<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
and
Schedule 13D
under the Securities Exchange Act of 1934
RENAISSANCE HOTEL GROUP N.V.
(Name of Subject Company)
MARRIOTT INTERNATIONAL, INC.
(Bidder)
Common Stock, Par Value 0.01 Netherlands Guilders
(Title of Class of Securities)
N73689 10 6
(CUSIP Number of Class of Securities)
G. Cope Stewart III, Esq. Copy to:
Marriott International, Inc. Jeffrey J. Rosen, Esq.
10400 Fernwood Road, O'Melveny & Myers LLP
6th Floor, Dept 52/923 555 13th St., N.W., Suite 500W
Bethesda, Maryland 20817 Washington, D.C. 20004-1109
(301) 380-9555 (202) 383-5300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and
Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
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Transaction Valuation/1/: $956,610,000 Amount of Filing Fee/2/: $191,322
- --------------------------------------------------------------------------------
/1/ For purposes of calculating the filing fee only. This calculation assumes
the purchase of (i) all 30,100,000 outstanding shares of Common Stock of
Renaissance Hotel Group N.V., and (ii) all 1,787,000 shares of Common
Stock issuable pursuant to outstanding stock options, in each case at
$30.00 net per share in cash.
/2/ The amount of the filing fee, calculated in accordance with Rule 0-11(d)
of the Securities Exchange Act of 1934, as amended, equals 1/50th of one
percent of the aggregate value of cash offered by Marriott International,
Inc. for such shares.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
Amount previously paid: Not applicable Filing Party: Not Applicable
Form or registration no.: Not applicable Date Filed: Not Applicable
(Continued on following page(s))
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Schedule 14D-1 and 13D
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CUSIP No. 14D-1 AND 13D
-----------
N73689 10 6
-----------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Marriott International, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
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3 SEC USE ONLY
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4 SOURCES OF FUNDS
BK, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON/*/
16,368,000
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)/*/
Approximately 54.37% of outstanding Shares; approximately 51.32%
of aggregate outstanding Shares and options to purchase Shares.
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10 TYPE OF REPORTING PERSON
CO, HC
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* On February 17, 1997, Marriott International, Inc. (the "Purchaser")
entered into a Shareholder Agreement (the "Shareholder Agreement") with
Diamant Hotel Investments N.V., a Netherlands Antilles corporation (the
"Principal Shareholder"). Pursuant to the Shareholder Agreement, the
Principal Shareholder has agreed, among other things, to tender and not
withdraw its Shares in the Offer. Based upon representations made by the
Principal Shareholder to the Purchaser, as of the date of the Shareholder
Agreement, the Principal Shareholder held 16,368,000 Shares. Pursuant to
the Shareholder Agreement, the Principal Shareholder has granted to the
Purchaser an option to purchase all owned Shares at a price equal to the
Offer Price. The option may be exercised during a six-month period
commencing on a termination of the Acquisition Agreement dated as of
February 17, 1997 by and between the Purchaser and the Company (the
"Acquisition Agreement") pursuant to specified provisions therein. The
option may be exercised if the Acquisition Agreement is terminated
pursuant to
<PAGE>
provisions that permit such termination (i) by the Board of Managing
Directors of the Company (the "Board"), if the Board has withdrawn its
approval or recommendation of the Offer by reason of an Alternative
Transaction Proposal (as defined in the Acquisition Agreement) and has
paid to the Purchaser a fee of $27,500,000, and (ii) by the board of
directors of the Purchaser, if the Board fails to issue, withdraws or
materially adversely modifies its approval or recommendation of the Offer
or recommends an Alternative Transaction Proposal (as defined in the
Acquisition Agreement) to the stockholders of the Company, or adopts a
resolution to effect any of the foregoing. Further, so long as the
Purchaser is not in material breach of the Acquisition Agreement or the
Shareholder Agreement, the option may be exercised if the Acquisition
Agreement is terminated by either party thereto if the Offer has expired
or been terminated and the Purchaser has not purchased Shares pursuant to
the Offer and if at the expiration or termination of the Offer there is
pending or outstanding an Alternative Transaction Proposal. The
Shareholder Agreement is described more fully in Section 10 of the Offer
to Purchase dated February 24, 1997 (the "Offer to Purchase") and is
annexed as Exhibit (c)(2) to this Schedule 14D-1.
<PAGE>
This Tender Offer Statement on Schedule 14D-1 also constitutes a Statement on
Schedule 13D with respect to the acquisition by the Purchaser of beneficial
ownership of the Shares subject to the Shareholder Agreement. The item numbers
and responses thereto below are in accordance with the requirements of Schedule
14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Renaissance Hotel Group N.V., a
Netherlands limited liability company (the "Subject Company"). The address of
the Subject Company's principal executive offices is c/o Renaissance Hotels
International, 17th Floor, New World Tower II, 18 Queen's Road, Central, Hong
Kong. The Company's Dutch registered office is in Amsterdam, The Netherlands.
(b) This Statement on Schedule 14D-1 relates to the offer by Marriott
International, Inc., a Delaware corporation (the "Purchaser"), to purchase all
outstanding shares of common stock (the "Shares"), par value 0.01 Netherlands
Guilders per share, of the Subject Company upon the terms and subject to the
conditions set forth in the Offer to Purchase dated February 24, 1997 and in
the related Letter of Transmittal (which together with any supplements or
amendments thereto collectively constitute the "Offer"), at a purchase price of
$30.00 per Share, net to the seller in cash. According to the Subject Company,
as of February 17, 1997, 30,100,000 Shares of the Common Stock were outstanding,
and 1,787,000 Shares were issuable upon exercise of outstanding options to
purchase Shares. The information set forth in the Introduction and Section 1
("Terms of the Offer") of the Offer to Purchase annexed hereto as Exhibit (a)(1)
is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase annexed hereto as Exhibit (a)(1) is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by the Purchaser. The
information set forth in Section 8 ("Certain Information Concerning the
Purchaser") of the Offer to Purchase annexed hereto as Exhibit (a)(1) and
Schedule I thereto is incorporated herein by reference.
(e) and (f) During the last five years, neither the Purchaser, nor any
persons controlling the Purchaser nor, to the best knowledge of the Purchaser,
any of the persons listed on Schedule I to the Offer to Purchase, (i) has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, Federal or State securities
laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
(a)-(b) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser"), Section 10 ("Background of the Offer;
The Acquisition Agreement; The Shareholder Agreement; The Confidentiality
Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company") of
the Offer to Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by
reference.
<PAGE>
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("Sources and Amounts of
Funds") of the Offer to Purchase annexed hereto as Exhibit (a)(1) is
incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; The Acquisition Agreement; The Shareholder Agreement;
The Confidentiality Agreement"), Section 11 ("Purpose of the Offer; Plans for
the Company") and Section 13 ("Dividends and Distributions") of the Offer to
Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by reference.
(f)-(g) The information set forth in Section 12 ("Effect of the Offer on
the Market for the Shares; Exchange Act Registration; Margin Regulations") of
the Offer to Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF SUBJECT COMPANY.
(a)-(b) The information set forth in Section 8 ("Certain Information
Concerning the Purchaser") of the Offer to Purchase annexed hereto as Exhibit
(a)(1) is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser"), Section 10 ("Background of the Offer;
The Acquisition Agreement; The Shareholder Agreement; The Confidentiality
Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company") of
the Offer to Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 17 ("Fees and Expenses") of the Offer
to Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by
reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in (i) Section 8 ("Certain Information Concerning
the Purchaser") of the Offer to Purchase annexed hereto as Exhibit (a)(1), (ii)
the Purchaser's Annual Report on Form 10-K for the year ended December 29, 1995
filed with the Commission pursuant to Rule 15d-2 of the Exchange Act (the
"Purchaser 10-K") (Item 8. Financial Statements and Supplementary Data, pages
20-40) and (iii) the Purchaser's Quarterly Report on Form 10-Q for the quarter
ended September 6, 1996 (the "Purchaser 10-Q") (Item 1. Financial Statements,
pages 3-9), is incorporated herein by reference.
The Purchaser 10-K and the Purchaser 10-Q should be available for
inspection at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and should also be
available for inspection at the Commission's regional offices located at Seven
World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may
<PAGE>
also be obtained by mail, upon payment of the Commission's customary fees, by
writing to its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The information should also be available for inspection at the New York
Stock Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 10 ("Background of the Offer;
The Acquisition Agreement; The Shareholder Agreement; The Confidentiality
Agreement") of the Offer to Purchase annexed hereto as Exhibit (a)(1) is
incorporated herein by reference.
(b)-(c) The information set forth in the Introduction, Section 1 ("Terms of
the Offer"), Section 10 ("Background of the Offer; The Acquisition Agreement;
The Shareholder Agreement; The Confidentiality Agreement"), Section 12 ("Effect
of the Offer on The Market for the Shares; Exchange Act Registration; Margin
Regulations"), Section 16 ("Certain Legal Matters; Regulatory Approvals") and
Section 18 ("Miscellaneous") of the Offer to Purchase annexed hereto as Exhibit
(a)(1) is incorporated herein by reference.
(d) The information set forth in Section 12 ("Effect of the Offer on the
Market for the Shares; Exchange Act Registration; Margin Regulations") and
Section 16 ("Certain Legal Matters; Regulatory Approvals") of the Offer to
Purchase annexed hereto as Exhibit (a)(1) is incorporated herein by reference.
(e) The information set forth in Section 16 ("Certain Legal Matters;
Regulatory Approvals") of the Offer to Purchase annexed hereto as Exhibit (a)(1)
is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, annexed hereto
as Exhibit (a)(1), and the Letter of Transmittal, annexed hereto as Exhibit
(a)(2), is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase dated February 24, 1997.
(2) Letter of Transmittal.
(3) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(4) Notice of Guaranteed Delivery.
(5) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(6) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(7) Text of Press Release dated February 18, 1997.
(8) Summary Advertisement dated February 24, 1997.
(b) (1) Credit Agreement dated as of July 12, 1996 by and among Marriott
International, Inc., Citibank, N.A., as Administrative Agent, and
certain financial institutions (incorporated herein by reference to
Exhibit 10 to the Purchaser's Quarterly Report on Form 10-Q for the
quarter ended June 14, 1996).
(2) Credit Agreement dated as of February 21, 1997 by and among Marriott
International, Inc., Citibank, N.A., as Administrative Agent, and
certain financial institutions.
(c) (1) Acquisition Agreement dated as of February 17, 1997 by and between
Renaissance Hotel Group N.V. and Marriott International, Inc.
(2) Shareholder Agreement dated as of February 17, 1997 by and between
Diamant Hotel Investments N.V. and Marriott International, Inc.
<PAGE>
(3) Confidentiality Agreement dated as of January 10, 1997 by and between
Renaissance Hotel Group N.V. and Marriott International, Inc.
(d) Not applicable
(e) Not applicable
(f) None
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
February 24, 1997
MARRIOTT INTERNATIONAL, INC.
By: /s/ Michael A. Stein
-----------------------
Name: Michael A. Stein
Title: Executive Vice President and Chief
Financial Officer
<PAGE>
14D-1 EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
(a) (1) Offer to Purchase dated February 24, 1997.
(2) Letter of Transmittal.
(3) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
(4) Notice of Guaranteed Delivery.
(5) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(6) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(7) Text of Press Release dated February 18, 1997.
(8) Summary Advertisement dated February 24, 1997.
(b) (1) Credit Agreement dated as of July 12, 1996 by and among Marriott
International, Inc., Citibank, N.A., as Administrative Agent, and
certain financial institutions (incorporated by reference to
Exhibit 10 to the Purchaser's Quarterly Report on Form 10-Q for the
quarter ended June 14, 1996).
(2) Credit Agreement dated as of February 21, 1997 by and among
Marriott International, Inc., Citibank, N.A., as Administrative
Agent, and certain financial institutions.
(c) (1) Acquisition Agreement dated as of February 17, 1997 by and between
Renaissance Hotel Group N.V. and Marriott International, Inc.
(2) Shareholder Agreement dated as of February 17, 1997 by and between
Diamant Hotel Investments N.V. and Marriott International, Inc.
(3) Confidentiality Agreement dated as of January 10, 1997 by and
between Renaissance Hotel Group N.V. and Marriott International,
Inc.
(d) Not applicable
(e) Not applicable
(f) None
</TABLE>
<PAGE>
Exhibit 99(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
AT
$30.00 NET PER SHARE
BY
MARRIOTT INTERNATIONAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01 A.M., NEW YORK CITY
TIME, ON SATURDAY, MARCH 29, 1997, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF MANAGING DIRECTORS OF RENAISSANCE HOTEL GROUP N.V. (THE
"COMPANY") HAS UNANIMOUSLY APPROVED THE OFFER, DETERMINED THAT THE OFFER IS
FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY, AND
RECOMMENDS ACCEPTANCE OF THE OFFER BY THE SHAREHOLDERS OF THE COMPANY.
---------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES
WHICH CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE CAPITAL STOCK ENTITLED
TO VOTE AND THEN OUTSTANDING (THE "MINIMUM CONDITION"). THE MINIMUM CONDITION
MAY BE WAIVED BY MARRIOTT INTERNATIONAL, INC. (THE "PURCHASER"). SEE SECTION
15.
---------------
THE OFFER IS BEING MADE PURSUANT TO AN ACQUISITION AGREEMENT DATED AS OF
FEBRUARY 17, 1997 BETWEEN THE PURCHASER AND THE COMPANY. THE PURCHASER ALSO
HAS ENTERED INTO AN AGREEMENT (THE "SHAREHOLDER AGREEMENT") WITH DIAMANT HOTEL
INVESTMENTS N.V. (THE "PRINCIPAL SHAREHOLDER"). PURSUANT TO THE SHAREHOLDER
AGREEMENT, THE PRINCIPAL SHAREHOLDER HAS AGREED, AMONG OTHER THINGS, TO TENDER
AND NOT WITHDRAW ITS SHARES IN THE OFFER. THE PRINCIPAL SHAREHOLDER ALSO HAS
GRANTED TO THE PURCHASER AN OPTION TO PURCHASE ALL SHARES OWNED BY THE
PRINCIPAL SHAREHOLDER UNDER SPECIFIED CIRCUMSTANCES, AND HAS MADE CERTAIN
AGREEMENTS WITH RESPECT TO VOTING ITS OWNED SHARES IN FAVOR OF THE OFFER. SEE
INTRODUCTION AND SECTION 10.
---------------
IT IS THE CURRENT INTENTION OF THE PURCHASER TO CAUSE THE COMPANY TO DELIST
THE SHARES FROM THE NEW YORK STOCK EXCHANGE, INC. AND TO TERMINATE THE
REGISTRATION OF THE SHARES UNDER THE SECURITIES EXCHANGE ACT OF 1934, AFTER
CONSUMMATION OF THE OFFER, IF THE REQUIREMENTS FOR SUCH DELISTING AND
TERMINATION OF REGISTRATION ARE MET. AS A RESULT, A NON-TENDERING SHAREHOLDER
MAY IN THE FUTURE HOLD A HIGHLY ILLIQUID INVESTMENT WITH NO ASSURANCE AS TO
THE TIMING OF ANY OPPORTUNITY FOR DISPOSITION. SEE SECTIONS 11 AND 12.
IMPORTANT
Any shareholder desiring to tender all or any portion of such holder's
Shares (as defined herein) should either (a) complete and sign the Letter of
Transmittal (or a manually signed facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificates representing the tendered Shares and all other required
documents to First Chicago Trust Company of New York (the "DEPOSITARY"), or
tender such Shares pursuant to the procedure for book-entry transfer set forth
in Section 3 of this Offer to Purchase or (b) request his or her broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him or her. A shareholder whose Shares are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee
if such holder desires to tender such Shares.
Any shareholder who desires to tender such holder's Shares and whose
certificates representing such Shares are not immediately available or who
cannot comply with the procedures for book-entry transfer on a timely basis
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3 of this Offer to Purchase.
Questions and requests for assistance and for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the other tender offer
materials may also be obtained from brokers, dealers, commercial banks or
trust companies.
---------------
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
---------------
February 24, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<C> <S> <C>
INTRODUCTION............................................................ 1
1. Terms of the Offer................................................. 2
2. Acceptance for Payment and Payment................................. 3
3. Procedures for Tendering Shares.................................... 4
4. Withdrawal Rights.................................................. 6
5. Certain Tax Considerations......................................... 6
6. Price Range of Shares; Dividends................................... 9
7. Certain Information Concerning the Company......................... 9
8. Certain Information Concerning the Purchaser....................... 11
9. Sources and Amounts of Funds....................................... 14
10. Background of the Offer; The Acquisition Agreement; The Shareholder
Agreement; The Confidentiality Agreement.......................... 15
11. Purpose of the Offer; Plans for the Company........................ 24
12. Effect of the Offer on the Market for the Shares; Exchange Act
Registration; Margin Regulations.................................. 26
13. Dividends and Distributions........................................ 27
14. Extension of Tender Period; Amendment; Termination................. 28
15. Conditions to the Offer............................................ 29
16. Certain Legal Matters; Regulatory Approvals........................ 30
17. Fees and Expenses.................................................. 32
18. Miscellaneous...................................................... 32
Schedule I--Directors and Executive Officers of the Purchaser
</TABLE>
<PAGE>
To the Holders of Common Stock of
Renaissance Hotel Group N.V.
INTRODUCTION
Marriott International, Inc., a Delaware corporation (the "PURCHASER"),
hereby offers to purchase all outstanding shares of common stock, par value
0.01 Netherlands Guilders (the "SHARES"), of Renaissance Hotel Group N.V., a
Netherlands limited liability company (the "COMPANY"), at $30.00 per Share,
net to the seller in cash, without interest thereon (the "OFFER PRICE"), upon
the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together with any supplements
or amendments thereto collectively constitute the "OFFER").
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of
Salomon Brothers Inc ("SALOMON BROTHERS") which is acting as the Dealer
Manager for the Offer (in such capacity, the "DEALER MANAGER"), First Chicago
Trust Company of New York (the "DEPOSITARY"), and MacKenzie Partners, Inc.
(the "INFORMATION AGENT"), incurred in connection with the Offer. See Section
17. For purposes of this Offer to Purchase, references to "SECTION" are
references to a section of this Offer to Purchase, unless the context
otherwise requires.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES
WHICH CONSTITUTES AT LEAST NINETY PERCENT (90%) OF THE CAPITAL STOCK ENTITLED
TO VOTE AND THEN OUTSTANDING (THE "MINIMUM CONDITION"). THE MINIMUM CONDITION
MAY BE WAIVED BY THE PURCHASER. SEE SECTION 15.
THE BOARD OF MANAGING DIRECTORS OF THE COMPANY (THE "BOARD" OR "BOARD OF
MANAGING DIRECTORS") HAS UNANIMOUSLY APPROVED THE OFFER, DETERMINED THAT THE
OFFER IS FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY,
AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE SHAREHOLDERS OF THE COMPANY.
The Offer is being made pursuant to an Acquisition Agreement dated as of
February 17, 1997 (the "ACQUISITION AGREEMENT") by and between the Company and
the Purchaser.
The Acquisition Agreement provides, among other things, that in accordance
with the provisions of the Dutch Civil Code (the "DCC"), as soon as
practicable after the consummation of the Offer, the Purchaser may, at its
sole discretion, take all actions necessary and proper under the DCC to
commence the process leading to a Compulsory Buy-Out (the "BUY-OUT") in
accordance with Section 2:92a of the DCC, to acquire, at a judicially
determined price, all the issued Shares not acquired by the Purchaser in the
Offer. The DCC requires that, in order to implement the Buy-Out, the Purchaser
and other corporations belonging to its corporate group must hold ninety-five
percent (95%) of the issued and outstanding capital stock of the Company. The
Purchaser intends to initiate the Buy-Out process if, upon consummation of the
Offer, the Purchaser holds sufficient Shares to be eligible for such procedure
under the DCC.
The Acquisition Agreement also provides that, if the Purchaser acquires less
than ninety-five percent (95%) of the outstanding Shares pursuant to the
Offer, then the Purchaser may elect, to the extent permitted by the DCC, to
effectuate a statutory merger (a "STATUTORY MERGER") involving the Company as
a disappearing entity pursuant to Section 2:308 et seq. of the DCC, in which
case, to the extent permitted by the DCC, the merger consideration shall be
the same as (or shall provide equivalent value to) the Offer Price. See
Section 11.
Morgan Stanley & Co. Incorporated ("MORGAN STANLEY"), financial advisor to
the Company, has delivered to the Board of Managing Directors a written
opinion dated February 17, 1997 to the effect that, as of such date and based
upon its review and analysis and subject to the limitations set forth therein,
the consideration to be received by the holders of Shares in the Offer is fair
from a financial point of view to such holders. A copy of
1
<PAGE>
such opinion is included with the Company's Solicitation/Recommendation
Statement on Schedule 14D-9 (the "SCHEDULE 14D-9"), which is being mailed to
shareholders concurrently herewith, and should be read carefully in its
entirety for a description of the assumptions made, matters considered and
limitations on the review undertaken by Morgan Stanley.
The Purchaser has entered into an agreement dated as of February 17, 1997
(the "SHAREHOLDER AGREEMENT") with Diamant Hotel Investments N.V., a
Netherlands Antilles corporation (the "PRINCIPAL SHAREHOLDER"). Pursuant to
the Shareholder Agreement, the Principal Shareholder has agreed, among other
things, to tender and not withdraw its Shares in the Offer. The Principal
Shareholder also has granted to the Purchaser an option to purchase all shares
owned by the Principal Shareholder under specified circumstances, and has made
certain agreements with respect to voting its owned Shares in favor of the
Offer. Based upon representations made by the Principal Shareholder to the
Purchaser, as of the date of the Shareholder Agreement, the Principal
Shareholder held 16,368,000 Shares representing approximately 54.37% of the
outstanding Shares. See Section 10.
According to the Company, as of February 17, 1997, (i) 30,100,000 Shares
were validly issued and outstanding, and (ii) 1,787,000 Shares were reserved
for future issuance upon exercise of outstanding options to purchase Shares
("COMPANY OPTIONS") granted to directors, officers, employees and consultants
of the Company pursuant to the Company's Amended and Restated 1995 Stock
Option Plan (the "COMPANY STOCK OPTION PLAN").
Based upon information provided by the Company and assuming no stock options
are exercised prior to consummation of the Offer, the Purchaser understands
that the Minimum Condition would be satisfied if at least 27,090,000 Shares
are validly tendered and not withdrawn prior to the Expiration Date.
Assuming no stock options are exercised prior to consummation of the Offer,
tender of Shares in the Offer by the Principal Shareholder in accordance with
the terms of the Shareholder Agreement would provide the Purchaser with at
least a 54.37% equity interest in the Company. Accordingly, assuming the
tender of Shares by the Principal Shareholder in accordance with the
Shareholder Agreement and assuming no Company Options are exercised prior to
consummation of the Offer, a further 10,722,000 Shares would need to be
tendered by other shareholders in order to satisfy the Minimum Condition.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares which are validly tendered
prior to the Expiration Date and not withdrawn in accordance with Section 4.
The term "EXPIRATION DATE" means 12:01 A.M., New York City time, on Saturday,
March 29, 1997, unless and until the Purchaser, subject to the terms of the
Acquisition Agreement, shall have extended the period of time during which the
Offer is open, in which event the term "EXPIRATION DATE" shall refer to the
latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.
Pursuant to the Acquisition Agreement, the Purchaser, subject to the terms
and conditions of the Offer, may, at its discretion, extend the period of time
during which the Offer is open if the Offer would otherwise expire before the
Conditions (as defined at Section 15) are satisfied or waived. The Purchaser
will not otherwise extend the period of time during which the Offer is open
unless any of the Conditions (as defined at Section 15) shall not have been
satisfied.
Subject to the terms of the Acquisition Agreement and the rules of the
Securities and Exchange Commission (the "COMMISSION"), the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
and regardless of whether or not any of the events set forth in Section 15
shall have occurred or shall have been determined by the Purchaser to have
occurred, (i) to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary and (ii) to
amend the Offer in any respect by giving oral or written
2
<PAGE>
notice of such amendment to the Depositary. Without the consent of the
Company, no amendment may be made which (x) decreases the Offer Price or
changes the form of consideration payable in the Offer, (y) decreases the
number of Shares sought, or (z) imposes additional conditions to the Offer or
amends any other term of the Offer in any manner adverse to the holders of
Shares.
The Offer is subject to certain conditions set forth in Section 15,
including satisfaction of the Minimum Condition and the expiration or
termination of any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"). If any such condition is
not satisfied prior to the expiration of the Offer, the Purchaser may, subject
to the terms of the Acquisition Agreement, (i) terminate the Offer and return
all tendered Shares to tendering shareholders, (ii) extend the Offer and,
subject to withdrawal rights as set forth in Section 4, retain all such Shares
until the expiration of the Offer as so extended, (iii) other than as
described in Section 15, waive such condition and, subject to any requirement
to extend the period of time during which the Offer is open, purchase all
Shares validly tendered and not withdrawn by the Expiration Date or (iv) delay
acceptance for payment of, or (whether or not the Shares have theretofore been
accepted for payment) payment for, any Shares tendered and not withdrawn,
subject to applicable law, until satisfaction or waiver of the conditions to
the Offer. For a description of the Purchaser's right to extend the period of
time during which the Offer is open, and to amend, delay or terminate the
Offer, see Section 14.
The Company has provided the Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal
and other related materials will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the shareholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered and not
properly withdrawn by the Expiration Date as soon as practicable after the
later of (i) the Expiration Date and (ii) the satisfaction or waiver of the
conditions set forth in Section 15. For a description of the Purchaser's right
to terminate the Offer and not accept for payment or pay for Shares or to
delay acceptance for payment or payment for Shares, see Section 14.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment tendered Shares if, as and when the Purchaser gives oral or written
notice to the Depositary of its acceptance of the tenders of such Shares.
Payment for Shares purchased pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting such payments to tendering shareholders. In all cases, payment
for Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of certificates for such Shares (or of a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in Section
3)), a properly completed and duly executed Letter of Transmittal (or manually
signed facsimile thereof) (unless, in the case of a book-entry transfer, an
Agent's Message (as defined below in Section 3) is utilized) and any other
documents required by the Letter of Transmittal. For a description of the
procedure for tendering Shares pursuant to the Offer, see Section 3.
Accordingly, payment may be made to tendering shareholders at different times
if delivery of the Shares and other required documents occur at different
times. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE
CONSIDERATION PAID FOR SHARES PURSUANT TO THE OFFER, REGARDLESS OF ANY DELAY
IN MAKING SUCH PAYMENT.
If the Purchaser increases the consideration to be paid for Shares pursuant
to the Offer, the Purchaser will pay such increased consideration for all
Shares purchased pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment
will not relieve the Purchaser of its obligations under the Offer or prejudice
the rights of tendering shareholders
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<PAGE>
to receive payment for Shares validly tendered and accepted for payment. The
Acquisition Agreement permits the Purchaser to assign its rights and delegate
its obligations to a wholly-owned subsidiary, provided that such assignment
and delegation does not relieve the Purchaser of its obligations under the
Acquisition Agreement. The Purchaser is in the process of establishing a
Netherlands private limited liability company as its indirect wholly-owned
subsidiary and expects, upon completion of the incorporation process and prior
to the consummation of the Offer, to assign its rights and delegate its
obligations to purchase Shares tendered in the Offer to such subsidiary.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for Shares not purchased or tendered will be returned (or, in the
case of Shares tendered by book-entry transfer, such Shares will be credited
to an account maintained at one of the Book-Entry Transfer Facilities),
without expense to the tendering shareholder, as promptly as practicable after
the expiration or termination of the Offer.
3. PROCEDURES FOR TENDERING SHARES
Valid Tender. To tender Shares pursuant to the Offer, either (a) a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof), with any required signature guarantees and any other
documents required by the Letter of Transmittal must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date and either (i) certificates for
Shares to be tendered must be received by the Depositary along with the Letter
of Transmittal or (ii) such Shares must be delivered to the Depositary
pursuant to the procedures for book-entry transfer described below (and a
confirmation of such delivery received by the Depositary including an Agent's
Message if the tendering shareholder has not delivered a Letter of
Transmittal), in each case prior to the Expiration Date, or (b) the tendering
shareholder must comply with the guaranteed delivery procedures described
below. The term "AGENT'S MESSAGE" means a message transmitted by a Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
book-entry confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Company may
enforce such agreement against such participant.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each of The Depository Trust Company and the Philadelphia
Depository Trust Company (collectively referred to as the "BOOK-ENTRY TRANSFER
FACILITIES") for purposes of the Offer within two business days after the date
of this Offer to Purchase, and any financial institution that is a participant
in the system of any Book-Entry Transfer Facility may make book-entry delivery
of Shares by causing a Book-Entry Transfer Facility to transfer such Shares
into the Depositary's account at a Book-Entry Transfer Facility in accordance
with the procedures of such Book-Entry Transfer Facility. However, although
delivery of Shares may be effected through book-entry transfer, the Letter of
Transmittal (or manually signed facsimile thereof) properly completed and duly
executed, together with any required signature guarantees and any other
required documents, must, in any case, be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase prior to
the Expiration Date, or the guaranteed delivery procedures described below
must be complied with. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a recognized member of a Medallion Signature Guarantee Program
or by any other "eligible guarantor institution" as defined in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
(each of the foregoing, an "ELIGIBLE INSTITUTION"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed
by the registered holder of the Shares tendered therewith and such holder has
not completed either the box entitled "Special Payment Instructions" or the
box entitled "Special Delivery Instructions" on the Letter of Transmittal or
(b) if such Shares are tendered for the account of an Eligible Institution.
4
<PAGE>
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless
be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary prior to the Expiration Date as provided below; and
(iii) the certificates for such Shares, in proper form for transfer (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility), together with a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile) thereof or, in the case of book-entry, an Agent's Message, with
any required signature guarantees and any other documents required by the
Letter of Transmittal, are received by the Depositary within three trading
days after the date of execution of the Notice of Guaranteed Delivery. A
"TRADING DAY" is any day on which the New York Stock Exchange (the "NYSE")
is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mailed to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS, INCLUDING THROUGH BOOK-ENTRY TRANSFER FACILITIES, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
Back-up U.S. Federal Income Tax Withholding. Under the U.S. federal income
tax laws, the Depositary will be required to withhold 31% of the amount of any
payments made to certain shareholders pursuant to the Offer. In order to avoid
such backup withholding, each tendering shareholder must provide the
Depositary with such shareholder's correct taxpayer identification number and
certify that such shareholder is not subject to back-up U.S. federal income
tax withholding by completing the Substitute Form W-9 included in the Letter
of Transmittal (see Instruction 10 of the Letter of Transmittal) or by filing
a Form W-9 with the Depositary prior to any such payments. If the shareholder
is a nonresident alien or foreign entity not subject to backup withholding,
the shareholder must give the Depositary a completed Form W-8 Certificate of
Foreign Status prior to receipt of any payments.
Other Requirements. By executing a Letter of Transmittal as set forth above,
a tendering shareholder irrevocably appoints designees of the Purchaser as the
shareholder's attorneys and proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of the
shareholder's rights with respect to the Shares tendered by the shareholder
and accepted for payment by the Purchaser (and any and all other Shares or
other securities issued or issuable in respect of such Shares on or after the
date of the Acquisition Agreement). All such proxies and powers of attorney
shall be irrevocable and coupled with an interest in the tendered Shares. Such
appointment is effective only upon acceptance for payment of the Shares by the
Purchaser. Upon such acceptance for payment, all prior proxies and consents
given by the shareholder with respect to such Shares and other securities
will, without further action, be revoked, and no subsequent proxies or powers
of attorney may be given nor any subsequent written consent executed by such
shareholder (and, if given or executed, will not be deemed to be effective)
with respect thereto. The designees of the Purchaser will, with respect to the
Shares and other securities, be empowered to exercise all voting and other
rights of such shareholder as they in their sole discretion may deem proper at
any annual, special or adjourned meeting of the Company's shareholders, by
written consent or otherwise. The Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for
5
<PAGE>
payment of such Shares, the Purchaser is able to exercise full voting and
other rights with respect to such Shares (including voting at any meeting of
shareholders then scheduled or acting by written consent without a meeting).
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the terms and
conditions of the Offer, as well as the tendering shareholder's representation
and warranty that such shareholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal. The
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering shareholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment
of any tendered Shares will be determined by the Purchaser in its sole
discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of any Shares
determined by it not to be in proper form or the acceptance for payment of, or
payment for which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any defect or
irregularity in any tender of Shares. No tender of Shares will be deemed to
have been properly made until all defects and irregularities relating thereto
have been cured or waived. The Purchaser's interpretation of the terms and
conditions of the Offer in this regard (including the Letter of Transmittal
and the Instructions thereto) will be final and binding. None of the
Purchaser, the Depositary, the Dealer Manager, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification.
4. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after April 24, 1997, unless
theretofore accepted for payment as provided in this Offer to Purchase.
To be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder, if different from that of the person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares tendered by an Eligible
Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering shareholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn, or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at one of the Book-Entry Transfer
Facilities to be credited with the withdrawn shares. Withdrawals may not be
rescinded, and Shares withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Shares may be retendered by
again following one of the procedures described in Section 3 at any time prior
to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, the Depositary, the Dealer Manager, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
5. CERTAIN TAX CONSIDERATIONS
U.S. Federal Income Tax Consequences. The following summary addresses the
material U.S. federal income tax consequences to holders of Shares who sell
their Shares in the Offer. The summary does not address all aspects of U.S.
federal income taxation that may be relevant to particular holders of Shares
and thus, for
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example, may not be applicable to holders of Shares who are not citizens or
residents of the United States, who are employees and who acquired their
Shares pursuant to the exercise of compensatory stock options or who are
entities that are otherwise subject to special tax treatment under the
Internal Revenue Code of 1986, as amended (the "CODE") (such as insurance
companies, tax-exempt entities and regulated investment companies); nor, other
than to the limited extent expressly set forth below, does this summary
address the effect of any applicable foreign, state, local or other tax laws.
