimum Borrowing Amounts, etc. The aggregate principal
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amount of each Borrowing of Loans shall not be less than the Minimum
Borrowing Amount applicable to such Loans, provided that Mandatory
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Borrowings shall be made in the amounts required by Section 1.01(c). More
than one Borrowing may be incurred on any day, provided, that at no time
shall there be outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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make a Borrowing hereunder (excluding (x) Borrowings of Swingline Loans and
(y) Mandatory Borrowings), an Authorized Officer of the Borrower shall give
the Administrative Agent at its Notice Office, prior to 12:00 Noon (New
York time), at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans, and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base
Rate Loans to be made hereunder. Each such notice (each, a "Notice of
Borrowing") shall, except as otherwise expressly provided in Section 1.10,
be irrevocable, and, in the case of each written notice and each
confirmation of telephonic notice, shall be in the form of Exhibit A,
appropriately completed to specify: (i) the aggregate principal amount of
the Loans to be made pursuant to such Borrowing, (ii) the date of such
Borrowing (which shall be a Business Day), (iii) whether the respective
Borrowing shall consist of Base Rate Loans or, to the extent permitted
hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period
to be initially applicable thereto, and (iv) in the case of a Borrowing of
Revolving Loans the proceeds of which are to be utilized to finance, in
whole or in part, the purchase price of a Permitted Acquisition, (x) a
reference to the officer's certificate, if any, delivered in accordance
with Section 8.13, (y) the aggregate principal amount of such Revolving
Loans to be utilized in connection with such Permitted Acquisition and (z)
the Total Unutilized Revolving Loan Commitment then in effect after giving
effect to the respective Permitted Acquisition (and all payments to be made
in connection therewith). The Administrative Agent shall promptly give each
Bank written notice (or telephonic notice promptly confirmed in writing) of
each proposed Borrowing, of such Bank's proportionate share thereof and of
the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, an Authorized Officer of the Borrower shall give BTCo not later
than 2:00 P.M. (New York time) on the day such Swingline Loan is to be
made, written notice (or telephonic notice promptly confirmed in writing)
of each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and shall specify in each case (x) the date of such Borrowing
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(which shall be a Business Day) and (y) the aggregate principal amount of
the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(c), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of Mandatory Borrowings
as set forth in such Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent or BTCo (in the case of a Borrowing of
Swingline Loans) or the respective Letter of Credit Issuer (in the case of
the issuance of Letters of Credit), as the case may be, may prior to
receipt of written confirmation act without liability upon the basis of
such telephonic notice, believed by the Administrative Agent, BTCo or such
Letter of Credit Issuer, as the case may be, in good faith to be from an
Authorized Officer of the Borrower. In each such case, the Administrative
Agent's, BTCo's or the respective Letter of Credit Issuer's, as the case
may be, record of the terms of such telephonic notice shall be conclusive
evidence of the contents of such notice, absent manifest error.
1.04 Disbursement of Funds. (a) Not later than 1:00 P.M. (New
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York time) on the date specified in each Notice of Borrowing (or (x) in the
case of Swingline Loans, not later than 3:00 P.M. (New York time) on the
date specified in Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, not later than 12:00 Noon (New York time) on the date specified
in Section 1.01(c)), each Bank will make available its pro rata share
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(determined in accordance with Section 1.07), of each Borrowing requested
to be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof) in the manner provided below. All
amounts shall be made available to the Administrative Agent in U.S. Dollars
and in immediately available funds at the Payment Office and the
Administrative Agent promptly will make available to the Borrower (or BTCo
in the case of a Mandatory Borrowing) by depositing to its account at the
Payment Office the aggregate of the amounts so made available. Unless the
Administrative Agent shall have been notified by any Bank prior to the date
of Borrowing that such Bank does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made
on such date, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption,
may (in its sole discretion and without any obligation to do so) make
available to the Borrower a corresponding amount. If such corresponding
amount
-6-
is not in fact made available to the Administrative Agent by such Bank and
the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Bank. If such Bank does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover on demand
from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such
Bank, the overnight Federal Funds Rate or (y) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section
1.08.
(b) Nothing in this Agreement shall be deemed to relieve any
Bank from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Bank as a
result of any default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
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of, and interest on, all the Loans made to the Borrower by each Bank shall
be set forth on the Register maintained by the Administrative Agent
pursuant to Section 13.17 and, subject to the provisions of Section
1.05(e), shall be evidenced (i) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-1 with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and,
collectively, the "Revolving Notes") and (ii) if Swingline Loans, by a
promissory note substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to such Bank or its registered
assigns and be dated the date of issuance thereof, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the outstanding Revolving Loans
evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
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(c) The Swingline Note issued to BTCo shall (i) be executed by
the Borrower, (ii) be payable to BTCo or its registered assigns and be
dated the Effective Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of
the Base Rate Loans evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01 and mandatory repayment as provided
in Section 4.02 and (vii) be entitled to the benefits of this Agreement and
the other Credit Documents.
(d) Each Bank will note on its internal records the amount of
each Loan made by it to the Borrower and each payment in respect thereof
and will prior to any transfer of any of its Notes endorse on the reverse
side thereof the outstanding principal amount of Loans evidenced thereby.
Failure to make any such notation or any error in such notation shall not
affect the Borrower's obligations in respect of such Loans.
(e) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, Revolving Notes and the Swingline Note shall
only be delivered to Banks which at any time specifically request the
delivery of such Notes. No failure of any Bank to request or obtain a Note
evidencing its Loans to the Borrower shall affect or in any manner impair
the obligations of the Borrower to pay the Loans (and all related
Obligations) which would otherwise be evidenced thereby in accordance with
the requirements of this Agreement, and shall not in any way affect the
security or guaranties therefor provided pursuant to the various Credit
Documents. Any Bank which does not have a Note evidencing its outstanding
Loans shall in no event be required to make the notations otherwise
described in preceding clause (d). At any time when any Bank requests the
delivery of a Note to evidence any of its Loans, the Borrower shall
promptly execute and deliver to the respective Bank the requested Note or
Notes in the appropriate amount or amounts to evidence such Loans.
1.06 Conversions. The Borrower shall have the option to convert
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on any Business Day occurring on or after the Effective Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of Loans (other than Swingline Loans which
shall at all times be maintained as Base Rate Loans) made pursuant to one
or more Borrowings of one or more Types of Loans into a Borrowing or
Borrowings of another Type of Loan; provided, that (i) except as otherwise
provided in Section 1.10(b) or unless the Borrower pays all breakage costs
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and other amounts owing to
-8-
each Bank pursuant to Section 1.11 concurrently with any such conversion,
Eurodollar Loans may be converted into Base Rate Loans only on the last day
of an Interest Period applicable to the Loans being converted, and no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto,
(ii) Base Rate Loans may only be converted into Eurodollar Loans if no
Default under Sections 10.01 or 10.05 or Event of Default is in existence
on the date of the conversion and the Administrative Agent or the Required
Banks have notified the Borrower that such an election at such time would
be disadvantageous to the Banks and (iii) Borrowings of Eurodollar Loans
resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion shall be effected by the Borrower by
giving the Administrative Agent at its Notice Office, prior to 12:00 Noon
(New York time), at least three Business Days' (or one Business Day's in
the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which the Loans were made and, if to be converted
into a Borrowing of Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Bank prompt
notice of any such proposed conversion affecting any of its Loans. Upon any
such conversion, the proceeds thereof will be deemed to be applied directly
on the day of such conversion to prepay the outstanding principal amount of
the Loans being converted.
1.07 Pro Rata Borrowings. Subject to the provisions of 1.01(c),
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all Borrowings of Revolving Loans under this Agreement (including Mandatory
Borrowings) shall be incurred by the Borrower from the Banks pro rata on
the basis of their RL Percentages. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make
Loans hereunder and that each Bank shall be obligated to make the Loans to
be made by it hereunder, regardless of the failure of any other Bank to
fulfill its commitments hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
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respect of the unpaid principal amount of each Base Rate Loan made to it
from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Base Rate Loan and
(ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.06, at a rate per annum which shall at all times be the relevant
Applicable Margin plus the Base Rate, each as in effect from time to time.
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(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan made to it from the date of
the Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion
of such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable, at a rate per annum which shall at all times be
the relevant Applicable Margin plus the Eurodollar Rate for such Interest
Period, each as in effect from time to time.
(c) To the extent permitted by law, overdue principal and
overdue interest in respect of each Loan shall, in each case, bear interest
at a rate per annum equal to the greater of (x) the rate which is 2% in
excess of the rate borne by such Loan immediately prior to the respective
payment default and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans from time to time. Interest which
accrues under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the
date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted) and (y) the last day of
each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect
of each Loan, (x) at maturity (whether by acceleration or otherwise) and
(y) after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 13.07(c).
(f) Upon each Interest Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for the respective Interest
Period or Interest Periods and shall promptly notify the Borrower and the
Banks thereof. Each such determination shall, absent manifest error, be
final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives a Notice
----------------
of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the
initial Interest Period applicable thereto) or prior to 12:00
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Noon (New York time) on the third Business Day prior to the expiration of
an Interest Period applicable to a Borrowing of Eurodollar Loans (in the
case of any subsequent Interest Period), the Borrower shall have the right
to elect by giving the Administrative Agent written notice (or telephonic
notice promptly confirmed in writing) of the Interest Period applicable to
such Borrowing, which Interest Period shall, at the option of the Borrower
be a one, two, three, six or, to the extent available to each Bank, nine or
twelve month period. Notwithstanding anything to the contrary contained
above :
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period applicable thereto
expires;
(iii) if any Interest Period for any Borrowing of Eurodollar
Loans begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period for any
--------
Borrowing of Eurodollar Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period for a Borrowing of Eurodollar Loans
shall be selected which would extend beyond the Maturity Date;
(vi) no Interest Period may be elected at any time when a
Default under Section 10.01 or 10.05 or an Event of Default is then in
existence and the Administrative Agent or the Required Banks have notified
the Borrower that such an election at such time would be disadvantageous to
the Banks; and
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If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to the respective Borrowing
of Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 Increased Costs; Illegality; etc. (a) In the event that
--------------------------------
(x) in the case of clause (i) below, the Administrative Agent or (y) in the
case of clauses (ii) and (iii) below, any Bank, shall have determined in
good faith (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on any Interest Determination Date, that, by reason of any
changes arising after the Effective Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans because of (x) any change since the Effective Date in
any applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (other than, in
each case, any such change with respect to taxes or any similar charges),
such as, for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances affecting such Bank, the interbank
Eurodollar market or the position of such Bank in such market (other than
circumstances relating to taxes or any similar charges); or
(iii) at any time since the Effective Date, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank with any law, governmental rule, regulation, guideline or order
(or would conflict with any governmental rule, regulation, guideline,
request or order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the
case of clause (i) above) shall promptly give notice (by telephone
confirmed in writing) to the Borrower and (except in the case of clauses
(i)) to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter, (w) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies
the Borrower and the Banks that the circumstances giving rise to such
notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the Borrower, (x) in the case of
clause (ii) above, the Borrower agrees, subject to the provisions of
Section 13.18 (to the extent applicable), to pay to such Bank, upon written
demand therefor, such additional amounts (in the form of an increased rate
of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to
compensate such Bank for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, prepared in good faith and submitted to the Borrower
by such Bank shall, absent manifest error, be final and conclusive and
binding upon all parties hereto, although the failure to give any such
notice shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(a) upon the subsequent
receipt of such notice) and (y) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by
law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii), the Borrower shall) either (i) if the affected Eurodollar
Loan is then being made pursuant to a Borrowing, cancel said Borrowing by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof on the same date that the Borrower was notified by a Bank
pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days'
notice to the Administrative Agent, require the affected Bank to convert
each such Eurodollar Loan into a Base Rate Loan (which conversion, in the
case of the circumstance described in Section 1.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan or such earlier day as shall be required by applicable
law); provided, that if more than one Bank is affected at any time, then
--------
all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If any Bank shall have determined that after the Effective
Date, the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Bank's or such other corporation's
capital or assets as a consequence of such Bank's Revolving Loan Commitment
or its obligations hereunder to the Borrower to a level below that which
such Bank or such other corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration
such Bank's or such other corporation's policies with respect to capital
adequacy), then from time to time, upon written demand by such Bank (with a
copy to the Administrative Agent), accompanied by the notice referred to in
the last sentence of this clause (c), the Borrower agrees, subject to the
provisions of Section 13.18 (to the extent applicable), to pay to such Bank
such additional amount or amounts as will compensate such Bank or such
other corporation for such reduction in the rate of return to such Bank or
such other corporation. Each Bank, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower (a copy of which shall
be sent by such Bank to the Administrative Agent), which notice shall set
forth in reasonable detail the basis of the calculation of such additional
amounts, although the failure to give any such notice shall not release or
diminish the Borrower's obligation to pay additional amounts pursuant to
this Section 1.10(c) upon the subsequent receipt of such notice. In
determining any additional amounts owing under this Section 1.10(c), each
Bank will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable; provided that such Bank's
--------
reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
1.11 Compensation; Breakage. The Borrower agrees, subject to
----------------------
the provisions of Section 13.18 (to the extent applicable), to compensate
each Bank, upon its written request (which request shall set forth in
reasonable detail the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without
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limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such
Bank to fund its Eurodollar Loans but excluding any loss of anticipated
profits) which such Bank may sustain: (i) if for any reason (other than a
default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion given
by the Borrower (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made pursuant to Section 4.01 or 4.02 or as a result of an
acceleration of the Loans pursuant to Section 10 or as a result of the
replacement of a Bank pursuant to Section 1.13 or 13.12(b)) or conversion
of any Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto; (iii) if any prepayment of any
Eurodollar Loans, is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the
terms of this Agreement or (y) an election made by the Borrower pursuant to
Section 1.10(b). Each Bank's calculation of the amount of compensation
owing pursuant to this Section 1.11 shall be made in good faith. A Bank's
basis for requesting compensation pursuant to this Section 1.11 and a
Bank's calculation of the amount thereof made in accordance with the
requirements of this Section 1.11, shall, absent manifest error, be final
and conclusive and binding on all parties hereto.
1.12 Change of Lending Office. (a) Each Bank may at any time
------------------------
or from time to time designate, by written notice to the Administrative
Agent to the extent not already reflected on Schedule II, one or more
lending offices (which, for this purpose, may include Affiliates of the
respective Bank) for the various Loans made, and Letters of Credit
participated in, by such Bank; provided that, for designations made after
the Effective Date, to the extent such designation shall result in
increased costs under Section 1.10, 2.05 or 4.04 in excess of those which
would be charged in the absence of the designation of a different lending
office (including a different Affiliate of the respective Bank), then the
Borrower shall not be obligated to pay such excess increased costs
(although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay the costs which
would apply in the absence of such designation and any subsequent increased
costs of the type described above resulting from changes after the date of
the respective designation). Each lending office and Affiliate of any Bank
designated as provided above shall, for all purposes of this Agreement, be
treated in the same manner as the respective Bank (and shall be entitled to
all indemnities and similar provisions in respect of its acting as such
hereunder).
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(b) Each Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05
or 4.04 with respect to such Bank, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on
--------
such terms that such Bank and its lending office suffer no economic, legal
or regulatory disadvantage, with the object of avoiding the consequences of
the event giving rise to the operation of any such Section. Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Section 1.10, 2.05 or 4.04
(although each such Bank shall nevertheless have an obligation to change
its applicable lending office subject to the terms set forth in the
immediately preceding sentence).
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04
with respect to any Bank which results in such Bank charging to the
Borrower increased costs in a material amount in excess of those being
generally charged by the other Banks or (z) in the case of a refusal by a
Bank to consent to a proposed change, waiver, discharge or termination with
respect to this Agreement which has been approved by the Required Banks as
provided in Section 13.12(b), the Borrower shall have the right, in
accordance with Section 13.04(b), if no Default or Event of Default will
exist after giving effect to such replacement, to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferee or Transferees,
none of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") and each of which shall
be reasonably acceptable to the Administrative Agent; provided that:
--------
(i) at the time of any replacement pursuant to this Section
1.13, the Replacement Bank shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 13.04(b) (and with all fees
payable pursuant to said Section 13.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Revolving Loan Commitment and outstanding Revolving Loans and
participations in Letter of Credit Outstandings by, the Replaced Bank and,
in connection therewith, shall pay to (x) the Replaced Bank in respect
thereof an amount equal to the sum of (A) an amount equal to the principal
of, and all accrued interest on, all outstanding Revolving Loans of the
Replaced Bank, (B) an amount equal to all Unpaid Drawings (unless there are
no Unpaid Drawings) that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto
at such time
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and (C) an amount equal to all accrued, but theretofore unpaid, Fees owing
to the Replaced Bank pursuant to Section 3.01, (y) to BTCo an amount equal
to such Replaced Bank's RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Bank; and
(ii) all obligations of the Borrower then owing to the Replaced
Bank (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid, but including all amounts, if any, owing under Section 1.11
shall be paid in full to such Replaced Bank concurrently with such
replacement; and
Upon the execution of the respective Assignment and Assumption Agreements,
the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Administrative Agent
pursuant to Section 13.17 and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes executed
by the Borrower, (x) the Replacement Bank shall become a Bank hereunder and
the Replaced Bank shall cease to constitute a Bank hereunder, except with
respect to indemnification provisions under this Agreement (including,
without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which
shall survive as to such Replaced Bank and (y) the RL Percentages of the
Banks shall be automatically adjusted at such time to give effect to such
replacement.
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SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit
Issuer at any time and from time to time after the Effective Date and prior
to the tenth Business Day (or the 30th day in the case of Trade Letters of
Credit) preceding the Maturity Date to issue on a sight basis, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C
Supportable Obligations, irrevocable sight standby letters of credit in a
form customarily used by such Letter of Credit Issuer or in such other form
as has been approved by such Letter of Credit Issuer (each such standby
letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (y) for the account of the Borrower and for the
benefit of sellers of goods and materials to the Borrower or any of its
Subsidiaries in the ordinary course of business, irrevocable sight trade
letters of credit in a form customarily used by such Letter of Credit
Issuer or in such other form as has been approved by such Letter of Credit
Issuer (each such trade letter of credit, a "Trade Letter of Credit," and
each such Standby Letter of Credit and Trade Letter of Credit, a "Letter of
Credit" and, collectively, the "Letters of Credit").
(b) Subject to and upon the terms and conditions set forth
herein, each Letter of Credit Issuer hereby agrees that it will, at any
time and from time to time after the Effective Date and prior to the tenth
Business Day (or the 30th day in the case of Trade Letters of Credit)
preceding the Maturity Date, following its receipt of the respective Letter
of Credit Request, issue for the account of the Borrower one or more
Letters of Credit, (x) in the case of Trade Letters of Credit, in support
of trade obligations of the Borrower or any of its Subsidiaries that arise
in the ordinary course of business or (y) in the case of Standby Letters of
Credit, in support of such L/C Supportable Obligations as is permitted to
remain outstanding hereunder. Notwithstanding the foregoing, no Letter of
Credit Issuer shall be under any obligation to issue any Letter of Credit
if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain such Letter
of Credit Issuer from issuing such Letter of Credit or any requirement of
law applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect
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to such Letter of Credit any restriction or reserve or capital requirement
(for which such Letter of Credit Issuer is not otherwise compensated) not
in effect on the Effective Date, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Letter of Credit
Issuer as of the Effective Date and which such Letter of Credit Issuer in
good xxxxx xxxxx material to it; or
(ii) such Letter of Credit Issuer shall have received written
notice from the Borrower or the Required Banks prior to the issuance of
such Letter of Credit of the type described in clause (vii) of Section
2.01(c) or the last sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the
date of, and prior to the issuance of, the respective Letter of Credit) at
such time, would exceed $10,000,000; (ii) no Letter of Credit shall be
issued, if, after giving effect thereto, (x) the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Loan Commitment at such time or
(y) the Revolving Credit Exposure of any Bank would exceed its Revolving
Loan Commitment as then in effect; (iii) (x) each Standby Letter of Credit
shall have an expiry date occurring not later than one year after such
Standby Letter of Credit's date of issuance, provided, that any such
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Standby Letter of Credit may be extendible for successive periods of up to
one year, but not beyond the tenth Business Day preceding the Maturity
Date, on terms acceptable to the Letter of Credit Issuer and (y) each Trade
Letter of Credit shall have an expiry date occurring not later than 180
days after such Trade Letter of Credit's date of issuance; (iv) (x) no
Standby Letter of Credit shall have an expiry date occurring later than the
tenth Business Day preceding the Maturity Date and (y) no Trade Letter of
Credit shall have an expiry date occurring later than 30 days prior to the
Maturity Date; (v) each Letter of Credit shall be denominated in U.S.
Dollars; (vi) the Stated Amount of each Letter of Credit shall not be less
than $100,000 or such lesser amount as is acceptable to the respective
Letter of Credit Issuer; and (vii) no Letter of Credit Issuer will issue
any Letter of Credit after it has received written notice from the
Borrower, the Administrative Agent or the Required Banks stating that a
Default or an Event of Default exists until such time as such Letter of
Credit Issuer shall have received a written notice of (x) rescission of
such notice from the party or parties originally delivering the same or (y)
a waiver of such Default or Event of Default by the requisite Banks
hereunder.
(d) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective
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Letter of Credit Issuer has entered into arrangements satisfactory to it
and the Borrower to eliminate such Letter of Credit Issuer's risk with
respect to the participation in Letters of Credit of the Defaulting Bank or
Banks, including by cash collateralizing such Defaulting Bank's or Banks'
RL Percentage of the Letter of Credit Outstandings, as the case may be.
2.02 Letter of Credit Requests. (a) Whenever the Borrower
-------------------------
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Letter of Credit Issuer written
notice thereof prior to 12:00 Noon (New York time), via courier delivery or
facsimile transmission, at least three Business Days (or such shorter
period as may be acceptable to the respective Letter of Credit Issuer)
prior to the proposed date of issuance (which shall be a Business Day)
which written notice shall be in the form of Exhibit C (each, a "Letter of
Credit Request"). Each Letter of Credit Request shall include any other
documents as such Letter of Credit Issuer customarily requires in
connection therewith.
(b) The making of each Letter of Credit Request shall be deemed
to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and it will not violate the
requirements of, Section 2.01(c). Unless the respective Letter of Credit
Issuer has received notice from the Borrower, the Administrative Agent or
the Required Banks before it issues a Letter of Credit that one or more of
the applicable conditions specified in Section 5 or 6, as the case may be,
are not then satisfied, or that the issuance of such Letter of Credit would
violate Section 2.01(c), then such Letter of Credit Issuer may issue the
requested Letter of Credit for the account of the Borrower in accordance
with such Letter of Credit Issuer's usual and customary practice.
2.03 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
the issuance by a Letter of Credit Issuer of any Letter of Credit, such
Letter of Credit Issuer shall be deemed to have sold and transferred to
each other Bank, and each such Bank (each, a "Participant") shall be deemed
irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant's RL
Percentage, in such Letter of Credit, each substitute Letter of Credit,
each drawing made thereunder and the obligations of the Borrower under this
Agreement with respect thereto (although Letter of Credit Fees shall be
payable directly to the Administrative Agent for the account of the Banks
as provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees with respect to such Letters of
Credit) and any security therefor or guaranty pertaining thereto. Upon any
change
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in the Revolving Loan Commitments or the RL Percentages of the Banks
pursuant to Sections 1.13 or 13.04(b) or as a result of a Bank Default, it
is hereby agreed that, with respect to all outstanding Letters of Credit
and Unpaid Drawings with respect thereto, there shall be an automatic
adjustment to the participations pursuant to this Section 2.03 to reflect
the new RL Percentages of the assigning and assignee Bank or of all Banks,
as the case may be.
(b) In determining whether to pay under any Letter of Credit,
no Letter of Credit Issuer shall have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
appear to substantially comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by any Letter of
Credit Issuer under or in connection with any Letter of Credit issued by it
if taken or omitted in the absence of gross negligence or willful
misconduct as determined by a court of competent jurisdiction, shall not
create for such Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall not
have reimbursed such amount in full to the Letter of Credit Issuer pursuant
to Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify
each Participant of such failure, and each such Participant shall promptly
and unconditionally pay to the Administrative Agent for the account of such
Letter of Credit Issuer, the amount of such Participant's RL Percentage of
such payment in U.S. Dollars and in same day funds. If the Administrative
Agent so notifies any Participant required to fund a payment under a Letter
of Credit prior to 11:00 A.M. (New York time) on any Business Day, such
Participant shall make available to the Administrative Agent at the Payment
Office for the account of the respective Letter of Credit Issuer such
Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds (and, to the extent such notice is given after 11:00
A.M. (New York time) on any Business Day, such Participant shall make such
payment on the immediately following Business Day). If and to the extent
such Participant shall not have so made its RL Percentage of the amount of
such payment available to the Administrative Agent for the account of the
respective Letter of Credit Issuer, such Participant agrees to pay to the
Administrative Agent for the account of such Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each
day from such date until the date such amount is paid to the Administrative
Agent for the account of the Letter of Credit Issuer at the overnight
Federal Funds Rate. The failure of any
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Participant to make available to the Administrative Agent for the account
of the respective Letter of Credit Issuer its RL Percentage of any payment
under any Letter of Credit issued by it shall not relieve any other
Participant of its obligation hereunder to make available to the
Administrative Agent for the account of such Letter of Credit Issuer its RL
Percentage of any payment under any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the
Administrative Agent for the account of such Letter of Credit Issuer such
other Participant's RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of
a reimbursement obligation as to which the Administrative Agent has
received for the account of such Letter of Credit Issuer any payments from
the Participants pursuant to clause (c) above, such Letter of Credit Issuer
shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Participant which has paid its RL Percentage thereof,
in U.S. Dollars and in same day funds, an amount equal to such RL
Percentage of the principal amount thereof and interest thereon accruing
after the purchase of the respective participations.
(e) Each Letter of Credit Issuer shall, promptly after each
issuance of, or amendment or modification to, a Standby Letter of Credit
issued by it, give the Administrative Agent and the Borrower written notice
of the issuance of, or amendment or modification to, such Standby Letter of
Credit. Upon receipt of any such written notice from the Letter of Credit
Issuer, the Administrative Agent shall promptly notify each Participant.
Upon request from a Participant, the Administrative Agent will furnish to
such Participant copies of each Letter of Credit issued and amendments or
modifications, if any.
(f) Each Letter of Credit Issuer (other than BTCo) shall
deliver to the Administrative Agent, promptly on the first Business Day of
each week, by facsimile transmission, the aggregate daily Stated Amount
available to be drawn under the outstanding Trade Letters of Credit issued
by such Letter of Credit Issuer for the previous week. The Administrative
Agent shall, within 10 days after the last Business Day of each calendar
month, deliver to each Participant a report setting forth for such
preceding calendar month the aggregate daily Stated Amount available to be
drawn under all outstanding Trade Letters of Credit during such calendar
month.
-22-
(g) The obligations of the Participants to make payments to
the Administrative Agent for the account of the respective Letter of Credit
Issuer with respect to Letters of Credit issued by it shall be irrevocable
and not subject to counterclaim, set-off or other defense or any other
qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Arranger, any Letter of Credit Issuer, any Bank,
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower or
any of its Subsidiaries and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The
--------------------------------------------
Borrower hereby agrees to reimburse the respective Letter of Credit Issuer,
by making payment to the Administrative Agent in U.S. Dollars and in
immediately available funds at the Payment Office, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of
Credit issued by it (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") immediately after, and in any event on the
date of such payment or disbursement, with interest on the amount so paid
or disbursed by such Letter of Credit Issuer, to the extent not reimbursed
prior to 2:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not
including the date
-23-
such Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Applicable Margin for Revolving Loans maintained as Base
Rate Loans as in effect from time to time (plus an additional 2% per annum
if not reimbursed by the third Business Day after the date of such payment
or disbursement), such interest also to be payable on demand. Each Letter
of Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it; provided,
--------
that (i) the notices referred to above shall not be required to be given if
a Default or an Event of Default under such Section 10.05 shall have
occurred and be continuing (in which case the Unpaid Drawings shall be due
and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by the Borrower) and (ii) the
failure of, or delay in, giving any such notice shall not release or
diminish the obligations of the Borrower under this Section 2.04(a) or
under any other Section of this Agreement.