The discussion assumes that each holder of Shares holds such Shares as a
capital asset within the meaning of Section 1221 of the Code. The U.S. federal
income tax discussion set forth below is included for general information only
and is based upon present law. The precise tax consequences of the Offer will
depend on the particular circumstances of the holder. SHAREHOLDERS ARE URGED
TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC U.S. FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE PROPOSED TRANSACTION.
The receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local or foreign tax laws. In general, a
shareholder who receives cash for Shares pursuant to the Offer will recognize
gain or loss for U.S. federal income tax purposes equal to the difference
between the amount of cash received in exchange for the Shares sold and such
shareholder's adjusted tax basis in such Shares. Such gain or loss will be
capital gain or loss, and will be long-term capital gain or loss if the holder
has held the Shares for more than one year at the time of sale. Under current
law, gain or loss will be calculated separately for each block of Shares
tendered pursuant to the Offer.
Under current law, the maximum U.S. federal tax rate applicable to long-term
capital gains recognized by an individual is 28%, and the maximum U.S. federal
tax rate applicable to ordinary income (including dividends and short-term
capital gains recognized by individuals) is 39.6%. The maximum U.S. federal
tax rate applicable to all capital gains and ordinary income recognized by a
corporation is 35%. It is possible that legislation may be enacted that would
reduce the maximum U.S. federal tax rate applicable to long-term capital
gains, possibly with retroactive effect. It is not possible to predict whether
or in what form any such legislation may be enacted.
Withholding. Unless a shareholder complies with certain reporting and/or
certification procedures or is an exempt recipient under applicable provisions
of the Code (and regulations promulgated thereunder), such shareholder may be
subject to a "backup" withholding tax of 31% with respect to any payments
received in the Offer. Shareholders should contact their brokers to ensure
compliance with such procedures. Foreign shareholders should consult with
their tax advisors regarding withholding taxes in general.
Netherlands Tax on Sale of Shares in the Offer. No Netherlands withholding
tax applies on the sale or disposition of Shares to persons other than the
Company and affiliates of the Company. The Purchaser has been advised that no
Netherlands withholding tax should apply to a sale of Shares pursuant to the
Offer. Shareholders holding, alone or with certain related parties, directly
or indirectly, 5% or more of the Company's Shares may be subject to
Netherlands income tax or corporation tax, as the case may be, on the sale or
disposition of Shares.
Buy-Out. If the Purchaser is able to implement the Buy-Out as described at
Section 11 below, then each non-tendering Shareholder would be compelled to
sell its Shares to the Purchaser at a judicially determined price. The
Purchaser has been advised that no Netherlands withholding tax should apply to
sale of Shares in the Buy-Out.
Sale of U.S. Companies and Dividend of Proceeds. After consummation of the
Offer, the Purchaser may, among other possible actions, cause the Company to
sell to the Purchaser or an affiliate of the Purchaser the shares of
Renaissance Hotel Holdings, Inc., a Delaware corporation ("RHHI"), a wholly-
owned subsidiary of the Company. RHHI holds all of the Company's interests in
the Company's U.S. operations. See Section 11 below. The purchase price would
be the fair market value as determined by an independent investment banking
firm. The purchase price for RHHI, though not yet valued, is expected to be a
substantial portion of the value of the Company. The Purchaser intends that
substantially all proceeds to the Company from this sale would be distributed
by the Company as a dividend to its shareholders.
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Any such dividend paid to non-tendering shareholders who are not Netherlands
residents would be subject to Netherlands dividend withholding tax on the
entire amount of the dividend or a portion thereof, generally at a rate equal
to 25% (shareholders holding, alone or with certain related parties, directly
or indirectly 5% or more of a company's shares may also be subject to
Netherlands income tax or corporation tax, as the case may be). A shareholder
may be eligible for a reduction or refund of Netherlands dividend withholding
tax under a tax convention which is in effect between the country of residence
of the shareholder and The Netherlands. The Netherlands has concluded such
conventions with, among others, the United States, Canada, Switzerland, Japan,
and all EU Member States except Portugal. Under such conventions, the
Netherlands dividend withholding tax is reduced to 15% or a lower rate.
Under the United States-Netherlands income tax treaty of 1992 (the
"TREATY"), the dividend withholding rate on dividends paid by the Company to a
U.S. individual, corporation, trust or estate (a "U.S. SHAREHOLDER") may be
reduced to 5% or 15% if the U.S. Shareholder meets certain tests contained in
the Treaty. An individual will satisfy the Treaty test, and be subject to
withholding at a 15% rate, if he or she is a U.S. resident within the meaning
of the Treaty. A U.S. corporation, trust or estate should contact its tax
advisors to determine whether it will be eligible for the reduced Treaty rate.
Under the Treaty, in certain circumstances, dividends paid by the Company to
U.S. pension funds and U.S. exempt organizations may be eligible for an
exemption from dividend withholding tax.
The dividend payable after a sale of RHHI would be equivalent to that
portion of the value of non-tendering shareholder's Shares attributable to the
U.S. companies. As a result, a non-Netherlands resident shareholder who does
not tender in the Offer would receive a portion of the value of such
shareholder's Shares as a dividend which would be subject to Netherlands
withholding taxes. As noted in Section 2 above, the Purchaser intends to
assign its rights to purchase Shares in the Offer to a Netherlands private
limited liability company that the Purchaser is in the process of establishing
and that will be a wholly-owned indirect subsidiary of the Purchaser. If the
Shares purchased in the Offer are held by a Netherlands private limited
liability company, then no Netherlands withholding tax should be payable upon
receipt by such entity of the dividend paid after a sale of RHHI.
Section 338 Election. Following consummation of the Offer (and assuming the
purchase in the Offer of at least 80% of the Shares), the Purchaser may make
an election under Section 338 of the Code (a "SECTION 338 ELECTION") to treat
the Company for U.S. federal income tax purposes as if it sold all its assets
pursuant to a plan of complete liquidation at the end of the day on which the
Offer is consummated. The Company then will be treated for U.S. federal income
tax purposes as a new corporation that purchased the assets on the day
following such date. As a result of the Section 338 Election, the Company's
basis in the stock of each direct subsidiary of the Company (including RHHI)
will be adjusted pursuant to the Code to equal its fair market value. Except
to the extent provided in the Foreign Investment in Real Property Tax Act of
1980, as amended ("FIRPTA"), such a Section 338 Election should not result in
any taxable gain to the Company for U.S. federal income tax purposes. However,
if RHHI is determined to be a "United States real property holding
corporation," as defined in FIRPTA, and if a Section 338 Election is made, the
Company will recognize gain (or loss) with respect to its ownership interest
in RHHI equal to the difference between the fair market value of such stock
and the adjusted basis in such stock immediately before such election, and
will be subject to U.S. federal income tax on such gain at rates of up to 35%,
and may also be subject to withholding tax and certain other requirements. The
Purchaser is currently considering the tax aspects of a Section 338 Election.
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6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are traded on the NYSE under the symbol "RHG." The following
table sets forth, for the fiscal quarters indicated, the high and low closing
prices per Share as reported by the NYSE:
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Fiscal Year Ended June 30, 1996:
Quarter ended September 30, 1995*........................ $18 $17
Quarter ended December 31, 1995.......................... $25 1/2 $17 1/8
Quarter ended March 31, 1996............................. $25 7/8 $19 3/4
Quarter ended June 30, 1996.............................. $22 5/8 $19
Fiscal Year Ending June 30, 1997:
Quarter ended September 30, 1996......................... $22 1/2 $19
Quarter ended December 31, 1996.......................... $22 7/8 $12 5/8
Quarter ending March 31, 1997 (through February 21,
1997)................................................... $29 3/4 $22 1/2
</TABLE>
- --------
* Represents the activity from the date of the Company's initial public
offering (September 27, 1995) through the end of the first quarter of fiscal
year 1996 (September 30, 1995).
No cash dividends have been declared or paid on the Shares since the
Company's initial public offering on September 27, 1995. The Acquisition
Agreement prohibits the Company from declaring or paying any dividends until
the consummation of the Offer.
On February 14, 1997, the last full trading day prior to announcement of the
Acquisition Agreement, the last reported sales quotation per Share on the NYSE
was $25 1/8. On February 21, 1997, the last full trading day prior to the
commencement of the Offer, the last reported sales quotation per Share on the
NYSE was $29 5/8.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a limited liability company incorporated under the laws of
the Kingdom of the Netherlands with its principal offices located at c/o
Renaissance Hotels International, 17th Floor, New World Tower II, 18 Queen's
Road, Central, Hong Kong. The Company was formed in June 1995 to succeed to
the hotel management and franchise business of New World Development Company
Limited, a Hong Kong corporation, and its affiliates.
The Company offers lodging products under the Renaissance, New World and
Ramada International brand names on five continents. Renaissance hotels are
luxury properties located in business and financial centers throughout the
world and in selected resort destinations. New World hotels are upscale
properties located in major cities throughout Asia. Ramada International
hotels are mid-priced properties located outside the United States.
As of December 31, 1996, the Company had a portfolio of 150 hotels with
46,369 rooms, including (i) management agreements for 63 Renaissance hotels,
15 New World hotels and 33 Ramada International hotels, and (ii) franchise
agreements for eight Renaissance hotels and 31 Ramada International hotels.
The Company owns the Renaissance, New World and Ramada marks world-wide and
has exclusively licensed the use of the Ramada name in the United States and
Canada to unaffiliated parties. There were approximately 825 Ramada hotels in
the United States as of September 30, 1996 and 34 Ramada hotels in Canada as
of December 31, 1996, which were sublicensed pursuant to exclusive license
agreements.
As of December 31, 1996, the Company had entered into management or
franchise agreements for an additional 34 hotels (21 of which were under
construction), representing planned additions of approximately 9,467 rooms to
the Company's base of 46,369 rooms.
9
<PAGE>
On January 6, 1997, the Company and Doubletree Corporation ("DOUBLETREE")
announced that their respective boards of directors approved a memorandum of
understanding for the proposed acquisition of the Company by Doubletree, with
holders of Shares to receive consideration per Share consisting of $8.00 cash
and 0.4342 shares of Doubletree common stock, subject to adjustment. See
Section 10 below. A copy of the memorandum of understanding is attached to the
Company's report on Form 6-K filed with the Commission on January 7, 1997. The
memorandum of understanding provided that, if the Company entered into a
merger or acquisition agreement with a party other than Doubletree within 120
days, the Company would pay Doubletree a termination fee of $15 million.
The Company is subject to the information requirements of the Exchange Act
applicable to a foreign private issuer, and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
the Company's directors and officers, options granted to them, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company is required to be described in periodic
statements distributed to the Company's shareholders and filed with the
Commission. These reports, and other information, including the Company's
Annual Report on Form 20-F for the year ended June 30, 1996 (the "COMPANY 20-
F") and the Schedule 14D-9, should be available for inspection and copying at
the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office. Such material should
also be available for inspection at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. The Commission also maintains an Internet site on
the world wide web at http://www.sec.gov that contains reports and other
information.
The above information concerning the Company has been taken from or based
upon the Company 20-F and other publicly available documents on file with the
Commission, other publicly available information and information provided by
the Company. Although the Purchaser has no knowledge that would indicate that
such information is untrue, the Purchaser takes no responsibility for, or
makes any representation with respect to, the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information
but which are unknown to the Purchaser.
A copy of this Offer to Purchase, and certain of the agreements referred to
herein, are attached to the Purchaser's Tender Offer Statement on Schedule
14D-1, dated February 24, 1997 (the "SCHEDULE 14D-1"), which has been filed
with the Commission. The Schedule 14D-1 and the exhibits thereto, along with
such other documents as may be filed by the Purchaser with the Commission, may
be examined and copied from the offices of the Commission in the manner set
forth in the sixth paragraph of this Section 7.
Summary Financial Information for the Company. The following table sets
forth certain summary consolidated financial information with respect to the
Company and its subsidiaries excerpted or derived from the audited financial
statements contained in the Company 20-F and the unaudited financial
information contained in the Company's Quarterly Reports on Form 6-K for the
six months ended December 31, 1996 and December 31, 1995. More comprehensive
financial information is included in such reports and other documents filed by
the Company with the Commission, and the following summary is qualified in its
entirety by reference to such documents (which may be inspected and obtained
as described above), including the financial statements and related notes
contained therein. The Purchaser assumes no responsibility for the accuracy of
the financial information set forth below.
10
<PAGE>
RENAISSANCE HOTEL GROUP N.V.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31 FISCAL YEAR ENDED JUNE 30
----------------- -----------------------------
1996 1995 1996 1995(1) 1994(1)
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA
Net sales and operating
revenues and
other revenues............ $ 67,117 $ 62,036 $128,294 $116,830 $100,936
Net income................. 17,934 14,543 31,849 10,115 10,249
BALANCE SHEET DATA (AT END
OF PERIOD)
Working capital............ 83,923 33,017 58,636 (75,657) (32,051)
Total long-term
indebtedness.............. 132,234 136,121 132,158 49,367 101,095
Total assets............... 325,177 298,578 306,483 254,222 293,921
Shareholders' equity....... 74,155 42,768 56,884 28,372(3) 40,006(3)
PER SHARE DATA(2)
Earnings per common share
(and common share
equivalents).............. 0.60 0.48 1.05 -- --
Earnings per share on a
fully diluted basis....... 0.60 0.48 1.05 -- --
WEIGHTED AVERAGE SHARES
Weighted average number of
shares outstanding during
the period................ 30,100 30,100 30,269 -- --
</TABLE>
- --------
(1) Data for the periods prior to July 1, 1995 present the combined assets and
liabilities and results of operations of the Company on a carved-out
basis. Because the Company did not prepare separate financial statements
prior to July 1, 1995, such financial statements were derived by
extracting the assets, liabilities and results of operations of the
Company from the consolidated assets, liabilities and results of
operations of New World Development Company Limited, a Hong Kong
corporation, and its affiliates (these entities referred to collectively
as "New World Group Members").
(2) Per share data has not been presented for fiscal years ended June 30, 1995
and June 30, 1994 because the Company was not publicly held during those
years.
(3) Amounts represent New World Group Members' net investment in the Company.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER
The Purchaser is a Delaware corporation. The Purchaser, together with its
consolidated subsidiaries, is a diversified hospitality company with
operations in two business segments: Lodging, which operates and franchises
lodging businesses under five brand names and operates a vacation timesharing
business; and Contract Services, consisting of food service and facilities
management for clients in business, education and health care; development,
ownership and operation of retirement communities; and wholesale food
distribution.
Until October 8, 1993, the Purchaser was a wholly-owned subsidiary of
Marriott Corporation. Marriott Corporation separated the Purchaser's
businesses from its other businesses through a distribution (the
"DISTRIBUTION") to the holders of outstanding shares of Marriott Corporation
common stock, on a share-for-share basis, of all the outstanding shares of the
Purchaser's common stock. Upon the consummation of the Distribution, the
Purchaser became a separate, publicly-held company and Marriott Corporation
changed its name to Host Marriott Corporation.
The principal executive offices of the Purchaser are located at 10400
Fernwood Road, Bethesda, Maryland 20817. The name, citizenship, business
address, present principal occupation or employment, and material
11
<PAGE>
positions held during the past five years of each of the directors and
executive officers of the Purchaser are set forth in Schedule I to this Offer
to Purchase.
Except as set forth in this Offer to Purchase, neither the Purchaser, nor,
to the best knowledge of the Purchaser, any of the persons listed on Schedule
I, has any contract, arrangement, understanding or relationship with any other
person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, neither the Purchaser, or, to the best
knowledge of the Purchaser, any of the persons listed on Schedule I, has had,
since July 1, 1993, any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that would
require reporting under the rules of the Commission. Except as set forth in
this Offer to Purchase, since July 1, 1993, there have been no contacts,
negotiations or transactions between the Purchaser, or its subsidiaries or, to
the best knowledge of any of the Purchaser, any of the persons listed on
Schedule I, and the Company or its affiliates, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
election of directors or a sale or other transfer of a material amount of
assets. Except, as set forth in this Offer to Purchase, neither the Purchaser
nor, to the best knowledge of the Purchaser, any of the persons listed on
Schedule I, or any majority-owned subsidiary or associate of the Purchaser or
any person so listed beneficially owns any Shares or has effected any
transactions in the Shares in the past 60 days.
12
<PAGE>
Certain Financial Information. Set forth below is a summary of certain
consolidated financial and operating data relating to the Purchaser and its
consolidated subsidiaries excerpted or derived from the information contained
in or incorporated by reference into the Purchaser's Annual Report on Form 10-
K for the year ended December 29, 1995 filed with the Commission pursuant to
Rule 15d-2 of the Exchange Act (the "PURCHASER 10-K") and the Purchaser's
Quarterly Reports on Form 10-Q for the quarters ended September 6, 1996 and
September 8, 1995. More comprehensive financial information is included in or
incorporated by reference into the Purchaser 10-K and other documents filed by
the Purchaser with the Commission, and the financial information summary set
forth below is qualified in its entirety by reference to the Purchaser 10-K
and such other documents and all the financial information and related notes
contained therein.
MARRIOTT INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
($ IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
36 WEEKS ENDED
----------------
FISCAL YEAR
SEPT. 6 SEPT. 8 -----------------------
1996 1995 1995 1994 1993(1)
------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales and operating revenues and
other revenues........................ $6,725 $6,051 $8,961 $8,415 $7,430
Income before cumulative effect of a
change in accounting principle(2)..... 196 157 247 200 159
Net income............................. 196 157 247 200 126
BALANCE SHEET DATA (AT END OF PERIOD)
Working capital........................ (330) (128) (150) (166) (142)
Total assets........................... 5,211 3,844 4,018 3,207 3,092
Total long-term indebtedness........... 1,285 687 806 506 564
Shareholders' equity................... 1,278 965 1,054 767 696
PER SHARE DATA
Earnings per common share before
cumulative effect of a change in
accounting principle(2)............... 1.45 1.19 1.87 1.51 1.28
Change in accounting for income
taxes(2).............................. -- -- -- -- (.27)
Earnings per common share (and common
share equivalents).................... 1.45 1.19 1.87 1.51 1.01
Earnings per share on a fully diluted
basis(3).............................. 1.44 1.19 1.87 1.51 1.00
WEIGHTED AVERAGE SHARES
Weighted average shares outstanding
during the period..................... 127.4 124.5 124.7 125.5 117.2
</TABLE>
- --------
(1) The Purchaser was a wholly-owned subsidiary of Marriott Corporation (now
named Host Marriott Corporation) prior to October 8, 1993, on which date
its common stock was distributed to Marriott Corporation shareholders. The
historical income statement of the Purchaser for 1993 includes 40 weeks of
operating results as a subsidiary of Marriott Corporation and 12 weeks of
operating results as an independent entity. As a result, 1996, 1995 and
1994 operating results are not directly comparable to the results reported
by the Purchaser for fiscal year 1993.
(2) Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," was adopted in the first fiscal quarter of 1993.
(3) Earnings per share is computed on a fully diluted basis by using the
weighted average number of outstanding common shares plus other
potentially dilutive securities during the applicable period.
13
<PAGE>
The Purchaser is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Information, as of
particular dates, concerning the Purchaser's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Purchaser's securities and any material interest of such persons in
transactions with the Purchaser is required to be described in proxy
statements distributed to the Purchaser's shareholders and filed with the
Commission. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office. The
information should also be available for inspection at the NYSE, 20 Broad
Street, New York, New York 10005. The Commission also maintains an Internet
site on the world wide web at http://www.sec.gov that contains reports and
other information.
9. SOURCES AND AMOUNTS OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding and to pay
fees and expenses related to the Offer will be approximately $1 billion. To
obtain these funds, the Purchaser intends to use amounts raised through the
public or private securities markets, cash on hand, and borrowings under its
Acquisition Credit Facility (defined below) and its Revolving Credit Facility
(defined below).
An unsecured acquisition credit facility (the "ACQUISITION CREDIT FACILITY")
is available to the Purchaser pursuant to a Credit Agreement dated as of
February 21, 1997 (the "ACQUISITION CREDIT AGREEMENT") among the Purchaser,
Citibank, N.A., as Administrative Agent, and certain financial institutions,
as lenders. A copy of Acquisition Credit Agreement is filed as an exhibit to
the Schedule 14D-1. The Purchaser may borrow up to an aggregate of $400
million under the Acquisition Credit Facility in order to finance the
acquisition of the Shares of the Company and the payment for Company Stock
Options (in each case upon consummation of the Offer), and, thereafter, for
general corporate purposes of the Purchaser and its subsidiaries.
If the Offer closes on or before June 30, 1997, the lenders' commitment
under the Acquisition Credit Facility is available until February 20, 1998
(the "COMMITMENT TERMINATION DATE") (subject to earlier termination at the
election of the Purchaser or in the event of a default). Any loans made under
the Acquisition Credit Facility must be repaid on the Commitment Termination
Date; provided, however, that by notice to the Agent not more than 30 nor less
than 10 days prior to the Commitment Termination Date, the Purchaser may
convert such loans into term loans that mature eighteen months after the
Commitment Termination Date.
An unsecured revolving credit facility (the "REVOLVING CREDIT FACILITY" and
together with the Acquisition Credit Facility, the "CREDIT FACILITIES") is
available to the Purchaser pursuant to a Credit Agreement dated as of July 12,
1996 (the "REVOLVING CREDIT AGREEMENT" and, together with the Acquisition
Credit Agreement, the "CREDIT AGREEMENTS") among the Purchaser, Citibank,
N.A., as Administrative Agent, and certain financial institutions, as lenders.
The Purchaser may borrow up to an aggregate of $1 billion at any time
outstanding under the Revolving Credit Facility for general corporate
purposes, which includes acquisitions such as the acquisition of the Shares
pursuant to the Offer. Loans made under the Revolving Credit Agreement mature
at the expiration of the Revolving Credit Facility on June 30, 2001 (as the
same may be extended or changed pursuant to the Revolving Credit Agreement).
As of February 21, 1997, approximately $775 million was available for
borrowing under the Revolving Credit Facility.
The Purchaser's ability to borrow under each of the Credit Facilities is
conditioned only upon the accuracy at the time of borrowing of customary
representations and warranties, the absence of a default under the
14
<PAGE>
applicable Credit Agreement and, in the case of the Acquisition Credit
Facility, the consummation of the Offer. The Purchaser currently satisfies
these conditions (with the exception of the consummation of the Offer) and
believes that these conditions will be satisfied, and that adequate borrowing
capacity will exist under the Credit Facilities, at the time that funds are
required to pay for Shares tendered in the Offer.
Each loan provided pursuant to either Credit Facility bears interest, at the
Purchaser's election at (i) one of two identified variable interest rates as
in effect from time to time plus an incremental interest rate margin that
depends on the Purchaser's senior unsecured long-term debt ratings at the
time, or (ii) a rate determined pursuant to a competitive bidding process
among the financial institutions party to the applicable Credit Agreement. The
Purchaser also pays quarterly facility fees based upon the Purchaser's senior
unsecured long-term debt ratings at the time.
The preceding description of certain terms and conditions of the Revolving
Credit Facility is subject in its entirety to the terms and conditions of the
Revolving Credit Agreement, which is incorporated herein by reference to
Exhibit 10 to the Purchaser's Quarterly Report on Form 10-Q for the quarter
ended June 14, 1996. The preceding description of certain terms and conditions
of the Acquisition Credit Facility is subject in its entirety to the terms and
conditions of the Acquisition Credit Agreement, which is filed as an exhibit
to the Schedule 14D-1.
The Purchaser expects it will repay any amounts borrowed under the Credit
Facilities with cash flow from operations and/or with proceeds from subsequent
refinancings in the public or private securities markets, the commercial paper
market or a refinancing of such credit facilities prior to their respective
expiration dates.
10. BACKGROUND OF THE OFFER; THE ACQUISITION AGREEMENT; THE SHAREHOLDER
AGREEMENT; THE CONFIDENTIALITY AGREEMENT
BACKGROUND OF THE OFFER
On December 31, 1996 and during the first week of January 1997, several
press releases appeared in the U.S. press concerning the possible sale of the
Company to Doubletree. After reviewing these releases, the Purchaser contacted
one of its investment bankers to discuss the Company. After giving due
consideration to the matter, on January 9, 1997, the Purchaser, through Arne
Sorenson, a Senior Vice President of the Purchaser, sent a letter to the
Company indicating an interest in acquiring the Company at a price higher than
the one proposed by Doubletree.
As a result of Mr. Sorenson's letter, the Company asked the Purchaser to
execute a confidentiality agreement. A confidentiality agreement was executed
by the Company and the Purchaser on January 10, 1997 (the "CONFIDENTIALITY
AGREEMENT"). Immediately thereafter representatives of the Purchaser began a
due diligence review of the Company. During the due diligence process,
representatives of the Company suggested that if the Purchaser was serious
about making a bid to acquire the Company, it would be appropriate for
representatives of the Purchaser to meet with Henry Cheng Kar-Shun, Chairman
of the Company and Managing Director of New World Hotels (Holdings) Limited,
the owner of all of the outstanding capital stock of Diamant Hotel Investments
N.V., the majority shareholder of the Company. The Purchaser was told that all
interested bidders for the Company were being given the same suggestion.
On January 28 and 29, 1997, J. Willard Marriott, Jr., Chairman and Chief
Executive Officer of the Purchaser, Michael A. Stein, Executive Vice President
and Chief Financial Officer of the Purchaser, and Mr. Sorenson, together with
a representative of the Purchaser's investment banker, met with Dr. Cheng and
several of the Company's executive officers and advisors in Hong Kong. During
these meetings the parties discussed the Purchaser's interest in acquiring the
Company. The parties also discussed the advantages the Purchaser's management
expertise would bring to owners of hotels managed by the Company. The price
the Purchaser might offer to acquire the Company was not discussed during
these meetings.
15
<PAGE>
On February 4, 1997, Mr. Sorenson made a presentation concerning the Company
to the Purchaser's executive officers. On February 6, 1997, Mr. Sorenson made
a presentation to the Board of Directors of the Purchaser at the Board's
regularly scheduled meeting.
Representatives of the Company called Mr. Sorenson during the week of
February 3, 1997, and invited Mr. Sorenson and others to meet with Dr. Cheng
and other representatives of the Company in Beaver Creek, Colorado. During
this conversation Mr. Sorenson was advised that potential bidders for the
Company were invited to meet with Dr. Cheng and that each bidder would be
allowed two hours to make a presentation to Dr. Cheng and other
representatives of the Company and answer their questions. On February 9,
1997, Mr. Sorenson, Mr. Stein, an attorney for the Purchaser and a
representative of the Purchaser's investment banker met with Dr. Cheng, senior
executives of the Company and the Company's investment bankers and legal
counsel in Beaver Creek. The discussions during this meeting concerned the
Purchaser's plan for the management of the combined companies, and branding
issues relating to hotels managed by the Company. The price the Purchaser
might offer to acquire the Company was not discussed during this meeting.
On February 11, 1997, the Purchaser submitted a written bid to acquire all
the outstanding common stock of the Company for $28 per Share in cash. The bid
was subject to approval by the Board of Directors of the Purchaser and the
execution of definitive agreements embodying the terms of the transaction.
After submitting this bid, Mr. Sorenson received a telephone call from a
representative of the Company inviting Mr. Sorenson and the Purchaser's
attorneys to Palm Springs, California to meet with representatives of the
Company to discuss the bid and for the attorneys to meet with the Company's
attorneys to review and revise a proposed set of definitive agreements for the
proposed transaction.
Mr. Sorenson met with Dr. Cheng, Robert W. Olesen, Chief Financial Officer
for the Company, K. Daniel Heininger, General Counsel for the Company, and an
outside attorney for the Company on February 13, 1997. On February 14, 1997,
Mr. Sorenson and other representatives of the Purchaser met with
representatives of the Company and its attorneys and reviewed a draft of the
definitive documents that would be required to consummate the proposed
transaction. At the meetings on February 13 and 14, 1997, the price to be paid
by the Purchaser for the common stock of the Company was not discussed.
On February 15, 1997, a special meeting of the Board of Managing Directors
of the Company was held in Los Angeles, California, to review the terms of the
offers that had been received by the Company, including the Purchaser's offer.
On February 16, 1997, in the morning, Dr. Cheng and Mr. Sorenson spoke and
Dr. Cheng suggested that the Purchaser should consider increasing its bid
above $28 per Share. The Board of Managing Directors meeting was scheduled to
reconvene at 9 A.M. on February 16, 1997.
Mr. Sorenson told Dr. Cheng he would seek authority to increase the bid. At
approximately 9 A.M. on February 16, 1997, Mr. Sorenson delivered a letter to
Dr. Cheng increasing the Purchaser's bid to $30 per Share in cash. At 10:30
A.M. Dr. Cheng called Mr. Sorenson and informed him the Board of Managing
Directors had voted to accept the Purchaser's bid, subject to receipt of a
fairness opinion from the Company's investment banker and finalization of
definitive agreements. During the balance of the day on February 16, 1997,
representatives of the Purchaser and the Company negotiated the final terms of
the definitive documents for the transactions.
The Purchaser's Board of Directors met on February 17, 1997 and the
transaction with the Company was approved at $30 per Share. The members of the
Purchaser's Board of Directors offered to elect Dr. Cheng to the Board
effective on the later of June 1, 1997 or on the consummation of the Offer.
Dr. Cheng has accepted this offer. The Company received the fairness opinion
of its investment banker, the definitive agreements were executed and
delivered on February 17, 1997, and the transaction was publicly announced on
the morning of February 18, 1997.
On February 24, 1997, the Purchaser commenced the Offer.
16
<PAGE>
THE ACQUISITION AGREEMENT
The following is a summary of certain provisions of the Acquisition
Agreement, a copy of which is filed as an exhibit to the Schedule 14D-1 and
which is incorporated herein by reference. The following summary is qualified
in its entirety by reference to the Acquisition Agreement.
The Offer. The Acquisition Agreement provides for the making of the Offer by
the Purchaser. Subject only to the Conditions (as defined at Section 15
below), the Purchaser has agreed to accept for payment and pay for all Shares
tendered pursuant to the Offer as soon as practicable following the expiration
of the Offer. Without the written consent of the Company (such consent to be
authorized by the Board of Managing Directors of the Company or a duly
authorized committee thereof), the Purchaser shall not (i) decrease the Offer
Price or change the form of consideration payable pursuant to the Offer (other
than as set forth below), (ii) decrease the number of Shares sought or extend
the Offer (other than as set forth below), or (iii) impose any additional
conditions or amend any condition of the Offer in any manner adverse to the
holders of the Shares; provided, however, that if on the scheduled expiration
date of the Offer (as it may be extended), all conditions to the Offer shall
not have been satisfied or waived, the Offer may be extended by the Purchaser
from time to time to permit the satisfaction of such conditions until
termination of the Acquisition Agreement, without the consent of the Company,
to permit satisfaction of such conditions. In addition, the Purchaser may,
without the consent of the Company, increase the Offer Price and extend the
Offer to the extent required by law.
The obligation of the Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer is subject to (i) there being, at the
expiration of the Offer, validly tendered and not withdrawn that number of
Shares which represent at least ninety percent (90%) of the capital stock
entitled to vote and then outstanding (the "MINIMUM CONDITION") and (ii) the
satisfaction of certain other conditions that are set forth below in Section
15 of this Offer to Purchase.
Company Stock Options. Upon the consummation of the Offer, all outstanding
options and other rights to acquire shares under any stock option or purchase
plan, program or similar arrangement (each, as amended, an "OPTION PLAN" and
such options and other rights, "STOCK OPTIONS") of the Company, shall vest in
full and the Purchaser shall pay to the holder of each outstanding Stock
Option an amount equal to the difference between the Offer Price and the
exercise price of each such Stock Option, unless the Purchaser and the
pertinent holder agree otherwise in writing. Such amount shall be paid by the
Purchaser in cash. If and to the extent required by the terms of the Option
Plans or the terms of any Stock Option granted thereunder, the Company shall
use its best efforts to obtain the consent of each holder of outstanding Stock
Options to the foregoing treatment of such Stock Options and to take any other
action necessary to effectuate the foregoing provisions.
Except as otherwise agreed to by the parties and to the extent permitted by
the Option Plans, the Option Plans of the Company shall terminate as of the
consummation of the Offer and any rights under any provisions in any other
plan, program or arrangement providing for the issuance or grant by the
Company of any interest in respect of the capital stock of the Company shall
be canceled as of the consummation of the Offer.
Recommendation. In the Acquisition Agreement, the Company consents to the
Offer and states that the Board has unanimously (i) determined that the Offer
is fair to and in the best interests of the shareholders of the Company, (ii)
approved the Acquisition Agreement and the transactions contemplated thereby,
and (iii) resolved to recommend that the shareholders of the Company accept
the Offer and tender their Shares thereunder to the Purchaser.
Interim Agreements of the Purchaser and the Company. Except as contemplated
by the Acquisition Agreement, the Company has covenanted and agreed that,
during the period from the date of the Acquisition Agreement to the
consummation of the Offer, unless the Purchaser has consented in writing
thereto, the Company shall, and shall cause each of its subsidiaries to: (a)
conduct its business and operations only in the ordinary course of business
consistent with past practice; (b) use all reasonable efforts to preserve
intact the business organizations, goodwill, rights, licenses, permits and
franchises of the Company and its subsidiaries and maintain
17
<PAGE>
their existing relationships with customers, suppliers and other persons
having business dealings with them; (c) use its commercially reasonable
efforts to keep in full force and effect adequate insurance overages and
maintain and keep its properties and assets in good repair, working order and
condition, normal wear and tear excepted; (d) not amend or modify its
respective articles or certificate of incorporation, by-laws, partnership
agreement or other charter or organization documents; (e) not authorize for
issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit
to issue, sell, grant, deliver, pledge or encumber any shares of any class or
series of capital stock of the Company or any of its subsidiaries or any other
equity or voting security or equity or voting interest in the Company or any
of its subsidiaries, any securities convertible into or exercisable or
exchangeable for any such shares, securities or interests, or any options,
warrants, calls, commitments, subscriptions or rights to purchase or acquire
any such shares, securities or interests (other than issuances of Shares upon
exercise of Stock Options granted prior to the date of the Acquisition
Agreement to directors, officers, employees and consultants of the Company in
accordance with the Company Stock Option Plan as currently in effect); (f) not
(A) split, combine or reclassify any shares of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of, or in substitution for, shares of its capital stock, (B) in solely
the case of the Company, declare, set aside or pay any dividends on, or make
other distributions in respect of, any of the Company's capital stock, or (C)
repurchase, redeem or otherwise acquire, or agree or commit to repurchase,
redeem or otherwise acquire, any shares of capital stock or other equity or
debt securities or equity interests of the Company or any of its subsidiaries;
(g) not amend or otherwise modify the terms of any Company Options or the
company stock plan the effect of which shall be to make such terms more
favorable to the holders thereof or persons eligible for participation
therein; (h) other than regularly scheduled seniority increases in the
ordinary course of business consistent with past practice, not increase the
compensation payable or to become payable to any directors, officers or
employees of the Company or any of its subsidiaries, or grant any severance or
termination pay to, or enter into any employment or severance agreement with
any director or officer of the Company or any of its subsidiaries, or
establish, adopt, enter into or amend in any material respect or take action
to accelerate any material rights or benefits under any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit
of any director, officer or employee of the Company of any of its
subsidiaries; (i) not acquire or agree to acquire (including, without
limitation, by merger, consolidation, or acquisition of stock, equity
securities or interests, or assets) any corporation, partnership, joint
venture, association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets of any other person outside
the ordinary course of business consistent with past practice or any interest
in any real properties (whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money
(including draw-downs on letters or lines of credit) or issue or sell any
notes, bonds, debentures, debt instruments, evidences of indebtedness or other
debt securities of the Company or any of its subsidiaries or any options,
warrants or rights to purchase or acquire any of the same, except for (A)
renewals of existing bonds and letters of credit in the ordinary course of
business not to exceed $10,000,000 and (B) advances, loans or other
indebtedness in the ordinary course of business consistent with past practice
in an aggregate amount not to exceed $5,000,000; (k) not sell, lease, license,
encumber or otherwise dispose of, or agree to sell, lease, license, encumber
or otherwise dispose of, any material properties or assets of the Company or
any of its subsidiaries; (l) not authorize or make any capital expenditures
(including by lease) in excess of $5,000,000 in the aggregate for the Company
and all of its subsidiaries; (m) not make any material change in any of its
accounting or financial reporting (including Tax accounting and reporting)
methods, principles or practices, except as may be required by United States
generally accepted accounting principles ("GAAP"); (n) not make any material
tax election or settle or compromise any material United States, Dutch or
foreign tax liability; (o) except in the ordinary course of business
consistent with past practice, not amend, modify or terminate specified
contracts or waive, release or assign any material rights or claims
thereunder; (p) not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries; (q) not take any
action that would, or would be reasonably likely to, result in any of the
representations and warranties set forth in the Acquisition Agreement not
being true and correct in any material respect or any of the Conditions not
being satisfied; and (r) not agree or commit in writing or otherwise to do
(or, in the case of clauses (a) through (c), to do anything inconsistent with)
any of the foregoing.
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Other Offers. Prior to consummation of the Offer, the Company agrees (a)
that neither it nor any of its subsidiaries shall, nor shall it or any of its
subsidiaries authorize or permit their respective officers, directors,
employees, agents and representatives (including, without limitation, any
investment banker, financial advisor, attorney, accountant, consultant or
other advisor, agent, representative or expert retained by or acting on behalf
of it or any of its subsidiaries) (collectively, "REPRESENTATIVES") to,
directly or indirectly, initiate, solicit, negotiate, encourage, or provide
confidential information to facilitate any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer to any
of its shareholders) concerning, or that may reasonably be expected to lead
to, an Alternative Transaction (any such proposal or offer being hereinafter
referred to as an "ALTERNATIVE TRANSACTION PROPOSAL"), and (b) that it will
notify the Purchaser promptly if any such inquiries or proposals are received
by, any information or documents is requested from, or any negotiations or
discussions are sought to be initiated or continued with, the Company or any
of its subsidiaries; provided, however, that (i) the foregoing shall not
prohibit the Board of Managing Directors from, to the extent applicable,
complying with Rule 14e-2 promulgated under the Exchange Act with regard to an
Alternative Transaction Proposal and (ii) the Company and its subsidiaries and
Representatives may furnish confidential information to and participate in
negotiations with a person making or proposing to make an Alternative
Transaction Proposal if (x) the Company's Board of Managing Directors is
advised by one or more of its financial advisors that such person has the
financial wherewithal to consummate an Alternative Transaction, (y) the Board
of Managing Directors reasonably determines, after receiving advice from the
Company's financial advisor, that such person has proposed an Alternative
Transaction that involves consideration to the Company's shareholders that is
superior to the consideration provided for under the Agreement and (z) based
upon the advice of counsel to such effect, the Company's Board of Managing
Directors determines in good faith that it is necessary so to furnish
information and/or negotiate in order to comply with its fiduciary duty to
shareholders of the Company. The Company agrees that prior to furnishing any
such information to, or entering into any discussions or negotiations with,
any person or entity concerning an Alternative Transaction Proposal, the
Company shall (i) receive from such person or entity an executed
confidentiality agreement in customary form on terms not less favorable to the
Company than the confidentiality provisions contained in the Confidentiality
Agreement dated January 10, 1997 between the Purchaser and the Company (the
"CONFIDENTIALITY AGREEMENT"), providing for confidentiality of information
furnished by the Company to the Purchaser and its Representatives in
connection with the transactions contemplated hereby, and (ii) provide written
notice to the Purchaser to the effect that it is furnishing information to, or
entering into discussions or negotiations with, such person or entity. The
Company shall provide the Purchaser with a summary of the terms of any
Alternative Transaction Proposal received by the Company, or its subsidiaries
or Representatives. For purposes of the Acquisition Agreement, "ALTERNATIVE
TRANSACTION" means any of the following involving the Company or any of its
subsidiaries: (i) any merger, consolidation, Buy-Out, business combination or
other similar transaction; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 20% or more of the assets of the Company and
its subsidiaries, determined on a consolidated basis in accordance with GAAP;
(iii) any tender offer, exchange offer or other offer for 20% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; (iv)
the acquisition by any person or entity of beneficial ownership or the right
to acquire beneficial ownership of, or the formation or existence of any
"group" (as such term is defined under Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder) which beneficially owns, or
has the right to acquire beneficial ownership of, 20% or more of the then
outstanding shares of capital stock of the Company; or (v) any public
announcement of a proposal, plan or intention to do any of the foregoing or
any agreement or commitment to engage in any of the foregoing.
Board Representation. The Acquisition Agreement provides that in the event
that the Purchaser purchases and pays for at least a majority of the
outstanding Shares, the Company shall promptly take all actions necessary and
available (including, if requested by the Purchaser, calling a general meeting
of the holders of Shares) to cause the Board of Managing Directors to consist
solely of persons designated by the Purchaser.
Agreements Regarding Buy-Out. Pursuant to the Acquisition Agreement, at the
request of the Purchaser, the Company will (i) inform the Purchaser of the
fact that the Purchaser and/or one or more of its affiliates jointly
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holds 95% or more of the issued share capital in the Company, as soon as the
Company has become aware of that fact; (ii) provide the Purchaser with
extracts from and/or copies of the shareholders' register of the Company if so
required by the Purchaser; and (iii) provide the Purchaser and/or any auditor
instructed by the Purchaser with such information regarding the Company in
order for the Purchaser and/or such auditor to be in a position to establish
the value or price of a share in the issued capital of the Company for the
purposes of proceedings pursuant to Section 2:92a of the DCC.
Indemnification. From and after the consummation of the Offer, the Purchaser
shall, and shall cause the Company to, indemnify and hold harmless each person
who was on February 17, 1997, or was at any time prior thereto, an officer or
director of the Company or any of its subsidiaries (the "INDEMNIFIED PARTIES")
against any losses, claims, damages, judgments, settlements, liabilities,
costs or expenses (including without limitation reasonable attorneys' fees and
out-of-pocket expenses) incurred in connection with any claim, action, suit,
proceeding or investigation arising out of or pertaining to acts or omissions,
or alleged acts or omissions, by them in their capacities as such occurring at
or prior to the consummation of the Offer (including, without limitation, in
connection with the transactions contemplated by the Acquisition Agreement),
to the fullest extent that the Company or such subsidiaries would have been
permitted, under applicable law and the articles of incorporation or by-laws
of the Company or the organizational documents of such subsidiaries each as in
effect on the date of the Acquisition Agreement, to indemnify such person (and
the Purchaser or the Company shall also advance expenses as incurred to the
fullest extent permitted under applicable law upon receipt from the
Indemnified Party to whom expenses are advanced of a written undertaking to
repay such advances). The Purchaser and the Company shall pay all expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing this provision. If the foregoing indemnity is not available with
respect to any Indemnified Party, then the Purchaser and the Company, on the
one hand, and the Indemnified Party, on the other hand, shall contribute to
the amount payable in such proportion as is appropriate to reflect relative
faults and benefits.
The Acquisition Agreement provides that from and after the consummation of
the Offer until the sixth anniversary thereof, the Purchaser shall cause the
Company to maintain directors' and officers' liability insurance covering the
Indemnified Parties who are covered, in their capacities as directors and
officers of the Company, by the existing directors' and officers' liability
insurance of the Company in force on the date of the Acquisition Agreement,
with respect to losses or claims arising out of acts or omissions, or alleged
acts or omissions, by them in their capacities as such occurring at or prior
to the consummation of the Offer, and upon terms no less favorable to the
Indemnified Parties than such existing directors' and officers' liability
insurance; provided, however, that the Company shall not be required in order
to maintain or procure such coverage to pay an annual premium in excess of
150% of the current annual premium paid by the Company for its existing
coverage, and that if equivalent coverage cannot be obtained, or can be
obtained only by paying an annual premium in excess of such limit, the Company
shall only be required to obtain as much coverage as can be obtained by paying
an annual premium equal to such limit.
Reasonable Efforts; Consents and Certain Arrangements. Each of the parties
to the Acquisition Agreement agrees to use all commercially reasonable good
faith efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws
and regulations, and consult and fully cooperate with and provide reasonable
assistance to each other party hereto and their respective Representatives in
order, to consummate and make effective the transactions contemplated by the
Acquisition Agreement as promptly as practicable, including, without
limitation, (i) using all commercially reasonable good faith efforts to make
all filings, applications, notifications, reports, submissions and
registrations with, and to obtain all consents, approvals, authorizations or
permits of, governmental entities or other persons or entities as are
necessary for the consummation of the Offer and the other transactions
contemplated by the Acquisition Agreement (including, without limitation,
pursuant to the HSR Act, the Securities Act of 1933, as amended, the Exchange
Act, Blue Sky Laws and other applicable laws and regulations in effect in the
United States, The Netherlands or any other jurisdiction), and (ii) taking
such actions and doing such things as any other party hereto may reasonably
request in order to cause any of the Conditions to be fully satisfied. Prior
to making
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any application to or filing with any governmental entity or other person or
entity in connection with the Acquisition Agreement, the Company, on the one
hand, and the Purchaser, on the other hand, shall provide the other with
drafts thereof and afford the other a reasonable opportunity to comment on
such drafts.
Without limiting the generality of the foregoing, each of the Purchaser and
the Company has agreed to cooperate and use all commercially reasonable
efforts to vigorously contest and resist any action, suit, proceeding or
claim, and to have vacated, lifted, reversed or overturned any injunction,
order, judgment or decree (whether temporary, preliminary or permanent), that
delays, prevents or otherwise restricts the consummation of the Offer or any
other transaction contemplated by the Acquisition Agreement, and to take any
and all actions (including, without limitation, the disposition of assets,
divestiture of businesses, or the withdrawal from doing business in particular
jurisdictions) as may be required by governmental entities as a condition to
the granting of any such necessary approvals or as may be required to avoid,
vacate, lift, reverse or overturn any injunction, order, judgment, decree or
regulatory action (provided, however, that in no event shall any party hereto
take, or be required to take, any action that could reasonably be expected to
have a material adverse effect on the business, operations, prospects,
properties, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole (a "COMPANY MATERIAL ADVERSE EFFECT"), or
that, individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the business, operations, properties, financial
condition or results of operations of the Purchaser and its subsidiaries,
taken as a whole (a "PURCHASER MATERIAL ADVERSE EFFECT")).
Employee Benefits. The Purchaser acknowledges that the Company is bound by
the employee severance plans applicable to employees of the Company, and
Purchaser agrees to cause the Company to perform the terms thereof. The
Company agrees, prior to consummation of the Offer, that it shall, or shall
cause one of its subsidiaries to, take such action as is necessary to avoid
the requirement under the Renaissance Hotels Executive Supplemental 401(k)
Plan and Renaissance Hotels Deferred Incentive Plan (together, the "PLANS")
that, upon a change in control of the Company or one of its subsidiaries, the
liabilities under the Plans be funded through an irrevocable trust. Effective
as of the consummation of the Offer, the Purchaser shall assume the Company's
and any of the Company's subsidiaries, liabilities and obligations under the
Plans, except for the obligation to establish an irrevocable trust to fund the
liabilities. The Company and the Purchaser agree that employees of the Company
or any of its subsidiaries who participate in the Plans shall be fully vested
in their accrued benefits under the Plans as of the consummation of the Offer.
The Purchaser shall use its best efforts to ensure that the intended timing of
distributions under the Plans and the intended tax consequences to
participants in the Plans shall be maintained on and after the consummation of
the Offer, except to the extent modified by written agreement between the
Purchaser and such participants.
Representations and Warranties. The Acquisition Agreement contains certain
representations and warranties of the parties including representations by the
Company as to organization, capitalization, subsidiaries, authority relative
to the Acquisition Agreement, absence of conflicts with other obligations,
consents and approvals, filings with the Commission, undisclosed liabilities,
absence of certain changes concerning the Company's business, litigation,
compliance with laws, employee benefit plans, labor matters, tax matters,
properties of the Company and its subsidiaries, environmental matters,
material contracts and commitments, intangible property, opinion of the
Company's financial advisor, and brokers.
Termination. Pursuant to the terms of the Acquisition Agreement, the
Acquisition Agreement may be terminated and the Offer may be abandoned at any
time prior to consummation of the Offer: (a) by mutual consent of the
Purchaser and the Company; or (b) by action of the Board of Directors of
either the Purchaser or the Company if: (i) (x) the consummation of the Offer
shall not have occurred on or before June 30, 1997 (provided that the right to
terminate the Acquisition Agreement under this clause (i) is not available to
any party whose breach of any representation or warranty or failure to fulfill
any covenant or agreement under the Acquisition Agreement was the cause of or
resulted in the failure of the Offer to be consummated on or before such
date); or (y) the Offer shall have expired or been terminated and the
Purchaser shall not have purchased
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any Shares pursuant to the Offer unless, in the case of termination by the
Purchaser, the Purchaser's obligation to purchase Shares pursuant to the Offer
shall not have been satisfied by reason of any failure of the Purchaser to
fulfill its obligations hereunder; or (ii) a United States federal or state or
Dutch court of competent jurisdiction or United States federal or state or
Dutch governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
by the Acquisition Agreement and such order, decree, ruling or other action
shall have become final and non-appealable (provided, that the party seeking
to terminate the Acquisition Agreement pursuant to this clause (ii) shall have
used all commercially reasonable efforts to remove such injunction, order or
decree); or (c) by action of the Board of Managing Directors of the Company on
five days' prior written notice to Purchaser if the Board of Managing
Directors of the Company withdraws its approval or recommendation of the Offer
or the Acquisition Agreement, by reason of an Alternative Transaction
Proposal, and the Company pays to the Purchaser the fee provided in Section
7.2 of the Acquisition Agreement; or (d) by action of the Board of Directors
of the Purchaser, if the Board of Managing Directors of the Company shall not
have issued, or shall have withdrawn or modified (including by amendment of
the Schedule 14D-9) in a manner materially adverse to the Purchaser, its
approval or recommendation of the Offer or the Acquisition Agreement or shall
have recommended an Alternative Transaction Proposal to the shareholders of
the Company, or shall have adopted any resolution to effect any of the
foregoing. In the event of the termination of the Acquisition Agreement and
the abandonment of the Acquisition pursuant to its terms, all future
obligations and liabilities of the parties thereto shall terminate, except any
obligations of the parties to pay fees and expenses described below under
"Fees and Expenses."
Fees and Expenses. Pursuant to the Acquisition Agreement, in the event that
any person shall have made an Alternative Transaction Proposal for the Company
and the Acquisition Agreement is terminated by either party, or in the event
that the Acquisition Agreement is otherwise terminated under Section 7.1(d)
thereof, the Company shall pay the Purchaser a fee of $27,500,000 and
reimburse the Purchaser for its documented out-of-pocket expenses in
connection with the transactions contemplated by the Acquisition Agreement not
exceeding $1,000,000.
Except as specifically provided in the Acquisition Agreement, each party
shall bear its own respective expenses incurred in connection with the
Acquisition Agreement and the Offer, including the preparation, execution and
performance of the Acquisition Agreement and the transactions contemplated
thereby, and all fees and expenses of investment bankers, finders, brokers,
agents, representatives, counsel and accountants.
Amendment. The Acquisition Agreement may be amended by action taken by the
parties' respective boards of directors, at any time by an instrument in
writing signed on behalf of each of the parties thereto.
Assignment. The Acquisition Agreement permits the Purchaser to assign its
rights and delegate its obligations to a wholly-owned subsidiary. Any such
assignment and delegation would not relieve the Purchaser of its obligations
under the Acquisition Agreement.
SHAREHOLDER AGREEMENT
The following is a summary of certain provisions of the Shareholder
Agreement. A copy of the Shareholder Agreement is filed as an exhibit to the
Schedule 14D-1 and is incorporated herein by reference. The Shareholder
Agreement may be examined, and copies may be obtained, as set forth in Section
7 above. The following summary is qualified in its entirety by reference to
the Shareholder Agreement. The Principal Shareholder's obligations under the
Shareholder Agreement are guaranteed by New World Hotels (Holdings) Limited, a
Hong Kong corporation that is the beneficial owner of all outstanding capital
stock of the Principal Shareholder.
The Shareholder Agreement contains, among other representations and
warranties, a representation and warranty by the Shareholder as to its record
and beneficial ownership of 16,368,000 Shares.
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Tender of Shares. Pursuant to the Shareholder Agreement, the Principal
Shareholder agrees to tender and not withdraw all Shares beneficially owned by
it (or to cause the record owner thereof to tender and not withdraw such
Shares), pursuant to and in accordance with the terms of the Offer. The
parties have agreed that the Principal Shareholder will, for all Shares
tendered by the Principal Shareholder in the Offer and accepted for payment
and paid for by the Purchaser, receive the same per Share consideration paid
to other holders of Shares who have tendered into the Offer.
Restrictions on Transfer and Proxies; No Solicitation. The Principal
Shareholder agrees that it shall not directly or indirectly: except as
expressly provided in the Shareholder Agreement, (i) transfer (including the
transfer of any securities of an affiliate which is the record holder of
Shares if, as the result of such transfer, such person would cease to be an
affiliate of the Principal Shareholder) to any person any or all Shares; (ii)
grant any proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement, understanding or arrangement with
respect to such Shares; or (iii) take any action that would make any
representation or warranty of the Principal Shareholder contained in the
Shareholder Agreement untrue or incorrect or would result in a breach by the
Principal Shareholder of its obligations under the Shareholder Agreement.
The Principal Shareholder shall not, and shall cause its representatives not
to, directly or indirectly, (i) initiate, solicit or encourage, or take any
action to facilitate the making of, any offer or proposal which constitutes or
is reasonably likely to lead to any Alternative Transaction or any inquiry
with respect thereto, or (ii) in the event of an unsolicited Alternative
Transaction Proposal, engage in negotiations or discussions with, or provide
any information or data to, any person (other than the Purchaser, any of its
affiliates or representatives) relating to any Alternative Transaction. The
Principal Shareholder agrees to notify the Purchaser orally and in writing of
any such offers, proposals, inquiries relating to the purchase or acquisition
by any person of any Owned Shares (including without limitation the terms and
conditions thereof and the identity of the person making it), within 24 hours
of the receipt thereof. The Principal Shareholder shall, and shall cause its
Representatives to, immediately cease and cause to be terminated all existing
activities, discussions and negotiations, if any, with any parties conducted
heretofore with respect to any Alternative Transaction relating to the
Company, other than discussions or negotiations with the Purchaser and its
affiliates.
Voting of Owned Shares; Irrevocable Proxy. The Principal Shareholder agrees
that, at any meeting of the Company's shareholders in connection with any
written consent of the Company's shareholders, subject to the absence of a
preliminary or permanent injunction or other final order by any United States
federal, state or foreign court barring such action, the Principal Shareholder
shall vote (or cause to be voted) all owned Shares: (i) in favor of the Offer,
the execution and delivery by the Company of the Acquisition Agreement and the
approval and acceptance of the Offer and the terms thereof and each of the
other actions contemplated by the Acquisition Agreement and the Shareholder
Agreement and any actions required in furtherance thereof; (ii) against any
action or agreement that would (A) result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Acquisition Agreement or of the Principal Shareholder under the
Agreement or (B) impede, interfere with, delay, postpone, or adversely affect
the Offer or the transactions contemplated thereby or by the Acquisition
Agreement; and (iii) except as otherwise agreed to in writing in advance by
the Purchaser, against the following actions (other than the Offer and the
transactions contemplated by the Acquisition Agreement and the Shareholder
Agreement): (A) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of
its subsidiaries (including any Alternative Transaction); (B) any sale, lease
or transfer of a substantial portion of the assets or business of the Company
or its subsidiaries, or reorganization, restructuring, recapitalization,
special dividend, dissolution or liquidation of the Company or its
subsidiaries; or (C) any change in the present capitalization of the Company
including any proposal to sell any equity interest in the Company or any of
its subsidiaries. The Principal Shareholder shall not enter into any
agreement, arrangement or understanding with any person the effect of which
would be inconsistent or violative of the foregoing provisions.
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Option. Pursuant to the Shareholder Agreement, the Principal Shareholder has
granted to the Purchaser an option to purchase all owned Shares a price equal
to the Offer Price. The Option may be exercised during a six-month period
commencing on a termination of the Acquisition Agreement (x) under Section
7.1(c) or (d) of the Acquisition Agreement, or (y) so long as the Purchaser
shall not have materially breached the Acquisition Agreement or the
Shareholder Agreement, under Section 7.1(b)(i)(y) of the Acquisition Agreement
if at the expiration or termination of the Offer there is pending or
outstanding an Alternative Transaction Proposal.
Assignment. The Shareholder Agreement permits the Purchaser to assign its
rights and delegate its obligations to a wholly-owned subsidiary. Any such
assignment and delegation would not relieve the Purchaser of its obligations
under the Shareholder Agreement.
CONFIDENTIALITY AGREEMENT
The following is a summary of certain provisions of the Confidentiality
Agreement. A copy of the Confidentiality Agreement is filed as an exhibit to
the Schedule 14D-1 and is incorporated herein by reference. The
Confidentiality Agreement may be examined, and copies may be obtained, as set
forth in Section 7 above. The following summary is qualified in its entirety
by reference to the Confidentiality Agreement.
Pursuant to the Confidentiality Agreement, the Purchaser agreed, among other
things, that it and its representatives would keep confidential certain
information (the "INFORMATION") furnished to it by the Company and use such
Information solely for the purpose of evaluating a business combination,
restructuring, sale or other transactions (an "ACQUISITION TRANSACTION")
involving the Purchaser and the Company.
The Confidentiality Agreement contains a "standstill provision" which
provides that until July 10, 1998, neither the Purchaser nor any of its
affiliates will, without the prior written consent of the Company and its
Board of Managing Directors: (i) in any manner, acquire, attempt to acquire,
offer to acquire, or agree to acquire, directly or indirectly, by purchase or
otherwise, any voting securities or direct or indirect rights to acquire any
voting securities of the Company or any subsidiary thereof, or any assets of
the Company or any subsidiary or division thereof; (ii) make or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" (as
such terms are used in the proxy rules of the Commission) to vote or seek,
advise or influence any person or entity with respect to, the voting of, any
voting securities of the Company; (iii) make any public announcement with
respect to, or submit a proposal for, or offer of (with or without conditions)
any extraordinary transaction involving the Company or its securities or
assets; (iv) form, join or in any way participate in a "group" (as defined in
Section 13(d)(3) of the Exchange Act) in connection with any of the foregoing;
(v) advise, assist or encourage any other person in connection with any of the
foregoing; or (vi) take any action which might require the Company to make a
public announcement regarding the possibility of a business combination or
merger or other Acquisition Transaction.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
The purpose of the Offer is for the Purchaser to acquire a controlling
equity interest in the Company. Consummation of the Offer in accordance with
its terms and conditions will provide the Purchaser with at least a ninety
percent (90%) equity interest in the Company.
After consummation on the Offer, the Purchaser plans to assess various
aspects of the Company's business, including but not limited to operating,
administrative and corporate systems, policies and procedures and
organizational structure in an effort to identify efficiencies that could
result from the combined businesses. After this initial assessment is complete
the Purchaser expects to adopt the best practices employed by either company
to maximize operating efficiencies of the combined companies. The Purchaser
expects this process to take at least one year.
Buy-Out. Subject to the terms and conditions of the Acquisition Agreement,
and in accordance with the provisions of the DCC, the Purchaser intends to
take all actions necessary and proper under the DCC to commence the process
leading to the Buy-Out in accordance with Section 2:92a of the DCC to acquire
all the
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issued Shares not acquired by Purchaser pursuant to the Offer. Under the DCC,
the Purchaser will not be able to initiate the Buy-Out unless the Purchaser
and its affiliates own at least ninety-five percent (95%) of the issued and
outstanding capital stock of the Company at such time.
Under the DCC, a shareholder (or affiliated shareholders belonging to the
same corporate group) holding for its own account at least 95% of the issued
and outstanding capital of a Netherlands public limited liability company
("N.V.") or private limited liability company ("B.V.") may initiate
proceedings before the Enterprise Chamber ("Ondernemingskamer") of the Court
of Appeals in Amsterdam. In such proceedings, the Court will order each
remaining shareholder to transfer its Shares to the initiating party, unless:
(a) a remaining shareholder would suffer serious material damages, unrelated
to the value of the shares to be transferred, (b) a shareholder has shares
that provide him with special voting rights or authority, or (c) the
initiating party has waived its rights vis-a-vis the remaining shareholders.
The Court will determine the price that the initiating party must pay for the
Shares, which it may base upon the advice of one or more independent experts.
BECAUSE THE BUY-OUT WOULD REQUIRE A COURT PROCEEDING AND EXPERT VALUATION,
RECEIPT OF FUNDS COULD BE SUBSTANTIALLY DELAYED, AND THE PRICE PAID IN THE
BUY-OUT MAY BE MORE OR LESS THAN THE OFFER PRICE.
Statutory Merger. The Acquisition Agreement also provides that, if the
Purchaser acquires less than ninety-five percent (95%) of the outstanding
Shares pursuant to the Offer, then the Purchaser may in its sole discretion
elect, to the extent permitted by the DCC, to effectuate a statutory merger (a
"STATUTORY MERGER") involving the Company as a disappearing entity pursuant to
Section 2:308 et seq. of the DCC, in which case, to the extent permitted by
the DCC, the merger consideration shall be the same as (or shall provide
equivalent value to) the Offer Price.
The Purchaser may consider and, if appropriate, propose a triangular
statutory merger in which, subject to the DCC, the Company would merge with
two tiers of subsidiaries of the Purchaser. The Company would disappear in
this merger, the upper tier subsidiary (the "GROUP COMPANY") would become a
holding company, and the lower tier subsidiary (the "SURVIVING COMPANY") would
survive and succeed to all the assets and liabilities of the Company.
Shareholders of the Company not tendering their shares in the Offer would thus
become shareholders of the Group Company, and would have the rights and
obligations of holders of interests in that entity, rather than in the Company
or the Surviving Company.
Under any Statutory Merger, to the extent that the Surviving Company held
assets immediately prior to the merger, the ownership percentage of the non-
tendering shareholders in the Group Company would be less than their current
ownership percentage in the Company. If, after a Statutory Merger, the
ownership percentage of Purchaser and its affiliates in the Group Company
exceeded ninety-five percent (95%), then, subject to the DCC, the Purchaser
may be entitled to, and may, commence the Buy-Out.
Conversion to Private Limited Liability Form. If the shares are delisted
from the NYSE and registration under the Exchange Act terminated, as
contemplated by the Purchaser (see Section 12 below), and subject to the
requirements of the DCC, then the Company may convert its corporate form from
"N.V." (public limited liability company) to Netherlands "B.V." (private
limited liability company). Interests in a "B.V." are not freely transferable
under the DCC. The transfer must be subject to either or both (i) approval by
the corporation's management or supervisory board or such other corporate body
(e.g., the general meeting of shareholders) as is set forth in the articles of
association, or (ii) certain rights of first refusal of the other
shareholders. The articles of association may further limit acquisition of
shares to persons meeting specified requirements.
Rights of Minority Holders. If the Minimum Condition is satisfied and the
Purchaser acquires in excess of 90% of the Shares, then the non-tendering
shareholders, in the aggregate, would hold less than 10% of the Shares. Under
the DCC, holders of 10% of the voting capital stock of a Netherlands "N.V."
(unless a lower percentage is specified in a company's articles of
association) have the authority to cause the company to call a shareholders
meeting. Holders of 10% of the voting capital stock of a Netherlands "N.V."
further have the right to request a special investigation into the affairs of
the company by court appointed experts. If the Purchaser acquires in excess of
90% of the Shares in the Offer, then the non-tendering shareholders, acting
together as a group, would no longer hold sufficient Shares to be entitled to
exercise any of the foregoing rights under the DCC.
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Sale of U.S. Companies and Dividend of Proceeds; Tax Consequences of
Dividend. Regardless of whether the Purchaser is able to proceed with the Buy-
Out or chooses to proceed with a Statutory Merger or conversion from "N.V." to
"B.V.", the Purchaser contemplates taking certain actions to integrate certain
operations of the Company (many of which are located in the United States)
with the existing operations of the Purchaser and its affiliates. The
Purchaser is considering a number of alternatives in order to facilitate these
objectives. One alternative would be for the Company to sell to a wholly-owned
subsidiary of the Purchaser the stock of RHHI. The purchase price would be the
fair market value as determined by an independent investment banking firm. The
purchase price for RHHI (the "U.S. Operations Purchase Price"), though not yet
valued, is expected to be a substantial portion of the value of the Company.
The Purchaser would pay the U.S. Operations Purchase Price to the Company in
consideration for the transfer of stock of RHHI and other entities. The
Company would then declare and pay a dividend approximating the U.S.
Operations Purchase Price pro rata to its shareholders, including the non-
tendering shareholders. Other alternatives to achieve the same objectives are
currently under consideration. No final decision has been made concerning the
structure of such alternatives. ANY DIVIDEND PAID TO NON-RESIDENTS OF THE
NETHERLANDS FOLLOWING THE SALE OF RHHI WOULD GENERALLY BE SUBJECT TO
NETHERLANDS DIVIDEND WITHHOLDING TAX (AND, IN SOME SITUATIONS, BE SUBJECT TO
NETHERLANDS INCOME TAX OR CORPORATION TAX, AS THE CASE MAY BE) ON THE ENTIRE
AMOUNT OF THE DIVIDEND OR A PORTION THEREOF. SEE SECTION 5 ABOVE. As noted in
Section 5, above, if Shares purchased in the Offer are held by a Netherlands
private limited liability company then no Netherlands withholding tax should
be payable upon receipt by such entity of the dividend paid after a sale of
RHHI.
The Acquisition Agreement does not require the Purchaser to implement either
the Buy-Out, a Statutory Merger, or any of the other foregoing possible
scenarios. The Purchaser, however, intends to commence the Buy-Out if eligible
to do so under the DCC. After consummation of the Offer, the Purchaser will
continue to review approaches to integration of the business of the Company
with that of the Purchaser and its other affiliates.
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and may reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of the remaining Shares held by shareholders other than the Purchaser. The
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for or marketability of the Shares or whether it would cause
future market prices to be greater or less than the Offer Price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing
and may, therefore, be delisted from such exchange. According to the NYSE's
published guidelines, the NYSE could consider delisting the Shares if, among
other things, the number of publicly held Shares (excluding Shares held by
officers, directors, their immediate families and other concentrated holdings
of 10% or more) were less than 600,000, there were less than 1,200 holders of
at least 100 shares or the aggregate market value of the publicly held Shares
was less than $5 million. If, as a result of the purchase of Shares pursuant
to the Offer, the Shares no longer meet the requirements of the NYSE for
continued listing and the listing of Shares on such exchanges is discontinued,
the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
trade on another securities exchange or in the over-the-counter market and
that price quotations for the Shares would be reported by such exchange or
through Nasdaq or other sources. The extent of the public market for the
Shares and availability of such quotations would, however, depend upon such
factors as the number of holders and/or the aggregate market value of the
publicly held Shares at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), which has the effect, among other things, of allowing brokers
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to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, the
Shares might no longer constitute "margin securities" for the purposes of the
Federal Reserve Board's margin regulations and, therefore, could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated if the Shares are not listed on a national
securities exchange and there are fewer than 300 holders of record.