(b) The Borrower's obligation under this Section 2.04 to
reimburse the respective Letter of Credit Issuer with respect to drawings
on Letters of Credit (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which the Borrower or any
of its Subsidiaries may have or have had against any beneficiary named in
any Letter of Credit, the Letter of Credit Issuer, the Administrative
Agent, any Arranger or any Bank or other Person, including, without
limitation, any defense based upon the failure of any drawing under a
Letter of Credit issued by it to conform to the terms of the Letter of
Credit, any nonapplication or misapplication by the beneficiary of the
proceeds of such drawing; provided, however, that the Borrower shall not be
-------- -------
obligated to reimburse such Letter of Credit Issuer for any wrongful
payment made by such Letter of Credit Issuer under a Letter of Credit
issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer
as determined by a court of competent jurisdiction; provided, further, that
-----------------
any reimbursement made by the Borrower shall be without prejudice to any
claim it may have against such Letter of Credit Issuer as a result of acts
or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer.
2.05 Increased Costs. If after the Effective Date, any Letter of
---------------
Credit Issuer or any Participant determines that the adoption or
effectiveness of any applicable law, rule or regulation, order, guideline
or request or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance
-24-
by any Letter of Credit Issuer or any Participant with any request or
directive (whether or not having the force of law) by any such authority,
central bank or comparable agency shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by such Letter of Credit Issuer or such
Participant's participation therein, or (ii) impose on any Letter of Credit
Issuer or any Participant any other conditions directly or indirectly
affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to
increase the cost to such Letter of Credit Issuer or such Participant of
issuing, maintaining or participating in any Letter of Credit, or to reduce
the amount of any sum received or receivable by such Letter of Credit
Issuer or such Participant hereunder or reduce the rate of return on its
capital (other than any increased costs or reduction in the amount received
or receivable resulting from the imposition of or a change in the rate of
taxes or any similar charges) with respect to Letters of Credit, then, upon
written demand to the Borrower by such Letter of Credit Issuer or such
Participant (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Participant to the Administrative Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the
Borrower agrees, subject to the provisions of Section 13.18 (to the extent
applicable), to pay to such Letter of Credit Issuer or such Participant
such additional amount or amounts as will compensate such Letter of Credit
Issuer or such Participant for such increased cost or reduction. Any Letter
of Credit Issuer or any Participant, upon determining that any additional
amounts will be payable pursuant to this Section 2.05, will give prompt
written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Letter of Credit Issuer or
such Participant, as the case may be (a copy of which certificate shall be
sent by such Letter of Credit Issuer or such Participant to the
Administrative Agent), setting forth in reasonable detail the basis for the
determination of such additional amount or amounts necessary to compensate
such Letter of Credit Issuer or such Participant as aforesaid and such
certificate, if delivered in good faith, shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to
deliver any such certificate shall not release or diminish the Borrower's
obligations to pay additional amounts pursuant to this Section 2.05 upon
subsequent receipt of such certificate.
2.06 Indemnification. The Banks agree to indemnify the Letter of
---------------
Credit Issuers in their capacity as such, ratably according to their
respective "percentages" as used in determining the Required Banks at such
time or, if the Revolving Loan Commitments have terminated and all Loans
have been repaid in full, as determined immediately prior to such
termination and repayment (with such "percentages" to be determined as if
there are no
-25-
Defaulting Banks), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Letter of
Credit Issuers in any way relating to or arising out of this Agreement or
any other Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or
omitted to be taken by the Letter of Credit Issuers under or in connection
with any of the foregoing, but only to the extent that any of the foregoing
is not paid by the Borrower or any of its Subsidiaries; provided, that no
--------
Bank shall be liable to the Letter of Credit Issuers for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Letter of
Credit Issuers. If any indemnity furnished to the Letter of Credit Issuers
for any purpose shall, in the opinion of the Letter of Credit Issuers be
insufficient or become impaired, the Letter of Credit Issuers may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in
this Section 2.06 shall survive the payment of all Obligations.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower shall pay to the Administrative
----
Agent for distribution to each Non-Defaulting Bank, a commitment fee (the
"Commitment Fee") for the period from the Effective Date to but not
including the Maturity Date (or such earlier date as the Total Revolving
Loan Commitment shall have been terminated), computed at a rate for each
day equal to .50% per annum on the daily average Unutilized Revolving Loan
Commitment of such Non-Defaulting Bank. Accrued Commitment Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on
the Maturity Date (or such earlier date upon which the Total Revolving Loan
Commitment is terminated).
(b) The Borrower shall pay to the Administrative Agent for pro
---
rata distribution to each Non-Defaulting Bank (based on its RL Percentage),
----
a fee in respect of each Letter of Credit (the "Letter of Credit Fee")
computed at a rate per annum equal to the Applicable Margin for Revolving
Loans maintained as Eurodollar Loans then in effect on the daily Stated
Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be due
and
-26-
payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to each Letter of Credit Issuer a
fee in respect of each Letter of Credit issued by such Letter of Credit
Issuer (the "Facing Fee") computed at the rate of .25% per annum on the
daily Stated Amount of such Letter of Credit. Accrued Facing Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and
upon the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower shall pay directly to each Letter of Credit
Issuer upon each issuance of, payment under, and/or amendment of, a Letter
of Credit issued by such Letter of Credit Issuer such amount as shall at
the time of such issuance, payment or amendment be the administrative
charge which such Letter of Credit Issuer is generally charging for
issuances of, payments under or amendments of, letters of credit issued by
it.
(e) The Borrower shall pay to the Arrangers, for their own
accounts, such other fees as may be agreed to in writing from time to time
between the Borrower and the Arrangers, when and as due.
3.02 Voluntary Termination or Reduction of Total Unutilized
------------------------------------------------------
Revolving Loan Commitment. (a) Upon at least three Business Days' prior
-------------------------
notice to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Loan Commitment, in
integral multiples of $1,000,000 in the case of partial reductions to the
Total Unutilized Revolving Loan Commitment. Each reduction to the Total
Unutilized Revolving Loan Commitment pursuant to this Section 3.02(a) shall
apply to permanently reduce the Revolving Loan Commitments of the various
Banks pro rata based on their respective RL Percentages.
--- ----
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect
to this Agreement which have been approved by the Required Banks as
provided in Section 13.12(b), the Borrower shall have the right, subject to
obtaining the consents required by Section 13.12(b), upon five Business
Days' prior written notice to the Administrative Agent at its Notice Office
(which
-27-
notice the Administrative Agent shall promptly transmit to each of the
Banks), to terminate the entire Revolving Loan Commitment of such Bank, so
long as all Loans, together with accrued and unpaid interest, Fees and all
other amounts, owing to such Bank (including all amounts, if any, owing
pursuant to Section 1.11) are repaid concurrently with the effectiveness of
such termination (at which time Schedule I shall be deemed modified to
reflect such changed amounts) and at such time, such Bank shall no longer
constitute a "Bank" for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall survive as
to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Revolving
----------------------------------
Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on the Maturity Date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment shall be
reduced from time to time to the extent required by Section 4.02.
(c) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall apply to
proportionally and permanently reduce the Revolving Loan Commitment of each
Bank (based on their RL Percentages).
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, and the right to allocate such prepayments to Revolving
Loans and/or Swingline Loans, made to the Borrower as the Borrower elects,
in whole or in part, without premium or penalty except as otherwise
provided in this Agreement, from time to time on the following terms and
conditions:
(i) the Borrower shall give the Administrative Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are
Revolving Loans or Swingline Loans, the amount of such prepayment, the
Types of Loans to be repaid and (in the case of Eurodollar Loans) the
specific Borrowing or Borrowings pursuant to which made, which notice (I)
shall be given by the Borrower prior to 12:00 Noon (New York time) (x) at
least one Business Day prior
-28-
to the date of such prepayment in the case of Base Rate Loans, (y) on the
date of such prepayment in the case of Swingline Loans and (z) at least
three Business Days prior to the date of such prepayment in the case of
Eurodollar Loans and (II) shall, except in the case of Swingline Loans,
promptly be transmitted by the Administrative Agent to each of the Banks;
(ii) each prepayment (other than prepayments in full of (I) all
outstanding Base Rate Loans or (II) any outstanding Borrowing of Eurodollar
Loans) shall be in an aggregate principal amount of at least (x)
$1,000,000, in the case of Eurodollar Loans, (y) $500,000, in the case of
Revolving Loans maintained as Base Rate Loans and (z) $100,000, in the case
of Swingline Loans and, in each case, if greater, in integral multiples of
$100,000, provided, that no partial prepayment of Eurodollar Loans made
--------
pursuant to a Borrowing shall reduce the aggregate principal amount of the
Eurodollar Loans outstanding pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto;
(iii) at the time of any prepayment of Eurodollar Loans pursuant
to this Section 4.01 on any date other than the last day of the Interest
Period applicable thereto, the Borrower shall pay the amounts required
pursuant to Section 1.11;
(iv) except as provided in clause (v) below, each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
--- ----
among the Banks which make such Loans, provided, that at the Borrower's
--------
election in connection with any prepayment of Revolving Loans pursuant to
this Section 4.01, such prepayment shall not be applied to any Revolving
Loans of a Defaulting Bank;
(v) in the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect
to this Agreement which have been approved by the Required Banks as
provided in Section 13.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of
the Banks), repay all Loans of such Bank (including all amounts, if any,
owing pursuant to Section 1.11), together with accrued and unpaid interest,
Fees and all other amounts then owing to such Bank in accordance with said
Section 13.12(b), so long as (A), the Revolving Loan Commitment of such
Bank is terminated concurrently with such repayment (at which time Schedule
I shall be deemed modified to reflect the changed Revolving Loan
-29-
Commitments) and (B) the consents required by Section 13.12(b) in
connection with the repayment pursuant to this clause (v) shall have been
obtained; and
4.02 Mandatory Repayments and Commitment Reductions. (a) If on
----------------------------------------------
any day the Aggregate Revolving Credit Exposure exceeds the Total Revolving
Loan Commitment as then in effect, the Borrower shall prepay on such day
the principal of outstanding Swingline Loans and, after all Swingline Loans
have been repaid in full or if no Swingline Loans are outstanding,
principal of outstanding Revolving Loans in an amount equal to such excess.
If, after giving effect to the prepayment of all such outstanding Swingline
Loans and Revolving Loans, the sum of the outstanding Letter of Credit
Outstandings exceeds the Total Revolving Loan Commitment as then in effect,
the Borrower shall pay to the Administrative Agent cash and/or Cash
Equivalents in an amount equal to such excess (up to a maximum amount equal
to the Letter of Credit Outstandings at such time), such cash and/or Cash
Equivalents to be held as security for all obligations of the Borrower
hereunder and under the other Credit Documents in a cash collateral account
to be established by the Administrative Agent.
(b) In addition to any other commitment reductions pursuant to
this Section 4.02, on each date on or after the Effective Date upon which
the Borrower or any of its Subsidiaries receives Net Sale Proceeds from any
Asset Sale, the Total Revolving Loan Commitment shall be reduced by an
amount equal to the Applicable Prepayment Percentage of the Net Sale
Proceeds from such Asset Sale, provided that (x) with respect to no more
--------
than $5,000,000 in the aggregate of such Net Sale Proceeds received by the
Borrower or its Subsidiaries in any fiscal year of the Borrower, such Net
Sale Proceeds shall not give rise to a mandatory commitment reduction on
such date to the extent that no Default or Event of Default then exists and
the Borrower delivers a certificate to the Administrative Agent on or prior
to such date stating that such Net Sale Proceeds shall be used or
contractually committed to be used to purchase assets used or to be used in
the businesses permitted pursuant to Section 9.01 (including, without
limitation (but only to the extent permitted by Section 9.02), the purchase
of the capital stock of a Person engaged in such businesses) within 270
days following the date of receipt of such Net Sale Proceeds from such
Asset Sale (which certificate shall set forth the estimates of the proceeds
to be so expended) and (y)(i) if all or any portion of such Net Sale
Proceeds are not so used (or contractually committed to be used) within
such 270-day period, the Total Revolving Loan Commitment shall be reduced
by an amount equal to such remaining portion as provided above and (ii) if
all or any portion of such Net Sale Proceeds are not so used within such
270-day period referred to in clause (i)
-30-
of this clause (y) because such amount is contractually committed to be
used and subsequent to such date such contract is terminated or expires
without such portion being so used, the Total Revolving Loan Commitment
shall be reduced by an amount equal to such remaining portion as provided
above.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 4.02, on each date on or after the Effective Date
on which the Borrower or any of its Subsidiaries receives any cash proceeds
from any incurrence of Indebtedness (other than Indebtedness permitted to
be incurred pursuant to Section 9.04 as in effect on the Effective Date) or
issuance of Preferred Stock (other than (w) Disqualified Preferred Stock to
the extent the proceeds therefrom are used to effect Permitted Acquisitions
and (x) Qualified Preferred Stock by the Borrower or any of its
Subsidiaries), the Total Revolving Loan Commitment shall be reduced by an
amount equal to the Applicable Prepayment Percentage of the Net Cash
Proceeds of the respective incurrence of Indebtedness or issuance of
Preferred Stock.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 4.02, within 10 days following each date on or
after the Effective Date on which the Borrower or any of its Subsidiaries
receives any proceeds from any Recovery Event (other than proceeds from any
Excluded Recovery Event), the Total Revolving Loan Commitment shall be
reduced by an amount equal to 100% of the proceeds of such Recovery Event
(net of reasonable costs (including, without limitation, legal costs and
expenses) and taxes incurred in connection with such Recovery Event and the
amount of such proceeds required to be used to repay any Indebtedness
(other than Indebtedness of the Banks pursuant to this Agreement) which is
secured by the respective assets subject to such Recovery Event)); provided
--------
that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $5,000,000, the Total Revolving Loan Commitment
shall not be reduced on such date to the extent that an Authorized Officer
of the Borrower has delivered a certificate to the Administrative Agent on
or prior to such date stating that such proceeds shall be used or shall be
committed to be used to replace or restore any properties or assets in
respect of which such proceeds were paid within 360 days following the date
of such Recovery Event (which certificate shall set forth the estimates of
the proceeds to be so expended) and (y) so long as no Default or Event of
Default then exists and to the extent that (a) the amount of such proceeds
exceeds $5,000,000, (b) the amount of such proceeds, together with other
cash available to the Borrower and its Subsidiaries and permitted to be
spent by them on Capital Expenditures during the relevant period, equals at
least 100% of the
-31-
cost of replacement or restoration of the properties or assets in respect
of which such proceeds were paid as determined by the Borrower and as
supported by such estimates or bids from contractors or subcontractors or
such other supporting information as the Administrative Agent may
reasonably accept, (c) an Authorized Officer of the Borrower has delivered
to the Administrative Agent a certificate on or prior to the date the
application would otherwise be required pursuant to this Section 4.02(d) in
the form described in clause (x) above and also certifying its
determination as required by preceding clause (b) and certifying the
sufficiency of business interruption insurance as required by succeeding
clause (d), and (d) an Authorized Officer of the Borrower has delivered to
the Administrative Agent such evidence as the Administrative Agent may
reasonably request in form and substance reasonably satisfactory to the
Administrative Agent establishing that the Borrower has sufficient business
interruption insurance and that the Borrower will receive payment
thereunder in such amounts and at such times as are necessary to satisfy
all obligations and expenses of the Borrower (including, without
limitation, all debt service requirements, including pursuant to this
Agreement), without any delay or extension thereof, for the period from the
date of the respective casualty, condemnation or other event giving rise to
the Recovery Event and continuing through the completion of the replacement
or restoration of respective properties or assets, then the entire amount
of the proceeds of such Recovery Event and not just the portion in excess
of $5,000,000 shall be deposited with the Administrative Agent pursuant to
a cash collateral arrangement reasonably satisfactory to the Administrative
Agent whereby such proceeds shall be disbursed to the Borrower from time to
time as needed to pay or reimburse the Borrower or such Subsidiary actual
costs incurred by it in connection with the replacement or restoration of
the respective properties or assets (pursuant to such certification
requirements as may be established by the Administrative Agent), provided
--------
further, that at any time while an Event of Default has occurred and is
-------
continuing, the Required Banks may direct the Administrative Agent (in
which case the Administrative Agent shall, and is hereby authorized by the
Borrower to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations
hereunder in the same manner as proceeds would be applied pursuant to the
Pledge Agreement, and provided further, that if all or any portion of such
----------------
proceeds not required to cause a mandatory commitment reduction pursuant to
the second preceding proviso (whether pursuant to clause (x) or (y)
thereof) are either (A) not so used or committed to be so used within 360
days after the date of the respective Recovery Event or (B) if committed to
be used within 360 days after the date of receipt of such net proceeds and
not so used within 18 months after the date of respective Recovery Event
then, in either such case, the Total Revolving Loan Commitment shall be
reduced by an amount equal to such
-32-
remaining portion not used or committed to be used in the case of preceding
clause (A) and not used in the case of preceding clause (B) on the date
occurring 360 days after the date of the respective Recovery Event in the
case of clause (A) above or the date occurring 18 months after the date of
the respective Recovery Event in the case of clause (B) above.
(e) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of
--------
Eurodollar Loans pursuant to this Section 4.02 may only be made on the last
day of an Interest Period applicable thereto unless (x) all Eurodollar
Loans with Interest Periods ending on such date of required repayment and
all Base Rate Loans have been paid in full and/or (y) concurrently with
such repayment, the Borrower pays all breakage costs and other amounts
owing to each Bank pursuant to Section 1.11; (ii) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto, such Borrowing
shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans; and (iii) each repayment of Revolving Loans
made pursuant to a Borrowing shall be applied pro rata among the Banks
--- ----
which made such Revolving Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion
with a view, but no obligation, to minimize breakage costs owing under
Section 1.11. Notwithstanding the foregoing provisions of this Section
4.02, if at any time the mandatory repayment of Loans pursuant to Section
4.02(a) (as a result of commitment reductions described in clauses (b), (c)
or (d)) would result, after giving effect to the procedures set forth in
this clause (i) above, in the Borrower incurring breakage costs under
Section 1.11 as a result of Eurodollar Loans being repaid other than on the
last day of an Interest Period applicable thereto (any such Eurodollar
Loans, "Affected Loans"), the Borrower may elect, by written notice to the
Administrative Agent, to have the provisions of the following sentence be
applicable. At the time any Affected Loans are otherwise required to be
prepaid the Borrower may elect to deposit 100% (or such lesser percentage
elected by the Borrower as not being repaid) of the principal amounts that
otherwise would have been paid in respect of the Affected Loans with the
Administrative Agent to be held as security for the obligations of the
Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance satisfactory to the Administrative Agent, with
such cash collateral to be released from such cash collateral account (and
applied to repay the principal amount of such Eurodollar Loans) upon each
-33-
occurrence thereafter of the last day of an Interest Period applicable to
Eurodollar Loans (or such earlier date or dates as shall be requested by
the Borrower), with the amount to be so released and applied on the last
day of each Interest Period to be the amount of such Eurodollar Loans to
which such Interest Period applies (or, if less, the amount remaining in
such cash collateral account).
(f) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline Loans shall
be repaid in full on the Swingline Expiry Date and (ii) all other then
outstanding Revolving Loans shall be repaid in full on the Maturity Date.
4.03 Method and Place of Payment. Except as otherwise
---------------------------
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the ratable account of the
Bank or Banks entitled thereto not later than 12:00 Noon (New York time) on
the date when due and shall be made in U.S. Dollars in immediately
available funds at the appropriate Payment Office of the Administrative
Agent in respect of any obligation of the Borrower under this Agreement.
Any payments under this Agreement or under any Note which are made later
than 12:00 Noon (New York time) on any Business Day shall be deemed to have
been made on the next succeeding Business Day. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in
effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
------------
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Sections 4.04(b), all such payments
will be made free and clear of, and without deduction or withholding for,
any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, in the case of each
Bank, except as provided in the second succeeding sentence, any tax,
including any income, branch profits, franchise or similar tax, which in
each case is imposed on or measured by the net income, net profits or
capital of such Bank pursuant to the laws of the jurisdiction in which such
Bank is organized or the jurisdiction in which the principal office or
applicable lending office of such Bank is located or any political
subdivision or taxing authority thereof or therein) and all interest,
penalties or
-34-
similar liabilities with respect to such nonexcluded taxes, levies,
imposts, duties, fees, assessments or other charges (all such nonexcluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts
due by the Borrower under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are
payable in respect of Taxes pursuant to the preceding sentence (any such
amounts, the "Gross-Up Amount"), the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for the net amount, if any, of
any taxes such Bank shall determine are incurred by such Bank (taking into
account in calculating such net amount any allowable credit, deduction or
other benefit available as a result of, or with respect to, the payment by
the Borrower to such Bank of (i) the Gross-Up Amount or (ii) any amount
paid pursuant to this sentence) that would not have been incurred in the
absence of the payment by the Borrower of (i) the Gross-Up Amount or (ii)
any amount paid pursuant to this sentence. The Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes
is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify
and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such
Bank in respect of any payments by or on behalf of the Borrower.
(b) Each Bank party to this Agreement on the Effective Date
hereby represents that, as of the Effective Date, all payments of
principal, interest, and fees to be made to it by the Borrower pursuant to
this Agreement will be totally exempt from withholding of United States
federal tax. Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on
or prior to the Effective Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 13.04, on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments to be made under this Agreement and under any
Note, or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the
-35-
form of Exhibit D (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such
Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement
and under any Note. In addition, each Bank agrees that (a) from time to
time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in
any material respect, and (b) upon the Borrower's reasonable request after
the occurrence of any other event requiring the delivery of a Form 1001,
Form 4224, Form W-8, or any successor form in addition to or in replacement
of the forms previously delivered, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies
of Internal Revenue Service Form 4224, 1001, Form W-8 and a Section
4.04(b)(ii) Certificate, or any successor form, as the case may be, and
such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement
and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such form or
certificate in which case such Bank shall not be required to deliver any
such form or certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service forms that establish
a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to such Bank, or to indemnify and hold
harmless or reimburse such Bank, in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the
Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment,
other than interest, to a Bank described in clause (ii) above, to the
extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 13.04(b), the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction
requiring
-36-
the deduction or withholding) in respect of any Taxes deducted or withheld
by it as described in the immediately preceding sentence as a result of any
changes after the Effective Date (or, if later, after the date such Bank
became a party to this Agreement) in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes. For
purposes of the immediately preceding sentence, the final U.S. Treasury
regulations that were issued October 6, 1997 with respect to the
withholding of United States Federal income tax (the "New Withholding
Regulations") shall not be considered to constitute a change after the
Effective Date, or otherwise, in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of Taxes, notwithstanding that the
New Withholding Regulations generally are only effective for payments made
after December 31, 1999. The Borrower shall not be required to pay any
additional amounts or indemnification under Section 4.04(a) to any Bank to
the extent that the obligation to pay such additional amounts or
indemnification would not have arisen but for the representation set forth
in the first sentence of Section 4.04(b) above made by the Bank not being
true.
(c) If the Borrower pays any additional amount under this
Section 4.04 with respect to taxes imposed on any payments made to or on
behalf of a Bank and such Bank determines in its sole discretion that it
has actually received or realized in connection therewith any refund of
tax, or any reduction of, or credit against, its tax liabilities (a "Tax
Benefit"), such Bank shall pay to the Borrower an amount that the Bank
shall, in its sole discretion, determine is equal to the net benefit, after
tax, which was obtained by the Bank as a consequence of such refund,
reduction or credit; provided, however, that (i) any Bank may determine, in
-------- -------
its sole discretion consistent with the policies of such Bank, whether to
seek a Tax Benefit and (ii) nothing in this Section 4.04(c) shall require
the Bank to disclose any confidential information to the Borrower
(including, without limitation, its tax returns).
(d) Each Bank shall use reasonable efforts (consistent with
legal and regulatory restrictions and subject to overall policy
considerations of such Bank) (i) to file any certificate or document or to
furnish any information as reasonably requested by the Borrower pursuant to
any applicable treaty, law or regulation or (ii) to designate a different
applicable lending office of such Bank, if the making of such filing or the
furnishing of such information or the designation of such other lending
office would avoid the need for or reduce the amount of any additional
amounts payable by the Borrower and would not, in the sole discretion of
such Bank, be disadvantageous to such Bank.
-37-
(e) The provisions of this Section 4.04 are subject to the
provisions of Section 13.18 (to the extent applicable).
SECTION 5. Conditions Precedent to Effective Date. The
--------------------------------------
occurrence of the Effective Date pursuant to Section 13.10, and the
obligation of each Bank to make Loans hereunder, and the obligation of the
Letter of Credit Issuer to issue Letters of Credit hereunder, in each case
on the Effective Date, are subject at the time of the occurrence of the
Effective Date to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective
-----------------------------
Date, (i) this Agreement shall have been executed and delivered as provided
in Section 13.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each Bank that requests same, the
appropriate Revolving Note and to BTCo the Swingline Note, in each case
executed by the Borrower and in the amount, maturity and as otherwise
provided herein.
5.02 Officer's Certificate. On the Effective Date, the
---------------------
Administrative Agent shall have received a certificate dated such date
signed by an appropriate officer of the Borrower stating that all of the
applicable conditions set forth in Sections 5.05 through 5.08, inclusive,
and 6.01 (other than such conditions that are subject to the satisfaction
of the Arrangers and/or the Required Banks), have been satisfied on such
date.
5.03 Opinions of Counsel. On the Effective Date, the
-------------------
Administrative Agent shall have received opinions, addressed to each
Arranger, the Administrative Agent, the Collateral Agent and each of the
Banks and dated the Effective Date, from Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special New York counsel to the Credit Parties, which opinion
shall cover the matters contained in Exhibit E and such other matters
incident to the transactions contemplated herein as the Arrangers and the
Required Banks may reasonably request and be in form and substance
reasonably satisfactory to the Arrangers.
5.04 Company Documents; Proceedings. (a) On the Effective Date,
------------------------------
the Administrative Agent shall have received from the Borrower and each
other Credit Party a certificate, dated the Effective Date, signed by an
Authorized Officer of such Credit Party, and attested to by the secretary
or any assistant secretary of such Credit Party, in the form of Exhibit F
with appropriate insertions, together with copies of the certificate of
incorporation, by-laws or equivalent organizational documents of such
Credit Party and the resolutions of such Credit Party referred to in such
certificate and all of the foregoing (including each such
-38-
certificate of incorporation, by-laws or other organizational document)
shall be reasonably satisfactory to the Arrangers.
(b) On the Effective Date, the Administrative Agent shall have
received a certificate from each Credit Party (x) to the effect that such
Credit Party is in good standing in its respective state of organization
and in those states where such Credit Party conducts business and (y)
providing the resolutions adopted by such Credit Party with respect to the
actions contemplated by this Agreement and the other Credit Documents, and
all of the foregoing shall be acceptable to the Arrangers.
(c) On the Effective Date, all Company and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
reasonably satisfactory in form and substance to the Arrangers, and the
Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates,
bring-down certificates and any other records of Company proceedings and
governmental approvals, if any, which any Arranger reasonably may have
requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper Company or governmental authorities.
(d) On the Effective Date, the Cendant Documents (as in effect
prior to the Cendant Amendment Effective Date), the Stockholders Agreement
and the Existing Preferred Stock shall all be in full force and effect, and
shall be in the form delivered to the Arrangers prior to the Effective
Date.
5.05 Adverse Change, etc. (a) On the Effective Date, since
--------------------
December 31, 1997, nothing shall have occurred which (i) either Arranger
shall reasonably determine has had, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Banks or
the Administrative Agent, or on the ability of any Credit Party to perform
its obligations to them hereunder or under any other Credit Document or
(ii) has had a Material Adverse Effect.
(b) On the Effective Date, there shall not have occurred and be
continuing any material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have
occurred and be continuing a material disruption or a material adverse
change in financial, banking or capital markets that would have a material
-39-
adverse effect on the syndication, in each case as determined by the
Arrangers in their reasonable discretion.
5.06 Litigation. On the Effective Date, there shall be no
----------
actions, suits, proceedings or investigations pending or to the Borrower's
knowledge threatened (a) with respect to this Agreement or any other
Document, (b) with respect to any Existing Indebtedness or (c) which either
the Arranger or the Required Banks shall determine could reasonably be
expected to have (i) a Material Adverse Effect or (ii) a material adverse
effect on the rights or remedies of the Banks, the Administrative Agent or
the Arrangers hereunder or under any other Credit Document or on the
ability of any Credit Party to perform its respective obligations to the
Banks, the Administrative Agent or the Arrangers hereunder or under any
other Credit Document.