Termination of the registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company
to holders of Shares and to the Commission and would make certain of the
provisions of the Exchange Act, such as the requirements of Rule 13e-3 under
the Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. Furthermore, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
listing on a securities exchange or Nasdaq reporting.
IT IS THE CURRENT INTENTION OF THE PURCHASER TO CAUSE THE COMPANY TO DELIST
THE SHARES FROM THE NYSE AND TO TERMINATE THE REGISTRATION OF THE SHARES UNDER
THE EXCHANGE ACT AFTER CONSUMMATION OF THE OFFER, IF THE REQUIREMENTS FOR SUCH
DELISTING AND TERMINATION OF REGISTRATION ARE MET. AS A RESULT, A NON-
TENDERING SHAREHOLDER MAY IN THE FUTURE HOLD A HIGHLY ILLIQUID INVESTMENT WITH
NO ASSURANCE AS TO THE TIMING OF ANY OPPORTUNITY FOR DISPOSITION. SUBSEQUENT
CONVERSION OF THE COMPANY TO A "B.V." WOULD FURTHER LIMIT THE LIQUIDITY OF
INVESTMENTS IN SHARES. SEE SECTION 11 ABOVE.
No appraisal rights are available in connection with the Offer. However, if
the Buy-Out is initiated, shareholders of the Company would have certain
rights under the DCC to receive payment in cash for the fair value of the
Shares. Such rights could lead to a judicial determination of the fair value
required to be paid in cash to such non-tendering holders for their Shares.
Any such judicial determination of the fair value of Shares could be based
upon considerations other than or in addition to the price paid in the Offer
and the market value of the Shares, including asset values and the investment
value of the Shares. The value so determined could be more or less than the
Offer Price.
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Buy-Out or another business combination
following the purchase of Shares pursuant to the Offer in which the Purchaser
seeks to acquire the remaining Shares not held by it and the Shares remain
registered under the Exchange Act. Purchaser believes, however, that if the
Buy-Out were consummated within one year of the purchase of Shares pursuant to
the Offer, Rule 13e-3 would not be applicable to the Buy-Out. The Purchaser
believes that if the Buy-Out is not consummated within one year of its
purchase of Shares pursuant to the Offer, and if the Shares are still subject
to the Exchange Act, then Rule 13e-3 may be applicable to the Buy-Out. Rule
13e-3 requires, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority shareholders in
such transaction be filed with the Commission and disclosed to shareholders
prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the date of the Acquisition Agreement, the Company should
(a) split, combine or otherwise change the Shares or its capitalization, (b)
acquire or otherwise cause a reduction in the number of outstanding Shares or
other securities or (c) issue or sell additional Shares (other than the
issuance of Shares upon exercise of Stock Options granted prior to the date of
the Acquisition Agreement to directors, officers, employees and consultants of
the Company in accordance with the Company Stock Option Plan as then in
effect), shares of any other class of capital stock, other voting securities
or any securities convertible into or exchangeable for, or rights, warrants or
options, conditional or otherwise, to acquire, any of the foregoing, then,
without prejudice to
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the Purchaser's rights under Sections 1 and 15, the Purchaser, in its sole
discretion, may make such adjustments as it deems appropriate in the Offer
Price and other terms of the Offer, including, without limitation, the number
or type of securities offered to be purchased.
If, on or after the date of the Acquisition Agreement, the Company should
declare or pay any dividend on the Shares or make any distribution (including,
without limitation, cash dividends, the issuance of additional Shares pursuant
to a stock dividend or stock split, the issuance of other securities or the
issuance of rights for the purchase of any securities) with respect to the
Shares, payable or distributable to shareholders of record on a date prior to
the transfer of the Shares purchased pursuant to the Offer to the Purchaser or
its nominee or transferee on the Company's stock transfer records, then,
without prejudice to the Purchaser's rights under Sections 1 and 15, (a) the
Offer Price may, in the sole discretion of the Purchaser, be reduced by the
amount of any such cash dividend or cash distribution and (b) the whole of any
such noncash dividend, distribution or issuance to be received by the
tendering shareholders will (i) be received and held by the tendering
shareholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering shareholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights
and privileges as owner of any such dividend, distribution or right and may
withhold the entire purchase price for Shares tendered in the Offer or deduct
from the purchase price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
Section 5.1 of the Acquisition Agreement prohibits the Company from taking
any of the foregoing actions without the prior written consent of the
Purchaser.
14. EXTENSION OF TENDER PERIOD; AMENDMENT; TERMINATION
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, regardless of whether or not any of the Conditions
set forth at Section 15 will have occurred or will have been determined by the
Purchaser to have occurred, subject to the terms of the Acquisition Agreement
and the applicable rules of the Commission, (i) to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of,
and the payment for, any Shares, by giving oral or written notice of such
extension to the Depositary and (ii) to amend the Offer in any respect by
giving oral or written notice of such amendment to the Depositary. In the
Acquisition Agreement, the Purchaser and the Company have agreed that either
party may terminate the Acquisition Agreement if the Offer shall not have been
consummated by June 30, 1997 (provided that such right to terminate the
Acquisition Agreement shall not be available to any party whose breach of any
representation or warranty or failure to fulfill any covenant or agreement
under the Agreement has been the cause of or resulted in the failure of the
Offer to be consummated on or before such date).
The Purchaser also reserves the right, in its sole discretion, subject to
the terms of the Acquisition Agreement, in the event any of the conditions
specified in Section 15 will not have been satisfied and so long as Shares
have not theretofore been accepted for payment, to delay (except as otherwise
required by applicable law) acceptance for payment of or payment for Shares or
to terminate the Offer and not accept for payment or pay for Shares.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
the Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 4. However, the ability
of the Purchaser to delay the payment for Shares which the Purchaser has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer (including the Minimum Condition), the
Purchaser will disseminate additional tender offer materials and extend
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the Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information. With respect to a change in
price or a change in percentage of securities sought, a minimum ten business
day period is generally required to allow for adequate dissemination to
shareholders and investor response. If prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all shareholders whose Shares are
accepted for payment pursuant to the Offer. As used in this Offer to Purchase,
"business day" means any day other than a Saturday, Sunday or a federal
holiday and consists of the time period from 12:01 A.M. through 12:00
midnight, New York City time, as computed in accordance with Rule 14d-1 under
the Exchange Act.
15. CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restrictions referred to
above, the payment for, any tendered Shares, and may amend the Offer
consistent with the terms of the Acquisition Agreement or terminate the Offer
if (i) any applicable waiting period under the HSR Act has not expired or
terminated prior to the expiration of the Offer, (ii) the Minimum Condition
has not been satisfied, or (iii) at any time on or after February 17, 1997 and
at or before the time of acceptance of Shares for payment pursuant to the
Offer, any of the following events shall occur:
(A) there shall have occurred any change, event, occurrence or
circumstance in the business, operations, properties, financial condition
or results of operations of the Company or any of its subsidiaries which,
individually or in the aggregate, has had or is reasonably likely to have a
Company Material Adverse Effect (except for changes, events, occurrences or
circumstances with respect to general economic or industry conditions);
(B) any governmental entity or court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which (1) makes
the acceptance for payment of, or the payment for, some or all of the
Shares illegal or otherwise prohibits or restricts consummation of the
Offer, (2) imposes material limitations on the ability of the Purchaser to
acquire or hold or to exercise any rights of ownership of the Shares, or
effectively to manage or control the Company and its business, assets and
properties or (3) has had or is reasonably likely to have a Company
Material Adverse Effect; provided, however, that the parties shall use all
commercially reasonable efforts to cause any such decree, judgment or other
order to be vacated or lifted;
(C) the representations and warranties of the Company set forth in the
Acquisition Agreement shall not (i) have been true and correct in any
material respect on the date of the Acquisition Agreement or (ii) be true
and correct in any respect as of the Expiration Date (as such date may be
extended) as though made on or as of such date or the Company shall have
breached or failed in any respect to perform or comply with any material
obligation, agreement or covenant required by the Acquisition Agreement to
be performed or complied with by it except, in each case with respect to
clause (ii), (x) for changes specifically permitted by the Acquisition
Agreement and (y) (A) for those representations and warranties that address
matters only as of a particular date which are true and correct as of such
date or (B) where the failure of representations and warranties (without
regard to materiality qualifications therein contained) to be true and
correct, or the performance or compliance with such obligations, agreements
or covenants, would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect;
(D) the Acquisition Agreement shall have been terminated in accordance
with its terms;
(E) it shall have been publicly disclosed or the Purchaser shall have
learned that any person, entity or "group" (as that term is defined in
Section 13(d)(3) of the Exchange Act), other than the Purchaser or its
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affiliates, shall have acquired beneficial ownership (as determined
pursuant to Rule 13d-3 of the Exchange Act) of 20% or more of the Shares,
or shall have entered into a definitive agreement with the Company with
respect to a tender offer or exchange offer for any Shares or merger,
consolidation or other business combination with or involving the Company
or any of its subsidiaries;
(F) the Board of Managing Directors of the Company shall have withdrawn
or modified in a manner adverse to the Purchaser its approval or
recommendation of the Offer, shall have recommended to the Company's
shareholders another offer or shall have adopted any resolution to effect
any of the foregoing;
(G) any of the consents, approvals, authorizations, orders or permits
required to be obtained by the Company, the Purchaser, or their respective
subsidiaries in connection with the Offer from, or filings or registrations
required to be made by any of the same prior to the consummation of the
Offer with, any governmental entity in connection with the execution,
delivery and performance of the Acquisition Agreement shall not have been
obtained or made or shall have been obtained or made subject to conditions
or requirements, except (i) where the failure to have obtained or made any
such consent, approval, authorization, order, permit, filing or
registration or such conditions or requirements could not reasonably be
expected to (1) have a Company Material Adverse Effect or a Purchaser
Material Adverse Effect or (2) impose material limitations on the ability
of the Purchaser to acquire or hold or to exercise any rights of ownership
of the Shares, or effectively to manage or control the Company and its
business, assets and properties and (ii) for any such consent, approval,
authorization, order, permit, filing or registration related to, or arising
out of, compliance with statutes, rules or regulations regulating the
consumption, sale or serving of alcoholic beverages; or
(H) there shall have occurred (1) any general suspension of trading in,
or limitation on prices for, securities on the NYSE, (2) the declaration of
a banking moratorium or any suspension of payments in respect of banks in
the United States (whether or not mandatory), (3) the commencement of a
war, armed hostilities or other international or national calamity directly
or indirectly involving the United States and having had or being
reasonably likely to have a Company Material Adverse Effect or materially
adversely affecting (or materially delaying) the consummation of the Offer,
(4) any limitation or proposed limitation (whether or not mandatory) by any
United States or Dutch governmental authority or agency, or any other
event, that materially adversely affects generally the extension of credit
by banks or other financial institutions, (5) from the date of this
Agreement through the date of termination or expiration of the Offer, a
decline of at least 25% in the Standard & Poor's 500 Index or (6) in the
case of any of the situations described in clauses (1) through (5)
inclusive, existing at the date of the commencement of the Offer, a
material acceleration, escalation or worsening thereof;
which, in the reasonable judgment of the Purchaser, in any such case, and
regardless of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payments.
The conditions set forth in this Section 15 (the "CONDITIONS") are for the
sole benefit of the Purchaser and may be asserted by the Purchaser regardless
of any circumstances giving rise to any condition and may be waived by the
Purchaser, in whole or in part at any time and from time to time in the sole
discretion of the Purchaser. The failure by the Purchaser (or any affiliate of
the Purchaser) at any time to exercise any of the foregoing rights will not be
deemed a waiver of any right and each right will be deemed an ongoing right
which may be asserted at any time and from time to time.
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
Except as described in this Section 16, based upon a review of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, the Purchaser is not aware of
any license or regulatory permit that appears to be material to the business
of the Company and its subsidiaries, taken as a whole, that might be adversely
affected by the acquisition of Shares by the Purchaser pursuant to the Offer
or otherwise or, except as set forth below, of any approval or other action by
any governmental, administrative or regulatory agency or authority, domestic
or foreign, that would be required prior
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to the acquisition of Shares by the Purchaser pursuant to the Offer or
otherwise. Should any such approval or other action be required, the Purchaser
currently contemplates that it will be sought. While the Purchaser does not
currently intend to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that adverse
consequences might not result to the Company's business or that certain parts
of the business of the Company or the Purchaser might not have to be disposed
of in the event that such approvals were not obtained or any other actions
were not taken. The Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions, including
conditions relating to certain of the legal matters discussed in this Section
16. See Section 15.
State Takeover Statutes. A number of states have adopted "takeover" statutes
that purport to apply to attempts to acquire corporations that are
incorporated in such states, or whose business operations have substantial
economic effects in such states, or which have substantial assets, security
holders, employees, principal executive offices or principal places of
business in such states.
In Edgar v. MITE Corporation, the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Act,
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in CTS Corp. v. Dynamics
Corp. of America, addressing Indiana's Control Share Acquisition Act, the
Supreme Court held that a state may, as a matter of corporate law and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided
that such laws were applicable under certain conditions, in particular, that
the corporation has a substantial number of shareholders in the state and is
incorporated there.
The Company, through its subsidiaries, conducts business in a number of
states throughout the United States, some of which have enacted "takeover"
statutes. The Purchaser does not know whether any of these statutes will, by
their terms, apply to the Offer, and has not complied with any such statutes.
To the extent that certain provisions of these statutes purport to apply to
the Offer, the Purchaser believes that there are reasonable bases for
contesting such statutes. If any person should seek to apply any state
takeover statute, the Purchaser would take such action as then appears
desirable, which action may include challenging the validity or applicability
of any such statute in appropriate court proceedings. If it is asserted that
one or more takeover statutes apply to the Offer, and it is not determined by
an appropriate court that such statute or statutes do not apply or are invalid
as applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities,
and the Purchaser might be unable to purchase or pay for Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment or pay
for Shares tendered. See Section 14.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by the
Purchaser of a Notification and Report Form with respect to the Offer, unless
the Purchaser receives a request for additional information or documentary
material from the Antitrust Division or the FTC or unless early termination of
the waiting period is granted. If, within the initial 15-calendar day waiting
period, either the Antitrust Division or the FTC requests additional
information or material from the Purchaser concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by the
Purchaser with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with
the consent of the Purchaser. In practice, complying with a request for
additional information or material can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of the
Shares pursuant to the Offer and the Acquisition Agreement. At any time before
or after the Purchaser's acquisition of Shares, the Antitrust Division or the
FTC could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares
acquired by the Purchaser or divestiture of substantial assets of the
Purchaser or its subsidiaries. Private parties and state
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attorneys general may also bring legal action under the antitrust laws in
certain circumstances. Based upon an examination of publicly available
information relating to the business in which the Purchaser and the Company
are engaged, the Purchaser believes that the acquisition of Shares by the
Purchaser will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer or other acquisition of Shares by the
Purchaser on antitrust grounds will not be made or, if such challenge is made,
of the result. See Section 15 for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
The Purchaser is reviewing requirements for filings with foreign antitrust
and competition enforcement authorities. One or more such filings may be
required. The submission of such filings may, pending approval or further
action by governmental authorities, constitute a failure of one of the
Conditions, and could thus delay or prevent acceptance of the Offer and
payment for Shares.
Federal Reserve Board Regulations. The margin regulations promulgated by the
Federal Reserve Board place restrictions on the amount of credit that may be
extended for the purpose of purchasing margin stock (including the Shares) if
such credit is secured directly or indirectly by margin stock. The Purchaser
believes that the financing of the acquisition of the Shares will not be
subject to the margin regulations.
17. FEES AND EXPENSES
The Purchaser has retained Salomon Brothers to act as Dealer Manager in
connection with the Offer and serve as financial advisor to the Purchaser in
connection with the proposed acquisition of the Company. Upon the acquisition
by the Purchaser or its subsidiary of the Company, or all or a significant
portion of the assets of the Company or more than 5% of the equity securities
of the Company, the Purchaser has agreed to pay Salomon Brothers a fee of $5
million. The Purchaser will also reimburse Salomon Brothers for reasonable
out-of-pocket expenses, including reasonable attorneys' fees and expenses, and
has also agreed to indemnify Salomon Brothers against certain liabilities and
expenses in connection with the Offer, including certain liabilities under the
federal securities laws.
The Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and First Chicago Trust Company of New York, to serve as the
Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities and expenses under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the fees of the Dealer Manager, the Information
Agent and the Depositary) in connection with the solicitation of tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies will be reimbursed by the Purchaser upon request for customary
mailing and handling expenses incurred by them in forwarding material to their
customers.
18. MISCELLANEOUS
The Purchaser is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser becomes aware
of any jurisdiction in which the making of the Offer would not be in
compliance with applicable law, the Purchaser will make a good faith effort to
comply with any such law. If, after such good faith effort, the Purchaser
cannot comply with any such law, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) the holders of Shares residing in
such jurisdiction. In those jurisdictions whose securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by one or more registered brokers or
dealers which are licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
The Purchaser has filed with the Commission the Tender Offer Statement on
Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with
exhibits, furnishing certain additional information with respect to the Offer,
and may file amendments thereto. Such Schedule 14D-1 and any amendments
thereto, including exhibits, should be available for inspection and copies
should be obtainable in the manner set forth in Section 7 (except that such
material will not be available at the regional offices of the Commission).
Marriott International, Inc.
February 24, 1997
32
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
The name, business address, present principal occupation or employment and
five-year employment history of each director and executive officer of the
Purchaser and certain other information are set forth below. Unless otherwise
indicated below, the address of each director and officer is c/o 10400
Fernwood Road, Bethesda, Maryland 20817. Unless otherwise indicated, each
occupation set forth opposite an individual's name refers to employment with
the Purchaser. All directors and officers listed below are citizens of the
United States. Parenthetical years indicated the year the individual was
elected or appointed a director of the Purchaser.
<TABLE>
<CAPTION>
NAME AND TITLE AGE EMPLOYMENT HISTORY
- -------------- --- ------------------
<S> <C> <C>
J.W. Marriott, Jr.* 64 Mr. Marriott is Chairman of the Board, President and
Chairman of the Board Chief Executive Officer of the Purchaser.
and CEO Mr. Marriott has been a director of the Purchaser
since 1964 (including the period prior to the spin-
off of the Purchaser in 1993 from Marriott
Corporation (now known as Host Marriott Corporation)
(the "Distribution")), and is currently serving a
three-year term expiring at the 1999 Annual Meeting
of Shareholders. He also serves as a director of
Host Marriott Corporation, Host Marriott Services
Corporation, General Motors Corporation, Outboard
Marine Corporation and the U.S.-Russia Business
Roundtable. He also serves on the board of trustees
of the Mayo Foundation, the National Geographic
Society, and Georgetown University, and on the
advisory board of the Boy Scouts of America. He is
on the President's Advisory Committee of the
American Red Cross and the Executive Committee of
the World Travel & Tourism Council, and is a member
of the Business Council and the Business Roundtable.
Mr. Marriott became President of Marriott
Corporation in 1964, Chief Executive Officer of
Marriott Corporation in 1972 and Chairman of the
Board of Marriott Corporation in 1985. Effective
March 31, 1997, Mr. Marriott will resign as
President but will continue to serve as Chairman and
Chief Executive Officer.
Richard E. Marriott* 58 Mr. Marriott has been a director of the Purchaser
Director since 1979 (including the period prior to the
Distribution), and is currently serving a three-year
term expiring at the 1998 Annual Meeting of
Shareholders. Mr. Marriott is Chairman of the Board
of Host Marriott Corporation. He is also Chairman of
the Board of First Media Corporation and serves as a
director of Host Marriott Services Corporation,
Potomac Electric Power Company, Riggs National Bank,
and trustee of Gallaudet University, Polynesian
Cultural Center, Primary Children's Medical Center,
Boys and Girls Clubs of America SE Region, and The
J. Willard Marriott Foundation. He also serves on
the board of trustees of Federal City Council and
Marriott Foundation for People with Disabilities.
Prior to the Distribution, Mr. Marriott served as an
Executive Vice President and member of the Board of
Directors of Marriott Corporation.
</TABLE>
- --------
* Messrs. J.W. Marriott, Jr. and Richard E. Marriott are brothers.
I-1
<PAGE>
<TABLE>
<CAPTION>
NAME AND TITLE AGE EMPLOYMENT HISTORY
- -------------- --- ------------------
<S> <C> <C>
Gilbert M. Grosvenor 65 Mr. Grosvenor has been a director of the Purchaser
Director since 1987 (including the period prior to the
Distribution), and is currently serving a three-year
term expiring at the 1998 Annual Meeting of
Shareholders. Mr. Grosvenor is Chairman of the Board
of the National Geographic Society (a publisher of
books and magazines and producer of television
documentaries) and a director or trustee of Chevy
Chase Federal Savings Bank, Ethyl Corporation, and
Saul Centers, Inc. Prior to the Distribution, Mr.
Grosvenor served as a member of the Board of
Directors of Marriott Corporation.
Floretta Dukes McKenzie 61 Dr. McKenzie has been a director of the Purchaser
Director since 1992 (including the period prior to the
Distribution), and is currently serving a three-year
term expiring at the 1997 Annual Meeting of
Shareholders. Dr. McKenzie is the founder, President
and a director of The McKenzie Group, Inc. (an
educational consulting firm). She is also a director
or trustee of Potomac Electric Power Company,
National Geographic Society, the Acacia Group, Group
Hospitalization and Medical Services, Inc., Reading
is Fundamental (RIF), Howard University, White House
Historical Association, American Association of
School Administrators Foundation Fund, Lightspan
Partnership, Inc., Impact II--The Teachers Network,
Foundation for Teaching Economics, National Academy
Foundation, Institute for Educational Leadership,
Inc., and National Association of Partners in
Education, Inc. (NAPE). From 1981 to 1988, she
served as Superintendent of the District of Columbia
Public Schools. Prior to the Distribution, Dr.
McKenzie served as a member of the Board of
Directors of Marriott Corporation.
Harry J. Pearce 54 Mr. Pearce has been a director of the Purchaser
Director since 1995 and is currently serving a term to expire
at the 1998 Annual Meeting of Shareholders. Mr.
Pearce is Vice Chairman of the Board of General
Motors Corporation (an automobile manufacturer) and
a director of General Motors Acceptance Corporation,
Hughes Electronics Corporation, American Automobile
Manufacturers Association and the Economic Strategy
Institute, and is a member of the U.S. Air Force
Academy's Board of Visitors. He also serves on the
board of trustees of Howard University and is a
member of Northwestern University School of Law's
Visiting Committee and the Dean's Advisory Council.
W. Mitt Romney 50 Mr. Romney has been a director of the Purchaser
Director since 1993 (including the period prior to the
Distribution), and is currently serving a three-year
term expiring at the 1999 Annual Meeting of
Shareholders. Mr. Romney is a director, President
and Chief Executive Officer of Bain Capital, Inc. (a
private equity investment firm). He is also a
director of The Sports Authority, Inc., Duane Reade,
Inc., and Staples, Inc. Mr. Romney is a member of
the Executive Board of Boy Scouts of America and the
boards of the National Points of Light Foundation
and City Year. Prior to the Distribution, Mr. Romney
served as a member of the Board of Directors of
Marriott Corporation.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
NAME AND TITLE AGE EMPLOYMENT HISTORY
- -------------- --- ------------------
<S> <C> <C>
Roger W. Sant 65 Mr. Sant has been a director of the Purchaser since
Director 1993, and is currently serving a three-year term
expiring at the 1997 Annual Meeting of Shareholders.
Mr. Sant is Chairman of the Board and a co-founder
of The AES Corporation (an international independent
power business). He is also Chairman of the Board of
World Wildlife Fund (U.S.) and a member of the Board
of World Resources Institute and Worldwide Fund for
Nature.
Lawrence M. Small 55 Mr. Small has been a director of the Purchaser since
Director 1995, and is currently serving a term to expire at
the 1997 Annual meeting of Shareholders. Mr. Small
is President, Chief Operating Officer and a member
of the Board of Directors of Fannie Mae (a
Congressionally chartered mortgage financing
corporation). Prior to joining Fannie Mae, Mr. Small
was Vice Chairman and Chairman of the Executive
Committee of the Boards of Directors of
Citicorp/Citibank. He also serves as a director of
The Chubb Corporation, Chairman of the Financial
Advisory Committee of Trans-Resources International,
a member of the Board of Trustees of Morehouse
College and New York University Medical Center, and
a member of the U.S. Holocaust Memorial Council.
Clifford J. Ehrlich 58 Mr. Ehrlich joined Marriott Corporation in 1973 and
Senior Vice President was Marriott Corporation's chief human resources
executive from April 1978 until the Distribution in
1993. In 1980, Mr. Ehrlich was elected Senior Vice
President--Human Resources of Marriott Corporation.
In October 1993, effective as of the Distribution,
he was named to his current position. Mr. Ehrlich
has announced his retirement from the Purchaser,
effective March 31, 1997.
Joseph Ryan 55 Mr. Ryan joined the Purchaser in December 1994 as
Executive Vice President Executive Vice President and General Counsel. Prior
and General Counsel to that time, he was a partner in the law firm of
O'Melveny & Myers, serving as the Managing Partner
from 1993 until his departure. He joined O'Melveny &
Myers in 1967 and was admitted as a partner in 1976.
William J. Shaw 51 Mr. Shaw joined Marriott Corporation in 1974, was
Executive Vice President Corporate Controller in 1979 and a Vice President in
and President--Marriott 1982. In 1985, he assumed responsibility for
Service Group Marriott Corporation's tax department and risk
management department and was elected Senior Vice
President--Finance. In 1986, Mr. Shaw was elected
Senior Vice President--Finance and Treasurer of
Marriott Corporation. He was elected Executive Vice
President of Marriott Corporation and promoted to
Chief Financial Officer in April 1988. In February
1992, he was elected President of the Marriott
Service Group, which now comprises the Purchaser's
Contract Service Group. In October 1993, effective
as of the Distribution, he was named to his current
position. Mr. Shaw is also Chairman of the Board of
Host Marriott Services Corporation. Effective March
31, 1997, Mr. Shaw will become President and Chief
Operating Officer of the Purchaser.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
NAME AND TITLE AGE EMPLOYMENT HISTORY
- -------------- --- ------------------
<S> <C> <C>
Michael A. Stein 47 Mr. Stein joined Marriott Corporation in 1989 as
Executive Vice President Vice President, Finance and Chief Accounting
and Chief Financial Officer. In 1990, he assumed responsibility for
Officer Marriott Corporation's financial planning and
analysis functions. In 1991, he was elected Senior
Vice President--Finance and Corporate Controller of
Marriott Corporation and also assumed responsibility
for Marriott Corporation's internal audit function.
In October 1993, effective as of the Distribution,
he was named Executive Vice President and Chief
Financial Officer. Prior to joining Marriott
Corporation, Mr. Stein spent 18 years with Arthur
Andersen LLP (formerly Arthur Andersen & Co.) where,
since 1982, he was a partner.
William R. Tiefel 62 Mr. Tiefel joined Marriott Corporation in 1961 and
Executive-Vice President was named President of Marriott Hotels, Resorts and
and President--Marriott Suites in 1988. Mr. Tiefel previously served as a
Lodging Group resident manager and general manager at several
Marriott Hotels prior to being appointed Regional
Vice President and later Executive Vice President of
Marriott Hotels, Resorts and Suites and Marriott
Ownership Resorts. Mr. Tiefel was elected Executive
Vice President of Marriott Corporation in November
1989. In March 1992, Mr. Tiefel was elected
President--Marriott Lodging Group and assumed
responsibility for all of the Purchaser's lodging
brands. In October 1993, effective as of the
Distribution, he was named to his current position.
</TABLE>
I-4
<PAGE>
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each shareholder of the Company or his
broker, dealer, commercial bank or other nominee to the Depositary at one of
its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
Tenders & Exchanges Tenders & Exchanges Attention: Tenders & Exchanges
P.O. Box 2569 14 Wall Street c/o The Depository Trust Company
Suite 4660-RHG 8th Floor, Suite 4680-RHG 55 Water Street, DTC TAD
Jersey City, New Jersey New York, New York 10005 Vietnam Veterans Memorial
07303-2569 Plaza New York, New York 10041
</TABLE>
Facsimile Transmission
(For Eligible Institutions Only):
201-222-4720
or
201-222-4721
Confirm Receipt of Notice of Guaranteed Delivery:
(201) 222-4707
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent at its telephone numbers and location
listed below. You may also contact your broker, dealer, commercial bank or
trust company or nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF MACKENZIE PARTNERS, INC. APPEARS HERE]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE: (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-1622 (Call Collect)
<PAGE>
Exhibit 99(a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
AT $30.00 NET PER SHARE
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 24, 1997
BY
MARRIOTT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01 A.M., NEW YORK CITY TIME,
ON SATURDAY, MARCH 29, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES AND ANY OTHER REQUIRED
DOCUMENTS SHOULD BE SENT ORDELIVERED BY EACH SHAREHOLDER OF THE COMPANY OR HIS
BROKER, DEALER, COMMERCIAL BANK OR OTHER NOMINEETO THE DEPOSITARY AT ONE OF ITS
ADDRESSES SET FORTH BELOW.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
Tenders & Exchanges Tenders & Exchanges Attention: Tenders &
P.O. Box 2569Suite 14 Wall Street Exchangesc/o The
4660-RHGJersey City, 8th Floor, Suite 4680-RHG Depository Trust
New Jersey 07303-2569 New York, New York 10005 Company55 Water Street,
DTC TADVietnam Veterans
Memorial PlazaNew York,
New York 10041
By Facsimile Transmission:
(For Eligible Institutions (as defined below) Only):
(201) 222-4720
or
(201) 222-4721
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER
OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S) (PLEASE
FILL IN, IF BLANK, EXACTLY
AS NAME(S) APPEAR(S) ON
SHARE CERTIFICATE(S) AND SHARE(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
TENDERED) (ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED NUMBER OF
CERTIFICATE BY SHARE SHARES
NUMBER(S) CERTIFICATE(S)* TENDERED**
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
TOTAL SHARES:
- --------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares
evidenced by each Share Certificate delivered to the Depositary are
being tendered hereby. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE>
This Letter of Transmittal is to be completed by shareholders either if
certificates are to be forwarded herewith or if delivery is to be made by
book-entry transfer to the Depositary's account at The Depository Trust
Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each, a
"Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3 of the Offer to
Purchase (as defined below).
Shareholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot comply
with the book-entry transfer procedures on a timely basis must tender their
Shares according to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-
ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH ONE OF THE BOOK-ENTRY
TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution_______________________________________________
Check Box of Book-Entry Transfer Facility (check one):
[_] DTC [_] PDTC
Account Number______________________________________________________________
Transaction Code Number_____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY SENT TO THE DEPOSITARY PRIOR TO THE DATE HEREOF AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)______________________________________________
Window Ticket Number (if any)_______________________________________________
Date of Execution of Notice of Guaranteed Delivery__________________________
Name of Institution that Guaranteed Delivery________________________________
Check Box of Book-Entry Transfer Facility if Delivered by Book-Entry
Transfer (check one):
[_] DTC [_] PDTC
Account Number (if delivered by Book-Entry Transfer)________________________
Transaction Code Number_____________________________________________________
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Marriott International, Inc., a Delaware
corporation (the "Purchaser"), the above-described shares of Common Stock, par
value 0.01 Netherlands Guilders (the "Shares"), of Renaissance Hotel Group
N.V., a Netherlands limited liability company (the "Company"), at $30.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated February
24, 1997 (the "Offer to Purchase"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which together with the Offer to Purchase
and any supplements or amendments thereto collectively constitute the
"Offer"). The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or in part from time to time to one or more
direct or indirect wholly-owned subsidiaries of the Purchaser, the right to
purchase Shares tendered pursuant to the Offer.
Subject to and effective upon acceptance for payment of the Shares tendered
herewith in accordance with the terms and subject to the conditions of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all of the
Shares that are being tendered hereby and all other Shares or other securities
or property issued or issuable in respect thereof on or after February 17,
1997 (such other Shares, securities or property other than the Shares being
referred to herein as the "Other Securities") and irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Other Securities with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver Share Certificates evidencing such
Shares and all Other Securities, or transfer ownership of such Shares and all
Other Securities on the account books maintained by any of the Book-Entry
Transfer Facilities, together, in either case, with all accompanying evidences
of transfer and authenticity, to or upon the order of the Purchaser, upon
receipt by the Depositary, as the undersigned's agent, of the purchase price
(adjusted, if appropriate, as provided in the Offer to Purchase), (b) present
such Shares and all Other Securities for transfer on the books of the Company,
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares and all Other Securities, all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints the Purchaser, William J. Shaw
and William R. Tiefel, and each of them or any other designees of the
Purchaser, the attorneys and proxies of the undersigned, each with full power
of substitution, to the full extent of the undersigned's rights, including to
exercise such voting and other rights as each such attorney and proxy or his
(or her) substitute shall, in his (or her) sole discretion, deem proper, and
otherwise act (including pursuant to written consent), with respect to all of
the Shares tendered hereby which have been accepted for payment by the
Purchaser (and any and all Other Securities issued or issuable in respect
thereof on or after February 17, 1997), which the undersigned is entitled to
vote at any meeting of shareholders of the Company (whether annual or special
and whether or not an adjourned meeting), or written consent in lieu of such
meeting, or otherwise. This proxy and power of attorney is coupled with an
interest in the Shares tendered hereby and is irrevocable and is granted in
consideration of, and is effective upon, the acceptance for payment of such
Shares by the Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall, without further action, revoke all prior proxies
and consents granted by the undersigned with respect to such Shares (and all
Shares and other securities issued in Other Securities in respect of such
Shares), and no subsequent proxy or power of attorney or written consent shall
be given (and if given or executed, shall be deemed not to be effective) with
respect thereto by the undersigned. The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser is
able to exercise full voting and other rights with respect to such Shares
(including voting at any meeting of shareholders then scheduled or acting by
written consent without a meeting).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Other Securities, and that when such Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances, and that none of such Shares and Other Securities will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver any signature guarantees or additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Other
Securities. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the
3
<PAGE>
account of the Purchaser all Other Securities in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and
pending such remittance or appropriate assurance thereof, the Purchaser shall
be entitled to all rights and privileges as owner of such Other Securities and
may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by the Purchaser in its sole
discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated
in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, the Purchaser may not be required to accept
for payment any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates evidencing Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates evidencing Shares not tendered or accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the Special Delivery Instructions and the Special Payment Instructions
are completed, please issue the check for the purchase price and/or return any
Share Certificates evidencing Shares not purchased (together with accompanying
documents as appropriate) in the name(s) of, and deliver said check and/or
return such Share Certificates to, the person or persons so indicated.