5.07 Approvals. On the Effective Date, (i) all necessary
---------
governmental (domestic and foreign), regulatory and third party approvals
in connection with any Existing Indebtedness, the Cendant Documents (as in
effect prior to the Cendant Amendment Effective Date), the Stockholders
Agreement, the Existing Preferred Stock, the transactions contemplated by
the Credit Documents and otherwise referred to herein or therein shall have
been obtained and remain in full force and (ii) all applicable waiting
periods shall have expired without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse
conditions upon the making of the Loans and the transactions contemplated
by the Credit Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially
adverse conditions upon, or materially delaying, or making economically
unfeasible, the making of the Loans.
5.08 Refinancing of Indebtedness. (a) On the Effective Date,
----------------------------
the Borrower and its Subsidiaries shall have no Indebtedness or Preferred
Stock outstanding other than (i) the Loans, (ii) the Existing Preferred
Stock, and (iii) certain other indebtedness existing on the Effective Date
as listed on Schedule III (with the Indebtedness described in this sub-
clause (iii) being herein called the "Existing Indebtedness"). On and as of
the Effective Date, all of the Existing Indebtedness shall remain
outstanding without any default or event of default existing thereunder or
arising as a result of the transactions contemplated hereby (except to the
extent amended or waived by the parties thereto on terms and conditions
satisfactory to the Arrangers).
-40-
(b) The Administrative Agent shall have received evidence in
form, scope and substance reasonably satisfactory to it that the matters
set forth in Section 5.08(a) have been satisfied on the Effective Date.
5.09 Pledge Agreement. On the Effective Date, each of the
-----------------
Credit Parties shall have duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibit G (as amended, amended and restated,
modified or supplemented from time to time in accordance with the terms
thereof and hereof, the "Pledge Agreement") and shall have delivered to the
Collateral Agent, as pledgee thereunder, all of the Pledged Securities
referred to therein then owned by such Credit Parties and required to be
pledged pursuant to the terms thereof, endorsed in blank in the case of
promissory notes or accompanied by executed and undated stock powers in the
case of capital stock, along with evidence that all other actions necessary
or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the Pledge
Agreement have been taken, and the Pledge Agreement shall be in full force
and effect.
5.10 Subsidiaries Guaranty. On the Effective Date, each
---------------------
Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit H (as amended, amended and
restated, modified or supplemented from time to time in accordance with the
terms thereof and hereof, the "Subsidiaries Guaranty"), and the
Subsidiaries Guaranty shall be in full force and effect.
5.11 Employee Benefit Plans; Shareholders' Agreements;
-------------------------------------------------
Management Agreements; Employment Agreements; Existing Indebtedness
-------------------------------------------------------------------
Agreements. On or prior to the Effective Date, there shall have been
----------
delivered to the Administrative Agent true and correct copies, certified as
true and complete by an appropriate officer of the Borrower of the
following documents (in each case except to the extent already delivered to
or made available for review by the Administrative Agent on or prior to the
Effective Date), in each case as same will be in effect on the Effective
Date after the transactions contemplated hereby:
(a) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of the
most recent such report and any other "employee benefit plans," as defined
in Section 3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of the
Borrower or any of its Subsidiaries or any ERISA Affiliate (collectively,
the "Employee Benefit Plans");
-41-
(b) all agreements (including, without limitation,
shareholders' agreements, subscription agreements and registration rights
agreements) entered into by the Borrower or any of its Subsidiaries
governing the terms and relative rights of its capital stock and any
agreements entered into by shareholders relating to any such entity with
respect to its capital stock (collectively, the "Shareholders'
Agreements");
(c) all material agreements with members of, or with respect
to, the management of the Borrower or any of its Subsidiaries after giving
effect to the transactions contemplated hereby (collectively, the
"Management Agreements");
(d) any material employment agreements entered into by the
Borrower or any of its Subsidiaries after giving effect to the transactions
contemplated hereby (collectively, the "Employment Agreements"); and
(e) all agreements evidencing or relating to Existing
Indebtedness of the Borrower or any of its Subsidiaries, which on an
individual basis evidence Indebtedness greater than $2,000,000
(collectively, the "Existing Indebtedness Agreements").
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, and Existing Indebtedness Agreements shall
be in form and substance reasonably satisfactory to the Arrangers and the
Required Banks and shall be in full force and effect on the Effective Date.
5.12 Solvency Certificate. On or before the Effective Date, the
--------------------
Administrative Agent shall have received a solvency certificate in the form
of Exhibit I from the chief financial officer of the Borrower, dated the
Effective Date, and supporting the conclusion that, after giving effect to
the incurrence of all financings contemplated herein, the Borrower (on a
stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis), in each case, are not insolvent and will not be rendered insolvent
by the indebtedness incurred in connection herewith, will not be left with
unreasonably small capital with which to engage in its or their respective
businesses and will not have incurred debts beyond its or their ability to
pay such debts as they mature and become due.
5.13 Financial Statements; Balance Sheet. (a) On or prior to
-----------------------------------
the Effective Date, there shall have been delivered to the Administrative
Agent (i) true and correct copies of the financial statements referred to
in Section 7.10(b) and (ii) an unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of September 30, 1998, which financial
-42-
statements, unaudited consolidated balance sheet and funds flow statement
shall be reasonably satisfactory to the Arrangers.
(b) On or prior to the Effective Date, there shall have been
delivered to the Administrative Agent, and the Administrative Agent hereby
acknowledges receipt of, detailed projected consolidated financial
statements of the Borrower and its Subsidiaries (the "Projections"),
satisfactory in form and substance to the Arrangers.
5.14 Payment of Fees. On the Effective Date, all costs, fees
---------------
and expenses, and all other compensation due to the Agents or the Banks
(including, without limitation, legal fees and expenses) shall have been
paid to the extent due.
SECTION 6. Conditions Precedent to All Credit Events. The
-----------------------------------------
obligation of each Bank to make Loans (including Loans made on the
Effective Date but excluding Mandatory Borrowings made thereafter, which
shall be made as provided in Section 1.01(c)), and the obligation of a
Letter of Credit Issuer to issue any Letter of Credit, is subject, at the
time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
------------------------------------------
of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any other Credit Document shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit
Event (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be
true and correct in all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior
---------------------------------------------
to the making of each Loan (excluding Swingline Loans and Mandatory
Borrowings), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a). Prior to the making
of any Swingline Loan, BTCo shall have received the notice required by
Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Letter of Credit Issuer shall have
received a Letter of Credit Request meeting the requirements of Section
2.02(a).
-43-
The occurrence of the Effective Date and the acceptance of the
benefits or proceeds of each Credit Event shall constitute a representation and
warranty by the Borrower to each of the Arrangers and each of the Banks that all
the conditions specified in Section 5 and in this Section 6 and applicable to
such Credit Event (other than such conditions that are subject to the
satisfaction of the Arrangers and/or the Required Banks) exist as of that time.
All of the Notes, certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be in form and substance
satisfactory to the Banks.
SECTION 7. Representations and Warranties. In order to induce the
------------------------------
Banks to enter into this Agreement and to make the Loans and issue and/or
participate in the Letters of Credit provided for herein, the Borrower makes the
following representations and warranties to the Banks, all of which shall
survive the execution and delivery of this Agreement, the making of the Loans
and the issuance of the Letters of Credit (with the occurrence of the Effective
Date and each Credit Event on and after the Effective Date being deemed to
constitute a representation and warranty by the Borrower that the matters
specified in this Section 7 are true and correct in all material respects on and
as of the Effective Date and the date of each such Credit Event, unless stated
to relate to a specific earlier date in which case such representations and
warranties shall be true and correct in all material respects only as of such
earlier date):
7.01 Company Status. The Borrower and each of its Subsidiaries (i)
--------------
is a duly organized and validly existing Company in good standing under the laws
of the jurisdiction of its organization, (ii) has the Company power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified or in
good standing would have a Material Adverse Effect.
7.02 Company Power and Authority. Each Credit Party has the
---------------------------
Company power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary Company action to authorize the execution, delivery and performance of
the Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each
-44-
such Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable against it in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance
------------
by any Credit Party of the Credit Documents to which it is a party, nor
compliance by any Credit Party with the terms and provisions thereof, nor the
consummation of the transactions contemplated herein or therein, (i) will
contravene any material provision of any applicable law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Pledge
Agreement) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Credit Party or
any of its Subsidiaries pursuant to the terms of any material indenture,
mortgage, deed of trust, loan agreement, credit agreement or any other material
agreement or instrument to which such Credit Party or any of its Subsidiaries is
a party or by which it or any of its property or assets are bound or to which it
may be subject (including, without limitation, the Existing Indebtedness), or
(iii) will violate any provision of the certificate of incorporation, by-laws,
certificate of partnership, partnership agreement, certificate of limited
liability company, limited liability company agreement or equivalent
organizational document, as the case may be, of such Credit Party or any of its
Subsidiaries.
7.04 Litigation. There are no actions, suits, proceedings or
----------
investigations pending or, to the knowledge of the Borrower, threatened (i) with
respect to any Credit Document, (ii) with respect to the Cendant Documents, the
Stockholders Agreement, the Existing Preferred Stock or any other Document that
could reasonably be expected to have a Material Adverse Effect or (iii) with
respect to the Borrower or any of its Subsidiaries (x) that are likely to have a
Material Adverse Effect (after giving effect to projected reserves for
remediation expenses, the anticipated timing of remediation expenses, potential
insurance and indemnification recoveries and tax savings) or (y) that could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Arrangers, the Administrative Agent or the Banks or on the
ability of any Credit Party to perform its respective obligations to the
Arrangers, the Administrative Agent or the Banks hereunder and under the other
Credit Documents to which it is, or will be, a party. Additionally, there does
not exist any
-45-
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the occurrence of any Credit Event.
7.05 Use of Proceeds; Margin Regulations.
-----------------------------------
(a) The proceeds of all Revolving Loans and Swingline Loans shall be
utilized for the general corporate and working capital purposes of the Borrower
and its Subsidiaries (including, but not limited to, Permitted Acquisitions).
(b) Neither the making of any Loan, nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
7.06 Governmental Approvals. Except as may have been obtained or
----------------------
made on or prior to the Effective Date (and which remain in full force and
effect on the Effective Date), no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance by the Credit
Parties of any Credit Document or (ii) the legality, validity, binding effect or
enforceability of any Credit Document.
7.07 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.09 True and Complete Disclosure. All factual information (taken
----------------------------
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of
-46-
its Subsidiaries in writing to any Arranger or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein or therein
is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any such Persons in writing to any Arranger or any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided, it being understood and agreed that for purposes of
this Section 7.09, such factual information shall not include the Projections or
any pro forma financial information.
--- -----
7.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Effective Date, after giving effect to all Indebtedness (including the
Loans) incurred, and to be incurred, and Liens created, and to be created, by
each Credit Party in connection therewith, with respect to the Borrower (on a
stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis), (x) the sum of the assets, at a fair valuation, of the Borrower (on a
stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis), will exceed its or their debts, (y) it has or they have not incurred nor
intended to, nor believes or believe that it or they will, incur debts beyond
its or their ability to pay such debts as such debts mature and (z) it or they
will have sufficient capital with which to conduct its or their business. For
purposes of this Section 7.10, "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(b) Prior to the Effective Date, the Borrower has delivered to the
Banks the consolidated balance sheets of the Borrower and its consolidated
Subsidiaries at December 31, 1996, December 31, 1997 and September 30, 1998, and
the related statements of income and cash flows and changes in shareholders'
equity of the Borrower for the fiscal years or nine-month period, as the case
may be, ended as of said dates. All such financial statements have been prepared
in accordance with GAAP consistently applied except to the
-47-
extent provided in the notes to said financial statements and subject, in the
case of the nine-month statements, to normal year-end audit adjustments (all of
which are of a recurring nature and none of which, individually or in the
aggregate, would be material) and the absence of footnotes.
(c) Since December 31, 1997, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 7.10(b) and the Indebtedness incurred under this Agreement, (i) there
were as of the Effective Date (and after giving effect to any Loans made on such
date), no liabilities or obligations (excluding current obligations incurred in
the ordinary course of business) with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, could reasonably be expected to be material to the Borrower and its
Subsidiaries taken as a whole and (ii) the Borrower knows of no basis for the
assertion against it or any of its Subsidiaries of any such liability or
obligation which, either individually or in the aggregate, are or would be
reasonably likely to have, a Material Adverse Effect.
(e) On and as of the Effective Date, the Projections have been
prepared on a basis consistent with the financial statements referred to in
Section 7.10(b), and have been prepared in good faith and are based on
reasonable assumptions under the then known facts and circumstances. On the
Effective Date, the management of the Borrower believes that the Projections are
reasonable and attainable based upon the then known facts and circumstances (it
being understood that nothing contained in this Section 7.10(e) shall constitute
a representation that the results forecasted in such Projections will in fact be
achieved). On and as of the Effective Date, there is no fact known to the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, which has not been disclosed herein or in such other
documents, certificates and statements furnished to the Banks for use in
connection with the transactions contemplated hereby.
7.11 Security Interests. On and after the Effective Date, the
------------------
Security Documents create (or after the execution and delivery thereof will
create), as security for the Obligations, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto, superior
to and prior to the rights of all third Persons, and subject to no other Liens
(except that such Collateral may be subject to Permitted Liens). No filings
-48-
or recordings are required in order to perfect and/or render enforceable as
against third parties the security interests created under the Security
Documents except for filings or recordings required in connection with the
Security Documents which shall have been made on or prior to the Effective Date
with respect to the Pledge Agreement as contemplated by Section 5.09 or on or
prior to the execution and delivery thereof as contemplated by Sections 8.11,
8.13 and 9.13.
7.12 Compliance with ERISA. Part A of Schedule IV sets forth each
---------------------
Plan and each Multiemployer Plan; each Plan (and each related trust, insurance
contract or fund) is in substantial compliance with its terms and with all
applicable laws, including without limitation ERISA and the Code; each Plan (and
each related trust, if any) which is intended to be qualified under Section
401(a) of the Code has received a determination letter from the Internal Revenue
Service to the effect that it meets the requirements of Sections 401(a) and
501(a) of the Code; except as described in item (i) set forth on Part B of
Schedule IV, all contributions required to be made with respect to a Plan have
been timely made by the Borrower and each Subsidiary of the Borrower; neither
the Borrower nor any Subsidiary of the Borrower has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Plan pursuant to Section 409, 502(i) or 502(l) of ERISA or Section
4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan; no condition exists which presents
a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a material liability to or on account of a Plan pursuant
to the foregoing provisions of ERISA and the Code; no action, suit, proceeding
or hearing with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, expected
or, to the best knowledge of the Borrower threatened; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
maintained by the Borrower or any Subsidiary which covers or has covered
employees or former employees of the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate has at all times been operated in material compliance with
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of
the Code; no lien imposed under the Code or ERISA on the assets of the Borrower
or any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and, except as described in item (ii) set forth on
Part B of Schedule IV, the Borrower and its Subsidiaries may cease contributions
to or terminate any employee benefit plan maintained by any of them without
incurring any material liability.
-49-
7.13 Capitalization. On the Effective Date, the authorized capital
--------------
stock of the Borrower shall consist of (i) 50,000,000 shares of common stock,
$.01 par value per share (such authorized shares of common stock, together with
any subsequently authorized shares of common stock of the Borrower, the
"Borrower Common Stock"), 10,000,000 of which shares shall be issued and
outstanding and (ii) 405,000 shares of preferred stock, $.01 par value per
share, (x) 260,000 of which shares are authorized to be the Borrower's 9.00%
Series A Cumulative Senior Redeemable Preferred Stock (the "Series A Preferred
Stock"), of which 157,591 shares shall be issued and outstanding, (y) 25,000 of
which shares are authorized to be the Borrower's 5.00% Series B Cumulative
Convertible Redeemable Preferred Stock (the "Series B Preferred Stock"), of
which 24,000 shares shall be issued and outstanding, and (z) 125,000 of which
shares are authorized to be the Borrower's 18.00% Series C Cumulative Junior
Redeemable Preferred Stock (the "Series C Preferred Stock", and together with
the Series A Preferred Stock and the Series B Preferred Stock, the "Existing
Preferred Stock"), of which 68,510 shares shall be issued and outstanding. All
such outstanding shares have been duly and validly issued, are fully paid and
nonassessable and have been issued free of preemptive rights. Except as set
forth on Schedule V hereto, the Borrower does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its capital
stock.
7.14 Subsidiaries. (a) On and as of the Effective Date, the
------------
Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule
VI. Schedule VI correctly sets forth, as of the Effective Date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
or other equity interests of each of its Subsidiaries and also identifies the
direct owner thereof. All outstanding shares of capital stock of each Subsidiary
of the Borrower have been duly and validly issued, are fully paid and non-
assessable and have been issued free of preemptive rights. Except as set forth
on Schedule V hereto, no Subsidiary of the Borrower has outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any right to subscribe for or to purchase, or any options or warrants for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of or any calls, commitments or claims of any character relating to,
its capital stock or any stock appreciation or similar rights.
7.15 Intellectual Property, etc. Each of the Borrower and each of
---------------------------
its Subsidiaries owns, licenses or has the right to use all patents, trademarks,
permits, service
-50-
marks, trade names, copyrights, licenses, franchises and other rights with
respect to the foregoing reasonably necessary for the conduct of its business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, would result in a Material Adverse Effect.
7.16 Compliance with Statutes, etc. Each of the Borrower and each
------------------------------
of its Subsidiaries is in compliance with all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such non-compliance as is not
reasonably likely to, individually or in the aggregate, have a Material Adverse
Effect.
7.17 Environmental Matters. (a) Each of the Borrower and its
---------------------
Subsidiaries on the date of each Credit Event is in material compliance with,
all applicable Environmental Laws and the requirements of any permits issued
under such Environmental Laws and none of the Borrower or any of its
Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing. There are no pending unresolved
past or, to the knowledge of the Borrower, threatened Environmental Claims
against the Borrower or any of its Subsidiaries, or against any Real Property
owned or operated by the Borrower, any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of the Borrower or any of its Subsidiaries or any Real Property at
any time owned or operated by the Borrower or any of its Subsidiaries that would
reasonably be expected (i) to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any of their currently owned or
operated Real Property or (ii) to cause any such currently owned or operated
Real Property to be subject to any restrictions on the ownership, occupancy, use
or transferability of such Real Property by the Borrower or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported by the Borrower or any of its Subsidiaries
or by any Person acting for or under contract to the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person, to or
from any Real Property owned or operated by the Borrower or any of
-51-
its Subsidiaries except in material compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. Hazardous Materials have not at any time been Released by the Borrower
or any of its Subsidiaries or by any Person acting for or under contract to the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person on or from any Real Property owned or operated by the Borrower or
any of its Subsidiaries except in compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. There are not now any underground storage tanks owned or operated by
the Borrower or any of its Subsidiaries, or to the knowledge of the Borrower, by
any other Person, located on any Real Property owned or operated by the Borrower
or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.17,
the representations made in this Section 7.17 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, would reasonably be expected to have a Material Adverse
Effect (after giving effect to projected reserves for remediation expenses, the
anticipated timing of remediation expenses, potential insurance and
indemnification recoveries and tax savings).
7.18 Properties. Each of the Borrower and each of its Subsidiaries
----------
has good and marketable title to, or a validly subsisting leasehold interest in,
all material properties owned or leased by it except where failure to do so
would not be reasonably likely to have a Material Adverse Effect.
7.19 Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower and its Subsidiaries, threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower and its Subsidiaries, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower
and its Subsidiaries, threatened against the Borrower or any of its Subsidiaries
and (iii) no union representation question existing with respect to the
employees of the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower and its Subsidiaries, no union organizing activities are taking
place, except (with respect to any
-52-
matter specified in clause (i), (ii) or (iii) above, either individually or in
the aggregate) such as is not reasonably likely to have a Material Adverse
Effect.
7.20 Tax Returns and Payments. Each of the Borrower and each of its
------------------------
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and fully provided for on the financial statements
of the Borrower and its Subsidiaries in accordance with GAAP. Each of the
Borrower and each of its Subsidiaries has provided adequate reserves (in the
good faith judgment of the management of the Borrower) for the payment of all
federal, state and foreign income taxes which have not yet become due. There is
no material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of the Borrower or any of its Subsidiaries, threatened by
any authority regarding any taxes relating to the Borrower or any of its
Subsidiaries. Neither the Borrower nor any of its Subsidiaries has entered into
an agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of the Borrower or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of the
Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations, in each case except to the extent the liability of the
Borrower or such Subsidiary giving rise to any extension of any such normally
applicable statute of limitation is not material.
7.21 Existing Indebtedness. Schedule III sets forth a true and
---------------------
complete list of all Existing Indebtedness of the Borrower and its Subsidiaries
as of the Effective Date, in each case showing the aggregate principal amount
thereof and the name of the Borrower and any other entity which directly or
indirectly guaranteed such debt.
7.22 Insurance. Set forth on Schedule VII hereto is a true,
---------
correct and complete summary of all insurance carried by each Credit Party on
and as of the Effective Date, with the amounts insured set forth therein.
7.23 Year 2000 Representation. Any reprogramming required to
------------------------
permit the proper functioning, in and following the year 2000, of (i) the
Borrower's and its Subsidiaries' computer systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the Borrower's and its Subsidiaries' systems interface) and the testing of
all such systems and equipment, as so reprogrammed, will be
-53-
completed by December 31, 1999, except to the extent the failure to
complete such reprogramming could not reasonably be expected to result in a
Default, an Event of Default or a Material Adverse Effect. The cost to the
Borrower and its Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Borrower and its
Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) could not reasonably be expected
to result in a Default, an Event of Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence
as may be necessary, the computer and management information systems of the
Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient
to permit the Borrower and its Subsidiaries to conduct their respective
businesses without a Material Adverse Effect.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants
---------------------
and agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Commitment has terminated, no
Letters of Credit or Notes are outstanding and the Loans and Unpaid
Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 13.13 which are not then due and
payable) incurred hereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each
---------------------
Bank:
(a) Quarterly Financial Statements. Within 50 days after the
------------------------------
close of the first three quarterly accounting periods in each fiscal year
of the Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and of cash
flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting period
and the budgeted figures for such quarterly period as set forth in the
respective budget delivered pursuant to Section 8.01(c) and (ii)
management's discussion and analysis of significant operational and
financial developments during such quarterly period, all of which shall be
in reasonable detail and certified by the chief financial officer or other
Authorized Officer of the Borrower that they fairly present in all material
respects the financial condition of the Borrower and its Subsidiaries as of
the dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, subject to normal year-end
audit adjustments and the absence of footnotes.
-54-
(b) Annual Financial Statements. Within 95 days after the
---------------------------
close of each fiscal year of the Borrower, the consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income and retained earnings and of
cash flows for such fiscal year and setting forth comparative consolidated
figures for the preceding fiscal year and comparable budgeted figures for
such fiscal year as set forth in the respective budget delivered pursuant
to Section 8.01(c) and (except for such comparable budgeted figures)
certified by such independent certified public accountants of recognized
national standing as shall be reasonably acceptable to the Administrative
Agent, in each case to the effect that such statements fairly present in
all material respects the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their operations
and changes in financial position for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years, together with a
certificate of such accounting firm stating that in the course of its
regular audit of the business of the Borrower and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing
standards, no Default or Event of Default which has occurred and is
continuing has come to their attention or, if such a Default or an Event of
Default has come to their attention, a statement as to the nature thereof.
(c) Budgets, etc. Not more than 60 days after the commencement
-------------
of each fiscal year of the Borrower, consolidated budgets of the Borrower
and its Subsidiaries (x) in reasonable detail for each of the four fiscal
quarters of such fiscal year and (y) in summary form for each of the two
fiscal years immediately following such fiscal year, in each case as
customarily prepared by management for its internal use setting forth, with
appropriate discussion, the principal assumptions upon which such budgets
are based. Together with each delivery of financial statements pursuant to
Sections 8.01(a) and (b), a comparison of the current year to date
financial results against the budgets required to be submitted pursuant to
this clause (c) shall be presented.
(d) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(a) and (b), a
certificate of the chief financial officer or other Authorized Officer of
the Borrower to the effect that, to the best of such officer's knowledge,
no Default or Event of Default exists or, if any Default or Event of
Default does exist, specifying the nature and extent thereof, which
certificate shall, if delivered in connection with the financial statements
in respect of a period ending on the last day of a fiscal quarter or fiscal
year of the Borrower, set forth (x) the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections
-55-
4.02, 9.02, 9.04(d), 9.05(g), (k) and (s), 9.08 and 9.09 as at the end of
such fiscal quarter or year, as the case may be, and (y) the calculation of
the Total Leverage Ratio as at the last day of the respective fiscal
quarter or fiscal year of the Borrower, as the case may be.
(e) Notice of Default or Litigation. Promptly, and in any
-------------------------------
event within five Business Days after a senior officer of the Borrower
obtains actual knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default, which notice shall
specify the nature and period of existence thereof and what action the
Borrower proposes to take with respect thereto, (ii) any litigation or
proceeding pending or threatened (x) against the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, (y) with respect to any material Indebtedness of the Borrower or
any of its Subsidiaries or (z) with respect to any Document and (iii) any
other event which could reasonably be expected to have a Material Adverse
Effect.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy
-----------------
of each report or "management letter" submitted to the Borrower or any of
its Subsidiaries by its independent accountants in connection with any
annual, interim or special audit made by them of the books of the Borrower
or any of its Subsidiaries.
(g) Environmental Matters. Promptly and in any event within
---------------------
five Business Days after a senior officer of the Borrower obtains actual
knowledge of any of the following (but only to the extent that any of the
following, either individually or in the aggregate, could reasonably be
expected to (x) have a Material Adverse Effect, (y) result in a remedial
cost to the Borrower or any of its Subsidiaries not previously disclosed to
the Arrangers and the Banks prior to the Effective Date in excess of
$500,000 or (z) result in a remedial cost to the Borrower or any of its
Subsidiaries in excess of $1,000,000 over and above the established reserve
for remediation costs as set forth in the Projections), written notice of:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property at any
time owned or operated by the Borrower or any of its Subsidiaries that (x)
results in noncompliance by the Borrower or any of its Subsidiaries with
any applicable Environmental Law or (y) could
-56-
reasonably be anticipated to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property currently
owned or operated by the Borrower or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by the
Borrower or such Subsidiary, as the case may be, of its interest in such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and the Borrower's response or proposed response thereto. In addition, the
Borrower agrees to provide the Banks with copies of all material
communications by the Borrower or any of its Subsidiaries with any Person,
government or governmental agency relating to Environmental Laws or to any
of the matters set forth in clauses (i)-(iv) above, and such reasonably
detailed reports relating to any of the matters set forth in clauses (i)-
(iv) above as may reasonably be requested by the Administrative Agent or
the Required Banks.
(h) Annual Meetings with Banks. At the written request of the
--------------------------
Administrative Agent, the Borrower shall within 120 days after the close of
each of its fiscal years, hold a meeting (at a mutually agreeable location
and time) open to all of the Banks at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial condition
of the Borrower and its Subsidiaries and the budgets presented for the
current fiscal year of the Borrower and its Subsidiaries.
(i) Notice of Commitment Reductions. On or prior to the date
-------------------------------
of any reduction to the Total Revolving Loan Commitment, the Borrower shall
provide written notice of the amount of the reduction to the Total
Revolving Loan Commitment, and the calculation thereof (in reasonable
detail).
(j) Other Information. Promptly upon transmission thereof,
-----------------
copies of any filings and registrations with, and reports to, the SEC by
the Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as
-57-
the Borrower or any of its Subsidiaries shall send generally to analysts
and, with reasonable promptness, such other information or documents
(financial or otherwise) as any Arranger on its own behalf or on behalf of
the Required Banks may reasonably request from time to time.
8.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries to, permit, upon reasonable notice to the chief
financial officer or other Authorized Officer of the Borrower, officers and
designated representatives of either Arranger or the Required Banks to
visit and inspect under the guidance of officers of the Borrower any of the
properties or assets of the Borrower and any of its Subsidiaries in
whomsoever's possession, and to examine the books of account of the
Borrower and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be
advised as to the same by, their officers and independent accountants, all
at such reasonable times and intervals and to such reasonable extent as
such Arranger or the Required Banks may desire, provided that so long as no
--------
Default or Event of Default is then in existence, the Borrower shall have
the right to participate in any discussions of the Arrangers or the Banks
with any independent accountants of the Borrowers.
8.03 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to (i) maintain, with financially sound and reputable
insurance companies, insurance on all its property in at least such amounts
and against at least such risks as is consistent and in accordance with
industry practice and (ii) furnish to the Administrative Agent and each of
the Banks, upon request, full information as to the insurance carried. In
addition to the requirements of the immediately preceding sentence, the
Borrower will at all times cause insurance of the types described in
Schedule VII to be maintained (with the same scope of coverage as that
described in Schedule VII) at levels which are consistent with its
practices immediately before the Effective Date. Such insurance shall
include physical damage insurance on all real and personal property
(whether now owned or hereafter acquired) on an all risk basis and business
interruption insurance.
8.04 Payment of Taxes. The Borrower will pay and discharge, and
----------------
will cause each of its Subsidiaries to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits, or upon any material properties belonging to
it, prior to the date on which penalties attach thereto, and all
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material lawful claims for sums that have become due and payable which, if
unpaid, might become a Lien not otherwise permitted under Section 9.03(a);
provided, that neither the Borrower nor any of its Subsidiaries shall be
--------
required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
8.05 Corporate Franchises. The Borrower will do, and will cause
--------------------
each of its Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its
material rights, franchises, authority to do business, licenses and
patents, except for rights, franchises, authority to do business, licenses
and patents the loss of which (individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect; provided,
--------
however, that any transaction permitted by Section 9.02 will not constitute
-------
a breach of this Section 8.05.
8.06 Compliance with Statutes; etc. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except for such noncompliances
as would not, either individually or in the aggregate, have a Material
Adverse Effect or a material adverse effect on the ability of any Credit
Party to perform its obligations under any Credit Document to which it is a
party.
8.07 Compliance with Environmental Laws. (i) The Borrower will
----------------------------------
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to their businesses or the
ownership or use of its Real Property now or hereafter owned or operated by
the Borrower or any of its Subsidiaries, will promptly pay or, with respect
to any of its Subsidiaries, cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be
kept all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws and (ii) none of the Borrower or any of its
Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, release or disposal of,
Hazardous Materials on any Real Property owned or operated by the Borrower
or any of its Subsidiaries other than in compliance with Environmental Laws
and as required in connection with the normal business operations of
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the Borrower or its Subsidiaries, or transport or permit the transportation
of Hazardous Materials other than in compliance with Environmental Laws and
as required in connection with the normal business operations of the
Borrower or its Subsidiaries, unless the failure to comply with the
requirements specified in clause (i) or (ii) above, either individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect. If the Borrower or any of its Subsidiaries or any tenant or
occupant of any Real Property owned or operated by the Borrower or any of
its Subsidiaries causes or permits any intentional or unintentional act or
omission resulting in the presence or Release of any Hazardous Material in
a quantity or concentration sufficient to require reporting or to trigger
an obligation to undertake clean-up, removal or remedial action under
applicable Environmental Laws, the Borrower agrees to undertake, and/or to
cause any of its Subsidiaries, tenants or occupants to undertake, at their
sole expense, any clean up, removal, remedial or other action required
pursuant to Environmental Laws to remove and clean up any Hazardous
Materials from any Real Property except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect; provided
--------
that none of the Borrower or any of its Subsidiaries shall be required to
comply with any such order or directive which is being contested in good
faith and by proper proceedings so long as it has maintained adequate
reserves with respect to such compliance to the extent required in
accordance with GAAP. Notwithstanding any provision of this Section 8.07,
the Borrower shall be required by this Section to exercise any degree of
control over the operations of any of its Subsidiaries that could
reasonably be construed under applicable Environmental Law to make the
Borrower liable for Environmental Claims arising from or causally related
to the Real Property or operations of such Subsidiary as an owner or an
operator or upon any other basis.
8.08 ERISA. As soon as possible and, in any event, within
-----
fifteen Business Days after the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate knows or has reason to know of the occurrence of any
of the following, the Borrower will deliver to each of the Banks a
certificate of the chief financial officer of the Borrower setting forth
the full details as to such occurrence and the action, if any, that the
Borrower, such Subsidiary or an ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or
filed with or by the Borrower, the Subsidiary, the ERISA Affiliate, the
PBGC or any other governmental agency, or a Plan; that any contribution
required to be made by the Borrower, any Subsidiary or any ERISA Affiliate
with respect to a Plan has not been timely made; that the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate will or is reasonably
expected to incur any material liability (including any indirect,
contingent, or secondary liability) to or on account; Section 4980 of the
Code or with respect to a group health plan (as defined in Section 607(1)
of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; that the Borrower or any Subsidiary of the
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Borrower will or is reasonably expected to incur any material liability
(including any indirect, contingent, or secondary liability) with respect
to a Plan under Section 4975 of the Code or Section 409, 502 (i) or 502(1)
of ERISA; or that the Borrower or any Subsidiary of the Borrower will or is
reasonably expected to incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA). The Borrower will deliver to
each of the Banks at the request of any Bank on ten Business Days' notice a
complete copy of the annual report (on Internal Revenue Service Form 5500-
series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Banks pursuant to the first sentence hereof,
copies of any material documents or other information required to be
furnished to the PBGC, and any material notices received by the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate with respect to any
Plan shall be delivered to the Banks no later than ten Business Days after
the date such documents and/or information has been furnished to the PBGC
or such notice has been received by the Borrower, such Subsidiary or such
ERISA Affiliate, as applicable.
8.09 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used in
its business are kept in good repair, working order and condition, ordinary
wear and tear excepted, and that from time to time there are made in such
properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto,
to the extent and in the manner useful or customary for companies in
similar businesses.
8.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
------------------------------------
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii)
each of its, and each of its Subsidiaries', fiscal quarters to end on March
31, June 30, September 30 and December 31 of each year.
8.11 Additional Security; Further Assurances. (a) The Borrower
---------------------------------------
will, and will cause each of its Wholly-Owned Subsidiaries to, grant to the
Collateral Agent security interests in such assets of the Borrower and its
Subsidiaries which are of the type required to be pledged, assigned or
hypothecated pursuant to the Pledge Agreement to the extent requested from
time to time by the Administrative Agent or the Required Banks
(collectively,
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the "Additional Security Documents"). All such security interests shall be
granted pursuant to documentation reasonably satisfactory in form and
substance to the Collateral Agent and shall constitute valid and
enforceable perfected security interests and hypothecations superior to and
prior to the rights of all third Persons and enforceable as against third
parties and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have
been duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable
in connection therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at the expense of the Borrower, make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by the Security Documents
as the Collateral Agent may reasonably require. Furthermore, the Borrower
shall cause to be delivered to the Collateral Agent such opinions of
counsel and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 8.11 has been complied
with.
(c) The Borrower agrees that each action required above by this
Section 8.11 shall be completed as soon as possible, but in no event later
than 90 days after such action is either requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Banks or
required to be taken by the Borrowers and their respective Subsidiaries
pursuant to the terms of this Section 8.11; provided that in no event will
--------
the Borrower or any of its Subsidiaries be required to take any action,
other than using its commercially reasonable efforts, to obtain consents
from third parties with respect to its compliance with this Section 8.11.
8.12 Ownership of Subsidiaries. Except to the extent expressly
-------------------------
permitted herein, by applicable law or as otherwise expressly consented in
writing by the Required Banks, and except as set forth on Schedule VI each
Credit Party shall directly or indirectly own 100% of the capital stock or
other equity interests of each of their respective Subsidiaries.
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8.13 Permitted Acquisitions. (a) Subject to the provisions of
----------------------
this Section 8.13 and the requirements contained in the definition of
Permitted Acquisition, the Borrower and any of its Wholly-Owned Domestic
Subsidiaries may from time to time effect Permitted Acquisitions, so long
as (in each case except to the extent the Required Banks otherwise
specifically agree in writing in the case of a specific Permitted
Acquisition): (A) no Default or Event of Default shall be in existence at
the time of the consummation of the proposed Permitted Acquisition or
immediately after giving effect thereto, and (B) if the aggregate
consideration (which shall include, without limitation, cash or the fair
market value of assets transferred, the principal amount of assumed
Indebtedness and the principal amount of all issued promissory notes and,
without duplication, the amount of Preferred Stock canceled or retired)
exceeds $5,000,000 in the case of any Permitted Acquisition (or series of
related Permitted Acquisitions) paid, transferred, assumed, issued or
cancelled by the Borrower and its Subsidiaries (net of amounts paid to the
Borrower or its Subsidiaries by Cendant and its Subsidiaries in connection
with such Permitted Acquisition) (i) the Borrower shall have given the
Administrative Agent and the Banks at least 5 Business Days' prior written
notice of any Permitted Acquisition; (ii) calculations are made by the
Borrower of compliance with the covenants contained in Sections 9.08 and
9.09 (in each case, giving effect to the last sentence appearing therein)
for the period of four consecutive fiscal quarters (taken as one accounting
period) most recently ended prior to the date of such Permitted Acquisition
(each, a "Calculation Period"), on a Pro Forma Basis as if the respective
--- -----
Permitted Acquisition (as well as all other Permitted Acquisitions
theretofore consummated after the first day of such Calculation Period) had
occurred on the first day of such Calculation Period, and such
recalculations shall show that such financial covenants would have been
complied with if the Permitted Acquisition had occurred on the first day of
such Calculation Period (for this purpose, if the first day of the
respective Calculation Period occurs prior to the Effective Date,
calculated as if the covenants contained in said Sections 9.08 and 9.09 (in
each case, giving effect to the last sentence appearing therein) had been
applicable from the first day of the Calculation Period); (iii) based on
good faith projections prepared by the Borrower for the period from the
date of the consummation of the Permitted Acquisition to the date which is
one year thereafter, the level of financial performance measured by the
covenants set forth in Sections 9.08 and 9.09 (in each case, giving effect
to the last sentence appearing therein) shall be better than or equal to
such level as would be required to provide that no Default or Event of
Default would exist under the financial covenants contained in Sections
9.08 and 9.09 (in each case, giving effect to the last sentence appearing
therein) of this Agreement as compliance with such covenants would be
required through the date which is one year from the date of the
consummation of the respective Permitted Acquisition; (iv) calculations are
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made by the Borrower demonstrating compliance with a Total Leverage Ratio
not to exceed 2.0:1.0 on the last day of the relevant Calculation Period,
on a Pro Forma Basis as if the respective Permitted Acquisition (as well as
--- -----
all other Permitted Acquisitions theretofore consummated after the first
day of such Calculation Period) had occurred on the first day of such
Calculation Period; (v) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties
had been made on and as of the date of such Permitted Acquisition (both
before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date;
(vi) the Borrower provides to the Administrative Agent and the Banks as
soon as available but not later than 5 Business Days after the execution
thereof, a copy of any executed purchase agreement or similar agreement
with respect to such Permitted Acquisition; (vii) after giving effect to
each Permitted Acquisition (and the payment of all post-closing purchase
price adjustments required (in the good faith determination of the
Borrower) in connection therewith, the Total Unutilized Revolving Loan
Commitment shall equal or exceed $10,000,000; and (viii) the Borrower shall
have delivered to the Administrative Agent an officer's certificate
executed by an Authorized Officer of the Borrower, certifying to the best
of his knowledge, compliance with the requirements of preceding clauses (i)
through (v), inclusive, and (vii) and containing the calculations required
by the preceding clauses (ii), (iii), (iv) and (vii); provided however,
-------- -------
that so long as the aggregate consideration (which shall include without
limitation, cash or the fair market value of assets transferred, assumed
Indebtedness and the principal amount of all issued promissory notes and
the amount of all Preferred Stock canceled or retired) payable by the
Borrower and its Subsidiaries in connection with the proposed Permitted
Acquisition (or series of related Permitted Acquisitions) (net of amounts
paid to the Borrower or its Subsidiaries by Cendant and its Subsidiaries in
connection with such Permitted Acquisition) shall not exceed $30,000,000.
(b) Within 10 days of each Permitted Acquisition involving the
creation or acquisition of a Subsidiary (other than a Regulated Subsidiary
and, within 60 days of such Permitted Acquisition with respect to a De
Minimis Subsidiary), or the acquisition of capital stock or other equity
interest of any Person, the capital stock or other equity interests thereof
created or acquired in connection with such Permitted Acquisition shall be
pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement in accordance with the requirements of Section 9.13.
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(c) Within 10 days of each Permitted Acquisition, the Borrower
shall cause each Subsidiary (other than a Regulated Subsidiary and, within
60 days of the Permitted Acquisition with respect to a De Minimis
Subsidiary) which is formed to effect, or is acquired pursuant to, such
Permitted Acquisition to comply with, and to execute and deliver, all of
the documentation required by, Sections 8.11 and 9.13, to the satisfaction
of the Administrative Agent.
(d) The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that the
certifications by the Borrower (or by one or more of its Authorized
Officers) pursuant to Section 8.13(a)(A) are true and correct and that all
conditions thereto have been satisfied and that same is permitted in
accordance with the terms of this Agreement, which representation and
warranty shall be deemed to be a representation and warranty for all
purposes hereunder, including, without limitation, Sections 6 and 10.
8.14 Maintenance of Company Separateness. The Borrower will, and
-----------------------------------
will cause each of its Subsidiaries and Unrestricted Subsidiaries to,
satisfy customary Company formalities, including, as applicable, the
holding of regular board of directors' and shareholders' meetings or action
by directors or shareholders without a meeting and the maintenance of
Company offices and records. Neither the Borrower nor any of its
Subsidiaries shall make any payment to a creditor of any Unrestricted
Subsidiary in respect of any liability of any Unrestricted Subsidiary, and
no bank account of any Unrestricted Subsidiary shall be commingled with any
bank account of the Borrower or any of its Subsidiaries. Any financial
statements distributed to any creditors of any Unrestricted Subsidiary
shall clearly establish or indicate the Company separateness of such
Unrestricted Subsidiary from the Borrower and its Subsidiaries. Finally,
neither the Borrower nor any of its Subsidiaries shall take any action, or
conduct its affairs in a manner, which is likely to result in the Company
existence of the Borrower or any of its Subsidiaries or Unrestricted
Subsidiaries being ignored, or in the assets and liabilities of the
Borrower or any of its Subsidiaries being substantively consolidated with
those of any other such Person or any Unrestricted Subsidiary in a
bankruptcy, reorganization or other insolvency proceeding.
8.15 Performance of Obligations. The Borrower will, and will
--------------------------
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, loan agreement or credit
agreement and each other material agreement,
-65-
contract or instrument by which it is bound, except such non-performances
as could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
8.16 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 7.05.
SECTION 9. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Commitment has terminated, no
Letters of Credit or Notes are outstanding and the Loans, together with
interest, Fees and all other Obligations (other than any indemnities
described in Section 13.13 which are not then due and payable) incurred
hereunder, are paid in full:
9.01 Changes in Business. (a) The Borrower will not, nor will
-------------------
the Borrower permit any of its Subsidiaries to, engage directly or
indirectly in any business other than a Permitted Business.
(b) No Unrestricted Subsidiary shall engage (directly or
indirectly) in any business other than a Permitted Business.
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc. The
-------------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger, amalgamation or consolidation, or convey, sell, lease or otherwise
dispose of all or any part of its property or assets (other than inventory
in the ordinary course of business), or enter into any sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials, general
intangibles and equipment in the ordinary course of business) of any Person
or agree to do any of the foregoing at any future time, except that the
following shall be permitted:
(a) the Borrower and its Subsidiaries may, as lessee, enter
into operating leases in the ordinary course of business with respect to
real, personal, movable or immovable property;
(b) the Borrower and its Subsidiaries may make purchases, sales
and other transfers and transactions pursuant to Sections 5.8 and 5.10 of
the Stockholders Agreement, and after the Cendant Amendment Effective Date,
the Acquisition Cooperation
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Agreement and agreements entered into with Cendant or one of its
Subsidiaries to effectuate such transactions; provided that Permitted
Acquisitions shall be subject to the requirements of Section 8.13;
(c) the Borrower and its Subsidiaries may enter into license and
sublicense agreements of software, customer lists, trademarks and other
intellectual property with Cendant or one or more of its Subsidiaries and
otherwise in the ordinary course of business;
(d) the Borrower and its Subsidiaries may make (i) investments
in the Hunneman Mortgage Corporation in connection with the residential
mortgage business or (ii) investments in connection with Arbitrage Loans;
(e) Investments permitted pursuant to Section 9.05 and the
disposition or liquidation of Cash Equivalents in the ordinary course of
business;
(f) the Borrower and any of its Subsidiaries may sell or
otherwise dispose of assets (excluding capital stock of, or other equity
interests in, Subsidiaries, Joint Ventures and Unrestricted Subsidiaries)
which, in the reasonable opinion of such Person, are obsolete, uneconomic
or no longer useful in the conduct of such Person's business, provided that
--------
except with respect to asset dispositions or transfers arising out of, or
in connection with, the events described in clauses (i) and (ii) of the
definition of Recovery Event, (w) each such sale or disposition shall be
for an amount at least equal to the fair market value thereof (as
determined in good faith by senior management of the Borrower in cases of
sales in excess of $1,000,000), (x) each such sale or disposition (I)
results in consideration at least 80% of which (taking the amount of cash,
the principal amount of any promissory notes and the fair market value, as
determined by the Borrower in good faith, of any other consideration) shall
be in the form of cash or (II) results in the assumption of all of the
Capitalized Lease Obligations or other purchase money obligations of the
Borrower or such Subsidiary in respect of such asset by the purchaser
thereof, (y) the aggregate Net Sale Proceeds from all assets sold or
otherwise disposed of pursuant to this clause (d), when added to the
aggregate amount of all Capitalized Lease Obligations and all other
purchase money obligations assigned in connection with all assets sold or
otherwise disposed of pursuant to this clause (d), shall not exceed
$10,000,000 in the aggregate in any fiscal year of the Borrower and (z) the
Net Sale Proceeds therefrom are applied to reduce the Total Revolving Loan
Commitment to the extent required by Section 4.02(b) or reinvested in
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replacement assets or retained to the extent permitted by Section 4.02(b)
and/or the other relevant provisions of this Agreement;
(g) the Borrower or any Subsidiary of the Borrower may convey,
lease, license, sell or otherwise transfer all or any part of its business,
properties and assets to the Borrower or any other Guarantor, so long as
any security interests granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Documents in the assets so
transferred shall remain in full force and effect and perfected (to at
least the same extent as in effect immediately prior to such transfer) and
all actions required to maintain said perfected status have been taken;
(h) any Subsidiary of the Borrower may merge with and into, or
be dissolved or liquidated into, the Borrower or any Guarantor, so long as
(i) the Borrower or such Guarantor is the surviving corporation of any such
merger, dissolution or liquidation and (ii) any security interests granted
to the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets of such Subsidiary shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such merger, dissolution or liquidation) and
all actions required to maintain said perfected status have been taken;
(i) any Foreign Subsidiary may be merged or amalgamated with and
into, or be dissolved or liquidated into, or transfer any of its assets to,
any other Wholly-Owned Foreign Subsidiary of the Borrower, so long as (i) a
Wholly-Owned Foreign Subsidiary of the Borrower is the surviving
corporation of any such merger, amalgamation, dissolution or liquidation
and (ii) any security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Wholly-Owned Foreign Subsidiary and such Foreign Subsidiary
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, amalgamation,
dissolution, liquidation or transfer) and all actions required to maintain
said perfected status have been taken;
(j) the Borrower and its Domestic Subsidiaries may transfer
assets to Wholly-Owned Foreign Subsidiaries, so long as (x) no Default or
Event of Default exists as the time of the respective transfer and (y) the
aggregate fair market value of all such assets so transferred (determined
in good faith by the Board of Directors or senior management of the
Borrower) to all such Foreign Subsidiaries does not exceed the sum of (i)
$5,000,000
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plus (ii) the aggregate fair market value of all assets of Foreign
----
Subsidiaries of the Borrower (as determined in good faith by senior
management of the Borrower) transferred by such Foreign Subsidiaries to the
Borrower and any Guarantor, pursuant to Section 9.02(g);
(k) the Borrower and its Subsidiaries may lease, as lessor, or
sublease, as sublessor, equipment, machinery or Real Property in the
ordinary course of business, so long as such lease is for fair
consideration (determined in good faith by the Board of Directors or senior
management of the Borrower);
(l) the Borrower and any of its Subsidiaries may sell or
otherwise dispose of the capital stock of, or other equity interests in,
any of their respective Subsidiaries, Unrestricted Subsidiaries and Joint
Ventures which, in the reasonable opinion of such Person, are uneconomic or
no longer useful in the conduct of such Person's business, provided that
--------
(v) in the case of a sale or other disposition of the capital stock or
other equity interests of any Wholly-Owned Subsidiary of the Borrower, 100%
of the capital stock or other equity interests of such Subsidiary shall be
so sold or disposed of, (w) each such sale or disposition shall be for an
amount at least equal to the fair market value thereof (as determined in
good faith by senior management of the Borrower), (x) each such sale
results in consideration at least 80% of which (taking the amount of cash,
the principal amount of any promissory notes and the fair market value, as
determined by the Borrower in good faith, of any other consideration) shall
be in the form of cash, (y) the aggregate Net Sale Proceeds of all assets
sold or otherwise disposed of pursuant to this clause (l) after the
Effective Date shall not exceed $10,000,000 in the aggregate and (z) the
Net Sale Proceeds therefrom are either applied to reduce the Total
Revolving Loan Commitment as required by Section 4.02(b) or reinvested in
replacement assets or retained to the extent permitted by Section 4.02(b)
and/or the other relevant provisions of this Agreement;
(m) the Borrower and its Subsidiaries may enter into agreements
to effect acquisitions and dispositions of stock or assets, so long as the
respective transaction is permitted pursuant to the provisions of this
Section 9.02; provided that the Borrower and its Subsidiaries may enter
--------
into agreements to effect acquisitions and dispositions of capital stock or
assets in transactions not permitted by the provisions of this Section 9.02
at the time the respective agreement is entered into, so long as in the
case of each such agreement, such agreement shall be expressly conditioned
upon obtaining the requisite consent of the Required Banks under this
Agreement or the repayment of all Obligations hereunder as a condition
precedent to the consummation of the respective transaction and, if for any
reason
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the transaction is not consummated because of a failure to obtain such
consent, the aggregate liability of the Borrower and its Subsidiaries under
any such agreement shall not exceed $1,000,000;
(n) the Borrower or any of its Subsidiaries may effect
Permitted Sale-Leaseback Transactions in accordance with the definition
thereof; provided that the aggregate amount of all proceeds received by the
--------
Borrower and its Subsidiaries from all Permitted Sale-Leaseback
Transactions consummated on and after the Effective Date shall not exceed
$10,000,000.
To the extent the Required Banks waive the provisions of this Section 9.02
with respect to the sale or other disposition of any Collateral, or any
Collateral is sold or otherwise disposed of as permitted by this Section
9.02, such Collateral (unless transferred to the Borrower or a Subsidiary
thereof) shall (except as otherwise provided above) be sold or otherwise
disposed of free and clear of the Liens created by the Security Documents
and the Administrative Agent shall take such actions (including, without
limitation, directing the Collateral Agent to take such actions) as are
appropriate in connection therewith.
9.03 Liens. The Borrower will not, nor will any Borrower permit
-----
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets of any kind (real or
personal, tangible or intangible, movable or immovable) of such Borrower or
any of its Subsidiaries, whether now owned or hereafter acquired, or sell
any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including
sales of accounts receivable or notes with recourse to such Borrower or any
of its Subsidiaries) or assign any right to receive income, except for the
following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes, assessments
or governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the ordinary
course of business and which have not arisen to secure Indebtedness for
borrowed money, such as carriers', materialmen's, warehousemen's and
mechanics' Liens, statutory and common law
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landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the
Security Documents;
(d) Liens in existence on the Effective Date which are listed,
and the property subject thereto described, in Schedule VIII, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees, awards or attachments
in circumstances not constituting an Event of Default under Section 10.09,
provided that the amount of cash and property (determined on a fair market
--------
value basis) deposited or delivered to secure the respective judgment or
decree or subject to attachment shall not exceed $3,000,000 at any time;
(f) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrower and its
Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the performance
by the Borrower and its Subsidiaries of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z) to
secure the performance by the Borrower and its Subsidiaries of leases of
Real Property, to the extent incurred or made in the ordinary course of
business consistent with past practices, provided that the aggregate amount
--------
of deposits at any time pursuant to sub-clause (y) and sub-clause (z) shall
not exceed $3,000,000 in the aggregate;
(g) licenses, sublicenses, leases or subleases granted to third
Persons in the ordinary course of business not interfering in any material
respect with the business of the Borrower or any of its Subsidiaries;
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(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title, encroachments and other similar charges or
encumbrances, in each case not securing Indebtedness and not interfering in
any material respect with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases;
(j) Liens created pursuant to Capital Leases permitted pursuant
to Section 9.04(d), provided that (x) such Liens only serve to secure the
--------
payment of Indebtedness arising under such Capitalized Lease Obligation
(and other Indebtedness permitted by Section 9.04(d) and incurred from the
same Person as such Indebtedness) and (y) the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any other
asset of the Borrower or any of its Subsidiaries (other than other assets
subject to Capitalized Lease Obligations and/or Indebtedness incurred
pursuant to Section 9.04(d), in each case owing to the same Person as such
Capitalized Lease Obligation);
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages or
security interests securing Indebtedness representing the purchase price
(or financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Effective Date, provided that (i)
--------
any such Liens attach only to the assets so purchased, upgrades thereon
and, if the asset so purchased is an upgrade, the original asset itself
(and such other assets financed by the same financing source), (ii) the
Indebtedness (other than Indebtedness incurred from the same financing
source to purchase other assets and excluding Indebtedness representing
obligations to pay installation and delivery charges for the property so
purchased) secured by any such Lien does not exceed 100% of the lesser of
the fair market value or the purchase price of the property being purchased
at the time of the incurrence of such Indebtedness and (iii) the
Indebtedness secured thereby is permitted to be incurred pursuant to
Section 9.04(d);
(m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 9.04(d), and
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(ii) such Liens are not incurred in connection with, or in contemplation or
anticipation of, such Permitted Acquisition and do not attach to any other
asset of the Borrower or any of its Subsidiaries;
(n) Liens arising out of consignment or similar arrangements
for the sale of goods entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(o) Liens incurred by the Borrower and its Subsidiaries, so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
$2,000,000; and
(p) Liens securing the Indebtedness permitted under Sections
9.04(j) and (k) and encumbering the assets financed with such Indebtedness;
and
(q) Liens securing seller Indebtedness and other Indebtedness
permitted to exist under Section 9.04(d).