Shareholders tendering Shares by book-entry transfer may request that any
Shares not accepted for payment be returned by crediting such account
maintained at DTC or PDTC as such shareholder may designate by making an
appropriate entry under "Special Payment Instructions." The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special
Payment Instructions to transfer any Shares from the name of the registered
holder(s) thereof if the Purchaser does not accept for payment any of the
Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares purchased or Share Certif- Shares purchased or Share Certif-
icates evidencing Shares not ten- icates evidencing Shares not ten-
dered or not purchased are to be dered or not purchased are to be
issued in the name of someone mailed to someone other than the
other than the undersigned. undersigned, or to the under-
signed at an address other than
that shown under "Description of
Shares Tendered."
Issue [_] Check
and/or [_] Certificate(s) to:
Name _____________________________ Mail [_] Check
__________________________________ and/or [_] Certificates to:
__________________________________ Name______________________________
(PLEASE PRINT) __________________________________
Address __________________________ __________________________________
__________________________________ (PLEASE PRINT)
(INCLUDE ZIP CODE) Address __________________________
__________________________________ __________________________________
(TAXPAYER IDENTIFICATION OR (INCLUDE ZIP CODE)
SOCIAL SECURITY NO.) (SEE
SUBSTITUTE FORM W-9)
4
<PAGE>
SHAREHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9)
_____________________________________________________
SIGNATURE(S) OF SHAREHOLDER(S)
_____________________________________________________
_____________________________________________________
Dated , 1997
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS
NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) OR ON A
SECURITY POSITION LISTING OR BY PERSON(S) AUTHORIZED
TO BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND
DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY
TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTOR-
NEY-IN-FACT, AGENT, OFFICER OF A CORPORATION OR ANY
OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE PROVIDE THE FOLLOWING INFORMATION.
SEE INSTRUCTION 5.)
Name(s)______________________________________________
_____________________________________________________
(PLEASE PRINT OR TYPE)
Capacity (full title)________________________________
Address______________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.
(home)_______________________________________________
(business)___________________________________________
Tax Identification or Social Security Number:________
(COMPLETE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature_________________________________
Name_________________________________________________
(PLEASE PRINT OR TYPE)
Name of Firm_________________________________________
Address______________________________________________
_____________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ______________________
Dated , 1997
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a recognized member of a Medallion Signature Guarantee
Program or by any other "eligible guarantor institution," as such term is
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended
(each of the foregoing being referred to as an "Eligible Institution"), unless
(i) this Letter of Transmittal is signed by the registered holder(s) of Shares
(which term, for the purposes of this document, shall include any participant
in a Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of Shares) tendered hereby and such holder(s) has (have)
not completed either the box entitled "Special Delivery Instructions" or the
box entitled "Special Payment Instructions" on this Letter of Transmittal or
(ii) such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by shareholders
either if Share Certificates are to be forwarded herewith or if a tender of
Shares is to be made pursuant to the procedures for delivery by book-entry
transfer set forth in Section 3 of the Offer to Purchase. Share Certificates
evidencing all physically tendered Shares, or confirmation ("Book-Entry
Confirmation") of any book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility of Shares delivered by book-entry transfer as
well as a properly completed and duly executed Letter of Transmittal, must be
received by the Depositary, at one of the addresses set forth herein prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase). If
Share Certificates are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery. Shareholders whose Share Certificates are not immediately
available, who cannot deliver their Share Certificates and all other required
documents to the Depositary prior to the Expiration Date or who cannot comply
with the book-entry transfer procedures on a timely basis may tender their
Shares by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 3
of the Offer to Purchase. Pursuant to such procedure, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser, must be received by the Depositary (as provided in (iii) below)
prior to the Expiration Date and (iii) the Share Certificates evidencing all
physically tendered Shares (or Book-Entry Confirmation with respect to such
Shares), as well as a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange trading days after the date of execution of such Notice of Guaranteed
Delivery, all as provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT SUCH CERTIFICATES
AND DOCUMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO INSURE
TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution
of this Letter of Transmittal (or a manually signed facsimile thereof), waive
any right to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares tendered should be listed on a separate signed schedule and attached
hereto.
4. PARTIAL TENDERS. (Not applicable to shareholders who tender by book-entry
transfer.) If fewer than all the Shares evidenced by any Share Certificate
submitted are to be tendered, fill in the number of Shares which are to be
tendered in the box entitled "Number of Shares Tendered." In such case, new
Share Certificate(s) evidencing the remainder of the Shares that were
evidenced by the old Share Certificate(s) will be sent to the registered
holder, unless otherwise provided in the appropriate box on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by Share Certificates delivered to the Depositary will be deemed
to have been tendered unless otherwise indicated.
6
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Share Certificate(s) without alteration,
enlargement or any change whatsoever. If any of the Shares tendered hereby are
held of record by two or more persons, all such persons must sign this Letter
of Transmittal.
If any tendered Shares are registered in different names on several Share
Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares evidenced by Share Certificates listed and transmitted hereby, no
endorsements of Share Certificates or separate stock powers are required
unless payment is to be made to or Share Certificates evidencing Shares not
tendered or purchased are to be issued in the name of a person other than the
registered holder(s), in which case the Share Certificate(s) evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificate(s). Signatures on such
certificates and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names
of the registered holder or holders appear on the Share Certificate(s).
Signatures on such Share Certificate(s) or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal or any Share Certificates or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or any person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of such person's authority so to
act must be submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect
to the transfer and sale of Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or if Share
Certificates evidencing Shares not tendered or purchased are to be registered
in the name of, any person other than the registered holder(s), or if Share
Certificates evidencing tendered shares are registered in the name of any
person other than the person(s) signing this letter of transmittal, the amount
of any stock transfer taxes (whether imposed on the registered holder(s) or
such other person) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN THIS LETTER
OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Share Certificate is to be sent and/or any Share
Certificates are to be returned to someone other than the signer above, or to
the signer above but at an address other than that shown in the box entitled
"Description of Shares Tendered" on the first page hereof, the appropriate
boxes on this Letter of Transmittal should be completed. Shareholders
tendering Shares by book-entry transfer may request that Shares not purchased
be credited to such account maintained at any of the Book-Entry Transfer
Facilities as such shareholder may designate under "Special Delivery
Instructions". If no such instructions are given, any such Share not purchased
will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may
be directed to, or additional copies of the Offer to Purchase, this Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from, the
Information Agent or the Dealer Manager at the telephone numbers and address
set forth below. Shareholders may also contact their broker, dealer,
commercial bank or trust company.
9. WAIVER OF CONDITIONS. Except as otherwise provided in the Offer to
Purchase, the Purchaser reserves the right in its sole discretion to waive in
whole or in part at any time or from time to time any of the specified
conditions of the Offer or any defect or irregularity in tender with regard to
any Shares tendered.
7
<PAGE>
10. SUBSTITUTE FORM W-9. The tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"),
generally the shareholder's social security or employer identification number,
on Substitute Form W-9, which is provided under "Important Tax Information"
below, and to certify, under penalties of perjury, whether he or she is
subject to backup withholding of federal income tax. If a tendering
shareholder is subject to backup withholding, he or she must cross out item
(2) of the Certification Box on Substitute Form W-9. Failure to provide the
information on Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price. If
the tendering shareholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, he or she should
write "Applied For" in the space provided for the TIN in Part I, sign and date
the Substitute Form W-9 and sign and date the Certificate of Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of payments for surrendered Shares thereafter until a TIN is
provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE
CASE OF A BOOK-ENTRY DELIVERY, TOGETHER WITH CERTIFICATES (OR BOOK-ENTRY
CONFIRMATION) AND ALL OTHER REQUIRED DOCUMENTS OR A PROPERLY COMPLETED AND
DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY
ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under federal tax law, a shareholder whose tendered Shares are accepted for
payment is required to provide the Depositary (as payor) with such
shareholder's correct TIN on Substitute Form W-9 below. If such shareholder is
an individual, the TIN is such shareholder's Social Security Number. If the
Depositary is not provided with the correct TIN or an adequate basis for
exemption, the shareholder may be subject to a $50 penalty imposed by the
Internal Revenue Service. In addition, payments that are made to such
shareholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding in an amount equal to 31% of the gross proceeds
resulting from the Offer.
Certain shareholders (including, among others, certain corporations and
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that shareholder must submit an IRS Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of his correct TIN by completing the
Substitute Form W-9 contained herein, certifying that the TIN provided on the
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN)
and that (1) the shareholder is exempt from backup withholding, (2) the
shareholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of failure to report all interest or
dividends, or (3) the Internal Revenue Service has notified the shareholder
that he or she is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report. If the tendering shareholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future,
he or she should write "Applied For" in the space provided for the TIN in Part
I, sign and date the Substitute Form W-9 and sign and date the Certificate of
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I
and the Depositary is not provided with a TIN within 60 days, the Depositary
will withhold 31% of all payments of the purchase price until a TIN is
provided to the Depositary.
8
<PAGE>
PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
PART I--PLEASE PROVIDE YOUR
SUBSTITUTE TIN IN THE BOX AT RIGHT AND TIN___________________
FORM W-9 CERTIFY BY SIGNING AND Social Security
DATING BELOW: Number orEmployer
Identification
DEPARTMENT OF ____________________________ NumberIf Awaiting TIN
THE TREASURY NAME (PLEASE PRINT) write "Applied For"
INTERNAL
REVENUE ____________________________ PART II--For Payees
SERVICE ADDRESS NOT subject to backup
withholding, see the
____________________________ enclosed Guidelines
PAYOR'S REQUEST FOR CITY STATE ZIP CODE for Certification of
TAXPAYER Taxpayer
IDENTIFICATION Identification Number
NUMBER (TIN) on Substitute Form W-
9 and complete as
instructed therein.
-------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct
taxpayer identification number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
SIGNATURE __________________ DATE ___________ , 1997
-------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because you have failed to report all interest or
dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup
withholding you received another notification from
the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED
FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office, or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number within sixty (60) days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number.
SIGNATURE(S) _________________________________ DATE: ________________ , 1997
- --------------------------------------------------------------------------------
9
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO OF MACKENZIE PARNTERS, INC. APPEARS HERE]
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (CALL COLLECT)
OR
CALL TOLL FREE: (800) 322-2885
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 783-1622 (CALL COLLECT)
10
<PAGE>
Exhibit 99(a)(3)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE
Purpose of Form. -- A person who is required to file an information return
with the Internal Revenue Service ("IRS") must obtain your correct taxpayer
identification number ("TIN") to report, for example, income paid to you, real
estate transactions, mortgage interest you paid, the acquisition or
abandonment of secured property, cancellation of debt or contributions you
made to an IRA. Use Form W-9 to furnish your correct TIN to the requester (the
person asking you to furnish your TIN) and, when applicable, (1) to certify
that the TIN you are furnishing is correct (or that you are waiting for a
number to be issued), (2) to certify that you are not subject to backup
withholding, or (3) to claim exemption from backup withholding if you are an
exempt payee.
Note: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form if it is substantially similar to Form W-9.
Taxpayer Identification Number (TIN) -- You must enter your TIN in the
appropriate box. If you are a resident alien and you do not have and are not
eligible to get a Social Security Number ("SSN"), your TIN is your IRS
individual taxpayer identification number (ITIN). Enter it in the social
security number box. If you do not have an ITIN, see How To Get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your
SSN or EIN. However, using your EIN may result in unnecessary notices to the
requester.
Note: See the chart below for further clarification of name and TIN
combinations.
How To Get a TIN. -- If you do not have a TIN, apply for one immediately. To
apply for a SSN, get Form SS-5 from your local office of the Social Security
Administration. Get Form W-7 to apply for an ITIN or Form SS-4 to apply for an
EIN. You can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM (1-
800-829-3676).
To complete Form W-9 if you do not have a TIN, write "Applied For" in the
space for the TIN in Part I, sign and date the form, and give it to the
requester. Generally, you will then have 60 days to obtain a TIN and furnish
it to the requester. If the requester does not receive your TIN within 60
days, backup withholding, if applicable, will begin and continue until you
furnish your TIN to the requester. For reportable interest or dividend
payments and certain payments made with respect to readily tradable
instruments, the payor must exercise one of the following options concerning
backup withholding during this 60-day period. Under option (1), a payor must
backup withhold on any reportable payment if you make withdrawals from your
account after the close of 7 business days after the requester receives the
Certificate of Awaiting Taxpayer Identification Number from you. Under option
(2), the payor must backup withhold on any reportable payments made to your
account, regardless of whether you make any withdrawals. The backup
withholding under option (2) must begin no later than 7 business days after
the requester receives the Certificate of Awaiting Taxpayer Identification
Number.
Note: Writing "Applied For" on the form means that you have already applied
for a TIN or that you intend to apply for one in the near future.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
What Is Backup Withholding? -- Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions.
This is called "backup withholding." Payments that may be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators, but do not include real estate transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
<PAGE>
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts
opened after 1983 only), or
5. You do not certify your TIN when required.
Certain payees and payments are exempt from backup withholding and
information reporting.
Payees and Payments Exempt From Backup Withholding. -- The payees listed in
items (1) through (5) are exempt from backup withholding and the payees listed
in items (6) through (15) may be exempt from backup withholding. For interest
and dividends, all listed payees are exempt except as listed in item (9). For
broker transactions, payees listed in items (1) through (13) and a person
registered under the Investment Advisers Act of 1940 who regularly acts as a
broker are exempt. Payments subject to reporting under sections 6041 and 6041A
are generally exempt from backup withholding only if made to payees described
in items (1) through (7), except a corporation that provides medical and
health care services or bills and collects payments for such services is not
exempt from backup withholding. Only payees described in items (1) through (5)
are exempt from backup withholding for barter exchange transactions and
patronage dividends.
(1) An organization exempt from tax under section 501(a), an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(5) An international organization or any of its agencies or
instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the
United States, the District of Columbia or a possession of the United
States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of
Corporate Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section
4947.
Payments of dividend and patronage dividends generally not subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
. Section 404(k) payments made by an ESOP.
2
<PAGE>
Payments of interest generally not subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
Note: Backup withholding applies if this interest is $600 or more and is
paid in the course of the payor's trade or business and you have not provided
a TIN or a correct TIN to the payor.
. Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid by you.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A, 6042, 6044,
6045, 6049, 6050A, and 6050N, and the regulations under those sections.
PENALTIES
Failure To Furnish TIN. -- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINs. -- If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
Name: -- If you are an individual, you must generally provide the name shown
on your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security
Administration of the name change, please enter your first name, the last name
shown on your social security card, and your new last name.
If the account is in joint names, list first and then circle the name of the
person or entity whose number you enter in Part I of the form.
If you are a sole proprietor, you must furnish your individual name as shown
on your social security card. You may enter your business, trade or "doing
business as" name on the business name line.
Other Entities. -- Enter the business name as shown on required Federal tax
documents. This name should match the name shown on the charter or other legal
document creating the entity. You may enter any business, trade, or "doing
business as" name on the business name line.
Joint Foreign Payees -- If the first payee listed on an account gives the
requestor Form W-8, Certificate of Foreign Status, or a similar statement
signed under penalties of perjury, backup withholding applies unless:
1. Every joint payee provides the statement regarding foreign status; or
2. Any one of the joint payees who has not established foreign status gives
the requestor a TIN.
3
<PAGE>
If any one of the joint payees who has not established foreign status gives
the requestor a TIN, that number is the TIN that must be used for purposes of
backup withholding and information reporting.
SIGNING THE CERTIFICATION
FOR A JOINT ACCOUNT, ONLY THE PERSON WHOSE TIN IS SHOWN IN PART I SHOULD
SIGN (WHEN REQUIRED).
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984 and
Broker Accounts Considered Active During 1983. You are required to furnish
your correct TIN, but you are not required to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester,
you must cross out item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may cross
out item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN, but you are
not required to sign the certification unless you have been notified that you
have previously given an incorrect TIN. "Other payments" include payments made
in the course of the requester's trade or business for rents, royalties, goods
(other than bills for merchandise), medical and health care services
(including payments to corporations), payments to a nonemployee for services
(including attorney and accounting fees), and payments to certain fishing boat
crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of Secured
Property, Cancellation of Debt, or IRA Contributions. You are required to
furnish your correct TIN, but you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part I, write "EXEMPT" in the block in Part II, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
Privacy Act Notice: -- Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid,
the acquisition or abandonment of secured property, cancellation of debt or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. The IRS may also
provide this information to the Department of Justice for civil and criminal
litigation and to cities, states, and the District of Columbia to carry out
their tax laws.
You must provide your TIN whether or not you are required to file a tax
return. Payors must generally withhold 31% of taxable interest, dividends, and
certain other payments to a payee who does not furnish a TIN to a payor.
Certain penalties may also apply.
4
<PAGE>
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
- ----------------------------------------------------
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND SSN OF:
- ----------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account (1)
3. Custodian account of a The minor (2)
minor (Uniform Gift to
Minors Act)
4.a. The usual revocable The grantor-trustee
savings trust (grantor (1)
is also trustee)
b. So-called trust The actual owner
account that is not a (1)
legal or valid trust
under state law
5. Sole proprietorship The owner (3)
<CAPTION>
- ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND EIN OF:
- ----------------------------------------------------
<S> <C>
6. Sole proprietorship The owner (3)
7. A valid trust, estate, Legal entity (4)
or pension trust
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
10. Partnership The partnership
11. A broker or registered The broker or
nominee nominee
12. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a state or
local government,
school district or
prison) that receives
agriculture program
payments
</TABLE>
- --------------------------------------
- -------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title).
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
5
<PAGE>
Exhibit 99(a)(4)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
TO
MARRIOTT INTERNATIONAL, INC.
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if the certificates representing shares of
common stock, par value 0.01 Netherlands Guilders (the "Shares"), are not
immediately available or if the procedure for book-entry transfer cannot be
completed on a timely basis or if time will not permit all required documents
to reach the Depositary at or prior to the expiration of the Offer. Such form
may be delivered by hand or transmitted by facsimile transmission or mail to
the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Overnight Courier: By Hand:
TENDERS & EXCHANGES TENDERS & EXCHANGES ATTENTION: TENDERS &
P.O. BOX 2569--SUITE 14 WALL STREET 8TH EXCHANGES C/O THE
4660--RHG FLOOR, SUITE 4680--RHG DEPOSITORY TRUST COMPANY 55
JERSEY CITY, NEW JERSEY NEW YORK, NEW YORK WATER STREET, DTC TAD
07303-2569 10005 VIETNAM VETERANS MEMORIAL
PLAZA
NEW YORK, NEW YORK 10041
By Facsimile Transmission:
(201) 222-4720
OR
(201) 222-4721
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(201) 222-4707
----------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Marriott International, Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated February 24, 1997 (the "Offer to Purchase") and the
related Letter of Transmittal (which together with any supplements or
amendments thereto collectively constitute the "Offer"), receipt of which is
hereby acknowledged, the number of Shares indicated below pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares: Name(s) of Record Holder(s):
-------------------
Share Certificate Numbers (if -------------------------------------
available):
-------------------------------------
- ------------------------------------- Please Type or Print
- ------------------------------------- Address(es)
-------------------------
If Shares will be delivered by book- -------------------------------------
entry transfer, check one box: Zip Code
[_] The Depository Trust Company Area Code and Telephone Number:
[_] Philadelphia Depository Trust -------------------------------------
Company
-------------------------------------
-------------------------------------
Account Number
---------------------- -------------------------------------
Signature(s)
Dated: , 1997 Dated: , 1997
------------------------ ------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a recognized member of a Medallion Signature Guarantee
Program or any other "eligible guarantor institution" as defined in Rule 17Ad-
15 under the Securities Exchange Act of 1934, as amended (each, an "Eligible
Institution"), hereby guarantees that either the certificates representing the
Shares tendered hereby in proper form for transfer, or timely confirmation of
a book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company or the Philadelphia Depository Trust Company
(pursuant to guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase), together with a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) or, in the case
of book-entry, an Agent's Message (as defined in the Offer to Purchase) with
any required signature guarantees and any other documents required by the
Letter of Transmittal, will be received by the Depositary at one of its
addresses set forth above within three (3) New York Stock Exchange trading
days after the date of execution hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal,
certificates for Shares and any other required documents to the Depositary
within the time period shown herein. Failure to do so could result in a
financial loss to such Eligible Institution.
Name of Firm:
-----------------------
-------------------------------------
Address: Authorized Signature
----------------------------
---------------------------- Name:
Zip Code -------------------------------
Please Type or Print
Area Code and Telephone Number: Title:
---- ------------------------------
Dated: ,1997
-------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES ARE TO BE DELIVERED WITH THE LETTER OF
TRANSMITTAL.
2
<PAGE>
Exhibit 99(a)(5)
-----------------
SALOMON BROTHERS
-----------------
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
AT
$30.00 NET PER SHARE
BY
MARRIOTT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01 A.M., NEW YORK CITY
TIME, ON SATURDAY, MARCH 29, 1997 UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 24, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Marriott International, Inc., a Delaware
corporation (the "Purchaser"), to act as Dealer Manager in connection with its
offer to purchase all outstanding shares of common stock, par value 0.01
Netherlands Guilders (the "Shares"), of Renaissance Hotel Group N.V., a
Netherlands limited liability company (the "Company"), at $30.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase dated
February 24, 1997 (the "Offer to Purchase") and the related Letter of
Transmittal (which together with any supplements or amendments thereto
collectively constitute the "Offer"), copies of which are enclosed herewith.
The Offer is being made in connection with the Acquisition Agreement dated as
of February 17, 1997 between the Purchaser and the Company.
For your information and for forwarding to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. Offer to Purchase;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating
to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to Purchase);
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer;
5. Solicitation/Recommendation Statement on Schedule 14D-9 issued by the
Company; and
6. Return envelope addressed to First Chicago Trust Company of New York,
as the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will be deemed to have accepted
<PAGE>
for payment, and will pay for, all Shares validly tendered and not properly
withdrawn by the Expiration Date (as defined in the Offer to Purchase) if, as
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of the tenders of such Shares for payment pursuant to
the Offer. Payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for such Shares
(or confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in the Offer
to Purchase)), a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) (unless, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase) is
utilized) and any other documents required by the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal or (manually signed facsimile thereof), with
any required signature guarantees and any other documents required by the
Letter of Transmittal, should be sent to the Depositary, and either
certificates representing the tendered Shares should be delivered or such
Shares must be delivered to the Depositary pursuant to the procedures for book
entry transfers, all in accordance with the instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to deliver their certificates on or prior to the Expiration Date or
to comply with the book-entry transfer procedures on a timely basis, a tender
may be effected by following the guaranteed delivery procedures specified in
Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Information Agent and the
Depositary as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse brokers, dealers, commercial banks and trust
companies for customary mailing and handling expenses incurred by them in
forwarding materials to their customers. The Purchaser will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01
A.M., NEW YORK CITY TIME, ON SATURDAY, MARCH 29, 1997, UNLESS THE OFFER IS
EXTENDED.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers
set forth on the back cover page of the Offer to Purchase.
Very truly yours,
Salomon Brothers Inc
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE PURCHASER, THE COMPANY, ANY AFFILIATE OF THE
COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
Exhibit 99(a)(6)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
AT
$30.00 NET PER SHARE
BY
MARRIOTT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01 A.M., NEW YORK CITY
TIME, ON SATURDAY, MARCH 29, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 24, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated February 24,
1997 (the "Offer to Purchase") and the related Letter of Transmittal (which
together with any supplements or amendments thereto collectively constitute
the "Offer") and other materials relating to the Offer by Marriott
International, Inc., a Delaware corporation (the "Purchaser"), to purchase all
outstanding shares of common stock, par value 0.01 Netherlands Guilders (the
"Shares"), of Renaissance Hotel Group N.V., a Netherlands limited liability
company (the "Company"), at $30.00 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set
forth in the Offer. This material is being sent to you as the beneficial owner
of Shares held by us for your account but not registered in your name. A
tender of such Shares can be made only by us as the holder of record and
pursuant to your instructions. The Letter of Transmittal accompanying this
letter is furnished to you for your information only and cannot be used by you
to tender Shares held by us for your account.
We request instructions as to whether you wish to have us tender any or all
of the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $30.00 per Share, net to the seller in cash,
without interest.
2. The Offer and withdrawal rights will expire at 12:01 a.m., New York
City time, on Saturday, March 29, 1997 unless the Offer is extended.
3. The Offer is being made as part of a series of transactions in
accordance with the terms of an Acquisition Agreement dated as of February
17, 1997 (the "Acquisition Agreement") by and between the Company and the
Purchaser.
Pursuant to the Acquisition Agreement, if upon consummation of the Offer
the Purchaser holds at least ninety-five percent (95%) of the issued and
outstanding capital stock of the Company, the Purchaser may in its sole
discretion take all actions necessary and proper under the Dutch Civil Code
("DCC") to commence the process leading to a Compulsory Buy-Out (the "Buy-
Out") in accordance with Section 2:92a of the DCC, to acquire, at a
judicially determined price, all the issued Shares not acquired by
Purchaser in the Offer. The Purchaser intends to initiate the Buy-Out if
upon consummation of the Offer the Purchaser holds sufficient Shares to be
eligible for such procedure under the DCC.
Also pursuant to the Acquisition Agreement, if the Purchaser acquires
less than ninety-five percent (95%) of the outstanding Shares pursuant to
the Offer, then the Purchaser may in its sole discretion elect, to the
extent permitted by the DCC, to effectuate a statutory merger involving the
Company as a disappearing entity pursuant to Section 2:308 et seq. of the
DCC, in which case, to the extent permitted by the DCC, the merger
consideration shall be the same as (or shall provide equivalent value to)
the Offer Price.
1
<PAGE>
The Purchaser has entered into an agreement dated as of February 17, 1997
(the "Shareholder Agreement") with Diamant Hotel Investments N.V., a
Netherlands Antilles corporation (the "Principal Shareholder"). Pursuant to
the Shareholder Agreement, the Principal Shareholder has agreed, among
other things, to tender and not withdraw its Shares in the Offer. Based
upon representations made by the Principal Shareholder to the Purchaser, as
of the date of the Shareholder Agreement, the Principal Shareholder held
16,368,000 Shares representing approximately 54.37% of the outstanding
Shares.
4. The Board of Managing Directors of the Company has unanimously
approved the Offer, determined that the Offer is fair to and in the best
interests of the shareholders of the Company, and recommends acceptance of
the Offer by the shareholders of the Company.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the
Offer to Purchase) a number of Shares which constitutes at least ninety
percent (90%) of the capital stock entitled to vote and then outstanding.
Any or all conditions to the Offer may be waived by the Purchaser.
6. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
The Offer is being made to all holders of Shares. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
in any jurisdiction in which the making of the Offer or acceptance thereof
would not be in compliance with the laws of such jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser by Salomon Brothers Inc or one or more registered
brokers or dealers licensed under the laws of such jurisdictions.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing and returning to us
the instruction form set forth below. Please forward your instructions to us
in ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer. If you authorize the tender of your Shares, all such
Shares will be tendered unless otherwise specified on the instruction form set
forth below.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
BY
MARRIOTT INTERNATIONAL, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated February 24, 1997 and the related Letter of Transmittal, in
connection with the offer by Marriott International, Inc., a Delaware
corporation, to purchase for cash all outstanding shares of common stock, par
value 0.01 Netherlands Guilders (the "Shares"), of Renaissance Hotel Group
N.V., a Netherlands limited liability company.
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) that are held by you for the account
of the undersigned, upon the terms and subject to the conditions set forth in
the Offer.
Dated:_____________, 1997
NUMBER OF SHARES TO BE TENDERED:
SHARES*
______________________________________________
______________________________________________
Signature(s)
______________________________________________
Please Print Name(s)
______________________________________________
Please Print Address(es)
______________________________________________
Area Code and Telephone Number(s)
______________________________________________
Tax Identification or Social Security Number(s)
- --------
* I (We) understand that if I (we) sign this instruction form without
indicating a lesser number of Shares in the space above, all Shares held by
you for my (our) account will be tendered.
3
<PAGE>
Exhibit 99(a)(7)
MARRIOTT INTERNATIONAL TO ACQUIRE
RENAISSANCE HOTEL GROUP
ACQUISITION MORE THAN DOUBLES INTERNATIONAL PRESENCE
MAJOR ASIAN ALLIANCE ESTABLISHED
WASHINGTON, DC -- February 18, 1997-- Marriott International, Inc. (MAR/NYSE)
and Renaissance Hotel Group, N.V. (RHG/NYSE) today announced an executed
agreement for Marriott to acquire Renaissance Hotel Group, a premier operator
and franchisor of 150 hotels (46,425 rooms) worldwide in 38 countries. Combined,
Marriott International and Renaissance Hotel Group operate or franchise more
than 1,300 hotels worldwide (273,000 rooms) across ten brands, including nearly
200 hotels (55,000 rooms) outside of the United States. By year-end 1997,
Marriott's worldwide lodging system is expected to exceed 300,000 hotel rooms.
Renaissance Hotel Group shareholders will receive $30 per share in cash. The
total acquisition cost is approximately $1 billion, including transaction costs
and existing net debt of Renaissance Hotel Group. Shareholders of Renaissance
Hotel Group, owning more than 54 percent of the voting stock, have agreed to the
terms of the acquisition. Marriott expects to commence a tender offer for all
outstanding Renaissance Hotel Group shares within five business days.
Renaissance Hotel Group operates or franchises its hotels and resorts under
three established brand names: Renaissance is a quality international brand for
affluent business and leisure travelers; New World is a quality hotel brand in
Asia and the Pacific region; and, Ramada International is a mid-priced lodging
brand outside of the United States and Canada. Renaissance Hotel Group also
master licenses the Ramada name in the United States and Canada to others under
long-term agreements. The company does not have any significant owned real
estate.
J.W. Marriott, Jr., Chairman of the Board and Chief Executive Officer of
Marriott International, and Dr. Henry K.S. Cheng, Chairman of Renaissance Hotel
Group and Managing Director of New World Development Co., Ltd., jointly
announced the agreement in Los Angeles, California.
"This acquisition provides a dramatic increase in rooms and market position for
Marriott International," said Mr. Marriott. "With the addition of these three
outstanding brands to our portfolio, we immediately will reach customers in 40
new markets including Russia, China, Japan, India, Italy and Turkey, and more
than double our presence outside of the United States."
(MORE)
<PAGE>
PAGE TWO
MARRIOTT AND RENAISSANCE
Mr. Marriott added, "The acquisition also creates considerable growth
opportunities for Marriott. Specifically:
. In the Asia/Pacific region, the New World brand will add new
locations in rapidly growing markets and provide infrastructure to
support growth.
. In addition to international opportunities, we will expand the
Renaissance brand in the United States, broadening our presence in the
quality tier of the full-service hotel market. We expect to achieve
exceptional results as we aggressively leverage our operating and
marketing skills across a growing number of lodging products. The
Renaissance affiliation with Marriott is expected to yield double-
digit revenue per available room growth for U.S. Renaissance hotels.
. With the Ramada International brand, we will increase our distribution
of moderate priced lodging products to 22 countries.
Each of these brands will provide additional development opportunities for
owners and franchisees."
New World Development Co., Ltd., a major Hong Kong-based real estate development
company, is the principal owner of Renaissance Hotel Group. New World's
substantial real estate and commercial interests are located throughout Asia,
particularly in the People's Republic of China. In addition to its Renaissance
stock holdings, New World or its affiliates control 83 hotels operated by
Renaissance.
"New World Development and Marriott will be important strategic partners in
future hotel expansion. I have tremendous respect for Dr. Cheng and have
invited him to join Marriott International's Board of Directors. His knowledge
and perspective will be valuable additions to our company," Mr. Marriott said.
"I am delighted to join Bill Marriott in announcing this transaction. We share
similar corporate cultures and complement each other geographically and
operationally. At New World, we are confident that our alliance with Marriott
will enhance substantially the value of our current hotel holdings, and provide
even more exciting hotel development opportunities going forward," said Dr.
Cheng.
On a combined basis, Marriott and Renaissance Hotel Group already have over 350
hotels with 50,000 rooms in their development pipelines, to open over the next
three years. Approximately 20,000 of these hotel rooms will be outside of the
United States.