9.04 Indebtedness. The Borrower will not, nor will the Borrower
------------
permit any of its Subsidiaries to, contract, create, incur, assume or
suffer to exist any Indebtedness, except (without duplication):
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Existing Indebtedness outstanding on the Effective Date and
listed on Schedule III (as reduced by any repayments thereof before, on or
after the Effective Date);
(c) Indebtedness under (i) Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest rates
in respect of the Obligations otherwise permitted under this Agreement or
(ii) Other Hedging Agreements providing protection against fluctuations in
currency values in connection with the Borrower's or any of its
Subsidiaries' operations, so long as management of the Borrower or such
Subsidiary, as the case may be, has determined that the entering into of
any such Other Hedging Agreement is a bona fide hedging activity (and is
not for speculative purposes) and is in the ordinary course of business and
consistent with its past practices;
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(d) (w) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed by the Borrower or any
Wholly-Owned Domestic Subsidiary pursuant to a Permitted Acquisition as a
result of a merger or consolidation or the acquisition of an asset securing
such Indebtedness) (the "Permitted Acquired Debt"), so long as (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (ii) such Indebtedness
does not constitute debt for borrowed money (except to the extent such
Indebtedness cannot be repaid in accordance with its terms at the time of
its assumption pursuant to such Permitted Acquisition and the aggregate
principal amount of all such Indebtedness for borrowed money permitted
pursuant to this parenthetical does not exceed $15,000,000), it being
understood and agreed that Capitalized Lease Obligations and purchase money
Indebtedness shall not constitute debt for borrowed money for purposes of
this clause (ii), (x) Capitalized Lease Obligations and Indebtedness of the
Borrower and its Subsidiaries representing purchase money Indebtedness
secured by Liens permitted pursuant to Section 9.03(l), (y) Indebtedness
issued by the Borrower or its Subsidiaries to the seller of an asset or
entity constituting a Permitted Acquisition and (z) other Indebtedness of
the Borrower and its Subsidiaries, provided, that the sum of (I) the
--------
aggregate principal amount of all Permitted Acquired Debt at any time
outstanding plus (II) the aggregate amount of Capitalized Lease Obligations
----
incurred on and after the Effective Date and outstanding at any time
(including Indebtedness evidenced by Capitalized Lease Obligations arising
from Permitted Sale-Leaseback Transactions) plus (III) the aggregate
----
principal amount of all such purchase money Indebtedness incurred on and
after the Effective Date and outstanding at any time plus (IV) the
aggregate principal amount of Indebtedness permitted under clauses (y) and
(z) above, shall not exceed $75,000,000 (provided the aggregate amount of
Indebtedness under clauses (I), (II) and (III) which is secured by a Lien
or any assets of the Borrower and/or its Subsidiaries shall not exceed
$25,000,000);
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f);
(f) Indebtedness of the Borrower or any of its Subsidiaries
which may be deemed to exist in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations in
connection with acquisitions or sales of assets and/or businesses effected
in accordance with the requirements of this Agreement (so long as any such
obligations are those of the Person making the respective acquisition or
sale, and are not guaranteed by any other Person);
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(g) Contingent Obligations of (x) the Borrower or any of its
Subsidiaries as a guarantor (A) of the lessee under any lease pursuant to
which the Borrower or any of its Wholly-Owned Subsidiaries is the lessee so
long as such lease is otherwise permitted hereunder or (B) of indemnity or
similar obligations under agreements for acquisitions or dispositions of
stock or assets so long as such agreements are otherwise permitted
hereunder, (y) the Borrower or any of its Subsidiaries as a guarantor of
any Capitalized Lease Obligation to which a Joint Venture or Unrestricted
Subsidiary is a party or any contract entered into by such Joint Venture or
Unrestricted Subsidiary in the ordinary course of business; provided that
--------
the maximum liability of the Borrower or any of its Subsidiaries in respect
of any obligations as described pursuant to preceding clause (y) is
permitted as an Investment on such date pursuant to the requirements of
Section 9.05(k) and (z) the Borrower which may be deemed to exist pursuant
to acquisition agreements entered into in connection with Permitted
Acquisitions (including any obligation to pay the purchase price therefor
and any indemnification, purchase price adjustment and similar
obligations);
(h) Indebtedness with respect to performance bonds, surety
bonds, appeal bonds or customs bonds required in the ordinary course of
business or in connection with the enforcement of rights or claims of the
Borrower or any of its Subsidiaries or in connection with judgments that do
not result in a Default or an Event of Default, provided that the aggregate
--------
outstanding amount of all such performance bonds, surety bonds, appeal
bonds and customs bonds permitted by this subsection (h) shall not at any
time exceed $5,000,000;
(i) (x) Permitted Subordinated Indebtedness incurred in
accordance with the requirements of the definition thereof, so long as the
aggregate principal amount of all Indebtedness permitted by this clause
(i), when added to the aggregate liquidation preference for all
Disqualified Preferred Stock issued after the Effective Date pursuant to
Section 9.11(c), does not exceed $75,000,000 at any time outstanding;
(j) Indebtedness incurred with respect to Arbitrage Loans
entered into from time to time by the Borrower and/or its Subsidiaries; and
(k) Indebtedness in connection with mortgage warehousing lines
of credit between Hunneman Mortgage Corporation and First Union National
Bank, and any
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exhibitions or refinancing thereof on substantially similar terms so long
as such Indebtedness does not exceed $30,000,000.
9.05 Advances; Investments; Loans. The Borrower will not, nor
----------------------------
will the Borrower permit any of its Subsidiaries to, lend money or extend
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (any of
the foregoing, an "Investment"), except:
(a) the Borrower and its Subsidiaries may invest in cash and
Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of the Borrower or such
Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations and equity securities) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements and Other Hedging
Agreements entered into in compliance with Section 9.04(c) shall be
permitted;
(e) advances, loans and investments in existence on the
Effective Date and listed on Schedule IX shall be permitted, without giving
effect to any additions thereto or replacements thereof, it being
understood that any additional Investments made with respect to such
existing Investments shall be permitted only if independently justified
under the other provisions of this Section 9.05;
(f) any Credit Party may make intercompany loans and advances
to any other Credit Party and any Credit Party may make intercompany loans
and advances to any Foreign Subsidiary that is not a Credit Party
(collectively, "Intercompany Loans"), provided, that (w) at no time shall
--------
the aggregate outstanding principal amount of all
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Intercompany Loans made pursuant to this clause (f) by the Credit Parties
to Foreign Subsidiaries, when added to the amount of contributions,
capitalizations and forgiveness theretofore made pursuant to Section
9.05(o) exceed $5,000,000 (determined without regard to any write-downs or
write-offs of such loans and advances), (x) each Intercompany Loan in
excess of $500,000 shall be evidenced by an Intercompany Note, (y) each
such Intercompany Note shall be pledged to the Collateral Agent pursuant to
the Pledge Agreement;
(g) loans and advances by the Borrower and its Subsidiaries to
employees, officers and directors of the Borrower and its Subsidiaries in
connection with relocations, purchases by such employees of Borrower Common
Stock or options or similar rights to purchase Borrower Common Stock and
other ordinary course of business purposes (including travel and
entertainment expenses) shall be permitted, so long as the aggregate
principal amount thereof at any time outstanding (determined without regard
to any write-downs or write-offs of such loans and advances) shall not
exceed $3,000,000;
(h) the Borrower may acquire and hold obligations of one or
more officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Borrower Common Stock, so long as no cash is actually advanced by the
Borrower or any of its Subsidiaries to such officers or employees in
connection with the acquisition of any such obligations;
(i) the Borrower and any of its Subsidiaries may make Permitted
Acquisitions in accordance with the relevant requirements of Section 8.13
and the component definitions as used therein;
(j) the Borrower and its Subsidiaries may own the capital stock
of their respective Subsidiaries created or acquired in accordance with the
terms of this Agreement;
(k) so long as no Default or Event of Default exists or would
exist immediately after giving effect to the respective Investment, the
Borrower and its Wholly-Owned Domestic Subsidiaries shall be permitted to
make Investments in (x) any Joint Venture on any date in an amount not to
exceed the Available Basket Amount on such date and (y) any Unrestricted
Subsidiary on any date in an amount not to exceed the Available Basket Sub-
Limit on such date (after giving effect to all prior and contemporaneous
adjustments thereto, except as a result of such Investment), it being
understood and agreed
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that, to the extent the Borrower or one or more other Credit Parties (after
the respective Investment has been made) receives a cash return from the
respective Joint Venture or Unrestricted Subsidiary of amounts previously
invested pursuant to this clause (k) (which cash return may be made by way
of repayment of principal in the case of loans and cash equity returns
(whether as a distribution, dividend or redemption) in the case of equity
investments) or a return in the form of an asset distribution from the
respective Joint Venture or Unrestricted Subsidiary of any asset previously
contributed pursuant to this clause (k) then the amount of such cash return
of investment or the fair market value of such distributed asset (as
determined in good faith by senior management of the Borrower), as the case
may be, shall, upon the Administrative Agent's receipt of a certification
of the amount of the return of investment from an Authorized Officer, apply
to increase the Available Basket Amount and/or the Available Basket Sub-
Limit, as applicable, provided that the aggregate amount of increases to
--------
the Available Basket Amount and/or the Available Basket Sub-Limit described
above shall not exceed the amount of returned investment and, in no event,
shall the amount of the increases made to the Available Basket Amount
and/or the Available Basket Sub-Limit in respect of any Investment exceed
the amount previously invested pursuant to this clause (k);
(l) the Borrower and its Subsidiaries may receive and hold
promissory notes and other non-cash consideration received in connection
with any asset sale permitted by Sections 9.02(d), (f) and (l);
(m) the Borrower and its Subsidiaries may convey, lease,
license, sell or otherwise transfer assets and properties to the extent
permitted by Sections 9.02(b), (d), (g), (i), (j), (k) and (n);
(n) the Borrower and its Subsidiaries may make advances in the
form of a prepayment of expenses, so long as such expenses were incurred in
the ordinary course of business and are being paid in accordance with
customary trade terms of the Borrower or such Subsidiary;
(o) the Borrower and its Domestic Subsidiaries may make cash
capital contributions to Foreign Subsidiaries, and may capitalize or
forgive any Indebtedness owed to them by a Foreign Subsidiary and
outstanding under clause (f) of this Section 9.05, provided that the
--------
aggregate amount of such contributions, capitalizations and forgiveness on
and after the Effective Date, when added to the aggregate outstanding
principal amount of
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Intercompany Loans made to Foreign Subsidiaries under such clause (f)
(determined without regard to any write-downs or write-offs thereof) shall
not exceed an amount equal to $10,000,000;
(p) the Borrower and its Subsidiaries may make the investments
listed on, and in the amounts described on Schedule XII hereto;
(q) the Borrower and any Guarantor may make cash equity
contributions to any Guarantor;
(r) the Borrower and its Subsidiaries may make investments in
connection with any joint venture with Cendant or affiliates thereof
involving the residential mortgage business; and
(s) in addition to investments permitted by clauses (a) through
(r) of this Section 9.05, the Borrower and its Subsidiaries may make
additional loans, advances and Investments to or in a Person in an
aggregate amount for all loans, advances and Investments made pursuant to
this clause (s) (determined without regard to any write-downs or write-offs
thereof), net of cash repayments of principal in the case of loans, sale
proceeds in the case of Investments in the form of debt instruments and
cash equity returns (whether as a distribution, dividend, redemption or
sale) in the case of equity investments, not to exceed $10,000,000.
9.06 Dividends; etc. The Borrower will not, nor will the
--------------
Borrower permit any of its Subsidiaries to, declare or pay any dividends
(other than dividends payable solely in common stock of such Borrower or
any such Subsidiary, as the case may be) or return any capital to, its
stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock, now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of
the foregoing purposes, and the Borrower will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares
of any class of the capital stock of the Borrower or any other Subsidiary,
as the case may be, now or hereafter outstanding (or any options or
warrants or stock appreciation rights issued by such Person with respect to
its capital stock) or enter into any derivatives or other transaction with
any financial institution, commodities or stock
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exchange or clearinghouse (a "Derivatives Counterparty") obligating it to
make payments to such Derivatives Counterparty as a result of any change in
market value of its capital stock (all of the foregoing "Dividends"),
except that:
(i) any Subsidiary of the Borrower may pay Dividends (directly
or indirectly) to the Borrower or any Guarantor;
(ii) the Borrower may redeem or purchase shares of Borrower
Common Stock or options to purchase Borrower Common Stock, as the case may
be, held by former employees or directors of the Borrower or any of its
Subsidiaries following the termination of their employment (by death,
disability or otherwise), provided that (w) the only consideration paid by
--------
the Borrower in respect of such redemptions and/or purchases shall be cash,
forgiveness of liabilities and/or Shareholder Subordinated Notes, (x) the
sum of (A) the aggregate amount paid by the Borrower in cash in respect of
all such redemptions and/or purchases plus (B) the aggregate amount of
liabilities so forgiven and (C) the aggregate amount of all cash principal
and interest payments made on Shareholder Subordinated Notes, in each case
after the Effective Date, shall not exceed $5,000,000, and (y) at the time
of any cash payment or forgiveness of liabilities permitted to be made
pursuant to this Section 9.06(ii), including any cash payment under a
Shareholder Subordinated Note, no Default or Event of Default shall then
exist or result therefrom;
(iii) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may pay regularly accruing cash Dividends on
Disqualified Preferred Stock issued pursuant to Section 9.11(c), with such
Dividends to be paid in accordance with the terms of the respective
certificate of designation therefor;
(iv) any non-Wholly-Owned Subsidiary of the Borrower may pay
cash Dividends to its shareholders or partners generally, so long as the
Borrower or its respective Subsidiary which owns the equity interest or
interests in the Subsidiary paying such Dividends receives at least its
proportionate share thereof (based upon its relative holdings of equity
interest in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity
interests in such Subsidiary or the terms of any agreements applicable
thereto);
(v) so long as no Default or Event of Default exists or would
arise therefrom, the Borrower may pay special dividends in an amount equal
to the sum of (i)
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$15,000,000 plus (ii) cash received by the Borrower from Cendant and/or its
Subsidiaries in the first six months after the Effective Date in connection
with the Cendant Documents;
(vi) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may, after the Qualified IPO, redeem the
Existing Preferred Stock with the proceeds received therefrom;
(vii) so long as no Default or Event of Default exists or
would result therefrom, the Borrower may pay cash Dividends on the Existing
Preferred Stock payable in accordance with the terms thereof;
(viii) so long as no Default or Event of Default exists or
would result therefrom, after a Qualified IPO, the Borrower may pay
additional Dividends, not to exceed an amount equal to (x) the Consolidated
Cumulative Net Income Amount at the time of such payment minus (y) all
Dividends paid pursuant to this Section 9.06(viii) prior to such payment;
(ix) the Borrower may cancel the Existing Preferred Stock held
by Cendant in connection with transactions under, and pursuant to the
provisions of Sections 5.10 and 5.18 of the Stockholders Agreement, and
after the Cendant Amendment Effective Date, the Acquisition Cooperation
Agreement; and
(x) to the extent constituting Dividends, all payments or
transfers made by the Borrower and/or its Subsidiaries pursuant to the
Cendant Documents.
9.07 Transactions with Affiliates and Unrestricted
---------------------------------------------
Subsidiaries. The Borrower will not, nor will the Borrower permit any of
its Subsidiaries to, enter into any transaction or series of transactions
with any Affiliate of the Borrower or any of its Subsidiaries or any of its
Unrestricted Subsidiaries other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be reasonably
expected to be obtainable by the Borrower or such Subsidiary at the time in
a comparable arm's-length transaction with a Person other than an
Affiliate; provided, that the following shall in any event be permitted:
--------
(i) the Borrower may pay fees, royalties, and any and all other amounts
payable under the Franchise Agreements and the other Cendant Documents;
(ii) intercompany transactions among the Borrower and its Subsidiaries to
the extent expressly permitted by Sections 9.02, 9.04, 9.05 and 9.06 shall
be permitted; (iii) so long as no Default or Event of Default is then in
existence or would result therefrom, payments due to
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Apollo in an aggregate amount not to exceed $1,000,000 in any fiscal
quarter of the Borrower pursuant to, and in accordance with the terms of,
the Advisory Services Agreement, provided that, if during any fiscal
--------
quarter of the Borrower, a Default or Event of Default is in existence and
such fees cannot be paid as provided above, such fees shall continue to
accrue and may be paid at such time as all Defaults and Events of Default
have been cured or waived and so long as no Default or Event of Default
will exist immediately after giving effect to the payment thereof; (iv)
customary fees to non-officer directors of the Borrower and its
Subsidiaries; (v) the Borrower and its Subsidiaries may enter into
employment arrangements with respect to the procurement of services with
their respective officers and employees in the ordinary course of business;
(vi) the reimbursement of Apollo and Cendant for their out-of-pocket
expenses incurred in connection with performing management services to the
Borrower and its Subsidiaries or in connection with this Agreement, the
Cendant Documents or the Stockholders Agreement and the transactions
contemplated thereby; (vii) the payment of consulting, management or other
fees to the Borrower or any Guarantor by any of their respective
Subsidiaries in the ordinary course of business; (viii) the payment of
marketing fees to the Borrower by Cendant Mortgage in connection with the
Marketing Agreement, and after the Cendant Amendment Effective Date, the
payments relating to of such fees in any joint venture between Cendant
and/or its Subsidiaries and the Borrower; and (ix) the transactions set
forth on Schedule XI hereto. In no event shall any management, consulting
or similar fee be paid or payable by the Borrower or any of its
Subsidiaries to any Person except in compliance with this Section 9.07.
9.08 Consolidated Adjusted Interest Coverage Ratio. The Borrower
---------------------------------------------
will not permit the Consolidated Adjusted Interest Coverage Ratio for any
Test Period ending after the Effective Date to be less than 2.00:1.00.
Notwithstanding anything to the contrary contained in this Agreement, all
calculations of compliance with this Section 9.08 shall be made on a Pro
---
Forma Basis.
-----
9.09 Total Leverage Ratio. The Borrower will not permit the
--------------------
Total Leverage Ratio on the last day of any fiscal quarter ending
after the Effective Date to exceed 2.00:1.00 .
Notwithstanding anything contrary contained above or elsewhere in this
Agreement, all calculations of compliance with this Section 9.09 shall be
made on a Pro Forma Basis.
--- -----
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9.10 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
------------------------------------------------------------------------
Certain Other Agreements; Issuances of Capital Stock; etc. Except as set
----------------------------------------------------------
forth in Schedule XII in connection with the Qualified IPO, the Borrower
will not, nor will the Borrower permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification
of, any provision of any Shareholder Subordinated Note, any Existing
Preferred Stock, or, after the incurrence or issuance thereof, any
Qualified Preferred Stock or Permitted Debt or of any agreement
(including, without limitation, any purchase agreement, indenture,
loan agreement, security agreement or certificate of designation)
relating thereto in a manner that could reasonably be expected to in
any way be adverse to the interests of the Banks;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or
acquisition for value of, or any prepayment or redemption as a result
of any asset sale, change of control or similar event of, after the
incurrence thereof, any Permitted Debt, or enter into any derivative
or other transaction with any Derivatives Counterparty obligating it
to make payments to such Derivatives Counterparty as a result of any
change in market value of any of the foregoing agreements;
(iii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of,
any Shareholder Subordinated Note (except to the extent permitted by
Section 9.06(ii)); and
(iv) amend, modify or change in any way which could reasonably
be expected to be adverse to the interests of the Banks in any
material respect any Management Agreement, any Cendant Document (other
than the amendments thereto contemplated in connection with any
Cendant Amendment Effective Date), its certificate of incorporation
(including, without limitation, by the filing or modification of any
certificate of designation other than any certificates of designation
relating to Qualified Preferred Stock or Disqualified Preferred Stock
issued as permitted herein), by-laws, certificate of partnership,
partnership agreement, certificate of limited liability company,
limited liability company agreement or any agreement entered into by
it, with respect to its capital stock or other equity interest
(including any Shareholders' Agreement (other than the amendments
thereto
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contemplated in connection with any Cendant Amendment Effective
Date)), or enter into any new Management Agreement or agreement with
respect to its capital stock or other equity interest which could
reasonably be expected to in any way be adverse to the interests of
the Banks in any material respect; provided that the foregoing clause
--------
shall not restrict the ability of the Borrower and its Subsidiaries to
amend their respective certificates of incorporation to authorize the
issuance of capital stock otherwise permitted to be issued pursuant to
the terms of this Agreement.
9.11 Limitation on Issuance of Capital Stock. (a) The Borrower
---------------------------------------
will not, nor will the Borrower permit any of its Subsidiaries to, issue
(i) any Preferred Stock (other than (x) the Existing Preferred Stock or
Preferred Stock issued pursuant to clauses (c) and (d) below, respectively
and (y) Preferred Stock issued pursuant to capital calls under Section 5.7
of the Stockholders Agreement) or any options, warrants or rights to
purchase Preferred Stock or (ii) any redeemable common stock unless, in
either case, the issuance thereof is, and all terms thereof are,
satisfactory to the Required Banks in their sole discretion.
(b) The Borrower shall not permit any of its Subsidiaries to
issue any capital stock (including by way of sales of treasury stock) or
any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then
outstanding shares of capital stock, (ii) for stock splits, stock dividends
and additional issuances which do not decrease the percentage ownership of
the Borrower or any of its Subsidiaries in any class of the capital stock
of such Subsidiaries, (iii) to qualify directors to the extent required by
applicable law, (iv) Subsidiaries formed after the Effective Date pursuant
to Section 9.13 may issue capital stock in accordance with the requirements
of Section 9.13 and (v) that Subsidiaries may issue common stock in
connection with any transaction permitted by Section 9.05(q). All capital
stock issued in accordance with this Section 9.12(b) shall, to the extent
required by the Pledge Agreement, be delivered to the Collateral Agent for
pledge pursuant to such Pledge Agreement.
(c) The Borrower may issue Disqualified Preferred Stock so long
as (i) no Default or Event of Default then exists or would exist
immediately after giving effect to the respective issuance, (ii) the
aggregate liquidation preference for all Disqualified Preferred Stock
issued after the Effective Date pursuant to this Section 9.12(c) shall not
exceed, when combined with the aggregate principal amount of all then
outstanding Indebtedness permitted by Section 9.04(i), $75,000,000 (iii)
with respect to each issue of Disqualified Preferred Stock, the gross cash
proceeds therefrom (or in the case of Disqualified Preferred Stock
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directly issued as consideration for a Permitted Acquisition, the fair
market value thereof (as determined in good faith by the Borrower) of the
assets received therefor) shall not exceed the liquidation preference
thereof at the time of issuance, (iv) calculations are made by the Borrower
of compliance with the covenants contained in Sections 9.08 and 9.09 for
the Calculation Period most recently ended prior to the date of the
respective issuance of Disqualified Preferred Stock, on a Pro Forma Basis
--- -----
after giving effect to the respective issuance of Disqualified Preferred
Stock, and such calculations shall show that such financial covenants would
have been complied with if such issuance of Disqualified Preferred Stock
had been consummated on the first day of the respective Calculation Period,
and (v) the Borrower shall furnish to the Administrative Agent a
certificate by an Authorized Officer of the Borrower certifying to the best
of his or her knowledge as to compliance with the requirements of this
Section 9.12(c) and containing the pro forma calculations required by the
--- -----
preceding clause (iv).
(d) The Borrower may issue Qualified Preferred Stock so long
as, with respect to each issue of Qualified Preferred Stock, the Borrower
receives reasonably equivalent consideration (as determined in good faith
by the Borrower).
9.12 Limitation on Certain Restrictions on Subsidiaries. The
--------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or
become effective, any encumbrance or restriction on the ability of any such
Subsidiary to (x) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits owned
by the Borrower or any Subsidiary of the Borrower, or pay any Indebtedness
owed to the Borrower or a Subsidiary of the Borrower, (y) make loans or
advances to the Borrower or any Subsidiary of the Borrower or (z) transfer
any of its properties or assets to the Borrower or any of its Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of
(i) applicable law, (ii) this Agreement, the other Credit Documents and the
Cendant Documents, (iii) the provisions contained in the Existing
Indebtedness, (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower, (v) customary provisions restricting assignment
of any contract entered into by the Borrower or any Subsidiary of the
Borrower in the ordinary course of business, (vi) any agreement or
instrument governing Permitted Acquired Debt, which encumbrance or
restriction is not applicable to any Person or the properties or assets of
any Person, other than the Person or the properties or assets of the Person
acquired pursuant to the respective Permitted Acquisition and so long as
the respective encumbrances or restrictions were not
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created (or made more restrictive) in connection with or in anticipation of
the respective Permitted Acquisition, (vii) customary provisions
restricting subletting or assignments of leases and/or customary provisions
restricting subletting or assignments of leases and/or non-assignment
provisions entered into in the ordinary course of business and consistent
with past practices; (viii) customary provisions restricting the assignment
of licensing agreements, management agreements or franchise agreements
entered into by the Borrower or any of its Subsidiaries in the ordinary
course of business; (ix) restrictions applicable to any Joint Venture that
is a Subsidiary existing at the time of the acquisition thereof as a result
of an Investment pursuant to Section 9.05 or a Permitted Acquisition
effected in accordance with Section 8.13, provided that the restrictions
--------
applicable to the respective such Joint Venture are not made worse, or more
burdensome, from the perspective of the Borrower and its Subsidiaries, than
those as in effect immediately before giving effect to the consummation of
the respective Investment or Permitted Acquisition, (x) any restriction or
encumbrance with respect to a Subsidiary imposed pursuant to an agreement
which has been entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such Subsidiary, so
long as such sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary is permitted under this Agreement and
(xi) the documentation governing Permitted Debt (other than Permitted
Acquired Debt).
9.13 Limitation on the Creation of Subsidiaries, Joint Ventures
----------------------------------------------------------
and Unrestricted Subsidiaries. (a) Notwithstanding anything to the contrary
-----------------------------
contained in this Agreement, the Borrower will not, and will not permit any
of its Subsidiaries to, establish, create or acquire after the Effective
Date any Subsidiary or Unrestricted Subsidiary (other than Joint Ventures
permitted to be established in accordance with the requirements of Section
9.05(k)); provided that (A) the Borrower, any of its Wholly-Owned Domestic
--------
Subsidiaries and any Unrestricted Subsidiary shall be permitted to
establish or create an Unrestricted Subsidiary, so long as (i) if a
Domestic Unrestricted Subsidiary of the Borrower, all of the capital stock
or other equity interests of such new Domestic Unrestricted Subsidiary
owned by the Borrower or any such Wholly-Owned Domestic Subsidiary shall be
pledged pursuant to the Pledge Agreement to the extent then required
thereunder and the certificates representing such stock or other equity
interests, together with appropriate powers duly executed in blank, shall
be delivered to the Collateral Agent and (ii) if a Foreign Unrestricted
Subsidiary of the Borrower, all of the capital stock or other equity
interests of such new Foreign Unrestricted Subsidiary owned by the Borrower
or any such Wholly-Owned Domestic Subsidiary (except that not more than 65%
of the outstanding voting stock of any Foreign Unrestricted Subsidiary need
be so pledged, except in the circumstances
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contemplated by Section 8.12) shall be pledged pursuant to the Pledge
Agreement and the certificates representing such stock or other equity
interests, together with appropriate powers duly executed in blank, shall
be delivered to the Collateral Agent, (B) the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to establish or create Wholly-Owned
Subsidiaries so long as, in each case, (i) at least 10 days' prior written
notice thereof is given to the Administrative Agent (or such shorter period
of time as is acceptable to the Administrative Agent), (ii) the capital
stock or other equity interests of such new Subsidiary (other than any
Regulated Subsidiary) are promptly pledged pursuant to, and to the extent
required by, this Agreement and the Pledge Agreement and the certificates,
if any, representing such stock or other equity interests, together with
stock or other appropriate powers duly executed in blank, are delivered to
the Collateral Agent, (iii) in the case of a Domestic Subsidiary (other
than any Regulated Subsidiary), such new Domestic Subsidiary promptly
executes a counterpart of the Subsidiaries Guaranty and the Pledge
Agreement, (C) Subsidiaries may be acquired pursuant to Permitted
Acquisitions so long as, in each such case (i) with respect to each Wholly-
Owned Subsidiary acquired pursuant to a Permitted Acquisition, the actions
specified in preceding clauses (B) and (C), as applicable, shall be taken
and (ii) with respect to each Subsidiary which is not a Wholly-Owned
Subsidiary and is acquired pursuant to a Permitted Acquisition, all capital
stock or other equity interests thereof owned by any Credit Party shall be
pledged pursuant to the Pledge Agreement, and (D) the Borrower and any of
its Wholly-Owned Subsidiaries shall be permitted to establish or create
Wholly-Owned Subsidiaries with Cendant principally involved in the
residential mortgage business. In addition, each new Subsidiary that is
required to execute any Credit Document shall execute and deliver, or cause
to be executed and delivered, all other relevant documentation of the type
described in Section 5.
(b) The Borrower will not, nor permit any of its Subsidiaries
to, enter into any Joint Venture, except to the extent permitted by
Sections 9.05(k) and (r).
9.14 De Minimis Subsidiaries. Notwithstanding anything to the
-----------------------
contrary stated herein, a De Minimis Subsidiary of the Borrower shall not be
required to comply with any of the covenants set forth in Section 8, Section 9
(other than Sections 9.01, 9.04, 9.08 and 9.09) or the representations and
warranties set forth in Section 7 until such De Minimis Subsidiaries become
Credit Parties as required under this Agreement and the other Credit Documents;
provided, however, that (i) the value of assets held in all De Minimis
-------- -------
Subsidiaries shall not exceed $35,000,000 and (ii) the gross revenues of all De
Minimis
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Subsidiaries at any time shall not exceed 7.5% of the gross revenues of the
Borrower and its Subsidiaries at such time.
9.15 Burnet Realty, Inc. Title Insurance Business.
--------------------------------------------
Notwithstanding anything to the contrary stated herein or in any other
Credit Document, Burnet Realty, Inc., will be permitted to transfer all of
its assets which relate to its title insurance business to a Subsidiary
after the Effective Date. Such title insurance subsidiary will be a
Regulated Subsidiary (as such term is defined herein) and treated as a
Regulated Subsidiary hereunder.
SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
--------
when due of any principal of the Loans or (ii) default, and such default
shall continue for three or more Business Days, in the payment when due of
any Unpaid Drawing, any interest on the Loans or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
--------------------
statement made by any Credit Party herein or in any other Credit Document
or in any statement or certificate delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
10.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement
contained in Section 8.01(e)(i), 8.10, 8.12, 8.13 or 9, or (b) default in
the due performance or observance by it of any term, covenant or agreement
(other than those referred to in Section 10.01, 10.02 or clause (a) of this
Section 10.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after notice to the defaulting
party by the Administrative Agent or the Required Banks; or
10.04 Default Under Other Agreements. (a) The Borrower or any of
------------------------------
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if
any, provided in the instrument or agreement under which Indebtedness was
created or (ii) default in the observance or performance of any agreement
or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the
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holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause (determined without regard to whether any
notice is required), any such Indebtedness to become due prior to its
stated maturity; or (b) any Indebtedness (other than the Obligations) of
the Borrower or any of its Subsidiaries shall be declared to be due and
payable, or shall be required to be prepaid other than by a regularly
scheduled required prepayment or as a mandatory prepayment (unless such
required prepayment or mandatory prepayment results from a default
thereunder or an event of the type that constitutes an Event of Default),
prior to the stated maturity thereof; provided, that it shall not
--------
constitute an Event of Default pursuant to clause (a) or (b) of this
Section 10.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to
in clauses (a) and (b) above, exceeds $2,500,000 at any one time; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
---------------
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Subsidiaries and the petition
is not controverted within 20 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of the Borrower or any of its Subsidiaries; or the
Borrower or any of its Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any of its
Subsidiaries; or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of
60 days; or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or the Borrower or any of its
Subsidiaries suffers any appointment of any custodian or the like for it or
any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
10.06 ERISA. (a) (i) Any Plan shall fail to satisfy the minimum
-----
funding standard required for any plan year or part thereof under Section
412 of the Code or Section 302 of ERISA or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412
of the Code or Section 303 or 304 of ERISA, (ii) a Reportable
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Event shall have occurred, (iii) a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall
be subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof) and an event
described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur within the
following 30 days, (iv) any Plan which is subject to Title IV of ERISA
shall have had or is likely to have a trustee appointed to administer such
Plan, (v) any Plan which is subject to Title IV of ERISA is, shall have
been or is likely to be terminated or to be the subject of termination
proceedings under ERISA, (vi) any Plan shall have an Unfunded Current
Liability, (vii) a contribution required to be made by the Borrower or any
Subsidiary of the Borrower with respect to a Plan has not been timely made,
(viii) the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur any liability to or on account of a Plan under Section 409,
502(i) or 502(1) of ERISA or Section 4975 of the Code, (ix) the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate has incurred or is
likely to incur any liability to or on account of a Plan under Section
4062, 4063, 4064, 4069 of ERISA or Section 401(a)(29) or 4971 of the Code
or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, ; or
(x) the Borrower or the Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide benefits
to retired employees or other former employees (other than as required by
Section 601 of ERISA) or pursuant to any Plan; (b) there shall result from
any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a
liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the reasonable opinion of the Required Banks,
has had, or could reasonably be expected to have, a Material Adverse
Effect; or
10.07 Security Documents. (a) The Pledge Agreement, or after the
------------------
execution and delivery thereof, any Additional Security Document, shall
cease to be in full force and effect, or shall cease to give the Collateral
Agent the Liens, rights, powers and privileges purported to be created
thereby in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 9.03), and
subject to no other Liens (except as permitted by Section 9.03), or (b) any
Credit Party shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to such security Documents and such default shall continue beyond
any cure or grace period specifically applicable thereto pursuant to the
terms of the Pledge Agreement; or
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10.08 Guaranties. The Subsidiaries Guaranty or any provision
----------
thereof shall cease to be in full force and effect, or any Guarantor or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under the Subsidiaries Guaranty or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
---------
entered against the Borrower or any of its Subsidiaries involving a
liability (to the extent not paid or not fully covered by insurance) in
excess of $10,000,000 for all such judgments and decrees and all such
judgments or decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 60 days from the entry thereof; or
10.10 Ownership. A Change of Control Event shall have occurred;
---------
or
10.11 Franchise Agreements. A (i) termination of any Franchise
--------------------
Agreement or (ii) default which would enable the franchisor to terminate
any Franchise Agreement or receive liquidated damage payments applicable to
substantially all of the Borrower's offices, under, any of the Franchise
Agreements shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Banks, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights
of the Administrative Agent or any Bank to enforce its claims against any
Guarantor or the Borrower, except as otherwise specifically provided for in
this Agreement (provided, that if an Event of Default specified in Section
--------
10.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically without
the giving of any such notice): (i) declare the Total Revolving Loan
Commitment terminated, whereupon the Revolving Loan Commitment of each Bank
shall forthwith terminate immediately and any Commitment Fees shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans
and all Obligations owing hereunder (including Unpaid Drawings) to be,
whereupon the same shall become, forthwith due and payable by the Borrower
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; (iii) enforce, as Collateral Agent
(or direct the Collateral Agent to enforce), any
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or all of the Liens and security interests created pursuant to the
Security Documents; (iv) terminate any Letter of Credit which may be
terminated in accordance with its terms; (v) direct the Borrower to pay
(and the Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 10.05, to pay) to
the Collateral Agent at the Payment Office such additional amounts of cash,
to be held as security for the Borrower's reimbursement obligations in
respect of Letters of Credit then outstanding, equal to the aggregate
Stated Amount of all Letters of Credit then outstanding; and (vi) apply any
cash collateral as provided in Section 4.02.
SECTION 11. Definitions. As used herein, the following terms
-----------
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular:
"Acquired Business" shall mean any Person or business, division
or product line acquired pursuant to a Permitted Acquisition.
"Acquired Person" shall have the meaning provided in the
definition of Permitted Acquisition.
"Acquired Revenues" shall mean, with respect to any Acquired
Business, the gross revenues of such Acquired Business for the twelve-month
period most recently ended prior to the date of the acquisition of such
Acquired Business as set forth in the financial statements for such
Acquired Business delivered to the Borrower and the Banks in connection
with such acquisition.
"Acquisition Cooperation Agreement" shall mean the Acquisition
Cooperation Agreement dated as of the Cendant Amendment Effective Date, by
and between the Borrower and Cendant.
"Acquisition Services Agreement" shall mean the Acquisition
Services Agreement, dated as of the Cendant Amendment Effective Date, by
and between the Borrower and Cendant.
"Additional Royalty Agreement" shall mean the Additional Royalty
Agreement dated as of August 11, 1997 by and among the Borrower, Coldwell
Banker Real Estate Corporation, Century 21 Real Estate Corporation and HFS
Incorporated.
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"Additional Security Documents" shall have the meaning provided
in Section 8.11.
"Administrative Agent" shall have the meaning provided in the
first paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.10.
"Advisory Services Agreement" shall mean the Advisory Services
Agreement, dated as of August 11, 1997, by and between the Borrower and
Apollo Management, L.P.
"Affected Loans" shall have the meaning provided in Section
4.02(e).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person; provided, however, that for
-------- -------
purposes of Section 9.07, an Affiliate of the Borrower shall include any
Person that directly or indirectly owns more than 5% of any class of the
capital stock of the Borrower and any officer or director of the Borrower
or any such Person.
"Aggregate Revolving Credit Exposure" shall mean, at any time,
the sum of (I) the aggregate principal amount of all Revolving Loans then
outstanding plus (II) the aggregate principal amount of all Swingline Loans
then outstanding plus (III) the aggregate amount of all Letter of Credit
Outstandings at such time.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time modified, amended and/or supplemented.
"Applicable Margin" shall mean a percentage equal to (i) in the
case of Loans maintained as (x) Base Rate Loans, 0.75% and (y) Eurodollar
Loans, 1.75%.
"Applicable Prepayment Percentage" shall mean, at any time, 100%.
"Apollo Group" shall mean Apollo Management, L.P., Apollo
Advisors, L.P., Apollo Investment Fund, L.P., Apollo Investment Fund III,
L.P., Apollo Overseas Partners III, L.P., Apollo (U.K.) Partners III, L.P.,
AIF II, L.P., and Apollo Advisors II, L.P., all
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Delaware limited partnerships (except that Apollo (U.K.) Partners III, L.P. is a
limited partnership organized under the laws of England).
"Arbitrage Loans" shall mean any loan incurred in the ordinary course
of business, in connection with title insurance and escrow operations to the
extent that the principal and interest thereon is secured by an amount of cash
or U.S. governmental securities to ensure the full payment of principal and
interest after giving effect to the interest income earned thereon.
"Arranger" shall have the meaning provided in the first paragraph of
this Agreement.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Borrower or
such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business, (ii) dispositions or
transfers arising out of, or in connection with, the events described in clauses
(i) and (ii) of the definition of Recovery Event, (iii) any sale or other
disposition of Cash Equivalents in the ordinary course of business, (iv) any
merger, consolidation or liquidation permitted by Sections 9.02(f) and (g), (v)
any transfer of assets permitted pursuant to Section 9.02(e), (g), (i) or (j),
(vi) any transaction permitted pursuant to Section 9.02(m), (vii) sales,
transfers and other dispositions made pursuant to Section 5.8 of the
Stockholders Agreement, and after the Cendant Amendment Effective Date, the
Acquisition Cooperation Agreement or one or more agreements entered into with
Cendant or one of its subsidiaries to effectuate same and (viii) other sales and
dispositions that generate Net Sale Proceeds of less than $2,500,000 in the
aggregate in any fiscal year of the Borrower.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Authorized Officer" shall mean, with respect to (i) the delivery of
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, the chief operating officer, any treasurer or other financial
officer of the Borrower, (ii) delivery of financial information and officer's
certificates pursuant to this Agreement, the chief operating
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officer, any treasurer or other financial officer of the Borrower and (iii) any
other matter in connection with this Agreement or any other Credit Document, any
officer (or a person or persons so designated by any two officers) of the
Borrower, in each case to the extent reasonably acceptable to the Administrative
Agent.
"Available Basket Amount" shall mean, on any date of determination, an
amount equal to the sum of (i) $15,000,000 minus (ii) the aggregate amount of
-----
Investments made pursuant to Section 9.05(k) after the Effective Date minus
-----
(iii) the aggregate amount of Indebtedness or other obligations (whether
absolute, accrued, contingent or otherwise and whether or not due) of any Joint
Venture or Unrestricted Subsidiary for which the Borrower or any of its
Subsidiaries (other than the respective Joint Venture or Unrestricted
Subsidiary) is liable, minus (iv) all payments made by the Borrower or any of
-----
its Subsidiaries (other than the respective Joint Venture) in respect of
Indebtedness or other obligations of the respective Joint Venture or
Unrestricted Subsidiary (including, without limitation, payments in respect of
obligations described in preceding clause (iii)) after the Effective Date, plus
----
(v) the amount of any increase to the Available Basket Amount made after the
Effective Date in accordance with the provisions of Section 9.05(k). In
connection with the foregoing, it is understood that the acquisition of an
Acquired Person which has ownership interests in one or more Joint Ventures,
pursuant to a Permitted Acquisition effected in accordance with the relevant
requirements of this Agreement shall not be deemed to constitute an Investment
pursuant to Section 9.05(k) and the Available Basket Amount shall not be reduced
as a result of the payment of consideration owing to effect the Permitted
Acquisition (although the Available Basket Amount would be affected to the
extent preceding clauses (iii) or (iv) apply with respect to the Joint Venture
so acquired or to the extent additional Investments are made in the respective
Joint Venture pursuant to Section 9.05(k)).
"Available Basket Sub-Limit" shall mean, on any date of determination,
an amount equal to the sum of (i) $5,000,000 minus (ii) the aggregate amount of
-----
Investments made in Unrestricted Subsidiaries pursuant to Section 9.05(k) after
the Effective Date, minus (iii) the aggregate amount of Indebtedness or other
-----
obligations (whether absolute, accrued, contingent or otherwise and whether or
not due) of any Unrestricted Subsidiary for which the Borrower or any of its
Subsidiaries is liable, minus (iv) all payments made by the Borrower or any of
-----
its Subsidiaries in respect of Indebtedness or other obligations of the
respective Unrestricted Subsidiary (including, without limitation, payments in
respect of obligations described in preceding clause (iii)) after the Effective
Date, plus (v) the amount of any increase to the Available Basket Sub-Limit made
----
after the Effective Date in accordance with
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the provisions of Section 9.05(k); provided that the Available Basket Sub-Limit
--------
shall not exceed at any time the Available Basket Amount as then in effect.
"Bank" shall mean each financial institution with a Revolving Loan
Commitment listed on Schedule I (as amended from time to time), as well as any
Person which becomes a "Bank" hereunder pursuant to Section 1.13 and/or
13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.03 or (ii) a Bank having notified the Administrative Agent
and/or the Borrower that it does not intend to comply with the obligations under
Section 1.01(a), 1.01(c) or 2.03.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Federal Funds Rate and (y) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Benefitted Bank" shall have the meaning provided in Section 13.06(b).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section
7.13.
"Borrowing" shall mean the borrowing of one Type of Loan by the
Borrower from all the Banks (or from BTCo in the case of Swingline Loans) on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period; provided that, Base
--------
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
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"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York or London interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section 8.13.
"Capital Expenditures" shall mean, with respect to any Person, for any
period, all expenditures by such Person which should be capitalized in
accordance with GAAP during such period, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with GAAP)
and, without duplication, the amount of all Capitalized Lease Obligations
incurred by such Person during such period.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits, certificates of
deposit and bankers' acceptances of any Bank or any commercial bank having, or
which is the principal banking subsidiary of a bank holding company organized
under the laws of the United States, any State thereof, the District of Columbia
or any foreign jurisdiction having capital, surplus and undivided profits
aggregating in excess of $200,000,000 and having a long-term unsecured debt
rating of at least "A" or the equivalent thereof from S&P or "A2" or the
equivalent thereof from Xxxxx'x, with maturities of not more than six months
from the date of acquisition by such Person, (iii) repurchase
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agreements with a term of not more than 30 days, involving securities of the
types described in preceding clause (i), and entered into with commercial banks
meeting the requirements of preceding clause (ii), (iv) commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x
and in each case maturing not more than six months after the date of acquisition
by such Person, (v) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(iv) above and (vi) overnight deposits and demand deposit accounts (in the
respective local currencies) maintained in the ordinary course of business.
"Cendant" shall mean Cendant Corporation.
"Cendant Amendment Effective Date" shall mean any date on which the
Borrower and its Subsidiaries execute and deliver copies of the Cendant
Documents to the Administrative Agent, as amended in a manner substantially
similar to the proposed amendments thereto delivered to the Administrative Agent
on the Effective Date.
"Cendant Documents" shall mean, (A) prior to the Cendant Amendment
Effective Date, collectively, (i) the Advisory Services Agreement, (ii) the
Preferred Alliance Agreement, (iii) the Development Advance Promissory Note and
Security Agreement, (iv) the Franchise Override Agreement, (v) the Incremental
Royalty Agreement, (vi) the Additional Royalty Agreement, (vii) the Support
Agreement, (viii) the Franchise Agreements, (ix) the Subscription Agreement, (x)
the Subordination Agreement, (xi) the Guarantee and (xii) the Indemnification
Agreement, and (B) on and after each applicable Cendant Amendment Effective
Date, collectively, (i) the Acquisition Services Agreement, (ii) the Program
Outsourcing Agreement, (iii) the Acquisition Cooperation Agreement, (iv) the
Development Advance Promissory Note and Security Agreement, (v) the Incremental
Royalty Agreement as in effect on and after such date, (vi) the Support
Agreement, (vii) the Master Letter Agreement, (viii) the Franchise Agreements,
(ix) the Subscription Agreement, (x) the Subordination Agreement, (xi) the
Guarantee and (xii) the Indemnification Agreement.
"Change of Control Event" shall mean, (I) at any time prior to the
consummation of a Qualified IPO, (a) Apollo Group, Cendant and their Affiliates
shall cease to own on a fully diluted basis in the aggregate at least 30% of the
economic and voting interest in the Borrower's capital stock (for such purposes,
excluding any Qualified Preferred
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Stock and any Disqualified Preferred Stock, in each case to the extent same is
not Voting Stock) or (b) Apollo Group, Cendant and their Affiliates, together
with the Management Participants and other investors which own shares of
Borrower Common Stock on the Effective Date, shall cease to own on a fully
diluted basis in the aggregate at least a majority of the outstanding Voting
Stock of the Borrower or (c) any Person or "group" (within the meaning of Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on the
Effective Date, other than the Permitted Holders, shall (A) have acquired
beneficial ownership of 30% or more on a fully diluted basis of the voting
and/or economic interest in the Borrower's capital stock or (B) obtained the
power (whether or not exercised) to elect a majority of the Borrower's directors
or (d) the Board of Directors of the Borrower shall cease to consist of a
majority of Continuing Directors or shall not be nominees of Apollo and/or
Cendant or (e) a "change of control" or similar event shall occur as provided in
any Existing Indebtedness, Permitted Debt, Disqualified Preferred Stock,
Qualified Preferred Stock or Existing Preferred Stock to the extent the
outstanding principal amount or liquidation preference, as the case may be, of
such Existing Indebtedness, Permitted Debt, Disqualified Preferred Stock,
Qualified Preferred Stock or Existing Preferred Stock exceeds $10,000,000 (II)
at any time after a Qualified IPO, (a) any Person or "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect
on the Effective Date), other than the Permitted Holders, shall have acquired
beneficial ownership of 25% or more on a fully diluted basis of the voting
and/or economic interest in the Borrower's capital stock and Apollo Group,
Cendant and their Affiliates shall own less than such Person or "group" on a
fully diluted basis of the economic and voting interest in the Borrower's
capital stock or (b) the Board of Directors of the Borrower shall cease to
consist of a majority of Continuing Directors or (c) a "change of control" or
similar event shall occur as provided in any Cendant Documents, Existing
Indebtedness, Permitted Debt, Disqualified Preferred Stock, Qualified Preferred
Stock or Existing Preferred Stock to the extent the outstanding principal amount
or liquidation preference, as the case may be, of such Existing Indebtedness,
Permitted Debt, Disqualified Preferred Stock, Qualified Preferred Stock or
Existing Preferred Stock exceeds $10,000,000.
"Chase" shall mean The Chase Manhattan Bank, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to
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the Code, as in effect at the date of this Agreement and any subsequent
provisions of the Code, amendatory thereof, supplemental thereto or substituted
therefor.
"Collateral" shall mean all property (whether real or personal,
movable or immovable) with respect to which any security interests have been
granted (or purported to be granted) pursuant to any Security Document,
including, without limitation, all Pledge Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to any Credit Document.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Common Stock" shall mean the Common Stock, par value $0.01 per share
of the Borrower.
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Consolidated Adjusted Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Interest Expense for such
period.
"Consolidated Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of the Borrower ending after the Initial
Borrowing Date and for which the related financial statements required to be
delivered pursuant to Section 8.01(a) or (b), as the case may be, have
theretofore been delivered.
"Consolidated Cumulative Net Income Amount" shall mean, at any date an
amount determined on a cumulative basis equal to (i) the sum of 15% of
Consolidated Net Income for all Consolidated Cumulative Net Income Periods
ending after the Initial Borrowing Date and prior to such date of determination
for which Consolidated Net Income was a positive number, minus (ii) 100% of
Consolidated Net Income (expressed as a positive number) for all Consolidated
Cumulative Net Income Periods ending after the last day of the Initial Borrowing
Date and prior to such date of determination for which Consolidated Net Income
was a negative number, in each case after adding back the amortization of costs
relating to the acquisition of (a) open real estate listing contracts and
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(b) pending real estate sales contracts to the extent deducted in the
calculation of net income.
"Consolidated Debt" shall mean, at any time, the sum of (without
duplication) (i) all Indebtedness of the Borrower and its Subsidiaries as would
be required to be reflected on the liability side of a balance sheet of such
Person in accordance with GAAP as determined on a consolidated basis (other than
(A) Indebtedness permitted under Section 9.04(k), (B) Indebtedness permitted
under Section 9.04(j) and (C) Indebtedness in connection with the Development
Advance Promissory Note and Security Agreement, so long as, in the case of (A)
and (B) above, there is a corresponding asset reflected on the balance sheet),
(ii) all Indebtedness of the Borrower and its Subsidiaries of the type described
in clauses (iii) and (vii) of the definition of Indebtedness and (iii) all
Contingent Obligations of the Borrower and its Subsidiaries in respect of
Indebtedness of other Persons (i.e., Persons other than the Borrower or any of
----
its Subsidiaries) of the type referred to in preceding clauses (i) and (ii) of
this definition; provided, that for purposes of this definition, any
--------
Disqualified Preferred Stock of the Borrower and any Preferred Stock of any of
its Subsidiaries shall be treated as Indebtedness, with an amount equal to the
greater of the liquidation preference or the maximum mandatory fixed repurchase
price of any such outstanding Preferred Stock deemed to be a component of
Consolidated Debt.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of the Borrower and its Subsidiaries, determined on a consolidated basis,
before Consolidated Interest Expense (to the extent deducted in arriving at
Consolidated Net Income) and provision for taxes based on income or gains or
losses from sales of assets other than inventory sold in the ordinary course of
business, in each case that were included in arriving at Consolidated Net
Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of (i) all amortization and depreciation
and other non-cash items, (ii) the portion of acquisition related costs which
have been or will be paid by Cendant and/or its Subsidiaries pursuant to
Sections 5.8 and 5.10 of the Stockholders Agreement or, after the Cendant
Amendment Effective Date, the Acquisition Cooperation Agreement, and (iii) any
management fees and consulting fees paid pursuant to, and in accordance with the
requirements of, clause (iv) of Section 9.07 that were deducted in arriving at
Consolidated EBIT for such period.
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"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, (i) that portion of Capitalized Lease Obligations of
----
the Borrower and its Subsidiaries representing the interest factor for such
period, and capitalized interest expense, (ii) the amount of all cash Dividend
requirements (whether or not declared or paid) on Disqualified Preferred Stock
of the Borrower, and on any Preferred Stock of any of its Subsidiaries paid,
accrued or scheduled to paid or accrued during such period, and the amount of
all cash Dividends paid on Existing Preferred Stock during such period, which
amounts described in preceding clause (ii) shall be treated as interest expense
of the Borrower and its Subsidiaries for purposes of this definition regardless
of the treatment of such amounts under GAAP, in each case net of the total
consolidated cash interest income of the Borrower and its Subsidiaries for such
period, but excluding the amortization of any deferred financing costs or of any
costs in respect of any Interest Rate Protection Agreement.
"Consolidated Net Income" shall mean, for any period, the net after-
tax income of the Borrower and its Subsidiaries determined on a consolidated
basis, without giving effect to any after-tax non-recurring gains or losses or
after-tax items classified as extraordinary gains or losses, any other non-cash
expenses incurred or payments made in connection with the transactions
contemplated by the Agreement, and without giving effect to gains and losses
from the sale or disposition of assets (other than sales or dispositions of
inventory, equipment, raw materials and supplies) by the Borrower and its
Subsidiaries; provided that the following items shall be excluded in computing
--------
Consolidated Net Income (without duplication): (i) the net income or net losses
of any Person in which any other Person or Persons (other than the Borrower and
its Wholly-Owned Domestic Subsidiaries) has an equity interest or interests,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or such Wholly-Owned Subsidiaries by such Person during
such period, (ii) except for determinations expressly required to be made on a
Pro Forma Basis, the net income (or loss) of any Person accrued prior to the
--- -----
date it becomes a Wholly-Owned Subsidiary or all or substantially all of the
property or assets of such Person are acquired by a Wholly-Owned Subsidiary and
(iii) the net income of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of such net
income is not at the time permitted by the operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary.
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"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
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the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such director's nomination for the
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean the Borrower and each Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
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"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"De Minimis Subsidiary" shall mean each Subsidiary of the
Borrower to the extent that (i) it holds no capital stock of any other
Subsidiary that is not a De Minimis Subsidiary, (ii) its revenues at any
time represents less than 1% of the total revenues of the Borrower and its
Subsidiaries at such time and (iii) its assets have a value of less than
$5,000,000.
"Derivatives Counterparty" shall have the meaning provided in
Section 9.06.
"Development Advance Promissory Note and Security Agreement"
shall mean the Development Advance Promissory Note, dated as of September
1, 1997, between NRT and Coldwell Banker Real Estate Corporation, and the
accompanying Security Agreement between the same parties, dated as of
September 1, 1998.
"Disqualified Preferred Stock" shall mean any Preferred Stock of
the Borrower other than Qualified Preferred Stock and Existing Preferred
Stock.
"Dividend" shall have the meaning provided in Section 9.06.
"Dividend Guarantee" shall mean the Guarantee dated August 11,
1997, by and among Xxxxx Referral Network, Inc., Xxxxxxxxx Referral
Associates, Inc., Coldwell Banker Xxx X. Xxxxx, Inc., Coldwell Banker Real
Estate, Inc., Coldwell Banker Real Estate Services, Inc., Coldwell Banker
Residential Brokerage Company, Coldwell Banker Residential Brokerage
Corporation, Coldwell Banker Residential Real Estate, Coldwell Banker
Residential Real Estate Services of Wisconsin, Inc., Coldwell Banker
Residential Referral Network, Coldwell Banker Residential Referral Network,
Inc., Contempo Holdings, Contempo Realty, Inc., Contempo Relocation, Inc.,
Del Monte Realty Company, Xxxxxxx and Xxxx Xxxxxxxxx, Inc. Forest X. Xxxxx,
Inc., Fox Realty Corporation, Grey City Graphics, Inc., Xxxx Realty
Companies, Inc., Referral Network, Inc. (FL), Referral Network, Inc. (TX),
Relocation Chicago, Inc., Valley of California, Inc., in favor of Apollo
Group, guarantying certain obligations of the Borrower to make additional
Dividend payments to Apollo.
"Documents" shall mean and include the Credit Documents, the
Stockholders Agreement and all Cendant Documents.
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"Dollar Equivalent" of an amount denominated in a currency other
than U.S. Dollars (the "Other Currency") shall mean, at any time for the
determination thereof, the amount of U.S. Dollar which could be purchased
with the amount of the Other Currency involved in such computation at the
spot exchange rate therefor as quoted by the Administrative Agent as of
11:00 A.M. (New York time) on the date two Business Days prior to the date
of any determination thereof for purchase on such date.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Domestic Unrestricted Subsidiary" shall mean any Unrestricted
Subsidiary which is not a Foreign Unrestricted Subsidiary.
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial bank,
mutual fund, financial institution, a "qualified institutional buyer" (as
defined in Rule 144A of the Securities Act), any fund that invests in bank
loans or any other "accredited investor" (as defined in Regulation D of the
Securities Act) (other than an individual).
"Employee Benefit Plans" shall have the meaning set forth in
Section 5.11.
"Employment Agreements" shall have the meaning set forth in
Section 5.11.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of non-compliance or violation, investigations or
proceedings relating in any way to any violation (or alleged violation) by
the Borrower or any of its Subsidiaries under any Environmental Law
(hereafter "Claims") or any permit issued to the Borrower or any of its
Subsidiaries under any such law, including, without limitation, (a) any and
all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant
to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.
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"Environmental Law" shall mean any federal, state, provincial,
foreign or local policy, statute, law, rule, regulation, ordinance, code or
rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment (for purposes
of this definition (collectively, "Laws")), relating to the environment, or
Hazardous Materials or health and safety to the extent such health and
safety issues arise under the Occupational Safety and Health Act of 1970,
as amended, or any such similar Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the rate per annum determined by the
Administrative Agent, at approximately 11:00 A.M. (London time) on the date
which is two Business Days prior to the beginning of the relevant Interest
Period (as specified in the applicable Notice of Borrowing or Notice of
Conversion) by reference to the British Bankers' Association Interest
Settlement Rates for deposits in U.S. Dollars (as set forth by any service
which has been nominated by the British Bankers' Association as an
authorized information vendor for the purpose of displaying such rates) for
a period equal to such Interest Period (provided that, to the extent that
--------
an interest rate is not ascertainable pursuant to the foregoing provision
of this definition, the "Eurodollar Rate" shall be the interest rate per
annum, determined by the Administrative Agent to be the average of the
rates per annum at which deposits in U.S. Dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 A.M.