(MORE)
<PAGE>
PAGE THREE
MARRIOTT AND RENAISSANCE
Marriott International's acquisition of Renaissance Hotel Group is expected to
be completed by the second quarter of 1997. Marriott estimates that the
acquisition will increase its EBITDA (earnings before interest expense, income
taxes, depreciation and amortization) by $75 to $85 million in the first 12
months. Marriott's 1997 fiscal year earnings are expected to be reduced by 10
to 14 cents per share, primarily due to intangibles amortization. Strong growth
in future years is expected through aggressive hotel expansion across each of
the acquired brands, integration of Renaissance into Marriott's marketing,
reservations, operating and administrative systems, and other cost savings.
After a transition period, Marriott expects to achieve annual cost savings of at
least $15 to $20 million. Marriott International reported net income of $306
million ($2.24 per share) on sales of $10.2 billion for its fiscal year ended
January 3, 1997
MARRIOTT INTERNATIONAL INC. is the world's leading hospitality company, with
approximately 4,700 operating units in the United States and 29 other countries.
Major businesses include hotels operated and franchised under the Marriott,
Ritz-Carlton, Courtyard, Fairfield, Residence Inn, TownePlace Suites and
Marriott Executive Residences brands; vacation ownership resorts; food service
and facilities management for clients in business, education, and health care;
senior living communities and services; and food service distribution. The
company has nearly 200,000 employees and is headquartered in Washington, D.C.
###
Marriott International Media Contacts: Tom Marder or Nick Hill at (301) 380-
2553.
Note: This press release contains "forward-looking statements" within the
meaning of federal securities law. These forward-looking statements include,
among others, statements concerning the company's outlook for 1997 and beyond;
the number of new hotel rooms expected to be added; business strategies and
their anticipated results; cost savings expectations; and similar statements
concerning anticipated future events and expectations that are not historical
facts. The forward-looking statements in this press release are subject to
numerous risks and uncertainties which could cause actual results to differ
materially from those expressed in or implied by those statements.
<PAGE>
Exhibit 99(a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase dated February 24, 1997 and the related Letter
of Transmittal and is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchaser (as defined below) by one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENAISSANCE HOTEL GROUP N.V.
AT
$30.00 NET PER SHARE
BY
MARRIOTT INTERNATIONAL, INC.
Marriott International, Inc., a Delaware corporation (the "Purchaser"), is
offering to purchase all outstanding shares of common stock, par value 0.01
Netherlands Guilders (the "Shares"), of Renaissance Hotel Group N.V., a
Netherlands limited liability company (the "Company"), at $30.00 per Share, net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated February 24, 1997 (the
"Offer to Purchase") and in the related Letter of Transmittal (which, together
with any supplements or amendments, collectively constitute the "Offer").
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:01 A.M., NEW YORK CITY
TIME, ON SATURDAY, MARCH 29, 1997, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) A NUMBER OF SHARES WHICH CONSTITUTES AT LEAST NINETY PERCENT (90%)
OF THE CAPITAL STOCK ENTITLED TO VOTE AND THEN OUTSTANDING.
The Offer is being made pursuant to an Acquisition Agreement, dated as of
February 17, 1997 (the "Acquisition Agreement"), between the Purchaser and the
Company.
Pursuant to the Acquisition Agreement, if upon consummation of the Offer
the Purchaser holds at least ninety-five percent (95%) of the issued and
outstanding capital stock of the Company, the Purchaser may in its sole
discretion take all actions necessary and proper under the Dutch Civil Code
("DCC") to commence the process leading to a Compulsory Buy-Out (the "Buy-Out"),
in accordance with Section 2:92a of the DCC, to acquire, at a judicially
determined price, all the issued and outstanding Shares not acquired by the
Purchaser in the Offer. The Purchaser intends to initiate the Buy-Out, if upon
consummation of the Offer the Purchaser holds sufficient Shares to be eligible
for such procedure under the DCC.
Also pursuant to the Acquisition Agreement, if the Purchaser acquires less
than ninety-five percent (95%) of the outstanding Shares pursuant to the Offer,
then the Purchaser may in its sole discretion elect, to the extent permitted by
the DCC, to effectuate a statutory merger involving the Company as a
disappearing entity pursuant to Section 2:308 et seq. of the DCC, in which case,
to the extent permitted by the DCC, the merger consideration shall be the same
as (or shall provide equivalent value to) the Offer Price.
The Purchaser has entered into an agreement dated as of February 17, 1997
(the "Shareholder Agreement") with Diamant Hotel Investments N.V., a Netherlands
Antilles corporation (the "Principal Shareholder"). Pursuant to the Shareholder
Agreement, the Principal Shareholder has agreed, among other things, to tender
and not withdraw its Shares in the Offer. Based upon representations made by
the Principal Shareholder to Purchaser, as of the date of the Shareholder
Agreement, the Principal Shareholder held 16,368,000 Shares representing
approximately 54.37% of the outstanding Shares.
The BOARD OF MANAGING DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER, DETERMINED THAT THE OFFER IS FAIR TO AND IN THE BEST INTERESTS OF THE
SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE
SHAREHOLDERS OF THE COMPANY.
<PAGE>
The Offer is subject to certain conditions set forth in the Offer to Purchase.
If any such condition is not satisfied, the Purchaser shall not be required to
accept for payment or pay for, and may delay acceptance for payment of, or
(whether or not the Shares have theretofore been accepted for payment) the
payment for, any Shares tendered, subject to applicable law, and may terminate
or extend the Offer and not accept for payment any Shares. The Purchaser may
waive any or all of the conditions to the Offer in whole or in part at any time
in its sole discretion.
The Purchaser reserves the right, at any time or from time to time, in
accordance with the terms of the Acquisition Agreement, to extend the period of
time during which the Offer is open by giving oral or written notice of such
extension to First Chicago Trust Company of New York (the "Depositary"). Any
such extension will be followed as promptly as practicable by a public
announcement thereof no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled date on which the Offer was to
expire. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer subject to the right of a tendering
shareholder to withdraw such shareholder's Shares.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment tendered Shares if, as and when the Purchaser gives oral or written
notice to the Depositary of its acceptance of the tenders of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of certificates for such Shares (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in the Offer to
Purchase)), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) or an Agent's Message (as defined in the Offer to Purchase)
and any other documents required by the Letter of Transmittal.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn at any time after April 24, 1997, unless theretofore
accepted for payment as provided in the Offer to Purchase. To be effective, a
written, telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth in the Offer
to Purchase and must specify the name of the person who tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If the Shares to be withdrawn have been delivered to the Depositary, a
signed notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution (as defined in the Offer to Purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release of
such Shares. In addition, such notice must specify, in the case of Shares
tendered by delivery of certificates, the name of the registered holder (if
different from that of the tendering shareholder) and the serial numbers shown
on the particular certificates evidencing the Shares to be withdrawn, or, in the
case of Shares tendered by book-entry transfer, the name and number of the
account at one of the Book-Entry Transfer Facilities to be credited with the
withdrawn Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided the Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares.
The Offer to Purchase, the related Letter of Transmittal and other related
materials will be mailed to record holders of Shares and will be furnished to
brokers, banks and similar persons whose names, or the names of whose nominees,
appear on the shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares. THE OFFER TO PURCHASE AND THE RELATED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
Requests for copies of the Offer of Purchase, the related Letter of
Transmittal and other tender offer materials may be directed to the Dealer
Manager or the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer or any other person (other than the
Dealer Manager, the Information Agent and the Depositary) in connection with the
solicitation of tenders of Shares pursuant to the Offer.
The Information agent for the Offer is:
[LOGO OF MACKENZIE PARTNERS, INC. APPEARS HERE]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-1622 (call collect)
February 24, 1997
<PAGE>
Exhibit 99(b)(2)
=======================================
U.S. $400,000,000
CREDIT AGREEMENT
dated as of February 21, 1997
among
MARRIOTT INTERNATIONAL, INC.
as Borrower,
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Administrative Agent
=======================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<TABLE>
<CAPTION>
<S> <C>
1.01. Certain Defined Terms............................................ 1
1.02. Computation of Time Periods...................................... 26
1.03. Accounting Terms................................................. 26
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01. The Revolving Loans.............................................. 26
2.02. The Competitive Bid Loans........................................ 27
2.03. Fees............................................................. 28
2.04. Reductions of the Commitments.................................... 29
2.05. Repayment........................................................ 29
2.06. Interest......................................................... 30
2.07. Interest Rate Determinations..................................... 30
2.08. Prepayments...................................................... 31
2.09. Payments and Computations........................................ 32
2.10. Taxes............................................................ 33
2.11. Sharing of Payments, Etc......................................... 37
2.12. Conversion of Revolving Loans.................................... 37
2.13. Pre-Funding Arrangements......................................... 38
ARTICLE III
MAKING THE LOANS
3.01. Making the Revolving Loans....................................... 41
3.02. Making the Competitive Bid Loans................................. 43
3.03. Increased Costs.................................................. 46
3.04. Illegality....................................................... 47
3.05. Reasonable Efforts to Mitigate................................... 48
3.06. Right of the Borrower to Replace Affected Person
or Lender.................................................... 48
3.07. Use of Proceeds.................................................. 49
ARTICLE IV
CONDITIONS OF LENDING
4.01. Conditions Precedent to Initial Borrowing........................ 49
4.02. Conditions Precedent to Each Revolving Loan
Borrowing.................................................... 51
4.03. Conditions Precedent to Each Competitive Bid Loan
Borrowing.................................................... 51
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties of the Borrower................... 53
</TABLE>
<PAGE>
ii
Page
----
ARTICLE VI
COVENANTS OF THE BORROWER
<TABLE>
<CAPTION>
<S> <C> <C>
6.01 Affirmative Covenants............................................ 56
6.02 Negative Covenants............................................... 60
ARTICLE VII
EVENTS OF DEFAULT
7.01. Events of Default................................................ 63
ARTICLE VIII
THE ADMINISTRATIVE AGENT, ETC.
8.01. Authorization and Action......................................... 67
8.02. Reliance, Etc.................................................... 67
8.03. Citibank and Affiliates.......................................... 68
8.04. Lender Credit Decision........................................... 68
8.05. Indemnification.................................................. 68
8.06. Successor Administrative Agent................................... 69
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc.................................................. 70
9.02. Notices, Etc..................................................... 71
9.03. No Waiver; Remedies.............................................. 71
9.04. Costs and Expenses............................................... 71
9.05. Right of Set-off................................................. 73
9.06. Binding Effect................................................... 73
9.07. Assignments and Participations................................... 74
9.08. Governing Law.................................................... 78
9.09. Execution in Counterparts........................................ 78
9.10. Confidentiality.................................................. 78
9.11. Jurisdiction, Etc................................................ 79
9.12. WAIVER OF JURY TRIAL............................................. 79
</TABLE>
SCHEDULES
---------
Schedule I - List of Applicable Lending Offices
Schedule II - Existing Liens
<PAGE>
EXHIBITS
--------
Exhibit A-1 - Form of Revolving Loan Note
Exhibit A-2 - Form of Competitive Bid Loan Note
Exhibit B-1 - Notice of Revolving Loan Borrowing
Exhibit B-2 - Notice of Competitive Bid Loan
Borrowing
Exhibit B-3 - Notice of Election of Term Option
Exhibit C-1 - Form of Assignment and Acceptance
Exhibit C-2 - Form of Participation Agreement
Exhibit D-1 - Form of Opinion of the Borrower's
Law Department (Closing Date)
Exhibit D-1 - Form of Opinion of the Borrower's
Law Department (Initial Borrowing)
Exhibit E - Form of Opinion of Special New York
Counsel to the Administrative Agent
<PAGE>
CREDIT AGREEMENT
Dated as of February 21, 1997
MARRIOTT INTERNATIONAL, INC., a Delaware corporation (the "Borrower"),
--------
the banks listed on the signature pages hereof under the heading "Banks" (the
"Banks") and CITIBANK, N.A., as administrative agent (in such capacity, the
-----
"Administrative Agent") for the Lenders hereunder, agree as follows:
--------------------
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquisition" shall mean (a) the purchase by the Borrower (either
-----------
directly or indirectly) of more than 50% of the Target Shares for cash pursuant
to the Tender Offer Materials and (b) the payment for vested options in respect
of Target Shares as contemplated by the Acquisition Agreement.
"Acquisition Agreement" means the Acquisition Agreement dated as of
---------------------
February 17, 1997 by and between the Borrower and the Target providing for the
acquisition of the Target by the Borrower or a wholly owned Subsidiary of the
Borrower, as from time to time amended (without prejudice, however, to Section
6.02(h)).
"Acquisition Documents" means the Acquisition Agreement, the
---------------------
Shareholder Agreement and the Tender Offer Materials.
"Adjusted Total Debt" means, as at any date, the sum for the Borrower
-------------------
and its Subsidiaries (determined on a Consolidated basis without duplication in
accordance with GAAP) of:
(a) the aggregate principal amount of Debt for Borrowed Money of the
Borrower and its Subsidiaries (other than any such Debt for Borrowed Money
constituting Non-Recourse Indebtedness) outstanding on such date plus
----
(b) the excess, if any, of (i) the aggregate of all Guarantees by the
Borrower and its Subsidiaries of Debt for Borrowed Money of others as of
such date over (ii) $400,000,000.
----
Credit Agreement
----------------
<PAGE>
2
"Administrative Agent" has the meaning specified in the recital of
--------------------
parties to this Agreement.
"Affected Person" has the meaning specified in Sections 2.10(j),
---------------
3.03(d) and 3.04.
"Affiliate" means, as to any Person, any other Person that, directly
---------
or indirectly, controls, is controlled by or is under common control with such
Person or, unless the reference is to an Affiliate of a Lender, is a Marriott
Family Member or is a partner, member, director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"Applicable Lending Office" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Loan and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan and, in
the case of a Competitive Bid Loan, the office of such Lender notified by such
Lender to the Administrative Agent as its Applicable Lending Office with respect
to such Competitive Bid Loan.
"Applicable Margin" means, as of any date, the applicable margin set
-----------------
forth below under the Base Rate column or the Eurodollar Rate column, as
applicable, based upon the Public Debt Rating in effect on such date:
<TABLE>
<CAPTION>
===============================================================
Public Debt
Rating Eurodollar
S&P/Moody's Base Rate Rate
===============================================================
<S> <C> <C>
Level 1
------- 0.000% 0.165%
A/A2 or higher
---------------------------------------------------------------
Level 2
------- 0.000% 0.180%
A-/A3
---------------------------------------------------------------
Level 3
------- 0.000% 0.245%
BBB+/Baa1
---------------------------------------------------------------
Level 4
------- 0.000% 0.285%
BBB/Baa2
---------------------------------------------------------------
</TABLE>
Credit Agreement
----------------
<PAGE>
3
<TABLE>
<CAPTION>
===============================================================
Public Debt
Rating Eurodollar
S&P/Moody's Base Rate Rate
===============================================================
<S> <C> <C>
Level 5
------- 0.000% 0.325%
BBB-/Baa3
---------------------------------------------------------------
Level 6
------- 0.125% 0.475%
Less than Level 5
===============================================================
</TABLE>
"Applicable Percentage" means, as of any date, the applicable
---------------------
percentage set forth below under the Facility Fee column based upon the Public
Debt Rating in effect on such date:
<TABLE>
<CAPTION>
==================================
Public Debt
Rating Facility
S&P/Moody's Fee
==================================
<S> <C>
Level 1
------- 0.060%
A/A2 or higher
----------------------------------
Level 2
------- 0.070%
A-/A3
----------------------------------
Level 3
------- 0.080%
BBB+/Baa1
----------------------------------
Level 4
------- 0.090%
BBB/Baa2
----------------------------------
Level 5
------- 0.125%
BBB-/Baa3
----------------------------------
Level 6
------- 0.225%
Less than Level 5
==================================
</TABLE>
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in accordance with Section 9.07 and in substantially the form of Exhibit
C-1 hereto.
"Banks" has the meaning specified in the recital of parties to this
-----
Agreement.
"Base Rate" means, for any period, a fluctuating interest rate per
---------
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the highest of:
Credit Agreement
----------------
<PAGE>
4
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as its "base rate";
(b) the sum (adjusted to the nearest 1/4 of one percent, or, if there
is no nearest 1/4 of one percent, to the next higher 1/4 of one percent) of
(i) 1/2 of one percent per annum, plus (ii) the rate obtained by dividing
----
(A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit
of major United States money market banks, such three-week moving average
(adjusted to the basis of a year of 365/366 days) being determined weekly
on each Monday (or, if any such date is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of
deposit dealers to and published by the Federal Reserve Bank of New York
or, if such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for Citibank
with respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of the
----
annual assessment rates for determining the then current annual assessment
payable by Citibank to the FDIC for insuring U.S. dollar deposits in the
United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Loan" means a Loan which bears interest at rates based upon
--------------
the Base Rate.
"Basic Documents" means the Loan Documents and the Acquisition
---------------
Documents.
"Bondable Lease Obligation" of any Person means the obligation of such
-------------------------
Person as tenant under an operating lease, upon the occurrence of a significant
underinsured casualty, an
Credit Agreement
----------------
<PAGE>
5
under-compensated governmental taking or the practical inability to operate the
premises for an extended period of time due to force majeure or loss of a
----- -------
material permit, to make a payment to the landlord (or to make an irrevocable
offer to purchase the landlord's fee interest to avoid termination of such
lease) in an amount that is calculated with reference to the landlord's
leasehold indebtedness.
"Borrower" has the meaning specified in the recital of parties to this
--------
Agreement.
"Borrowing" means a Revolving Loan Borrowing or a Competitive Bid Loan
---------
Borrowing.
"Business Day" means a day of the year on which banks are not required
------------
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Loans, on which dealings are carried on in the
London interbank market.
"Change in Control" means:
-----------------
(i) any Person or two or more Persons acting in concert other than a
Significant Shareholder or group of Significant Shareholders shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing not less than
30% of the combined voting power of all Voting Stock of the Borrower; or
(ii) during any period of up to 24 consecutive months, commencing on
the date of this Agreement, individuals who at the beginning of such 24-
month period were directors of the Borrower (together with any new director
whose election by the board of directors or whose nomination for election
by the stockholders of the Borrower was approved by a vote of at least two-
thirds of the directors then in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) shall cease for any reason (other than solely as a
result of (a) death or disability or (b) voluntary retirement of any
individual in the ordinary course and not for reasons related to an actual
or proposed change in control of the Borrower) to constitute a majority of
the board of directors of the Borrower; or
Credit Agreement
----------------
<PAGE>
6
(iii) any Person or two or more Persons acting in concert other than a
Significant Shareholder or group of Significant Shareholders shall have
acquired, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, the power to
exercise, directly or indirectly, effective control for any purpose over
Voting Stock of the Borrower (or other securities convertible into such
securities) representing not less than 30% of the combined voting power of
all Voting Stock of the Borrower.
"Citibank" means Citibank, N.A. and its successors.
--------
"Closing Date" means the date on which this Agreement shall have been
------------
executed and delivered by the Borrower, the Banks and the Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, and the regulations promulgated and rulings issued thereunder.
"COLI Debt" means all Indebtedness of the Borrower or any of its
---------
Subsidiaries to the insurance company issuing the COLI Policies, if and for so
long as:
(a) the aggregate principal amount of such Indebtedness is equal to
or less than the aggregate account value of all COLI Policies at the time
such Indebtedness is incurred by the Borrower and such Subsidiaries and at
all times thereafter; and
(b) the documentation with respect to such Indebtedness limits the
recourse of the insurance company issuing the COLI Policies, as lender,
against the Borrower and such Subsidiaries for the payment of such
Indebtedness directly to the ownership interest of the Borrower and its
Subsidiaries in the COLI Policies.
"COLI Policies" means all corporate-owned life insurance policies
-------------
purchased and maintained by the Borrower or any of its Subsidiaries to insure
the lives of certain employees of the Borrower and its Subsidiaries.
"Commitment" means, as to any Lender, (i) the amount set forth
----------
opposite its name on the signature pages hereof or (ii) if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender in the Register, in each case as the same may be reduced as provided
Credit Agreement
----------------
<PAGE>
7
herein (including, without limitation, pursuant to Sections 2.04 and 3.06).
"Commitment Termination Date" means the date 364 days after the
---------------------------
Closing Date or such earlier date as the Borrower may, by not less than 10 days'
notice to the Administrative Agent, specify (or, if earlier, the date of
termination in whole of the Commitments pursuant to Section 2.04 or pursuant to
Section 7.01).
"Competitive Bid Loan Borrowing" means a Borrowing from each of the
------------------------------
Lenders whose offer to make one or more Competitive Bid Loans as part of such
borrowing has been accepted by the Borrower under the auction bidding procedure
described in Section 3.02.
"Competitive Bid Loan Note" means a promissory note of the Borrower
-------------------------
payable to the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender resulting
from a Competitive Bid Loan made by such Lender.
"Competitive Bid Loan Reduction" has the meaning specified in Section
------------------------------
2.01.
"Competitive Bid Loan" means a loan by a Lender to the Borrower as
--------------------
part of a Competitive Bid Loan Borrowing resulting from the auction bidding
procedure described in Section 3.02.
"Confidential Information" means information that the Borrower or any
------------------------
of its Subsidiaries or Affiliates furnishes to the Administrative Agent, any
Managing Agent or Documentation Agent or any Lender on a confidential basis by
informing the recipient that such information is confidential or marking such
information as such, but does not include any such information that (i) is or
becomes generally available to the public or (ii) is or becomes available to
such Person or Persons from a source other than the Borrower, unless such Person
has actual knowledge that (a) such source is bound by a confidentiality
agreement or (b) such information has been previously furnished to such Person
on a confidential basis.
"Consolidated" refers to the consolidation of accounts of the Borrower
------------
and its Subsidiaries in accordance with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
---------- ------- ---------
Revolving Loans of one Type into Revolving Loans of the other Type pursuant to
Section 2.12.
Credit Agreement
----------------
<PAGE>
8
"Debt for Borrowed Money" of any Person means:
-----------------------
(i) all indebtedness of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade payables and accruals
incurred in the ordinary course of such Person's business);
(iv) all obligations of such Person as lessee under leases which
shall have been or should be, in accordance with GAAP, recorded as capital
leases; and
(v) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities to the extent that such
obligations support an obligation described in clauses (i) through (iv)
above.
"Default" means any Event of Default or any event that would
-------
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Documentation Agent" means a Lender that has, in its individual
-------------------
capacity, been designated as such by the Borrower with the approval of the
Administrative Agent.
"Domestic Lending Office" means, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, net income (or net loss) plus the sum
------ ----
of (a) Interest Expense, (b) income tax expense, (c) depreciation expense, (d)
amortization expense and (e) non-recurring non-cash charges (including the
cumulative effect of accounting changes), in each case determined in accordance
with GAAP for such period.
"Eligible Assignee" means:
-----------------
(i) a Lender and any Affiliate of such Lender;
Credit Agreement
----------------
<PAGE>
9
(ii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$1,000,000,000;
(iii) a savings bank organized under the laws of the United States,
or any State thereof, and having total assets in excess of $500,000,000;
(iv) a commercial bank organized under the laws of any other
country which is a member of the OECD or a political subdivision of any
such country, and having total assets in excess of $1,000,000,000; and
(v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership or other entity)
which is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business, and having total assets in
excess of $150,000,000.
"Environmental Law" means any federal, state or local law, rule,
-----------------
regulation, order, writ, judgment, injunction, decree, determination or award
relating to the environment, health, safety or hazardous materials, including,
without limitation, CERCLA, the Resource Conservation and Recovery Act, the
Hazardous Materials Transportation Act, the Clean Water Act, the Toxic
Substances Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and Rodenticide Act and
the Occupational Safety and Health Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person who for purposes of Title IV of
---------------
ERISA is a member of the Borrower's controlled group, or under common control
with the Borrower, within the meaning of Section 414(b) or 414(c) of the Code.
"ERISA Event" means, with respect to any Person, (a) the occurrence of
-----------
a reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of ERISA with respect to a
Credit Agreement
----------------
<PAGE>
10
termination described in Section 4041(c)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA);
(c) the cessation of operations at a facility of such Person or any of its ERISA
Affiliates in the circumstances described in Section 4062(e) of ERISA; (d) the
withdrawal by such Person or any of its ERISA Affiliates from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (e) the failure by such Person or any of
its Affiliates to make a payment to a Plan required under Section 302(f)(1)(A)
and (B) of ERISA; (f) the adoption of an amendment to a Plan of such Person or
any of its ERISA Affiliates requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by the PBGC of
proceedings to terminate a Plan of such Person or any of its ERISA Affiliates,
pursuant to Section 4042 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
---------------
Rate Loan comprising part of the same Revolving Loan Borrowing, an interest rate
per annum equal to the arithmetic average (rounded to the nearest 1/100 of one
percent) of the rates per annum at which deposits in U.S. dollars are offered by
the principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period in an amount substantially
equal to such Reference Bank's Eurodollar Rate Loan comprising part of such
Revolving Loan Borrowing to be outstanding during such Interest Period. The
Eurodollar Rate for any Interest Period for each Eurodollar Rate Loan comprising
part of the same Revolving Loan Borrowing shall be determined by the
Administrative Agent on the basis of applicable rates furnished to and received
by the Administrative Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to the provisions of
------- -------
Section 2.07.
Credit Agreement
----------------
<PAGE>
11
"Eurodollar Rate Loan" means a Loan which bears interest at rates
--------------------
based upon the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
----------------------------------
Period for any Eurodollar Rate Loan means the reserve percentage applicable
during such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning specified in Section 7.01.
-----------------
"Excluded Representations" means:
------------------------
(a) at any time, the representations and warranties set forth in
(i) the last sentence of Section 5.01(b) (to the extent the representations
and warranties set forth in such sentence relate to matters other than the
Loan Documents), (ii) the last sentence of Section 5.01(e) and (iii)
Sections 5.01(g)(i) and (iii), 5.01(h), 5.01(i) and 5.01(j); and
(b) at any time after the initial Borrowing, (i) the representations
and warranties set forth in Section 5.01(g)(ii) and (ii) each
representation and warranty with respect to the Acquisition Documents.
"FDIC" means the Federal Deposit Insurance Corporation or any
----
successor.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum 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
Credit Agreement
----------------
<PAGE>
12
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Maturity Date" means the date that is eighteen months after the
-------------------
Commitment Termination Date (or, if such day is not a Business Day, the
immediately preceding Business Day) or, if earlier, the date of acceleration of
the Loans pursuant to Section 7.01.
"Foreclosure Guarantee" means any guarantee of secured Indebtedness
---------------------
the obligations under which guarantee are limited to providing that following
foreclosure (or sale in lieu thereof) on all such security the guarantor will
pay the holder of such Indebtedness the amount (if any) by which the aggregate
proceeds received by such holder from such foreclosure or sale fall short of a
specified amount, provided that such specified amount does not exceed 25% of the
--------
original principal amount of such secured Indebtedness.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect from time to time, except that, with respect to
the determination of compliance by the Borrower with the covenants set forth in
Sections 6.01(j) and (k), "GAAP" shall mean such principles in the United States
----
of America as in effect as of the date of, and used in, the preparation of the
audited financial statements of the Borrower referred to in Section 5.01(e).
"Guarantee" of any Person means (a) any obligation, contingent or
---------
otherwise, directly or indirectly guaranteeing any Debt for Borrowed Money of
any other Person and (b) any other arrangement having the economic effect of a
Guarantee and the principal purpose of which is to assure a creditor against
loss in respect of Debt for Borrowed Money, in each case other than (i) the
endorsement for collection or deposit in the ordinary course of business,
(ii) any Foreclosure Guarantee and (iii) any Bondable Lease Obligation, and in
any event not including the obligations of the Borrower under the Host Marriott
Credit Agreement. The amount of any Guarantee shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made, and (b) the maximum
amount for which such Person may be liable pursuant to the instrument embodying
such Guarantee, unless such primary obligation and the maximum amount for which
such guaranteeing Person may be liable are not stated or determinable, in which
case the amount of such Guarantee shall be such Person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
Credit Agreement
----------------
<PAGE>
13
"Host Marriott Credit Agreement" means the Line of Credit and
------------------------------
Guarantee Reimbursement Agreement dated as of October 8, 1993 between the
Borrower, as lender, and Host Marriott Corporation and certain of its
Subsidiaries, as borrowers, as from time to time amended, modified,
supplemented, extended, or replaced without increase in the commitments of the
Borrower and its Subsidiaries over the original $630,000,000 commitment
thereunder.
"Indebtedness" of any Person means: (i) all Debt for Borrowed Money
------------
of such Person, (ii) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person and (iii) all Guarantees of such Person.
"Indemnified Party" has the meaning specified in Section 9.04(b).
-----------------
"Insufficiency" means, with respect to any Plan, the amount, if any,
-------------
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Interest Expense" means, for any period, gross interest expense plus
---------------- ----
capitalized interest for such period, in each case determined in accordance with
GAAP.
"Interest Period" means, for each Revolving Loan comprising part of
---------------
the same Revolving Loan Borrowing, the period commencing on the date of such
Revolving Loan and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one, two,
three or six months (or, if requested by the Borrower and acceptable to each of
the Lenders, nine or twelve months), in each case as the Borrower may, upon
notice received by the Administrative Agent not later than 12:00 noon (New York
City time) on the third Business Day prior to the first day of such Interest
Period, select; provided, however, that:
-------- -------
(i) the Borrower may not select any Interest Period (x) that
commences before and ends after the Commitment Termination Date or (y) that
ends after the Final Maturity Date;
Credit Agreement
----------------
<PAGE>
14
(ii) Interest Periods commencing on the same date for Revolving Loans
comprising part of the same Revolving Loan Borrowing shall be of the same
duration; and
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided, in the case of any Interest Period for a Eurodollar Rate Loan,
--------
that if such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day.
"Lenders" means the Banks and each Eligible Assignee that shall become
-------
a party hereto pursuant to Section 9.07.
"Leverage Ratio" means, as at the last day of any fiscal quarter of
--------------
the Borrower ending on or after the date hereof, the ratio of:
(a) Adjusted Total Debt as of such day, to
(b) Consolidated EBITDA for the period of four fiscal quarters ending
on such day.
"Lien" means any lien, security interest or other charge or
----
encumbrance of any kind, or any other type of preferential arrangement having
the practical effect of any of the foregoing, including, without limitation, the
lien or retained security title of a conditional vendor and any easement, right
of way or other encumbrance on title to real property.
"Loans" means all Revolving Loans and all Competitive Bid Loans.
-----
"Loan Documents" means this Agreement and the Notes.
--------------
"Managing Agent" means a Lender that has, in its individual capacity,
--------------
been designated as such by the Borrower with the approval of the Administrative
Agent.
"Margin Stock" means margin stock within the meaning of Regulation U.
------------
"Marriott Family Member" means Alice Marriott, J.W. Marriott, Jr.,
----------------------
Richard E. Marriott, any brother or sister of J.W. Marriott, Sr., any children
or grandchildren of any of the
Credit Agreement
----------------
<PAGE>
15
foregoing, any spouses of any of the foregoing, or any trust or other entity
established primarily for the benefit of one or more of the foregoing.
"Material Adverse Change" means any material adverse change in the
-----------------------
business, condition (financial or otherwise), operations or properties of the
Borrower and its Subsidiaries taken as a whole, provided that the consummation
--------
of the Acquisition shall not, by itself, constitute a Material Adverse Change.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, condition (financial or otherwise), operations or properties of the
Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of
the Administrative Agent or any Lender under the Loan Documents or (c) the
ability of the Borrower to perform its obligations under the Loan Documents.
"Material Subsidiary" means, at any time, a Subsidiary of the Borrower
-------------------
having (i) at least 10% of the total Consolidated assets of the Borrower and its
Subsidiaries (determined as of the last day of the most recent fiscal quarter of
the Borrower) or (ii) at least 10% of the Consolidated revenues of the Borrower
and its Subsidiaries for the fiscal year of the Borrower then most recently
ended.
"MICC" means Marriott International Capital Corporation, a Delaware
----
corporation.
"Moody's" means Moody's Investors Service, Inc., or any successor by
-------
merger or consolidation to its business.
"Multiemployer Plan" of any Person means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
----------------------
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and at least one Person other than
such Person and its ERISA Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could have liability under
Section 4064 or Section 4069 of ERISA in the event such plan has been or were to
be terminated.
Credit Agreement
----------------
<PAGE>
16
"MVCI" means Marriott Ownership Resorts, Inc. (d/b/a Marriott Vacation
----
Club International).