(London time) on the date which is two Business Days prior to the beginning
of such Interest Period) divided (and
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rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excluded Recovery Event" shall mean (i) any Recovery Event
resulting in the receipt of proceeds by the Borrower or any of its
Subsidiaries of less than $1,000,000 and (ii) any receipt of insurance
proceeds by the Borrower or any of its Subsidiaries payable under an
insurance policy covering environmental liabilities, to the extent (and
only to the extent) (x) the Borrower or such Subsidiary has, prior to the
date of its receipt of such proceeds, used monies to remediate or restore
properties in respect of which such proceeds were paid, (y) the amount of
the insurance proceeds included for purposes of this clause (ii) does not
exceed the amount of the monies so used to remediate or restore properties
as provided in the immediately preceding clause (x) and (z) within 10 days
following receipt by the Borrower or such Subsidiary of such insurance
proceeds, an Authorized Officer of the Borrower has delivered to the
Administrative Agent an officer's certificate, certifying the Borrower's
compliance with preceding clauses (x) and (y) and attaching invoices and
such other supporting information as the Administrative Agent may
reasonably request. For avoidance of doubt, the parties hereto acknowledge
and agree that the receipt by the Borrower or any of its Subsidiaries of
any proceeds from a single Recovery Event of the type described in clause
(ii) above not entitled to inclusion in said clause (ii) by virtue of the
qualification contained in clause (y) thereof shall be subject to the
provisions of Section 4.02(d) as if such receipt of proceeds were a
separate and distinct Recovery Event.
"Existing Indebtedness" shall have the meaning provided in
Section 5.08(a).
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.11.
"Existing Preferred Stock" shall have the meaning provided in
Section 7.13.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
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"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal Funds brokers of recognized standing selected by
the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower
other than a Domestic Subsidiary.
"Foreign Unrestricted Subsidiary" shall mean each Unrestricted
Subsidiary that is incorporated under the laws of any jurisdiction other
than the United States of America, any State thereof, the United States
Virgin Islands or Puerto Rico.
"Franchise Agreements" shall mean (x) prior to the Cendant
Amendment Effective Date, (i) the Amended and Restated Master Real Estate
Franchise Agreement, dated as of August 1997, by and between the Borrower
and Coldwell Banker Real Estate Corporation, (ii) the Master Membership
Agreement, dated as of August 1997, by and between ERA Franchise Systems,
Inc. and the Borrower and (iii) the Master Century 21 Real Estate Franchise
Agreement, dated as of August 1997, by and between Century 21 Real Estate
Corporation and the Borrower, and (y) on and after the Cendant Amendment
Effective Date, each such agreement as amended on such date substantially
in the manner described to the Administrative Agent on the Effective Date.
"Franchise Override Agreement" shall mean the Franchise Override
Agreement dated as of August 11, 1997, between the Borrower and Coldwell
Banker Real Estate Corporation, ERA Franchise Systems, Inc. and Century 21
Real Estate Corporation.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being
understood and agreed that determinations in accordance with GAAP for
purposes of Section 9, including defined terms as used therein, are subject
(to the extent provided therein) to Section 13.07(a).
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"Gross-Up Amount" shall have the meaning provided in Section
4.04(a).
"Guarantors" shall mean and include each Wholly-Owned Subsidiary
(excluding (i) Regulated Subsidiaries, and (ii) in the case of De Minimis
Subsidiaries existing on the Effective Date, such De Minimis Subsidiaries
for a period of 120 days from the Effective Date, and in the case of De
Minimis Subsidiaries created or acquired after the Effective Date,
excluding such De Minimis Subsidiaries for a period of 60 days after such
date) of the Borrower.
"HFS, Inc." shall mean HFS Incorporated, a Delaware corporation
and predecessor to Cendant.
"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "restricted
hazardous materials," "extremely hazardous wastes," "restrictive hazardous
wastes," "toxic pollutants," "contaminants" or "pollutants" under any
Environmental Law, or words of similar meaning and regulatory effect.
"Incremental Royalty Agreement" shall mean (x) prior to the
Cendant Amendment Effective Date, the Incremental Royalty Agreement dated
as of August 11, 1997, by and among the Borrower, Coldwell Banker Real
Estate Corporation, ERA Franchise Systems, Inc., Century 21 Real Estate
Corporation and HFS Incorporated and (y) on and after the Cendant Amendment
Effective Date, each such agreement as amended on such date substantially
in the manner described to the Administrative Agent on the Effective Date.
"Indebtedness" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services payable to the sellers thereof or any
of such seller's assignees which in accordance with GAAP would be shown on
the liability side of the balance sheet of such Person but excluding
deferred rent as determined in accordance with GAAP, (iii) the face amount
of all letters of credit issued for the account of such Person and, without
duplication, all drafts
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drawn thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed, (v) all Capitalized Lease Obligations of
such Person, (vi) all obligations of such Person to pay a specified
purchase price for goods or services whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vii) all obligations under
----
Interest Rate Protection Agreements and Other Hedging Agreements and (viii)
all Contingent Obligations of such Person, provided, that Indebtedness
--------
shall not include trade payables and accrued expenses, in each case arising
in the ordinary course of business.
"Indemnification Agreement" shall mean the Indemnification
Agreement dated August 11, 1997, by and between HFS, Inc. and the Borrower.
"Initial Borrowing Date" shall mean the date on which the initial
Credit Event occurs.
"Intercompany Loan" shall have the meaning provided in Section
9.05(f).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to
Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Investment" shall have the meaning provided in the preamble to
Section 9.05.
"Joint Venture" shall mean any Person, other than an individual
or a Wholly-Owned Subsidiary of the Borrower, (i) in which the Borrower or
a Subsidiary of the Borrower holds or acquires an ownership interest
(whether by way of capital stock,
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partnership or limited liability company interest, or other evidence of
ownership) and (ii) which is engaged in a Permitted Business.
"L/C Supportable Obligations" shall mean obligations of the
Borrower or its Wholly-Owned Subsidiaries incurred in the ordinary course
of business and otherwise permitted to exist pursuant to the terms of this
Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fees" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean BTCo and any other Bank
which, at the request of the Borrower and with the consent of the
Administrative Agent, agrees in such Bank's sole discretion to become a
Letter of Credit Issuer for purposes of issuing Letters of Credit pursuant
to Section 2. The sole Letter of Credit Issuer on the Effective Date shall
be BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum
of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, hypothecation or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed
under the UCC or any similar recording or notice statute, and any lease
having substantially the same effect as the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.11.
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"Management Participants" shall mean those employees, members of
management and directors of the Borrower eligible for awards under the 1997
Equity Participation Plan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Marketing Agreement" shall mean the Marketing Agreement, dated
as of August 11, 1997, by and between Cendant Mortgage Corporation and the
Borrower.
"Master Letter Agreement" shall mean that Master Letter Agreement
dated as of the Cendant Amendment Effective Date, by and among the
Borrower, Apollo Management L.P., Apollo Investment Fund III, L.P., Apollo
Overseas Partners III, L.P., Apollo (UK) Partners III, L.P., Cendant
Corporation and Cendant Operations, Inc.
"Material Adverse Effect" shall mean a material adverse effect on
the business, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, and its Subsidiaries taken as a
whole.
"Maturity Date" shall mean May 29, 2001.
"Maximum Swingline Amount" shall mean $2,500,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Cash Proceeds" shall mean for any event requiring a
reduction of the Total Revolving Loan Commitment pursuant to Sections 3.03
or 4.02, as the case may be, the gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received) received from such
event, net of reasonable transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and reasonable
legal, advisory and other fees and expenses associated therewith) received
from any such event.
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"Net Sale Proceeds" shall mean for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and
when received) received from any sale of assets, net of (i) reasonable
transaction costs (including, without limitation, any underwriting,
brokerage or other customary selling commissions and reasonable legal,
advisory and other fees and expenses, including title and recording
expenses, associated therewith) and payments of unassumed liabilities
relating to the assets sold at the time of, or within 30 days after, the
date of such sale, (ii) the amount of such gross cash proceeds required to
be used to repay any Indebtedness (other than Indebtedness of the Banks
pursuant to this Agreement) which is secured by the respective assets which
were sold, and (iii) the estimated marginal increase in income taxes which
will be payable by the Borrower's consolidated group with respect to the
fiscal year in which the sale occurs as a result of such sale; provided,
--------
however, that such gross proceeds shall not include any portion of such
-------
gross cash proceeds which the Borrower determines in good faith should be
reserved for post-closing adjustments (including indemnification payments)
(to the extent the Borrower delivers to the Banks a certificate signed by
its chief financial officer or treasurer, controller or chief accounting
officer as to such determination), it being understood and agreed that on
the day that all such post-closing adjustments have been determined (which
shall not be later than six months following the date of the respective
asset sale), the amount (if any) by which the reserved amount in respect of
such sale or disposition exceeds the actual post-closing adjustments
payable by the Borrower or any of its Subsidiaries shall constitute Net
Sale Proceeds on such date received by the Borrower and/or any of its
Subsidiaries from such sale, lease, transfer or other disposition. The
parties hereto acknowledge and agree that Net Sale Proceeds shall not
include any trade-in-credits or purchase price reductions received by the
Borrower or any of its Subsidiaries in connection with an exchange of
equipment for replacement equipment that is the functional equivalent of
such exchanged equipment.
"New Withholding Regulations" shall have the meaning provided in
Section 4.04(b).
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Non-Wholly Owned Entity" shall have the meaning provided in the
definition of Permitted Acquisition.
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"Note" shall mean each Revolving Note and/or the Swingline Note, as
the context may require.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or such other office as the Administrative Agent may designate to the
Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing
to the Administrative Agent, the Collateral Agent or any Bank pursuant to
the terms of this Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquired Debt" shall have the meaning set forth in Section
9.04(d).
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Wholly-Owned Domestic Subsidiaries of assets constituting a
business, division or product line of any Person not already a Subsidiary
of the Borrower or any of its Wholly-Owned Subsidiaries or of 100% of the
capital stock or other equity interests of any such Person, provided that
--------
(A) the consideration paid by the Borrower or such Wholly-Owned
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Subsidiary consists solely of cash (including proceeds of Revolving Loans),
the issuance of the Borrower Common Stock, the issuance of any Qualified
Preferred Stock or Disqualified Preferred Stock otherwise permitted in
Section 9.11, the issuance of Indebtedness otherwise permitted in Section
9.04 (including Permitted Subordinated Indebtedness) and the
assumption/acquisition of any Permitted Acquired Debt (calculated in
accordance with GAAP) relating to such business, division, product line or
Person which is permitted to remain outstanding in accordance with the
requirements of Section 9.04, or the cancellation of Preferred Stock held
by Cendant pursuant to the Acquisition Cooperation Agreement (B) those
acquisitions that are structured as stock acquisitions shall be effected
through a purchase of 100% of the capital stock or other equity interests
of such Person by the Borrower or such Wholly-Owned Domestic Subsidiary or
through a merger between such Person and a Wholly-Owned Domestic Subsidiary
of the Borrower, so that after giving effect to such merger, 100% of the
capital stock of the surviving corporation of such merger is owned by the
Borrower or a Wholly-Owned Domestic Subsidiary, (C) in the case of the
acquisition of 100% of the capital stock or other equity interests of any
Person, such Person (the "Acquired Person") shall own no capital stock or
other equity interests of any other Person unless either (x) the Acquired
Person owns 100% of the capital stock or other equity interests of such
other Person or (y) if the Acquired Person owns capital stock or equity
interests in any other Person which is not a Wholly-Owned Subsidiary of the
Acquired Person (a "Non-Wholly Owned Entity"), both (1) the Acquired Person
shall not have been created or established in contemplation of, or for
purposes of, the respective Permitted Acquisition and (2) any Non-Wholly
Owned Entity of the Acquired Person shall have been non-wholly-owned prior
to the date of the respective Permitted Acquisition and not created or
established in contemplation thereof, (D) substantially all of the
business, division or product line acquired pursuant to the respective
Permitted Acquisition, or the business of the Person acquired pursuant to
the respective Permitted Acquisition and its Subsidiaries taken as a whole,
is in the United States, (E) the assets acquired, or the business of the
Person whose stock is acquired, shall be in a Permitted Business and (F)
all applicable requirements of Sections 8.13 and 9.02 applicable to
Permitted Acquisitions are satisfied. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the
definition of "Permitted Acquisition" shall constitute a Permitted
Acquisition if, and to the extent, the Required Banks agree in writing that
such acquisition shall constitute a Permitted Acquisition for purposes of
this Agreement.
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"Permitted Acquisition Additional Cost Savings" shall mean, in
connection with each Permitted Acquisition, those demonstrable cost-savings
adjustments (in each case not included pursuant to clause (iii) or (iv) of
the definition of Pro Forma Basis contained herein) reasonably anticipated
--- -----
by the Borrower to be achieved in connection with such Permitted
Acquisition for the 12 month period following the consummation of such
Permitted Acquisition, which cost-savings adjustments shall be estimated on
a good faith basis by the Borrower and, if requested by the Administrative
Agent, be verified by a nationally recognized accounting firm or as
otherwise agreed to by the Administrative Agent.
"Permitted Business" shall mean any business principally engaged in or
related to real estate brokerage services, mortgage, title, escrow and
relocation services and other products and services pursuant to the Program
Outsourcing Agreement and reasonable extensions of the foregoing.
"Permitted Debt" shall mean and include Permitted Acquired Debt and
Permitted Subordinated Indebtedness.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances,
hypothecations and other matters affecting title to any Real Property and
found reasonably acceptable by the Administrative Agent, (ii) as to any
particular Real Property at any time, such easements, encroachments,
covenants, rights of way, minor defects, irregularities or encumbrances on
title which would reasonably be expected to materially impair such Real
Property for the purpose for which it is held by the mortgagor or grantor
thereof, (iii) zoning and other municipal ordinances which are not violated
in any material respect by the existing improvements and the present use
made by the mortgagor or grantor thereof of the premises, (iv) general real
estate taxes and assessments not yet delinquent, and (v) such other similar
items as the Administrative Agent may consent to (such consent not be
unreasonably withheld).
"Permitted Holders" shall mean Apollo Group, Cendant and their
Affiliates and the Management Participants.
"Permitted Liens" shall have the meaning provided in Section 9.03.
"Permitted Subordinated Indebtedness" shall mean subordinated
Indebtedness of the Borrower incurred in connection with a Permitted
Acquisition and in accordance with Section 8.13, which Permitted
Subordinated Indebtedness and all terms and conditions
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thereof (including, without limitation, the maturity thereof, the interest
rate applicable thereto, amortization, defaults, remedies, voting rights,
subordination provisions, etc.), and the documentation therefor, shall be
reasonably satisfactory to the Arrangers, provided, that in any event,
--------
unless the Required Banks otherwise expressly consent in writing prior to
the incurrence thereof, (i) no such Indebtedness shall be guaranteed by any
Subsidiary of the Borrower and (ii) no such Indebtedness shall be secured
by any asset of the Borrower or any of its Subsidiaries. The incurrence of
Permitted Subordinated Indebtedness shall be deemed to be a representation
and warranty by the Borrower that all conditions thereto have been
satisfied in all material respects and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall
be deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 6 and 10.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower
or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a
Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to
or had an obligation to contribute to such plan but excluding all
Multiemployer Plans.
"Pledge Agreement Collateral" shall mean all of the Collateral as
defined in the Pledge Agreement.
"Pledge Agreement" shall have the meaning provided in Section 5.09.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement, and shall exclude in any event (i) all Regulated
Subsidiaries, (ii) for the period starting on the Effective Date until the
date which is 120 days thereafter, all De Minimis Subsidiaries existing on
the Effective Date and (iii) for a period of 60 days after the creation or
acquisition of De Minimis Subsidiaries after the Effective Date, all such
De Minimis Subsidiaries.
"Preferred Alliance Agreement" shall mean the Preferred Alliance
Agreement dated as of August 11, 1997, by and between HFS Incorporated and
the Borrower.
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"Preferred Stock," as applied to the capital stock of any Person,
means capital stock of such Person (other than common stock of such Person)
of any class or classes (however designed) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to
shares of capital stock of any other class of such Person, and shall
include the Existing Preferred Stock and any Qualified Preferred Stock, and
Disqualified Preferred Stock.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, in connection with any calculation of
--- -----
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (v) if the relevant
--- -----
period to be tested includes any period prior to the Effective Date, the
consummation of the transactions contemplated by this Agreement as if the
same had occurred on the first day of such period (for such purpose,
without giving pro forma effect to synergies and cost savings which have
--- -----
been, or may be realized, such synergies and cost savings having been
independently accounted for in the proviso to the definition of
"Consolidated EBITDA"), (x) the incurrence of any Indebtedness (other than
revolving Indebtedness, except to the extent same is incurred to finance
the transactions contemplated by this Agreement, to refinance other
outstanding Indebtedness or to finance Permitted Acquisitions) or Preferred
Stock (other than Qualified Preferred Stock of the Borrower) after the
first day of the relevant Calculation Period as if such Indebtedness or
Preferred Stock had been incurred or issued (and the proceeds thereof
applied) on the first day of the relevant Calculation Period, (y) the
permanent repayment of any Indebtedness (other than revolving Indebtedness
except to the extent paid with Permitted Debt or Disqualified Preferred
Stock) or Preferred Stock (other than Qualified Preferred Stock of the
Borrower) after the first day of the relevant Calculation Period as if such
Indebtedness or Preferred Stock had been retired or redeemed on the first
day of the relevant Calculation Period and (z) the Permitted Acquisition,
if any, then being consummated as well as any other Permitted Acquisition
consummated after the first day of the relevant Calculation
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Period and on or prior to the date of the respective Permitted Acquisition
then being effected, with the following rules to apply in connection
therewith:
(i) all Indebtedness and Preferred Stock (other than Qualified
Preferred Stock of the Borrower) (x) (other than revolving Indebtedness,
except to the extent same is incurred to finance the transactions
contemplated by this Agreement, to refinance other outstanding
Indebtedness, or to finance Permitted Acquisitions) incurred or issued
after the first day of the relevant Calculation Period (whether incurred to
finance a Permitted Acquisition, to refinance Indebtedness or otherwise)
shall be deemed to have been incurred or issued (and the proceeds thereof
applied) on the first day of the respective Calculation Period and remain
outstanding through the date of determination (and thereafter in the case
of projections pursuant to Section 8.13(a)(B)(iii)) and (y) (other than
revolving Indebtedness except to the extent paid with Permitted Debt or
Disqualified Preferred Stock) permanently retired or redeemed after the
first day of the relevant Calculation Period shall be deemed to have been
retired or redeemed on the first day of the respective Calculation Period
and remain retired through the date of determination (and thereafter in the
case of projections pursuant to Section 8.13(a)(B)(iii));
(ii) all Indebtedness or Preferred Stock (other than Qualified
Preferred Stock of the Borrower) assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest or accrued
dividends, as the case may be, at (x) the rate applicable thereto, in the
case of fixed rate indebtedness or Preferred Stock or (y) the rates which
would have been applicable thereto during the respective period when same
was deemed outstanding, in the case of floating rate Indebtedness or
Preferred Stock (although interest expense with respect to any Indebtedness
or Preferred Stock for periods while same was actually outstanding during
the respective period shall be calculated using the actual rates applicable
thereto while same was actually outstanding); provided that for purposes of
--------
calculations pursuant to Section 8.13(a)(B)(iii), all Indebtedness or
Preferred Stock (whether actually outstanding or deemed outstanding)
bearing interest at a floating rate of interest shall be tested on the
basis of the rates applicable at the time the determination is made
pursuant to said provisions;
(iii) in making any determination of Consolidated EBITDA, pro forma
--- -----
effect shall be given to any Permitted Acquisition consummated after the
first day of the respective period being tested, taking into account, for
any portion of the relevant period being tested occurring prior to the
consummation of such Permitted Acquisition,
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demonstrable cost savings actually achieved simultaneously with the closing
of the respective Permitted Acquisition, as if such cost-savings were
realized on the first day of the relevant period;
(iv) without duplication of adjustments provided above, in case of any
Permitted Acquisition consummated after the first day of the relevant
period being tested, pro forma effect shall be given to the termination or
--- -----
replacement of operating leases with Capitalized Lease Obligations or other
Indebtedness, and to any replacement of Capitalized Lease Obligations or
other Indebtedness with operating leases, in each case effected at the time
of the consummation of such Permitted Acquisition or thereafter, in each
case if effected after the first day of the period being tested and prior
to the date the respective determination is being made, as if such
termination or replacement had occurred on the first day of the relevant
period; and
(v) in making any determination of Consolidated EBITDA for purposes
of any calculation of the Total Leverage Ratio or the only, (x) for any
Permitted Acquisition which occurred during the last two fiscal quarters
comprising the respective Test Period (and, in the case of Section 8.13,
thereafter and on or prior to the relevant date of determination), there
shall be added to Consolidated EBITDA the amount of Permitted Acquisition
Additional Cost Savings, determined in accordance with the definition
thereof contained herein, expected to be realized with respect to such
Permitted Acquisition, (y) for any Permitted Acquisition effected in the
second fiscal quarter of the respective Test Period, the Consolidated
EBITDA shall be increased by 75% of the Permitted Acquisition Additional
Cost Savings estimated to arise in connection with the respective Permitted
Acquisition and (z) for any Permitted Acquisition effected in the first
fiscal quarter of the respective Test Period, the Consolidated EBITDA shall
be increased by 37.5% of the Permitted Acquisition Additional Cost Savings
estimated to arise in connection with the respective Permitted Acquisition;
provided that the aggregate additions to Consolidated EBITDA, for any
period being tested, pursuant to this clause (v) shall not exceed 15% of
the amount which would have been Consolidated EBITDA in the absence of the
adjustment pursuant to this clause (v).
Notwithstanding anything to the contrary contained above, (x) for purposes
of Sections 9.08 and 9.09 and, for purposes of all determinations of the
Applicable Margins, pro forma effect (as otherwise provided above) shall
--- -----
only be given for events or occurrences which occurred during the
respective Test Period but not thereafter and (y) for purposes of Section
8.13, pro forma effect (as otherwise provided above) shall be given for
--- -----
events or occurrences which
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occurred during the respective Test Period and thereafter but on or prior
to the respective date of determination.
"Program Outsourcing Agreement" shall mean the Program Outsourcing
Agreement, dated as of the Cendant Amendment Effective Date, by and between
the Borrower and Cendant.
"Projections" shall have the meaning provided in Section 5.13(b).
"Qualified IPO" shall mean an underwritten public offering of Borrower
Common Stock which generates cash proceeds of at least $50,000,000.
"Qualified Preferred Stock" shall mean any Preferred Stock of the
Borrower, the express terms of which shall provide that dividends thereon
shall not be required to be paid at any time (and to the extent) that such
payment would be prohibited by the terms of this Agreement or any other
agreement of the Borrower relating to outstanding indebtedness and which,
by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event
(including any Change of Control Event), cannot mature and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
and is not redeemable, or required to be repurchased, at the sole option of
the holder thereof (including, without limitation, upon the occurrence of a
Change of Control Event), in whole or in part, on or prior to the date
occurring one year after the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, immovable property, improvements
and fixtures, including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by
reason of theft, physical destruction or damage or any other similar event
with respect to any properties or assets of the Borrower or any of its
Subsidiaries, (ii) by reason of any condemnation, taking, seizing or
similar event with respect to any properties or assets of the Borrower or
any of its
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Subsidiaries and (iii) under any policy of insurance required to be
maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.17.
"Regulated Subsidiaries" shall mean Subsidiaries of the Borrower
engaged solely in the title, escrow and similar businesses, which
Subsidiaries are regulated by State or local governmental authorities and
which either (x) would be prohibited from being a party to the Guaranty or
having its capital stock pledged pursuant to the Pledge Agreement or (y) it
could be unreasonably burdensome in the good faith opinion of the Borrower
to have such Subsidiary become a party to the Guaranty or have its capital
stock pledged pursuant to the Pledge Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to
all or any portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
to all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
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"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentage of Swingline Loans and Letter
of Credit Outstandings) represent an amount greater than 50% of the sum of
the Total Revolving Loan Commitment (or after the termination thereof, the
sum of the then total outstanding Revolving Loans of Non-Defaulting Banks
and the aggregate RL Percentages of all Non-Defaulting Banks of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such
time).
"Revolving Credit Exposure" shall mean, for any Bank at any time, the
sum of (i) the aggregate principal amount of all Revolving Loans made by
such Bank plus (ii) the product of (A) such Bank's RL Percentage and (B)
the sum of (x) the aggregate amount of all Letter of Credit Outstandings at
such time and (y) the aggregate principal amount of all Swingline Loans
then outstanding.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Part A of Schedule I directly
below the column entitled "Revolving Loan Commitment," as the same may be
reduced from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or
Section 10.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the
aggregate amount of Revolving Loan Commitments of all Banks at such time.
Notwithstanding anything to the contrary contained above, if the RL
Percentage of any Bank is to be determined after the Total Revolving Loan
Commitment has been terminated, then the RL Percentages of the Banks shall
be determined immediately prior (and without giving effect) to such
termination (and without giving effect to the termination of the Revolving
Loan Commitments).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
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"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Documents" shall mean and include the Pledge Agreement and
each Additional Security Document, if any.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported
in any way by the Borrower or any of its Subsidiaries) in the form of
Exhibit L.
"Shareholders' Agreements" shall have the meaning provided in Section
5.11.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stockholders Agreement" shall mean the Stockholders Agreement, dated
as of August 11, 1997, by and among the Borrower, Apollo Management, L.P.
and the stockholders of the Borrower as amended prior to the date
hereunder.
"Subordination Agreement" shall mean the Subordination Agreement dated
August 11, 1997, by and between HFS, Inc. and Apollo Group.
"Subscription Agreement" shall mean the Subscription Agreement dated
August 11, 1997, by and among the Borrower, Apollo Group and HFS, Inc.
"Subsidiaries Guaranty" shall have the meaning provided in 5.10.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not
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at the time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is
at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, association, joint venture or other
entity (other than a corporation) in which such Person directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time. Notwithstanding the foregoing (and except for purposes of Sections
7.01, 7.04, 7.12, 7.16, 7.17, 7.20, 8.01(g), 8.07, 8.08, 10.05, 10.06 and
10.09, and the definitions of Unrestricted Subsidiary and Wholly-Owned
Unrestricted Subsidiary contained herein), an Unrestricted Subsidiary shall
be deemed not to be a Subsidiary of the Borrower or any of its other
Subsidiaries for purposes of this Agreement.
"Support Agreement" shall mean the Support Agreement, dated as of
August 11, 1997, by and between Cendant and the Borrower.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters ended on the last day of the then most recently ended fiscal
quarter of the Borrower.
"Total Leverage Ratio" shall mean on any date the ratio of (i)
Consolidated Debt on such date to (ii) Consolidated EBITDA for the Test
Period most recently ended on or prior to such date. All calculations of
the Total Leverage Ratio shall be made on a Pro Forma Basis, it being
--- -----
understood and agreed that, as provided in the definition of Pro Forma
--- -----
Basis, the adjustments contained in clause (v) thereof shall not be taken
into account in determining the Total Leverage Ratio.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
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"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of
----
(I) the aggregate principal amount of all Revolving Loans then outstanding,
(II) the aggregate principal amount of Swingline Loans then outstanding
plus (III) the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning set forth in Section
2.01(a).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
----
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds the fair market value of all
plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that is acquired or created after the Effective Date and designated by the
Borrower as an Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent, provided that the Borrower shall only be permitted to
--------
so designate a new Unrestricted Subsidiary after the Effective Date and so
long as (i) no Default or Event of Default exists or would result
therefrom, (ii) in the case of any Unrestricted Subsidiary directly owned
by the Borrower or any of its Wholly-Owned Domestic Subsidiaries, 100% of
the capital stock of such newly-designated Unrestricted Subsidiary is owned
by the Borrower or such Wholly-Owned Domestic Subsidiary and (iii) all of
the provisions of Section 9.13 shall have been complied with in respect of
such newly-designated Unrestricted Subsidiary and such Unrestricted
Subsidiary shall be capitalized (to the extent capitalized by the Borrower
or any of its Subsidiaries) through Investments as permitted by, and in
compliance with, Section 9.05(k), with any assets owned by such
Unrestricted Subsidiary at the time of the initial designation thereof to
be treated as Investments pursuant to Section 9.05(k), provided that at the
--------
time of
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the initial Investment by the Borrower or any Wholly-Owned Domestic
Subsidiary in such Subsidiary, the Borrower shall designate such entity as
an Unrestricted Subsidiary in a written notice to the Administrative Agent.