"Non-Recourse Indebtedness" means any Indebtedness of the Borrower or
-------------------------
any of its Subsidiaries if, and so long as, such Indebtedness meets the
requirements of clause (i), clause (ii), clause (iii) or clause (iv) below:
(i) Such Indebtedness is secured solely by Purchase Money Liens and:
(a) the instruments governing such Indebtedness limit the
recourse (whether direct or indirect) of the holders thereof against
the Borrower and its Subsidiaries for the payment of such Indebtedness
to the property securing such Indebtedness (with customary exceptions,
including, without limitation, recourse for fraud, waste,
misapplication of insurance or condemnation proceeds, and
environmental liabilities); provided that any partial Guarantee by, or
--------
any other limited recourse for payment of such Indebtedness against,
the Borrower or its Subsidiaries which is not expressly excluded from
the definition of "Guarantee" in this Section 1.01 shall, to the
extent thereof, constitute a Guarantee for purposes of the calculation
of Adjusted Total Debt but shall not prevent the non-guaranteed and
non-recourse portion of such Indebtedness from constituting Non-
Recourse Indebtedness; and
(b) if such Indebtedness is incurred after July 12, 1996 by the
Borrower or a Subsidiary of the Borrower which is organized under the
laws of the United States or any of its political subdivisions,
either:
(x) (1) the holders of such Indebtedness shall have
irrevocably agreed that in the event of any bankruptcy,
insolvency or other similar proceeding with respect to the
obligor of such Indebtedness, such holders will elect (pursuant
to Section 1111(b) of the Federal Bankruptcy Code or otherwise)
to be treated as fully secured by, and as having no recourse
against such obligor or any property of such obligor other than,
the property securing such Indebtedness, and (2) if,
notwithstanding any election pursuant to clause (1) above, such
holders shall have or shall obtain
Credit Agreement
----------------
<PAGE>
17
recourse against such obligor or any property of such obligor
other than the property securing such Indebtedness, such recourse
shall be subordinated to the payment in full in cash of the
obligations owing to the Lenders and the Administrative Agent
hereunder and under the Notes; or
(y) the property securing such Indebtedness is not material
to the business, condition (financial or otherwise), operations
or properties of the Borrower and its Subsidiaries, taken as a
whole, as determined at the time such Indebtedness is incurred;
(ii) (a) The sole obligor of such Indebtedness (such obligor, a
"Specified Entity") is a corporation or other entity formed solely for the
-----------------
purpose of owning (or owning and operating) property which is (or may be)
subject to one or more Purchase Money Liens, (b) such Specified Entity owns
no other material property, (c) the sole collateral security provided by
the Borrower and its Subsidiaries with respect to such Indebtedness (if
any) consists of property owned by such Specified Entity and/or the capital
stock of (or equivalent ownership interests in) such Specified Entity
(provided that any partial Guarantee by, or any other limited recourse for
---------
payment of such Indebtedness against, the Borrower or its Subsidiaries
which is not expressly excluded from the definition of "Guarantee" in this
Section 1.01 shall, to the extent thereof, constitute a Guarantee for
purposes of the calculation of Adjusted Total Debt but shall not prevent
the non-guaranteed and non-recourse portion of such Indebtedness from
constituting Non-Recourse Indebtedness), and (d) such Specified Entity
conducts its business and operations separately from that of the Borrower
and its other Subsidiaries;
(iii) Such Indebtedness is COLI Debt; or
(iv) Such Indebtedness is non-recourse Indebtedness in an aggregate
principal amount not exceeding $53,782,000 owing by Essex House Condominium
Corporation (a Subsidiary of the Borrower), as Owner Participant under the
Trust Indenture and Security Agreement (Delta 1993-6) dated as of June 1,
1993 with NationsBank of Georgia, N.A., as indenture trustee, which
Indebtedness is secured by a Boeing 767 aircraft leased to Delta Airlines
and by an assignment of such lease.
Credit Agreement
----------------
<PAGE>
18
"Note" means a Revolving Loan Note or a Competitive Bid Loan Note.
----
"Notice of Competitive Bid Loan Borrowing" has the meaning specified
----------------------------------------
in Section 3.02(a).
"Notice of Election of Term Option" has the meaning specified in
---------------------------------
Section 2.05(a).
"Notice of Revolving Loan Borrowing" has the meaning specified in
----------------------------------
Section 3.01(a).
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Operating Agreement" means an agreement between the Borrower or one
-------------------
of its Subsidiaries and the owner of a lodging or senior living facility
pursuant to which the Borrower or such Subsidiary operates such lodging or
senior living facility.
"Other Taxes" has the meaning specified in Section 2.10(b).
-----------
"Participation Agreement" means a loan participation agreement in
-----------------------
substantially the form of Exhibit C-2 hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor.
"Permitted Liens" means any of the following:
---------------
(a) Liens for taxes, assessments and governmental charges or levies
which are not yet due or are payable without penalty or of which the
amount, applicability or validity is being contested by the Borrower or
such Subsidiary in good faith by appropriate proceedings as to which
adequate reserves are being maintained;
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business which are not delinquent or remain
payable without penalty or which are being contested or defended in good
faith by appropriate proceedings, or which are suspended or released by the
filing of lien bonds, or deposits to obtain the release of such Liens;
Credit Agreement
----------------
<PAGE>
19
(c) pledges, deposits and other Liens made in the ordinary course of
business to secure obligations under worker's compensation laws,
unemployment insurance, social security legislation or similar legislation
or to secure public or statutory obligations;
(d) Liens to secure the performance of bids, tenders, contracts,
leases or statutory obligations, or Liens to secure obligations under the
Self-Insurance Program, or to secure surety, stay or appeal or other
similar types of deposits, Liens or pledges (to the extent such Liens do
not secure obligations for the payment of Debt for Borrowed Money);
(e) attachment or judgment Liens to the extent such Liens are being
contested in good faith and by proper proceedings, as to which adequate
reserves are being maintained (provided that any such Liens as to which
--------
enforcement has been commenced and is unstayed, by reason of pending appeal
or otherwise, for a period of more than thirty consecutive days, do not, in
the aggregate, secure judgments in excess of $25,000,000);
(f) Liens on any property of any Subsidiary of the Borrower to secure
Indebtedness owing by it to the Borrower or another Subsidiary of the
Borrower;
(g) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for
its present purposes;
(h) Liens arising in connection with operating leases incurred in the
ordinary course of business of the Borrower and its Subsidiaries;
(i) Liens created in connection with letter of credit cash collateral
accounts created under the Credit Agreement dated as of July 12, 1996 among
the Borrower, the "Lenders", "Managing Agents", "Documentation Agent" and
"Letter of Credit Agent" referred to therein, and Citibank, as
Administrative Agent, as such Credit Agreement is amended and in effect
from time to time;
(j) (i) subordination of any Operating Agreement to any ground lease
and/or any mortgage debt of the owner or landlord, and (ii) any agreement
by the Borrower or any of
Credit Agreement
----------------
<PAGE>
20
its Subsidiaries as operator to attorn to the holder of such mortgage debt,
the lessor under such ground lease or any successor to either; and
(k) additional Liens upon cash and investment securities; provided
--------
that (i) the only obligations secured by such Liens are obligations arising
under Swap Transactions entered into with one or more counterparties who
are not Affiliates of the Borrower or any of its Subsidiaries and (ii) the
aggregate fair market value of cash and investment securities covered by
such Liens does not at any time exceed the aggregate amount of the
respective termination or liquidation payments that would be payable to
such counterparties upon the occurrence of an event of default or other
similar event as to which the Borrower or any of its Subsidiaries is the
defaulting or affected party (subject to the application of any customary
and reasonable collateral valuation discount percentages and minimum
collateral transfer thresholds contained in the respective security and
margin agreements).
"Permitted Modification" means, with respect to the Acquisition, the
----------------------
Tender Offer or any of the Acquisition Documents, any provision, change,
amendment or waiver that does not:
(a) increase the consideration payable for each outstanding Target
Share to more than $34 or provide for any form of consideration other than
cash;
(b) reduce below 54% the minimum percentage of the Target Shares that
must be tendered pursuant to the Tender Offer;
(c) either materially decrease any of the benefits or materially
increase any of the burdens to the Target and its Subsidiaries, taken as a
whole, under any of the following agreements between the Target and/or its
Subsidiaries and one or more of the Target's pre-Acquisition Affiliates:
(i) the Framework Agreement dated as of June 30, 1995, (ii) the Strategic
Alliance Agreement dated as of August 29, 1995, (iii) the Indemnification
Agreement dated as of August 29, 1995, (iv) the master Management Agreement
with CTF Hotel Holdings, Inc. dated as of August 5, 1993 and the letter
agreement dated August 29, 1995 extending its term, (v) the Indemnity of
Henry Cheng Kar Shun dated August 29, 1995, (vi) the HPI Master Management
Agreement dated as of June 30, 1995 and (vii) the Subordination Agreement
dated as
Credit Agreement
----------------
<PAGE>
21
of June 30, 1995 by and among the Target, Hotel Property Investments (BVI)
Ltd., Hotel Property Investments Inc., CTF Holdings Ltd. and CTF Hotel
Holdings, Inc.;
(d) extend the closing of the Acquisition beyond June 30, 1997;
(e) waive any condition to the closing of the Acquisition with the
result that the Borrower would be unable to satisfy any of the requirements
of Section 4.02; or
(f) waive any condition to the closing of the Acquisition under any
of the following clauses of Section 6.1(a)(iii) of the Acquisition
Agreement: (B)(1), (B)(2), (C) (with respect to representations relating
to the Target and its Subsidiaries under Section 3.4, 3.5 or 3.19 of the
Acquisition Agreement), (D) or (F).
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
----
"property" or "properties" means any right or interest in or to
-------- ----------
property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Public Debt Rating" means, as of any date, the lowest rating that has
------------------
been most recently announced by either S&P or Moody's, as the case may be, for
any class of long-term senior unsecured debt issued by the Borrower. For
purposes of the foregoing:
(a) if no Public Debt Rating shall be available from either S&P or
Moody's, the Applicable Margin and the Applicable Percentage will be set in
accordance with Level 6 under the definition of "Applicable Margin" or
"Applicable Percentage", as the case may be;
(b) if only one of S&P and Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating;
Credit Agreement
----------------
<PAGE>
22
(c) if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin and the Applicable Percentage shall
be based upon the higher rating, provided that if the lower rating falls
--------
more than one level below the higher rating (or in any event if the higher
split rating is Level 5), then the Applicable Margin and the Applicable
Percentage shall be based on the rating set forth in the level under the
definition of "Applicable Margin" or "Applicable Percentage" immediately
----------------- ---------------------
above the level for such lower rating; and
(d) if any rating established by S&P or Moody's shall be changed,
such change shall be effective as of the date on which such change is first
announced publicly by the rating agency making such change.
"Purchase Money Lien" means any Lien on property, real or personal,
-------------------
acquired or constructed by the Borrower or any Subsidiary of the Borrower after
December 30, 1994:
(i) to secure the purchase price of such property;
(ii) that was existing on such property at the time of acquisition
thereof by the Borrower or such Subsidiary and assumed in connection with
such acquisition;
(iii) to secure Indebtedness otherwise incurred to finance the
acquisition or construction of such property (including, without
limitation, Indebtedness incurred to finance the cost of acquisition or
construction of such property within 24 months after such acquisition or
the completion of such construction); or
(iv) to secure any Indebtedness incurred in connection with any
extension, refunding or refinancing of Indebtedness (whether or not secured
and including Indebtedness under this Agreement) incurred, maintained or
assumed in connection with, or otherwise related to, the acquisition or
construction of such property;
provided in each case that (1) such Liens do not extend to or cover or otherwise
- --------
encumber any property other than property acquired or constructed by the
Borrower and its Subsidiaries after December 30, 1994, and (2) such Liens do not
cover current assets of the Borrower or any of its Subsidiaries other than
current assets that relate solely to other property subject to such Lien.
Credit Agreement
----------------
<PAGE>
23
"Reference Banks" means Citibank and such other Lenders as the
---------------
Administrative Agent may designate from time to time with the consent of the
Borrower, such consent not to be unreasonably withheld.
"Register" has the meaning specified in Section 9.07(c).
--------
"Regulation U" means Regulation U issued by the Board of Governors of
------------
the Federal Reserve System, as from time to time amended.
"Required Lenders" means (a) at any time through and including the
----------------
making of the initial Loans, Citibank; and (b) thereafter, Lenders having at
least 51% of the aggregate amount of the Commitments or, if the Commitments
shall have terminated, Lenders holding at least 51% of the aggregate unpaid
principal amount of the Loans (provided that, for purposes hereof, neither the
--------
Borrower, nor any of its Affiliates, if a Lender, shall be included in (i) the
Lenders holding such amount of the Loans or having such amount of the
Commitments or (ii) determining the aggregate unpaid principal amount of the
Loans or the total Commitments).
"Revolving Loan" means a Loan by a Lender to the Borrower as part of a
--------------
Revolving Loan Borrowing and refers to a Base Rate Loan or a Eurodollar Rate
Loan, each of which shall be a "Type" of Revolving Loan.
----
"Revolving Loan Borrowing" means a borrowing consisting of
------------------------
simultaneous Revolving Loans of the same Type made by each of the Lenders
pursuant to Section 2.01.
"Revolving Loan Note" means a promissory note of the Borrower payable
-------------------
to the order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Revolving Loans made by such Lender.
"S&P" means Standard & Poor's Ratings Services, a division of The
---
McGraw-Hill Companies, Inc., or any successor by merger or consolidation to its
business.
"Self-Insurance Program" means the self-insurance program (including
----------------------
related self-funded insurance programs) established and maintained by the
Borrower in the ordinary course of its business.
Credit Agreement
----------------
<PAGE>
24
"Shareholder Agreement" means the Shareholder Agreement dated as of
---------------------
February 17, 1997 by and among the Borrower and Diamant Hotel Investments N.V.,
as from time to time amended (without prejudice, however, to Section 6.02(h)).
"Significant Shareholder" means any Person that:
-----------------------
(i) is either a Marriott Family Member or on the date hereof
possesses, directly or indirectly, and such possession has been publicly
disclosed, the power to vote 5% or more of the outstanding shares of common
stock of the Borrower,
(ii) is or hereafter becomes a spouse of or any other relative (by
blood, marriage or adoption) of a Person described in clause (i),
(iii) is or becomes a transferee of the interests of any of the
foregoing Person or Persons by descent or by trust or similar arrangement
intended as a method of descent, or
(iv) is an employee benefit or stock ownership plan of the Borrower.
"Single Employer Plan" of any Person means a single employer plan,
--------------------
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees
of such Person or any of its ERISA Affiliates and no Person other than such
Person and its ERISA Affiliates or (b) was so maintained and in respect of which
such Person or any of its ERISA Affiliates could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"SLS Entity" means any of Marriott Senior Living Services, Inc.
----------
and Marriott Senior Living Services Investment 10, Inc. and each other
Subsidiary of the Borrower that owns or operates a senior living services
facility.
"Special Funding Rate" means, with respect to "Deposits" under and as
--------------------
defined in Section 2.13 and the initial Loans made hereunder, the lesser of (a)
the Base Rate plus the Applicable Margin for Base Rate Loans and (b) a different
----
rate of interest quoted by Citibank in its sole discretion to the Borrower and
agreed by the Borrower.
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, trust or estate of which more than 50% of (a) the issued and
outstanding capital stock having
Credit Agreement
----------------
<PAGE>
25
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of
such partnership or joint venture or (c) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries.
"Swap Transaction" means (a) any rate, basis, commodity, currency,
----------------
debt or equity swap, (b) any cap, collar or floor agreement, (c) any rate,
basis, commodity, currency, debt or equity exchange or forward agreement, (d)
any rate, basis, commodity, currency, debt or equity option, (e) any other
similar agreement, (f) any option to enter into any of the foregoing, (g) any
investment management, master or other agreement providing for any of the
foregoing and (h) any combination of any of the foregoing.
"Target" means Renaissance Hotel Group N.V., a Netherlands corporation
------
and, from and after the consummation of the Acquisition, a Subsidiary of the
Borrower.
"Target Shares" means shares of the Target's common stock, par value
-------------
0.01 Netherlands Guilders per share.
"Taxes" has the meaning specified in Section 2.10(a).
-----
"Tender Offer" means an offer by the Borrower or one of its wholly
------------
owned Subsidiaries to purchase the Target Shares pursuant to the Tender Offer
Materials, as from time to time amended (without prejudice, however, to Section
6.02(h)).
"Tender Offer Closing Date" means the date of the initial purchase by
-------------------------
the Borrower or one of its Subsidiaries of the Target Shares tendered pursuant
to the Tender Offer.
"Tender Offer Materials" means the "Offer to Purchase" referred to in
----------------------
the Acquisition Agreement, the Tender Offer Statement on Schedule 14D-1 with
respect to the Tender Offer to be filed with the Securities and Exchange
Commission, all other "Offer Documents" referred to in the Acquisition
Agreement, and all amendments, exhibits and schedules thereto and related
documents distributed to the shareholders of the Target or filed with the
Securities and Exchange Commission, as any of the same
Credit Agreement
----------------
<PAGE>
26
may be from time to time amended (without prejudice, however, to Section
6.02(h)).
"Type" has the meaning specified in the definition of "Revolving
----
Loan."
"Unused Commitments" means, at any time, the aggregate amount of the
------------------
Commitments then unused and outstanding after giving effect to the Competitive
Bid Loan Reduction.
"Voting Stock" means capital stock issued by a corporation or
------------
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
to so vote has been suspended by the happening of such contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
------------
ERISA.
"Withdrawal Liability" has the meaning specified in Part 1 of Subtitle
--------------------
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Revolving Loans. Each Lender severally agrees, on
-------------------
the terms and conditions hereinafter set forth, to make Revolving Loans to the
Borrower from time to time on any Business Day during the period from the date
hereof to and including the Commitment Termination Date in an aggregate amount
not to exceed at any time outstanding the amount of such Lender's Commitment;
provided that the aggregate amount of the Commitments of the Lenders shall be
- --------
deemed used from time to time to the extent of the aggregate amount of
Competitive Bid Loans then
Credit Agreement
----------------
<PAGE>
27
outstanding, and such deemed use of the aggregate amount of the Commitments
shall be applied to the Lenders ratably according to their respective
Commitments as in effect from time to time (such deemed use of the aggregate
amount of the Commitments with respect to Competitive Bid Loans being a
"Competitive Bid Loan Reduction"). Each Revolving Loan Borrowing shall be in an
- -------------------------------
aggregate amount not less than $10,000,000 or an integral multiple of $1,000,000
in excess thereof (or, if less, an aggregate amount equal to the lesser of (x)
the difference between the aggregate amount of a proposed Competitive Bid Loan
Borrowing requested by the Borrower and the aggregate amount of Competitive Bid
Loans offered to be made by the Lenders and accepted by the Borrower in respect
of such Competitive Bid Loan Borrowing, if such Competitive Bid Loan Borrowing
is made on the same date as such Revolving Loan Borrowing and (y) the then
remaining Unused Commitments, as applicable) and shall consist of Revolving
Loans of the same Type made on the same day by the Lenders ratably according to
their respective Commitments. Within the limits of each Lender's Commitment,
the Borrower may from time to time borrow, repay pursuant to Section 2.05 or
prepay pursuant to Section 2.08 and reborrow under this Section 2.01.
SECTION 2.02. The Competitive Bid Loans.
-------------------------
(a) Each Lender severally agrees that the Borrower may make
Competitive Bid Loan Borrowings from time to time on any Business Day during the
period from the date hereof until the date occurring 30 days prior to the
Commitment Termination Date in the manner set forth in Section 3.02, provided
--------
that, following the making of each Competitive Bid Loan, the aggregate amount of
the Loans then outstanding shall not exceed the aggregate amount of the
Commitments.
(b) Within the limits and on the conditions set forth in this Section
2.02, the Borrower may from time to time borrow under this Section 2.02, repay
or prepay pursuant to subsection (c) below, and reborrow under this Section
2.02, provided that a Competitive Bid Loan Borrowing shall not be made within
--------
three Business Days of the date of any other Competitive Bid Loan Borrowing.
(c) The Borrower shall repay to the Administrative Agent for the
account of each Lender which has made a Competitive Bid Loan, or each other
holder of a Competitive Bid Loan Note, on the maturity date of each Competitive
Bid Loan (such maturity date being that specified by the Borrower for repayment
of such Competitive Bid Loan in the related Notice of Competitive Bid
Credit Agreement
----------------
<PAGE>
28
Loan Borrowing delivered pursuant to Section 3.02 and provided in the
Competitive Bid Loan Note evidencing such Competitive Bid Loan), the then unpaid
principal amount of such Competitive Bid Loan. The Borrower shall have no right
to prepay any principal amount of any Competitive Bid Loan unless, and then only
on the terms, specified by the Borrower for such Competitive Bid Loan in the
related Notice of Competitive Bid Loan Borrowing delivered pursuant to Section
3.02 and set forth in the Competitive Bid Loan Note evidencing such Competitive
Bid Loan.
(d) The Borrower shall pay interest on the unpaid principal amount of
each Competitive Bid Loan from the date of such Competitive Bid Loan to the date
the principal amount of such Competitive Bid Loan is repaid in full, at the rate
of interest for such Competitive Bid Loan specified by the Lender making such
Competitive Bid Loan in its notice with respect thereto delivered pursuant to
Section 3.02, payable on the interest payment date or dates specified by the
Borrower for such Competitive Bid Loan in the related Notice of Competitive Bid
Loan Borrowing delivered pursuant to Section 3.02, as provided in the
Competitive Bid Loan Note evidencing such Competitive Bid Loan.
(e) The indebtedness of the Borrower resulting from each Competitive
Bid Loan made to the Borrower as part of a Competitive Bid Loan Borrowing shall
be evidenced by a separate Competitive Bid Loan Note of the Borrower payable to
the order of the Lender making such Competitive Bid Loan.
SECTION 2.03. Fees.
----
(a) Facility Fees. The Borrower agrees to pay to the Administrative
-------------
Agent for the account of each Lender a facility fee on the average daily amount
(whether used or unused) of such Lender's Commitment (computed without regard to
any Competitive Bid Loan Reduction and without regard to any deemed utilization
of the Commitments under Section 2.13) from the Closing Date (in the case of
each Bank), and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender (in the case of each other
Lender), until the Final Termination Date, payable in arrears on the last
Business Day of each fiscal quarter during such term and on the Final
Termination Date, at a rate per annum equal to the Applicable Percentage in
effect from time to time. For purposes hereof, the "Final Termination Date"
----------------------
means the date that is the later of (i) the Commitment Termination Date and (ii)
the date on which all outstanding Loans, if any, shall have been repaid in full.
Credit Agreement
----------------
<PAGE>
29
(b) Competitive Bid Loan Fee. The Borrower agrees to pay to the
------------------------
Administrative Agent for its own account a fee in the amount of $2,500 for each
request made by the Borrower for a Competitive Bid Loan Borrowing pursuant to
Section 3.02.
(c) Other Fees. The Borrower agrees to pay to the Administrative
----------
Agent for each of their respective accounts such fees as from time to time may
be separately agreed between the Borrower and the applicable Person.
SECTION 2.04. Reductions of the Commitments. The Commitment of each
-----------------------------
Lender shall be automatically reduced to zero at the close of business (New York
time) on the Commitment Termination Date. In addition, the Borrower shall have
the right, upon at least five Business Days' notice to the Administrative Agent,
to terminate in whole or reduce ratably in part the unused portions of the
respective Commitments of the Lenders, provided that (i) the aggregate amount of
--------
the Commitments of the Lenders shall not be reduced pursuant to this sentence to
an amount which is less than the aggregate principal amount of the Loans then
outstanding and (ii) each partial reduction shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
SECTION 2.05. Repayment.
---------
(a) Revolving Loans. The Borrower shall repay the principal amount
---------------
of each Revolving Loan made by each Lender, and each Revolving Loan made by such
Lender shall mature, on the Commitment Termination Date; provided that the
--------
Borrower may (subject to (i) the delivery to the Administrative Agent of a
notice (a "Notice of Election of Term Option") in substantially the form of
---------------------------------
Exhibit B-3 hereto not more than 30 nor less than 10 days prior to the
Commitment Termination Date and (ii) the condition that no Default shall have
occurred and be continuing on the Commitment Termination Date) elect to repay
the Revolving Loans on the Final Maturity Date (and, if the Borrower does so
elect in accordance with this Section 2.05(a), the Borrower shall repay the
principal amount of each Revolving Loan made by each Lender, and each Revolving
Loan made by such Lender shall mature, on the Final Maturity Date).
(b) Competitive Bid Loans. The Borrower shall repay the principal
---------------------
amount of each Competitive Bid Loan made by each Lender as provided in Section
2.02(c).
Credit Agreement
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<PAGE>
30
SECTION 2.06. Interest.
--------
(a) Ordinary Interest. The Borrower shall pay interest on the unpaid
-----------------
principal amount of each Loan made by each Lender from the date of such
Revolving Loan until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Loans. If such Revolving Loan is a Base Rate Loan, a
---------------
rate per annum equal at all times to the Base Rate in effect from time to
time plus the Applicable Margin, payable on the last day of each calendar
----
quarter such Revolving Loan is outstanding and on the date such Revolving
Loan shall be paid in full.
(ii) Eurodollar Rate Loans. If such Revolving Loan is a Eurodollar
---------------------
Rate Loan, a rate per annum equal at all times during each Interest Period
for such Revolving Loan to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Margin, payable on the last day of such Interest
----
Period and, if such Interest Period has a duration of more than three
months, at three-month intervals following the first day of such Interest
Period.
(b) Default Interest. Notwithstanding the foregoing, the Borrower
----------------
shall pay interest on (x) the unpaid principal amount of each Loan owing to each
Lender that is not paid when due, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to two
percentage points (2%) per annum above the rate per annum required to be paid on
such Loan pursuant to said clause (a)(i) or (a)(ii) and (y) the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to two percentage points (2%) per annum
above the rate per annum required to be paid on Base Rate Loans pursuant to
clause (a)(i) above.
SECTION 2.07. Interest Rate Determinations.
----------------------------
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for the purpose of determining any such interest rate,
the Administrative Agent shall determine such
Credit Agreement
----------------
<PAGE>
31
interest rate on the basis of timely information furnished by the remaining
Reference Banks.
(b) The Administrative Agent shall give prompt notice to the Borrower
and the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.06(a)(i) or (ii), and the applicable rate, if
any, furnished by each Reference Bank for the purpose of determining the
applicable interest rate under Section 2.06(a)(ii).
(c) If, prior to 10:00 A.M. (New York City time) on any date on which
an interest rate is to be determined pursuant to the second sentence in the
definition of "Eurodollar Rate", the Administrative Agent receives notice from
two or more of the Reference Banks (or, if there is only one Reference Bank at
such time, from such Reference Bank) that U.S. dollar deposits are not being
offered by such Reference Bank or Banks to prime banks in the London interbank
market for the applicable Interest Period or in the applicable amounts, the
Administrative Agent shall so notify the Borrower of such circumstances,
whereupon the right of the Borrower to select Eurodollar Rate Loans for any
requested Revolving Loan Borrowing or any subsequent Revolving Loan Borrowing
shall be suspended until the first date on which the circumstances causing such
suspension cease to exist. If the Borrower shall not, in turn, before 11:00
a.m. (New York City time) on such date notify the Administrative Agent that its
Notice of Revolving Loan Borrowing with respect to which such Eurodollar Rate
was to be determined shall be converted to a Notice of Revolving Loan Borrowing
for a Base Rate Loan, such Notice of Revolving Loan Borrowing shall be deemed to
be canceled and of no force or effect, and Borrower shall not be liable to the
Administrative Agent or any Lender with respect thereto except as set forth in
Section 9.04(c). In the event of such a suspension, the Administrative Agent
shall review the circumstances giving rise to such suspension at least weekly
and shall notify the Borrower and the Lenders promptly of the end of such
suspension, and thereafter the Borrower shall be entitled, on the terms and
subject to the conditions set forth herein, to borrow Eurodollar Rate Loans.
SECTION 2.08. Prepayments.
-----------
(a) The Borrower shall have no right to prepay any principal amount
of any Revolving Loan other than as provided in subsection (b) below.
(b) The Borrower may, upon at least the number of Business Days'
prior notice specified in the first sentence of
Credit Agreement
----------------
<PAGE>
32
Section 3.01(a) with respect to any Revolving Loan of the same Type given to the
Administrative Agent stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given, the Borrower shall, prepay the
outstanding principal amounts of the Loans comprising part of the same Revolving
Loan Borrowing in whole or ratably in part, together with accrued interest to
the date of such prepayment on the principal amount prepaid; provided, however,
-------- -------
that (x) each partial prepayment shall be in an aggregate principal amount not
less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and (y) if any prepayment of any Eurodollar Rate Loans shall be made on a date
which is not the last day of an Interest Period for such Loans, the Borrower
shall also pay any amounts owing to each Lender pursuant to Section 9.04(c) so
long as such Lender makes written demand upon the Borrower therefor (with a copy
of such demand to the Administrative Agent) within 20 Business Days after such
prepayment.
SECTION 2.09. Payments and Computations.
-------------------------
(a) The Borrower shall make each payment hereunder and under the
Notes not later than 11:00 A.M. (New York City time) on the day when due in U.S.
dollars to the Administrative Agent at its address referred to in Section 9.02
in same day funds. The Administrative Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.02, 2.10
or 3.03) to the Lenders entitled thereto for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.07(c),
from and after the effective date specified in such Assignment and Acceptance
the Administrative Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder.
The parties to each Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest based on the Base Rate and of fees
shall be made by the Administrative Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate shall be made by the Administrative
Agent on
Credit Agreement
----------------
<PAGE>
33
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or facility fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, if such extension would cause payment of interest on
-------- -------
or principal of Eurodollar Rate Loans to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 2.10. Taxes.
-----
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.09, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
---------
the case of each Lender, each Managing Agent, each Documentation Agent and the
Administrative Agent, taxes imposed on or measured by its net income (including
alternative minimum taxable income), and franchise taxes imposed on it, by any
jurisdiction under the laws of which such Person is organized or in which such
Person is resident or doing business, or any political subdivision thereof (all
such non-excluded taxes,
Credit Agreement
----------------
<PAGE>
34
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
-----
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Notes to any such Person, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.10) such Person
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement, the Notes or the other Loan Documents (hereinafter referred to
as "Other Taxes").
-----------
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.10) paid in good faith by such Lender or the
Administrative Agent (as the case may be) and any liability (including, without
limitation, penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted; provided, however, that (i) the Borrower shall
-------- -------
not be liable to any Person for any liability arising from or with respect to
Taxes or Other Taxes, which results from the gross negligence or willful
misconduct of the Administrative Agent or such Lender, (ii) so long as no Event
of Default has occurred and is continuing, the Administrative Agent or such
Lender, as applicable, shall use its reasonable best efforts to cooperate with
the Borrower in contesting any Taxes or Other Taxes which the Borrower
reasonably deems to be not correctly or legally asserted or otherwise not due
and owing and (iii) the Borrower shall not be liable to the Administrative Agent
or such Lender (as the case may be) for any such liability arising prior to the
date 120 days prior to the date on which such Person first makes written demand
upon the Borrower for indemnification therefor. This indemnification shall be
made within 30 days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor.
Credit Agreement
----------------
<PAGE>
35
(d) Within 30 days after the date of any payment of Taxes by the
Borrower, the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 9.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement (in the case of each Bank) and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, on or before the date that such form expires or becomes obsolete or
after the occurrence of any event within the control of the Lender (including a
change in Applicable Lending Office but not including a change in law) requiring
a change in the most recent form so delivered by it, and from time to time
thereafter if requested in writing by the Borrower (but only so long thereafter
as such Lender remains lawfully able to do so), shall provide the Borrower with
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States. If the
form provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from "Taxes" as
defined in Section 2.10(a) unless and until such Lender provides the appropriate
form certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods governed by
such form; provided, however, that, if at the date of the Assignment and
-------- -------
Acceptance pursuant to which a Lender assignee becomes a party to this
Agreement, the Lender assignor was in compliance with the provisions of Section
9.07(g) and was entitled to payments under Section 2.10(a) in respect of United
States withholding tax with respect to interest paid at such date, then, to such
extent, the term "Taxes" shall include (in addition to withholding taxes that
-----
may be imposed in the future or other amounts otherwise includable in Taxes)
United States interest withholding tax, if any, applicable with respect to the
Lender assignee on such date. If any form or document referred to in this
Section 2.10(e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001 or 4224, that the Lender considers to
Credit Agreement
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36
be confidential, the Lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Person has failed to
provide the Borrower with the appropriate form described in Section 2.10(e) or
notice that it cannot provide such form (other than if such failure is due to a
----- ----
change in law occurring subsequent to the date on which a form originally was
required to be provided, or if such form otherwise is not required under the
first sentence of subsection (e) above), such Person shall not be entitled to
indemnification under Section 2.10(a) with respect to Taxes imposed by the
United States; provided, however, that should a Lender become subject to Taxe s
-------- -------
because of its failure to deliver a form required hereunder, the Borrower shall
take such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.10 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(h) Notwithstanding any contrary provisions of this Agreement, in the
event that a Lender that originally provided such form as may be required under
Section 2.10(e) thereafter ceases to qualify for complete exemption from United
States withholding tax, such Lender may assign its interest under this Agreement
to any Eligible Assignee and such assignee shall be entitled to the same
benefits under this Section 2.10 as the assignor provided that the rate of
United States withholding tax applicable to such assignee shall not exceed the
rate then applicable to the assignor.
(i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.10 shall survive the payment in full of principal and interest
hereunder and under the Notes and the termination of the Commitments.
(j) If the Borrower is required to pay any Lender any Taxes under
Section 2.10(c), such Lender shall be an "Affected
--------
Credit Agreement
----------------
<PAGE>
37
Person", and the Borrower shall have the rights set forth in Section 3.06 to
- ------
replace such Affected Person.
SECTION 2.11. Sharing of Payments, Etc. If any Lender shall obtain
-------------------------
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Revolving Loans made by it (other
than pursuant to Section 2.10, 3.03, 3.06 or 9.04(c)) in excess of its ratable
share of payments on account of the Revolving Loans obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in the Revolving Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them,
provided, however, that, if all or any portion of such excess payment is
- -------- -------
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.11 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.12. Conversion of Revolving Loans.
-----------------------------
(a) Optional. The Borrower may on any Business Day, upon notice
--------
given to the Administrative Agent not later than 12:00 noon (New York City time)
on (x) the third Business Day prior to the date of the proposed Conversion into
Eurodollar Rate Loans and (y) the first Business Day prior to the date of the
proposed Conversion into Base Rate Loans, and, in each case, subject to the
provisions of Section 3.04, Convert all or any portion of the Revolving Loans of
one Type comprising the same Revolving Loan Borrowing into Revolving Loans of
the other Type; provided, however, that any Conversion of Eurodollar Rate Loans
-------- -------
into Base Rate Loans shall be made only on the last day of an Interest Period
for such Eurodollar Rate Loans and any Conversion of Base Rate Loans into
Eurodollar Rate Loans shall be in an amount not less than the minimum amount
specified in Section 3.01(b). Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such
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38
Conversion, (ii) the Revolving Loans to be Converted and (iii) if such
Conversion is into Eurodollar Rate Loans, the duration of the initial Interest
Period for such Revolving Loans. Each notice of Conversion shall be irrevocable
and binding on the Borrower.