"Unutilized Revolving Loan Commitment" with respect to any Bank at any
time shall mean such Bank's Revolving Loan Commitment at such time less the
----
sum of (i) the aggregate outstanding principal amount of all Revolving
Loans made by such Bank and (ii) such Bank's RL Percentage of the Letter of
Credit Outstandings at such time.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a
majority of the Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares and/or other nominal amounts of shares required to be held other
than by such Person under applicable law) is at the time owned by such
Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii)
any partnership, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a
100% equity interest at such time; provided that (x) other than in the
--------
definition of Wholly-Owned Unrestricted Subsidiary, no Unrestricted
Subsidiary shall be considered a Wholly-Owned Subsidiary.
"Wholly-Owned Unrestricted Subsidiary" shall mean any Wholly-Owned
Subsidiary which is an Unrestricted Subsidiary..
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"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex,
facsimile device, telegraph or cable.
SECTION 12. The Administrative Agent.
------------------------
12.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints BTCo as Administrative Agent of such Bank (for purposes of this
Section 12, the term "Administrative Agent" shall mean BTCo in its capacity
as Administrative Agent hereunder and Collateral Agent pursuant to the
Security Documents), and each such Bank hereby irrevocably authorizes the
Administrative Agent, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such upon the express
conditions contained in this Section 12. Notwithstanding any provision to
the contrary elsewhere in this Agreement or in any other Credit Document,
the Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in the other Credit Documents,
or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or otherwise exist against the Administrative
Agent. The provisions of this Section 12 are solely for the benefit of the
Administrative Agent and the Banks, and neither the Borrower nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Banks
and does not assume and shall not be deemed to have assumed any obligation
or relationship of agency or trust with or for the Borrower or any of its
Subsidiaries.
12.02 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement or any other Credit Document by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The
Administrative Agent shall be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
12.03 Exculpatory Provisions. The Administrative Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any
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action lawfully taken or omitted to be taken by it or such Person in its
capacity as Administrative Agent, under or in connection with this
Agreement or the other Credit Documents (except for its or such Person's
own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Banks for any recitals, statements, representations or
warranties made by the Borrower, any of its respective Subsidiaries or any
of their respective officers contained in this Agreement or the other
Credit Documents, any other Document or in any certificate, report,
statement or other document referred to or provided for in, or received by
the Administrative Agent under or in connection with, this Agreement or any
other Document or for any failure of the Borrower or any of its
Subsidiaries or any of their respective officers to perform its obligations
hereunder or thereunder. The Administrative Agent shall be under no
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Documents, or to inspect the properties, books or
records of the Borrower or any of its Subsidiaries. The Administrative
Agent shall not be responsible to any Bank for the effectiveness,
genuineness, validity, enforceability, collectability or sufficiency of
this Agreement or any other Document or for any representations,
warranties, recitals or statements made herein or therein or made in any
written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection
herewith or therewith furnished or made by the Administrative Agent, to the
Banks or by or on behalf of any Borrower or any of its Subsidiaries to the
Administrative Agent, or any Bank or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to
the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
12.04 Reliance by the Administrative Agent. The Administrative Agent
------------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation reasonably believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any of its
Subsidiaries), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Credit Document unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate or it shall first be indemnified
to its satisfaction by the Banks against any and all liability and
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expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the other Credit Documents in accordance with a request of the Required
Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks.
12.05 Notice of Default. The Administrative Agent shall be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has actually received notice from a
Bank or a Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks;
provided, that, unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in
the best interests of the Banks.
12.06 Nonreliance on Administrative Agent and Other Banks. Each Bank
---------------------------------------------------
expressly acknowledges that the Administrative Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to
any Bank. Each Bank represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of the Borrower and its Subsidiaries and made its own
decision to make its Loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and without reliance upon
the Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of
the Borrower and its Subsidiaries. The Administrative Agent shall not have
any duty or responsibility to
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provide any Bank with any credit or other information concerning the
business, operations, assets, property, financial and other condition,
prospects or creditworthiness of the Borrower or any of its Subsidiaries
which may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
12.07 Indemnification. The Banks agree to indemnify the
---------------
Administrative Agent in its capacity as such, ratably according to their
respective "percentages" as used in determining the Required Banks at such
time or, if the Revolving Loan Commitments have terminated and all Loans
have been repaid in full, as determined immediately prior to such
termination and repayment (with such "percentages" to be determined as if
there are no Defaulting Banks), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment
of the Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this
Agreement or any other Credit Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action
taken or omitted to be taken by the Administrative Agent under or in
connection with any of the foregoing, but only to the extent that any of
the foregoing is not paid by the Borrower or any of its Subsidiaries;
provided, that no Bank shall be liable to the Administrative Agent for the
--------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting primarily from the gross negligence or willful misconduct of the
Administrative Agent. If any indemnity furnished to the Administrative
Agent for any purpose shall, in the opinion of the Administrative Agent be
insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in
this Section 12.07 shall survive the payment of all Obligations.
12.08 Administrative Agent in its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower and its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to the Loans made by it and all Obligations
owing to it, the Administrative Agent shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it
were not the Administrative Agent and the terms "Bank" and "Banks" shall
include the Administrative Agent in its individual capacity.
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12.09 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person or entity who, at the time of
making such request or giving such authority or consent, is the holder of
any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
12.10 Resignation of the Administrative Agent. (a) The Administrative
---------------------------------------
Agent may resign from the performance of all its functions and duties
hereunder and/or under the other Credit Documents at any time by giving 30
Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to the
Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 Business Day period, the Administrative Agent,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed), shall then appoint a successor Administrative Agent
who shall serve as Administrative Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Administrative
Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any,
as the Required Banks appoint a successor Administrative Agent as provided
above.
12.11 Syndication Agent. Each Bank hereby irrevocably designates and
-----------------
appoints Chase as Syndication Agent hereunder, it being understood and
agreed that Chase shall have no duties or obligations in such capacity
hereunder.
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SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
------------------------
or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Arrangers (including,
without limitation, the reasonable fees and disbursements of White & Case
LLP and local counsel) in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and
instruments referred to therein and any amendment, waiver or consent
relating thereto and in connection with the Arrangers' syndication efforts
with respect to this Agreement; (ii) pay all reasonable out-of-pocket costs
and expenses of each Arranger, the Administrative Agent, each Letter of
Credit Issuer and each of the Banks in connection with the enforcement of
the Credit Documents and the documents and instruments referred to therein
and, after an Event of Default shall have occurred and be continuing, the
protection of the rights of each Arranger, the Administrative Agent, each
Letter of Credit Issuer and each of the Banks thereunder (including,
without limitation, the reasonable fees and disbursements of counsel
(including in-house counsel) for each Arranger, the Administrative Agent,
for each Letter of Credit Issuer and for each of the Banks); (iii) pay and
hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters
and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iv)
indemnify each Arranger, the Administrative Agent, the Collateral Agent,
each Letter of Credit Issuer and each Bank, their respective officers,
directors, employees, representatives, trustees and agents from and hold
each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out
of, or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Arranger, the
Administrative Agent, the Collateral Agent, any Letter of Credit Issuer or
any Bank is a party thereto and whether or not any such investigation,
litigation or other proceeding is between or among any Arranger, the
Administrative Agent, the Collateral Agent, any Letter of Credit Issuer,
any Bank, any Credit Party or any third Person or otherwise) related to the
entering into and/or performance of this Agreement or any other Document or
the use of the proceeds of any Loans hereunder or any drawing on any Letter
of Credit or the consummation of any other transactions contemplated in any
Document (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified), or (b) the actual or
alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface
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of any Real Property or any Environmental Claim, in each case, including,
without limitation, the reasonable fees and disbursements of counsel and
independent consultants incurred in connection with any such investigation,
litigation or other proceeding (but excluding any losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified).
13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of
any such rights, upon the occurrence of an Event of Default, each Arranger,
each Letter of Credit Issuer and each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice
of any kind to the Borrower or any of its Subsidiaries or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Arranger, such Letter
of Credit Issuer or such Bank (including, without limitation, by branches
and agencies of such Arranger, such Letter of Credit Issuer and such Bank
wherever located) to or for the credit or the account of the Borrower or
any of its Subsidiaries against and on account of the Obligations of the
Borrower or any of its Subsidiaries to such Arranger, such Letter of Credit
Issuer or such Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of
the Borrower or any of its Subsidiaries purchased by such Bank pursuant to
Section 13.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Arranger, such Letter of Credit Issuer
or such Bank shall have made any demand hereunder and although said
Obligations shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, cabled or delivered, if to any
Credit Party, at the address specified opposite its signature below or in
the other relevant Credit Documents, as the case may be; if to any Bank, at
its address specified for such Bank on Schedule II; or, at such other
address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier,
and shall be effective when received.
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13.04 Benefit of Agreement. (a) This Agreement shall be binding upon
--------------------
and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, the Borrower may not
-------- -------
assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of each
of the Banks, except as provided in clause (v) of the first proviso to
Section 13.12(a), and, provided further, that, although any Bank may grant
----------------
participations in its rights hereunder, such Bank shall remain a "Bank" for
all purposes hereunder (and may not transfer or assign all or any portion
of its Revolving Loan Commitment or Loans hereunder except as provided in
Section 13.04(b)) and the participant shall not constitute a "Bank"
hereunder and, provided further, that no Bank shall transfer or grant any
----------------
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document
except to the extent such amendment or waiver would (i) extend the final
scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Revolving Loan Commitment or of a mandatory
repayment of Loans shall not constitute a change in the terms of such
participation, that an increase in any Revolving Loan Commitment or Loan
shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof and that
any amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in any rate of interest or fees
for purposes of this clause (i)), (ii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement (except as provided in clause (v) of the first proviso to Section
13.12(a)) or (iii) release all or substantially all of the Collateral under
the Security Documents (except as expressly provided in the Security
Documents) supporting the Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit
Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Bank had not sold
such participation.
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(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder)
to (i) its parent company and/or any affiliate of such Bank which is at
least 50% owned by such Bank or its parent company or to one or more Banks
or (ii) in the case of any Bank that is a fund that invests in bank loans,
any other fund that invests in bank loans and is managed by the same
investment advisor of such Bank or by an Affiliate of such investment
advisor or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of
such Revolving Loan Commitments (and related outstanding Obligations
hereunder) to one or more Eligible Transferees (treating (x) any fund that
invests in bank loans and (y) any other fund that invests in bank loans and
is managed by the same investment advisor as such fund or by an Affiliate
of such investment advisor, as a single Eligible Transferee), each of which
assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, provided that, (i) any assignment
--------
of all or any portion of the Revolving Loan Commitment and related
outstanding Obligations (or, if the Revolving Loan Commitment has
terminated, any assignment of Obligations originally extended pursuant to
the Revolving Loan Commitments) shall be made on a basis such that the
respective assignee participates in Revolving Loans, and in Letter of
Credit Outstandings, in accordance with the Revolving Loan Commitment so
assigned (or if the Revolving Loan Commitment has been terminated, on the
same basis as participated in by the Banks with Revolving Loan Commitments
prior to the termination thereof), (ii) at such time Schedule I shall be
deemed modified to reflect the Revolving Loan Commitments of such new Banks
and of the existing Banks (and their respective Affiliates), (iii) upon
surrender of the old Notes (or the furnishing of a standard indemnity
letter from the respective assigning Bank in respect of any lost Notes),
new Notes will be issued, at the Borrower's expense, to such new Bank and
to the assigning Bank, such new Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments, (iv) the consent
of the Administrative Agent and, so long as no Default or Event of Default
is then in existence, the Borrower shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) of this Section
13.04(b) (which consent, in each case, shall not be unreasonably withheld
or delayed), (v) the Administrative Agent shall receive at the time of each
assignment, from the assigning or assignee Bank, the payment of a non-
refundable assignment fee of $3,500 and, provided further, that such
----------------
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.17. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning
Bank shall be relieved of its
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obligations hereunder with respect to its assigned Revolving Loan
Commitments. At the time of each assignment pursuant to this Section
13.04(b) to a Person which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes, the respective assignee Bank shall provide to the U.S. Borrower
and the Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable a Section 4.04(b)(ii) Certificate) described in Section
4.04(b). To the extent that an assignment of all or any portion of a Bank's
Revolving Loan Commitment and outstanding Obligations pursuant to Section
1.13 or this Section 13.04(b) would, due to circumstances existing at the
time of such assignment, result in increased costs under Section 1.10,
1.11, 2.05 or 4.04 from those being charged by the respective assigning
Bank prior to such assignment, then the Borrowers shall not be obligated to
pay such increased costs (although the Borrower shall be obligated to pay
any other increased costs of the type described above resulting from
changes after the date of the respective assignment). Notwithstanding
anything to the contrary contained above, at any time after the termination
of the Total Revolving Loan Commitment, if any Revolving Loans or Letters
of Credit remain outstanding, assignments may be made as provided above,
except that the respective assignment shall be of a portion of the
outstanding Revolving Loans of the respective Bank and its participation in
Letters of Credit and its obligation to make Mandatory Borrowings, although
any such assignment effected after the termination of the Total Revolving
Loan Commitment shall not release the assigning Bank from its obligations
as a Participant with respect to outstanding Letters of Credit or to fund
its share of any Mandatory Borrowing (although the respective assignee may
agree, as between itself and the respective assigning Bank, that it shall
be responsible for such amounts).
(c) Nothing in this Agreement shall prevent or prohibit any Bank or
BTCo from pledging its Loans and Notes hereunder to a Federal Reserve Bank
in support of borrowings made by such Bank from such Federal Reserve Bank
and, with the consent of the Administrative Agent, any Bank which is a fund
may pledge all or any portion of its Notes or Loans to its trustee in
support of its obligations to its trustee. No pledge pursuant to this
clause (c) shall release the transferor Bank from any of its obligations
hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part
------------------------------
of the Administrative Agent, the Collateral Agent or any Bank in exercising
any right, power or privilege hereunder or under any other Credit Document
and no course of dealing between any Credit Party and the Administrative
Agent, the Collateral Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
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exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which the
Administrative Agent, the Collateral Agent or any Bank would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle
any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Collateral Agent or the Banks to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) The Administrative Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit
Party in respect of any Obligations of such Credit Party, it shall, except
as otherwise provided in this Agreement, distribute such payment to the
Banks (other than any Bank that has consented in writing to waive its pro
---
rata share of such payment) pro rata based upon their respective shares, if
---- --- ----
any, of the Obligations with respect to which such payment was received.
(b) Except to the extent that this Agreement provides for payments
to be allocated to the Banks with particular Obligations, if any Bank (a
"Benefitted Bank") shall at any time receive any payment of all or part of
its Loans or the other Obligations owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 10.05, or otherwise), in a greater proportion than
any such payment to or collateral received by any other Bank, if any, in
respect of such other Bank's Loans or the other Obligations owing to such
other Bank, or interest thereon, such Benefitted Banks shall purchase for
cash from the other Banks a participating interest in such portion of each
such other Bank's Loans and/or other Obligations owing to each such other
Banks, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks; provided, however, that if all
-------- -------
or any portion of such excess payment or benefits is thereafter recovered
from such Benefitted Bank, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
13.07 Calculations; Computations. (a) The financial statements to be
--------------------------
furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrower to the Banks); provided, that except as
--------
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otherwise specifically provided herein, all computations determining
compliance with Sections 4.02, 8.14 and 9, including definitions used
therein shall, in each case, utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used
to prepare, the December 31, 1997 financial statements of the Borrower
delivered to the Banks pursuant to Section 7.10(b); provided further, that
----------------
(i) to the extent expressly required pursuant to the provisions of this
Agreement, certain calculations shall be made on a Pro Forma Basis, (ii) to
--- -----
the extent compliance with any of Section 9.08 and 9.09 would include
periods occurring prior to the Effective Date, such calculation shall be
adjusted on a Pro Forma Basis to give effect to the transactions
--- -----
contemplated by the Agreement as if same had occurred on the first day of
the respective period, (iii) in the case of any determinations of
Consolidated Interest Expense or Consolidated EBITDA for any portion of any
Test Period which ends prior to the Effective Date, all computations
determining compliance with Sections 9.08 and 9.09 and all determinations
of the Total Leverage Ratio shall be calculated in accordance with the
definition of Test Period contained herein and (iv) for purposes of
calculating financial terms, all covenants and related definitions, all
such calculations based on the operations of the Borrower and its
Subsidiaries on a consolidated basis shall be made without giving effect to
the operations of any Unrestricted Subsidiaries.
(b) For purposes of determining compliance with any incurrence or
expenditure tests set forth in Sections 8 and/or 9 (excluding Sections 9.08
and 9.09), any amounts so incurred or expended (to the extent incurred or
expended in a currency other than U.S. Dollars) shall be converted into
U.S. Dollars on the basis of the Dollar Equivalent of the respective such
amounts as in effect on the date of such incurrence or expenditure under
any provision of any such Section that has an aggregate Dollar limitation
provided for therein (and to the extent the respective incurrence or
expenditure test regulates the aggregate amount outstanding or made at any
time and it is expressed in terms of U.S. Dollars, all amounts originally
incurred or spent in currencies other that U.S. Dollars shall be converted
into U.S. Dollars on the basis of the Dollar Equivalent of the respective
such amounts as in effect on the date any new incurrence or expenditures
made under any provision of any such Section that regulates the Dollar
amount outstanding or made at any time).
(c) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
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13.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
------------------------------------------------
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Agreement or any other Credit Document may
be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of
this Agreement, the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts. The Borrower hereby further irrevocably waives any
claim that any such courts lack jurisdiction over such Borrower, and agrees
not to plead or claim, in any legal action or proceeding with respect to
this Agreement or any other Credit Document brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Borrower. The
Borrower further irrevocably consents to the service of process in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to such Borrower, at its address for
notices pursuant to Section 13.03, such service to become effective 30 days
after such mailing. The Borrower hereby irrevocably waives any objection to
such service of process and further irrevocably waives and agrees not to
plead or claim in any action or proceeding commenced hereunder or under any
other Credit Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of the Administrative
Agent, the Collateral Agent, any Bank or the holder of any Note to serve
process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Credit Party in any other
jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
or any other Credit Document brought in the courts referred to in clause
(a) above and hereby further irrevocably waives and agrees not to plead or
claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete
set of counterparts executed by all the parties hereto shall be lodged with
the Borrower and the Administrative Agent.
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13.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which (i) the Borrower, the Administrative
Agent, and each of the Banks shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the
same (including by way of facsimile transmission) to the Administrative
Agent and (ii) the conditions contained in Sections 5 and 6 are met to the
satisfaction of the Administrative Agent and the Required Banks (determined
immediately after the occurrence of the Effective Date). Unless the
Administrative Agent has received actual notice from any Bank that the
conditions contained in Sections 5 and 6 have not been met to its
satisfaction, upon the satisfaction of the condition described in clause
(i) of the immediately preceding sentence and upon the Administrative
Agent's good faith determination that the conditions described in clause
(ii) of the immediately preceding sentence have been met, then the
Effective Date shall have been deemed to have occurred, regardless of any
subsequent determination that one or more of the conditions thereto had not
been met (although the occurrence of the Effective Date shall not release
the Borrower from any liability for failure to satisfy one or more of the
applicable conditions contained in Section 5 or 6). The Administrative
Agent will give the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
------------------------
other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party
thereto and the Required Banks, provided that no such change, waiver,
--------
discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) (with Obligations being directly affected thereby
in the case of the following clause (i)), (i) extend the final scheduled
maturity of any Loan or Note or extend the stated maturity of any Letter of
Credit beyond the Maturity Date, or reduce the rate or extend the time of
payment of interest or Fees thereon, or reduce the principal amount thereof
(it being understood that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in any rate
of interest or fees for purposes of this clause (i)), (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents) under the Security Documents, (iii) amend, modify or
waive any provision of this Section 13.12 (it being understood that with
the Consent of the Required
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Banks, additional extensions of credit pursuant to the Agreement may
provide for additional voting or consent rights with respect thereto), (iv)
reduce the percentage specified in the definition of Required Banks (it
being understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Banks on substantially the same basis as the
extensions of Revolving Loan Commitments are included on the Effective
Date) or (v) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement, except that the
Borrower may assign or otherwise transfer its rights, obligations and
interests hereunder or under the other Credit Documents to any Wholly-Owned
Domestic Subsidiary of the Borrower to the extent (but only to the extent)
that (i) the Borrower guarantees all of the Obligations of such assignee
Subsidiary pursuant to a guaranty in form and substance satisfactory to the
Required Banks and (ii) the Required Banks shall have consented to such
assignment or transfer; provided further, that no such change, waiver,
----------------
discharge or termination shall (v) increase the Revolving Loan Commitments
of any Bank over the amount thereof then in effect without the consent of
such Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Revolving Loan Commitment shall not constitute an
increase of the Revolving Loan Commitment of any Bank, and that an increase
in the available portion of any Revolving Loan Revolving Loan Commitment of
any Bank shall not constitute an increase in the Revolving Loan Commitment
of such Bank), (w) without the consent of each Letter of Issuer, amend,
modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (x) without the consent of
BTCo, alter its rights or obligations with respect to Swingline Loans, (y)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 as same applies to the Administrative Agent or any
other provision as same relates to the rights or obligations of the
Administrative Agent and (z) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations
of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the
consent of one or more of such other Banks whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-
consenting Banks whose individual consent is required are treated as
described in either clause (A) or (B) below, to either (A) replace each
such non-consenting Bank or Banks with one or more
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Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting
Bank's Revolving Loan Commitment and/or repay outstanding Loans of such
Bank which gave rise to the need to obtain such Bank's consent and/or cash
collateralize its applicable RL Percentage of the Letter of Credit of
Outstandings, in accordance with Sections 3.02(b) and/or 4.01(v), provided
--------
that, unless the Revolving Loan Commitments which are terminated and Loans
which are repaid pursuant to preceding clause (B) are immediately replaced
in full at such time through the addition of new Banks or the increase of
the Revolving Loan Commitments and/or outstanding Loans of existing Banks
(who in each case must specifically consent thereto), then in the case of
any action pursuant to preceding clause (B), the remaining Banks
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that the Borrower shall not have the
----------------
right to replace a Bank, terminate its Revolving Loan Commitment or repay
its Loans solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second
proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 12.07 and 13.01, shall,
subject to the provisions of Section 13.18 (to the extent applicable),
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
13.14 Domicile of Loans and Commitments. Each Bank may transfer and
---------------------------------
carry its Loans and/or Revolving Loan Commitments at, to or for the account
of any branch office, subsidiary or affiliate of such Bank; provided, that
--------
the Borrower shall not be responsible for costs arising under Section 1.10,
1.11, 2.05 or 4.04 resulting from any such transfer (other than a transfer
pursuant to Section 1.12) to the extent such costs would not otherwise be
applicable to such Bank in the absence of such transfer.
13.15 Confidentiality. (a) Each of the Banks agrees that it will use
---------------
its reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its directors, trustees, employees, auditors,
counsel or other professional advisors, to affiliates or to another Bank if
the Bank or such Bank's holding or parent company in its sole discretion
determines that any such party should have access to such information) any
information with respect to the Borrower or any of its Subsidiaries which
is furnished pursuant to this Agreement; provided, that any Bank may
--------
disclose any such information (a) as has become generally available to the
public, (b) as may be required or appropriate (x) in any report,
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statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or
to the Federal Reserve Board or the Federal Deposit Insurance Corporation
or similar organizations (whether in the United States or elsewhere) or
their successors or (y) in connection with any request or requirement of
any such regulatory body (including any securities exchange or self-
regulatory organization), (c) as may be required or appropriate in response
to any summons or subpoena or in connection with any litigation, (d) to
comply with any law, order, regulation or ruling applicable to such Bank,
and (e) to any prospective transferee in connection with any contemplated
transfer of any of the Notes or any interest therein by such Bank;
provided, that such prospective transferee agrees to be bound by this
--------
Section 13.15 to the same extent as such Bank.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or
any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that such Persons shall be subject to the
--------
provisions of this Section 13.15 to the same extent as such Bank.
13.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
--------------------
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
13.17 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as such Borrower's agent, solely for purposes of this
Section 13.17, to maintain a register (the "Register") on which it will
record the Revolving Loan Commitments from time to time of each of the
Banks, the Loans made by each of the Banks and each repayment in respect of
the principal amount of the Loans of each Bank. Failure to make any such
recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of any Revolving Loan Commitment of such Bank and the rights
to the principal of, and interest on, any Loan shall not be effective until
such transfer is recorded on the Register maintained by the Administrative
Agent with respect to ownership of such Revolving Loan Commitment and Loans
and prior to such recordation all amounts owing to the transferor with
respect to such Revolving Loan Commitment and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part
of any Revolving Loan Commitment and
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Loans shall be recorded by the Administrative Agent on the Register only
upon the acceptance by the Administrative Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 13.04(b).
Coincident with the delivery of such an Assignment and Assumption Agreement
to the Administrative Agent for acceptance and registration of assignment
or transfer of all or part of a Revolving Loan Commitment and/or Loan, or
as soon thereafter as practicable, the assigning or transferor Bank shall
surrender the Note evidencing such Revolving Loan Commitment and/or Loan,
and thereupon one or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new Bank.
The Borrower jointly and severally agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities
of whatsoever nature which may be imposed on, asserted against or incurred
by the Administrative Agent in performing its duties under this Section
13.17.
13.18 Limitation on Additional Amounts, etc. Notwithstanding anything
-------------------------------------
to the contrary contained in Section 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated
to pay an amount under such Section within six months after the later of
(x) the date the Bank incurs the respective increased costs, Taxes, loss,
expense or liability, reduction in amounts received or receivable or
reduction in return on capital or (y) the date such Bank has actual
knowledge of its incurrence of the respective increased costs, Taxes, loss,
expense or liability, reductions in amounts received or receivable or
reduction in return on capital, then such Bank shall only be entitled to be
compensated for such amount by the Borrower pursuant to said Section 1.10,
1.11, 2.05 or 4.04, as the case may be, to the extent of the costs, Taxes,
loss, expense or liability, reduction in amounts received or receivable or
reduction in return on capital that are incurred or suffered on or after
the date which occurs six months prior to such Bank giving notice to the
Borrower that it is obligated to pay the respective amounts pursuant to
said Section 1.10, 1.11, 2.05 or 4.04, as the case may be. This Section
13.18 shall have no applicability to any Section of this Agreement other
than said Sections 1.10, 1.11, 2.05 and 4.04.
* * * *
-145-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
NRT INCORPORATED.
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Title: Senior Vice President & Chief
Financial Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
and Arranger
By: /s/ Xxxxxxx XxXxxxxx
--------------------------
Title: Vice President
THE CHASE MANHATTAN BANK,
Individually and as Syndication Agent
and Arranger
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Title: Managing Director
SCHEDULE I
----------
PART A
------
LIST OF BANKS AND COMMITMENTS
-----------------------------
Revolving
Bank Loan Commitment
---- ---------------
Bankers Trust Company $25,000,000
The Chase Manhattan Bank $25,000,000
Total
$50,000,000
===========
SCHEDULE II
-----------
ADDRESSES
---------
Bank Address
---- -------
Bankers Trust Company Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
The Chase Manhattan Bank 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx Xxxxxxxx
Telephone No: (000) 000-0000
Facsimile No.: (000) 000-0000
SCHEDULE I List of Banks and Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Indebtedness
SCHEDULE IV Plans
SCHEDULE V Capitalization
SCHEDULE VI Subsidiaries
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Letters of Credit
SCHEDULE XI Affiliate Transactions
SCHEDULE XII IPO Amendments
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
special New York counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Subsidiaries Guaranty
EXHIBIT I Form of Solvency Certificate
EXHIBIT J Form of Assignment and Assumption Agreement
EXHIBIT K Form of Intercompany Note
EXHIBIT L Form of Shareholder Subordinated Note
(v)