(b) Mandatory. If the Borrower shall fail to select the duration of
---------
any Interest Period for any Eurodollar Rate Loans in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Loan will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Loan.
(c) Conversions Generally. The Borrower and the Lenders hereby
---------------------
acknowledge that Conversions pursuant to this Section 2.12 do not constitute
Borrowings and, accordingly, do not result in the remaking of any of the
Borrower's representations and warranties pursuant to Section 4.02 or Section
4.03.
2.13. Pre-Funding Arrangements. In order to expedite the funding
------------------------
procedures expected to occur on the Tender Offer Closing Date, and
notwithstanding anything to the contrary herein or in any other Loan Document,
the Borrower, the Lenders and the Administrative Agent hereby agree as follows:
(a) Establishment of Accounts; Deposits. The Borrower may request
-----------------------------------
that Citibank, as the sole Lender, (i) establish a Pre-Funding Deposit Account
and (ii) subject to the satisfaction of the conditions precedent set forth in
Section 4.02 (as if each deposit referred to in this clause (ii) were a
Borrowing), deposit immediately available funds of such Lender into such
Lender's Pre-Funding Deposit Account on the Pre-Funding Date in an amount
specified by the Borrower (which amount shall not in any event exceed the amount
of such Lender's Commitment). Each Lender shall direct the Depositary to invest
such Lender's Deposit from time to time in such Permitted Investments as the
Borrower may select and the Administrative Agent may approve, which Permitted
Investments shall be held in the name and be under the control of the relevant
Lender. The balance from time to time in each Lender's Pre-Funding Deposit
Account shall be subject to withdrawal or transfer only as provided herein.
(b) Not a Deemed Borrowing. The making of any Deposit by a Lender
----------------------
pursuant to this Section 2.13 shall not for any purpose be deemed to be a
Borrowing, nor shall amounts so
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39
deposited by a Lender into such Lender's Pre-Funding Deposit Account be deemed
to be a Loan, it being understood and agreed that the Borrower shall have no
right, title or interest in or to such Lender's Pre-Funding Deposit Account,
such Lender's Deposit or any earnings thereon.
(c) Compensation, Etc. The Borrower hereby agrees to compensate each
------------------
Lender for making a Deposit by paying such Lender compensation on the
outstanding principal amount of such Lender's Deposit from the date of such
Deposit until the date (the "Release Date") such Deposit shall be transferred to
------------
the Borrower's Depositary Account in accordance with Section 2.13(d) or
withdrawn by such Lender in accordance with Section 2.13(e), at a rate per annum
equal at all times to the Special Funding Rate for such Lender in effect from
time to time (net of earnings, if any, on such Deposit payable by the
Depositary), such compensation to be payable on the Expected Funding Date and on
the Release Date. The costs and expenses of opening and maintaining the Pre-
Funding Deposit Accounts are for the account of the Borrower.
(d) Transfers to Borrower. On or prior to the Tender Offer Closing
---------------------
Date, each Lender shall direct the Depositary to transfer on the Tender Offer
Closing Date the balance then outstanding to the credit of such Lender's Pre-
Funding Deposit Account in immediately available funds to the Borrower's
Depositary Account for the purpose of financing the purchase by the Borrower of
Target Shares tendered pursuant to the Tender Offer. Such transfer of funds from
a Lender's Pre-Funding Deposit Account to the Borrower's Depositary Account
shall be deemed for all purposes of this Agreement and the other Loan Documents
to be the making of a Revolving Loan by such Lender, and all such Loans deemed
made by the Lenders shall constitute a single Revolving Loan Borrowing hereunder
made on the Tender Offer Closing Date. Each transfer of funds to the Borrower's
Depositary Account pursuant to this Section 2.13(d) shall be subject to the
delivery by the Borrower of a Notice of Revolving Loan Borrowing pursuant to
Section 3.01, the satisfaction of the applicable conditions precedent set forth
in Sections 4.01 and 4.02 and all other terms and conditions herein applicable
to Revolving Loans and Revolving Loan Borrowings.
(e) Withdrawals by Lender, Etc. If the Tender Offer Closing Date
---------------------------
does not occur on or prior to the Expected Funding Date (or if an Event of
Default shall occur and be continuing), each Lender may in its discretion:
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40
(i) elect to liquidate any Permitted Investments credited to such
Lender's Pre-Funding Deposit Account;
(ii) withdraw from such Lender's Pre-Funding Deposit Account all or
any of such Lender's Deposit (and earnings thereon); and
(iii) close such Lender's Pre-Funding Deposit Account.
(f) Deposit Reduction. So long as any Deposit remains outstanding,
-----------------
the Commitment of each Lender shall be deemed for all purposes hereof and of the
other Loan Documents to be utilized in the amount of such Lender's Deposit.
(g) Miscellaneous. The procedures set forth in this Section 2.13
-------------
shall be inapplicable to any Borrowing to be made after the Tender Offer Closing
Date.
(h) Certain Definitions. As used in this Section 2.13 the following
-------------------
terms shall have the following meanings:
"Borrower's Depositary Account" means a bank account established with
-----------------------------
the Depositary in connection with the Tender Offer into which the purchase
price for the Target Shares tendered pursuant to the Tender Offer shall be
deposited on the Tender Offer Closing Date.
"Deposit" means, for any Lender, a deposit made by such Lender into
-------
such Lender's Pre-Funding Deposit Account made in accordance with this
Section 2.13.
"Depositary" means First Chicago Trust Company of New York, the bank
----------
acting as "Depositary" under and as defined in the Tender Offer Materials.
"Expected Funding Date" means a date specified in writing by the
---------------------
Borrower to the Administrative Agent as the date (in any event no later
than June 30, 1997) expected by the Borrower to be the Tender Offer Closing
Date.
"Permitted Investments" means cash and high-quality highly-liquid cash
---------------------
equivalents.
"Pre-Funding Date" means a date specified by the Borrower to the
----------------
Administrative Agent that is no earlier than the date two days before the
Expected Funding Date.
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41
"Pre-Funding Deposit Account" means, for any Lender, a bank account
---------------------------
with the Depositary established by (and in the name and under the control
of) such Lender.
ARTICLE III
MAKING THE LOANS
SECTION 3.01. Making the Revolving Loans.
--------------------------
(a) Each Revolving Loan Borrowing shall be made on notice, given not
later than (x) 12:00 noon (New York City time) on the third Business Day prior
to the date of a Eurodollar Rate Loan Borrowing, and (y) 11:00 A.M. (New York
City time) on the day of a Base Rate Loan Borrowing, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier, telex or cable. Each such notice of a Revolving Loan Borrowing (a
"Notice of Revolving Loan Borrowing") shall be made in writing, or orally and
- -----------------------------------
confirmed immediately in writing, by telecopier, telex or cable, in
substantially the form of Exhibit B-1 hereto, specifying therein the requested
(i) date of such Revolving Loan Borrowing (which shall be a Business Day), (ii)
Type of Revolving Loan comprising such Revolving Loan Borrowing, (iii) aggregate
amount of such Revolving Loan Borrowing, and (iv) in the case of a Revolving
Loan Borrowing comprised of Eurodollar Rate Loans, initial Interest Period for
each such Revolving Loan. Each Lender shall (A) before 11:00 A.M. (New York City
time) on the date of such Borrowing (in the case of a Eurodollar Rate Loan
Borrowing) and (B) before 1:00 P.M. (New York City time) on the date of such
Borrowing (in the case of a Base Rate Loan Borrowing), make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 9.02, in same day funds, such Lender's ratable
portion of such Revolving Loan Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article IV, the Administrative Agent will make such funds available to
the Borrower at the Administrative Agent's aforesaid address. Notwithstanding
anything herein or in any other Loan Document to the contrary, (1) the Borrower
may request that the initial Loans hereunder bear interest, for a period
commencing on the date such Loans are made and ending on the date not later than
three Business Days thereafter, at a rate per annum equal to the Special Funding
Rate and (2) Loans bearing interest at the Special Funding Rate shall be deemed
to be "Base Rate Loans" for all purposes (other than Section 2.06(a)(i)).
Credit Agreement
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<PAGE>
42
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Borrower may not select Eurodollar Rate Loans for any Revolving Loan
Borrowing if the aggregate amount of such Revolving Loan Borrowing is less than
$10,000,000.
(c) Subject to Sections 2.07(c) and 3.04, each Notice of Revolving
Loan Borrowing shall be irrevocable and binding on the Borrower. In the case of
any Revolving Loan Borrowing which the related Notice of Revolving Loan
Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Revolving Loan Borrowing for such Revolving Loan Borrowing the
applicable conditions set forth in Article IV, including, without limitation,
any loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Revolving Loan to be made by such Lender as part of such
Revolving Loan Borrowing when such Revolving Loan, as a result of such failure,
is not made on such date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Revolving Loan Borrowing that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
such Revolving Loan Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date
of such Revolving Loan Borrowing in accordance with subsection (a) of this
Section 3.01 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to Revolving Loans comprising such
Revolving Loan Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate, provided that the Borrower retains its rights against such Lender with
--------
respect to any damages it may incur as a result of such Lender's failure to
fund, and notwithstanding anything herein to the contrary, in no event shall the
Borrower be liable to such Lender or any other Person for the interest payable
by such Lender to the Administrative Agent pursuant to this sentence. If such
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43
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Revolving Loan as part of such
Revolving Loan Borrowing for purposes of this Agreement.
(e) Subject to Section 9.07(i), the failure of any Lender to make the
Revolving Loan to be made by it as part of any Revolving Loan Borrowing shall
not relieve any other Lender of its obligation, if any, hereunder to make its
Revolving Loan on the date of such Revolving Loan Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender on the date of any Revolving Loan Borrowing.
SECTION 3.02. Making the Competitive Bid Loans.
--------------------------------
(a) The Borrower may request a Competitive Bid Loan Borrowing under
this Section 3.02 by delivering to the Administrative Agent a notice (made in
writing, or orally and confirmed immediately in writing, by telecopier, telex or
cable) of a Competitive Bid Loan Borrowing (a "Notice of Competitive Bid Loan
------------------------------
Borrowing"), in substantially the form of Exhibit B-2 hereto, specifying the
- ---------
date (which shall be a Business Day) and aggregate amount of the proposed
Competitive Bid Loan Borrowing, the maturity date for repayment of each
Competitive Bid Loan to be made as part of such Competitive Bid Loan Borrowing
(which maturity date may not be earlier than the date occurring 7 days after the
date of such Competitive Bid Loan Borrowing or later than 180 days or six
months, as applicable, after the date of such Competitive Bid Loan Borrowing
(or, if earlier, the Commitment Termination Date)), the interest payment date or
dates relating thereto, and any other terms to be applicable to such Competitive
Bid Loan Borrowing, not later than (i) 10:00 A.M. (New York City time) at least
one Business Day prior to the date of the proposed Competitive Bid Loan
Borrowing, if the Borrower shall specify in the Notice of Competitive Bid Loan
Borrowing that the rates of interest to be offered by the Lenders shall be fixed
rates per annum and (ii) 12:00 noon (New York City time) at least four Business
Days prior to the date of the proposed Competitive Bid Loan Borrowing, if the
Borrower shall instead specify in the Notice of Competitive Bid Loan Borrowing
the basis to be used by the Lenders in determining the rates of interest to be
offered by them. The Administrative Agent shall in turn promptly notify each
Lender of each request for a Competitive Bid Loan Borrowing received by it from
the Borrower by sending such Lender a copy of the related Notice of Competitive
Bid Loan Borrowing.
Credit Agreement
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44
(b) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more Competitive Bid Loans to the Borrower as
part of such proposed Competitive Bid Loan Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to the Borrower),
before 10:00 A.M. (New York City time) (i) on the date of such proposed
Competitive Bid Loan Borrowing, in the case of a Notice of Competitive Bid Loan
Borrowing delivered pursuant to clause (i) of paragraph (a) above and (ii) three
Business Days before the date of such proposed Competitive Bid Loan Borrowing,
in the case of a Notice of Competitive Bid Loan Borrowing delivered pursuant to
clause (ii) of paragraph (a) above, of the minimum amount and maximum amount of
each Competitive Bid Loan which such Lender would be willing to make as part of
such proposed Competitive Bid Loan Borrowing (which amounts may, subject to the
proviso to the first sentence of Section 2.02(a), exceed such Lender's
Commitment), the rate or rates of interest therefor and such Lender's Applicable
Lending Office with respect to such Competitive Bid Loan; provided that if the
--------
Administrative Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Borrower of such offer before
9:00 A.M. (New York City time) on the date on which notice of such election is
to be given to the Administrative Agent by the other Lenders. If any Lender
shall elect not to make such an offer, such Lender shall so notify the
Administrative Agent, before 10:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Administrative Agent by the
other Lenders, and such Lender shall not be obligated to, and shall not, make
any Competitive Bid Loan as part of such Competitive Bid Borrowing; provided
--------
that the failure by any Lender to give such notice shall not cause such Lender
to be obligated to make any Competitive Bid Loan as part of such proposed
Competitive Bid Loan Borrowing.
(c) The Borrower shall, in turn, (i) before 11:30 A.M. (New York City
time) on the date of such proposed Competitive Bid Loan Borrowing, in the case
of a Notice of Competitive Bid Loan Borrowing delivered pursuant to clause (i)
of paragraph (a) above and (ii) before 1:00 P.M. (New York City time) three
Business Days before the date of such proposed Competitive Bid Loan Borrowing,
in the case of a Notice of Competitive Bid Loan Borrowing delivered pursuant to
clause (ii) of paragraph (b) above, either:
(A) cancel such Competitive Bid Loan Borrowing by giving the
Administrative Agent notice to that effect, or
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45
(B) accept one or more of the offers made by any Lender or Lenders
pursuant to paragraph (b) above, in its sole discretion, by giving notice
to the Administrative Agent of the amount of each Competitive Bid Loan
(which amount shall be equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified to the Borrower by the
Administrative Agent on behalf of such Lender for such Competitive Bid Loan
pursuant to paragraph (b) above) to be made by each Lender as part of such
Competitive Bid Loan Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (b) above by giving the Administrative Agent
notice to that effect.
(d) If the Borrower notifies the Administrative Agent that such
Competitive Bid Loan Borrowing is canceled pursuant to paragraph (c)(A) above,
the Administrative Agent shall give prompt notice thereof to the Lenders and
such Competitive Bid Loan Borrowing shall not be made.
(e) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (c)(B) above, the Administrative Agent
shall in turn promptly notify (i) each Lender that has made an offer as
described in paragraph (b) above, of the date and aggregate amount of such
Competitive Bid Loan Borrowing and whether or not any offer or offers made by
such Lender pursuant to paragraph (b) above have been accepted by the Borrower,
(ii) each Lender that is to make a Competitive Bid Loan as part of such
Competitive Bid Loan Borrowing, of the amount of each Competitive Bid Loan to be
made by such Lender as part of such Competitive Bid Loan Borrowing, and (iii)
each Lender that is to make a Competitive Bid Loan as part of such Competitive
Bid Loan Borrowing, upon receipt, that the Administrative Agent has received
forms of documents appearing to fulfill the applicable conditions set forth in
Article IV. Each Lender that is to make a Competitive Bid Loan as part of such
Competitive Bid Loan Borrowing shall, before 1:00 P.M. (New York City time) on
the date of such Competitive Bid Loan Borrowing specified in the notice received
from the Administrative Agent pursuant to clause (i) of the preceding sentence
or any later time when such Lender shall have received notice from the
Administrative Agent pursuant to clause (iii) of the preceding sentence, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 9.02 such Lender's portion of such
Competitive Bid Loan Borrowing, in same day funds. Upon fulfillment of the
applicable conditions set forth in Article IV and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make such
funds available to the
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Borrower at the Administrative Agent's aforesaid address. Promptly after each
Competitive Bid Loan Borrowing the Administrative Agent will notify each Lender
of the amount of the Competitive Bid Loan Borrowing, the consequent Competitive
Bid Loan Reduction and the dates upon which such Competitive Bid Loan Reduction
commenced and will terminate.
(f) Following the making of each Competitive Bid Loan Borrowing, the
Borrower shall be in compliance with the limitation set forth in the proviso to
the first sentence of Section 2.02(a).
SECTION 3.03. Increased Costs.
---------------
(a) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage, in each case as of the date
of determination thereof) in or in the interpretation of any law or regulation,
in each case as of the date hereof or (ii) the compliance with any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) which implements any introduction or change specified
in clause (i) above, there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans, then
the Borrower shall from time to time, within ten Business Days after written
demand by such Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost incurred
during the 120-day period prior to the date of such demand. A certificate as to
the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender and showing in reasonable detail the basis
for the calculation thereof, shall be prima facie evidence of such costs.
----- -----
(b) If any Lender determines that compliance with (i) the
introduction of or any change in or in the interpretation of, any law or
regulation, in each case after the date hereof, or (ii) any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law) which implements any introduction or change specified in clause
(i) above, affects or would affect the amount of capital required or expected to
be maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of this type, then,
within ten Business Days after written demand by such
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47
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall from time to time pay to the Administrative Agent for the account of such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances incurred during the 120-day
period prior to the date of such demand, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender and
showing in reasonable detail the basis for the calculation thereof shall be
prima facie evidence of such costs.
- ----- -----
(c) Without limiting the effect of the foregoing, the Borrower shall
pay to each Lender on the last day of each Interest Period so long as such
Lender is maintaining reserves against Eurocurrency Liabilities (or so long as
such Lender is maintaining reserves against any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined as provided in this Agreement or against any category
of extensions of credit or other assets of such Lender that includes any
Eurodollar Rate Loans) an additional amount (determined by such Lender and
notified to the Borrower through the Administrative Agent) equal to the product
of the following for each Eurodollar Rate Loan for each day during such Interest
Period:
(i) the principal amount of such Eurodollar Rate Loan outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of which is the
rate (expressed as a decimal) at which interest accrues on such Eurodollar
Rate Loan for such Interest Period as provided in this Agreement (less the
Applicable Margin) and the denominator of which is one minus the Eurodollar
-----
Rate Reserve Percentage in effect on such day minus (y) such numerator; and
-----
(iii) 1/360.
(d) If the Borrower is required to pay any Lender any amounts under
this Section 3.03, the applicable Lender shall be an "Affected Person", and the
---------------
Borrower shall have the rights set forth in Section 3.06 to replace such
Affected Person.
SECTION 3.04. Illegality. Notwithstanding any other provision of
----------
this Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or
Credit Agreement
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48
in the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Loans or to fund or maintain Eurodollar Rate Loans
hereunder, then, subject to the provisions of Section 3.06, (i) the obligation
of such Lender to make Eurodollar Rate Loans hereunder shall be suspended until
the first date on which the circumstances causing such suspension cease to
exist, (ii) any Eurodollar Rate Loans made or to be made by such Lender shall be
converted automatically to Base Rate Loans and (iii) such Lender shall be an
"Affected Person", and the Borrower shall have the right set forth in Section
- ----------------
3.06 to replace such Affected Person. In the event of such a suspension, such
Lender shall review the circumstances giving rise to such suspension at least
weekly and shall notify the Borrower, the Administrative Agent and the Lenders
promptly of the end of such suspension, and thereafter the Borrower shall be
entitled to borrow Eurodollar Rate Loans from such Lender.
SECTION 3.05. Reasonable Efforts to Mitigate. Each Lender shall use
------------------------------
its reasonable best efforts (consistent with its internal policy and legal and
regulatory restrictions) to minimize any amounts payable by the Borrower under
Section 3.03 and to minimize any period of illegality described in Section 3.04.
Without limiting the generality of the foregoing, each Lender agrees that, to
the extent reasonably possible to such Lender, it will change its Eurodollar
Lending Office if such change would eliminate or reduce amounts payable to it
under Section 3.03 or eliminate any illegality of the type described in Section
3.04, as the case may be. Each Lender further agrees to notify the Borrower
promptly, but in any event within five Business Days, after such Lender learns
of the circumstances giving rise to such a right to payment or such illegality
have changed such that such right to payment or such illegality, as the case may
be, no longer exists.
SECTION 3.06. Right of the Borrower to Replace Affected Person or
---------------------------------------------------
Lender. In the event the Borrower is required to pay any Taxes with respect to
- ------
an Affected Person pursuant to Section 2.10(c) or any amounts with respect to an
Affected Person pursuant to Section 3.03, or receives a notice from an Affected
Person pursuant to Section 3.04, the Borrower may elect, if such amounts
continue to be charged or such notice is still effective, to replace such
Affected Person as a party to this Agreement, provided that, concurrently
--------
therewith, (i) another financial institution which is an Eligible Assignee and
is reasonably satisfactory to the Borrower and the Administrative Agent (or if
Credit Agreement
----------------
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49
the Lender then serving as Administrative Agent is the Person to be replaced and
the Administrative Agent has resigned its position, the Lender becoming the
successor Administrative Agent) shall agree, as of such date, to purchase for
cash the Loans of the Affected Person, pursuant to an Assignment and Acceptance
and to become a Lender for all purposes under this Agreement and to assume all
obligations (including all outstanding Loans) of the Affected Person to be
terminated as of such date and to comply with the requirements of Section 9.07
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Person in same day funds on the day of such replacement all interest, fees and
other amounts then due and owing to such Affected Person by the Borrower
hereunder to and including the date of termination, including without limitation
payments due such Affected Person under Section 2.10 and costs incurred under
Section 3.03.
SECTION 3.07. Use of Proceeds. The proceeds of the Loans shall be
---------------
available (and the Borrower agrees that it shall use such proceeds) solely to
finance the Acquisition and, after the consummation of the Acquisition, for
general corporate purposes of the Borrower and its Subsidiaries (in each case in
compliance with all applicable legal and regulatory requirements, including,
without limitation, Regulations G, T, U and X and the Securities Act of 1933 and
the Securities Exchange Act of 1934 and the regulations thereunder); provided
--------
that neither any Lender nor the Administrative Agent shall have any
responsibility for the use of any of the proceeds of Loans.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Conditions Precedent to Initial Borrowing. The
-----------------------------------------
obligation of each Lender to make a Loan on the occasion of the initial
Borrowing is subject to the following conditions precedent being satisfied on or
before June 30, 1997:
(a) The Administrative Agent shall have received on or before the day
of the initial Borrowing the following in form and substance satisfactory
to the Administrative Agent and (except for the Notes) in sufficient copies
for each Lender:
(i) The Revolving Loan Notes payable to the order of the
Lenders, respectively.
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50
(ii) Certified copies of (x) the charter and by-laws of the
Borrower, (y) the resolutions of the Board of Directors of the
Borrower authorizing and approving this Agreement and the Notes, and
(z) all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the
Notes.
(iii) A certificate of the Secretary or an Assistant Secretary of
the Borrower certifying the names and true signatures of the officers
of the Borrower authorized to sign this Agreement and the Notes and
the other documents to be delivered hereunder.
(iv) (x) A favorable opinion of the Borrower's Law Department,
dated the Closing Date, and (y) a favorable opinion of the Borrower's
Law Department, dated the date of the initial Borrowing, substantially
in the forms of Exhibits D-1 and D-2, respectively, and covering such
other matters relating hereto as any Lender, through the
Administrative Agent, may reasonably request.
(v) A favorable opinion of Milbank, Tweed, Hadley & McCloy,
special New York counsel to the Administrative Agent, dated the date
of the initial Borrowing, substantially in the form of Exhibit E.
(b) Other than Permitted Modifications, the Borrower shall not have
made any change in the structure or terms of the Acquisition disclosed to
the Banks prior to the Closing Date.
(c) The Administrative Agent shall have received:
(i) a certified copy of the Acquisition Agreement and the
Shareholder Agreement, each as amended to and in effect on the date of
the initial Borrowing (and each such agreement shall be in
substantially the same form as provided to the Banks prior to the
Closing Date, except for (x) Permitted Modifications and (y) other
amendments thereto to which the Required Lenders shall have
consented); and
(ii) a certified copy of all of the Tender Offer Materials,
each as amended to and in effect on the date of the initial Borrowing.
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51
(d) The Borrower shall have certified to the Administrative Agent
that all conditions to the Acquisition have been satisfied (in each case
without any waiver thereof by the Borrower or any of its Subsidiaries,
other than (i) waivers constituting Permitted Modifications and (ii) other
waivers to which the Required Lenders have consented).
(e) The Borrower shall have paid all accrued fees and expenses of the
Administrative Agent and the Lenders (including the fees and expenses of
counsel to the Administrative Agent to the extent then payable).
SECTION 4.02. Conditions Precedent to Each Revolving Loan Borrowing.
-----------------------------------------------------
The obligation of each Lender to make a Loan (other than a Competitive Bid Loan)
on the occasion of each Borrowing (including the initial Borrowing) shall be
subject to the further conditions precedent that on the date of such Borrowing
the following statements shall be true (and the acceptance by the Borrower of
the proceeds of such Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing such statements are true):
(a) The representations and warranties contained in Section 5.01
(except the Excluded Representations) are correct on and as of the date of
such Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date other than any such representations or warranties that, by their
terms, refer to a date other than the date of such Borrowing; and
(b) No event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes a Default.
SECTION 4.03. Conditions Precedent to Each Competitive Bid Loan
-------------------------------------------------
Borrowing. The obligation of each Lender which is to make a Competitive Bid
- ---------
Loan on the occasion of a Competitive Bid Loan Borrowing (including the initial
Competitive Bid Loan Borrowing) to make such Competitive Bid Loan as part of
such Competitive Bid Loan Borrowing is subject to the conditions precedent that:
(a) the Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Loan Borrowing with respect thereto;
Credit Agreement
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52
(b) on or before the date of such Competitive Bid Loan Borrowing, but
prior to such Competitive Bid Loan Borrowing, the Administrative Agent
shall have received a Competitive Bid Loan Note payable to the order of
such Lender for each of the one or more Competitive Bid Loans to be made by
such Lender as part of such Competitive Bid Loan Borrowing, in a principal
amount equal to the principal amount of the Competitive Bid Loan to be
evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Loan in accordance with Sections 2.02 and 3.02; and
(c) on the date of such Competitive Bid Loan Borrowing the following
statements shall be true (and the acceptance by the Borrower of the
proceeds of such Competitive Bid Loan Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such
Competitive Bid Loan Borrowing such statements are true):
(i) The representations and warranties contained in Section
5.01 (except the Excluded Representations) are correct on and as of
the date of such Competitive Bid Loan Borrowing, before and after
giving effect to such Competitive Bid Loan Borrowing and to the
application of the proceeds therefrom, as though made on and as of
such date other than any such representations or warranties which, by
their terms, refer to a date other than the date of such Competitive
Bid Loan Borrowing;
(ii) No event has occurred and is continuing, or would result
from such Competitive Bid Loan Borrowing or from the application of
the proceeds therefrom, which constitutes a Default; and
(iii) No event has occurred and no circumstance exists as a
result of which the information concerning the Borrower that has been
provided to the Administrative Agent and each Lender by the Borrower
in connection herewith would include an untrue statement (in light of
the time such statements were made) of a material fact or omit to
state any material fact or any fact necessary to make the statements
contained therein taken as a whole, in the light of the circumstances
under which they were made, not misleading.
Credit Agreement
----------------
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53
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the Borrower.
----------------------------------------------
The Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (ii)
is duly qualified and in good standing as a foreign corporation in each
other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed would not have a Material
Adverse Effect and (iii) has all the requisite corporate power and
authority to own or lease and operate its properties and to carry on its
business as now conducted except where the failure to do so would not have
a Material Adverse Effect.
(b) The execution, delivery and performance by the Borrower of the
Basic Documents, and the consummation of the transactions contemplated
hereby (including, without limitation, the Acquisition), are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's certificate of
incorporation or by-laws, (ii) violate any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award, (iii) conflict
with or result in the breach of, or constitute a default under, any
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting the Borrower or any of its
Subsidiaries or any of their properties, except if such conflict, breach or
default would not have a Material Adverse Effect, or (iv) result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties of the Borrower or its Subsidiaries. The Borrower is not
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, except for such violation or breach which would not have a
Material Adverse Effect.
(c) Except as have been obtained (or, with respect to the Acquisition
and the Acquisition Documents at any time prior to the making of the
initial Loan, as have been or will be sought within the applicable time
periods), no
Credit Agreement
----------------
<PAGE>
54
authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third
party is required for (i) the due execution, delivery and performance by
the Borrower of the Basic Documents, or for consummation of the
transactions contemplated hereby, except and to the extent that either (x)
any failure to obtain such authorization, approval or other action would
not have a Material Adverse Effect or (y) with respect only to the
Acquisition and the Acquisition Documents, the waiver by the Borrower of
receipt of such authorization, approval or other action would constitute a
Permitted Modification, or (ii) the consummation of the Acquisition.
(d) Each of the Loan Documents is, and the Notes when delivered
hereunder will be, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with its terms.
(e) The Borrower has heretofore furnished to each of the Lenders
consolidated balance sheets of the Borrower and its Subsidiaries as at
December 29, 1995 and the related consolidated statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for
the fiscal year ended on said date, with the opinion thereon (in the case
of said consolidated balance sheet and statements) of Arthur Andersen LLP.
All such financial statements are complete and correct and fairly present
the consolidated financial condition of the Borrower and its Subsidiaries
as at said date and the consolidated results of their operations for the
fiscal year ended on said date, all in accordance with GAAP. Since
December 29, 1995, there has been no Material Adverse Change.
(f) No information, exhibit or report furnished by or on behalf of
the Borrower to the Administrative Agent or any Lender in connection with
the Acquisition or the execution of the Loan Documents contained any untrue
statement (in light of the time such statements were made) of a material
fact or omitted to state a material fact necessary to make the statements
made therein taken as a whole, in the light of the circumstances under and
the time at which they were made, not misleading, provided that the
--------
representations and warranties set forth in this Section 5.01(f) are, to
the extent relating to information relating to the Target or any of its
Subsidiaries, to the best of the Borrower's knowledge.
Credit Agreement
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<PAGE>
55
(g) There is no pending or threatened action or proceeding affecting
the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator which (i) is reasonably likely to have a Material
Adverse Effect, (ii) is reasonably likely to materially adversely affect
the consummation of the Acquisition or (iii) purports to affect this
Agreement or the transactions contemplated hereby.
(h) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that has resulted or could reasonably be expected
to result in a liability to the Borrower or its ERISA Affiliates in excess
of $5,000,000.
(i) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that it has incurred any
Withdrawal Liability, and neither the Borrower nor any of its ERISA
Affiliates, to the best of the Borrower's knowledge and belief, is
reasonably expected to incur any Withdrawal Liability to any Multiemployer
Plan, in each case other than any Withdrawal Liability that would not have
a Material Adverse Effect.
(j) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, except where such reorganization or termination would
not have a Material Adverse Effect.
(k) The Borrower and each of its Subsidiaries have filed, have caused
to be filed or have been included in all tax returns (federal, state, local
and foreign) required to be filed and have paid (or have accrued any taxes
shown that are not due with the filing of such returns) all taxes shown
thereon to be due, together with applicable interest and penalties, except
in any case where the failure to file any such return or pay any such tax
is not in any respect material to the Borrower or the Borrower and its
Subsidiaries taken as a whole.
(l) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, no proceeds of any
Loan will be used for any purpose that violates the provisions of the
regulations of the Board of Governors of the Federal Reserve System and
after applying the proceeds of each Loan, the Borrower is in
Credit Agreement
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<PAGE>
56
compliance with its obligations under Section 6.02(g). If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U, the
statements made in which shall be such, in the opinion of each Lender, as
to permit the transactions contemplated hereby in accordance with
Regulation U.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01 Affirmative Covenants. So long as any obligations under
---------------------
this Agreement or any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Required Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of its
--------------------------
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA, the Securities Act of 1933 and all
Environmental Laws, except, in each case, any non-compliance which would
not have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
----------------------
Subsidiaries to pay and discharge, before the same shall become delinquent,
all taxes, assessments, claims and governmental charges or levies imposed
upon it or upon its property, except to the extent that any failure to do
so would not have a Material Adverse Effect; provided, however, that
-------- -------
neither the Borrower nor any of its Subsidiaries shall be required to pay
or discharge any such tax, assessment, claim or charge that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Subsidiaries to maintain, appropriate and adequate insurance with
responsible and reputable insurance companies or associations or with self-
insurance programs to the extent consistent with prudent practices of the
Borrower and its Subsidiaries or otherwise customary in their respective
industries in such amounts and covering such
Credit Agreement
----------------
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57
risks as is customary in the industries in which the Borrower or such
Subsidiary operates.
(d) Payment of Welfare Plans. Pay, and cause each of its Material
------------------------
Subsidiaries to pay, the aggregate annualized cost (including, without
limitation, the cost of insurance premiums) with respect to post-retirement
benefits under Welfare Plans for which the Borrower and its Material
Subsidiaries are liable.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
-----------------------------------------
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory) and franchises;
provided, however, that (i) the Borrower and its Material Subsidiaries may
-------- -------
consummate any transaction permitted under Section 6.02(b) and (ii) neither
the Borrower nor such Subsidiary shall be required to preserve any right or
franchise (other than the corporate existence of the Borrower) when, in the
good faith business judgment of the Borrower, such preservation or
maintenance is neither necessary nor appropriate for the prudent management
of the business of the Borrower.
(f) Visitation Rights. At any reasonable time during normal business
-----------------
hours and upon reasonable prior notice and from time to time, permit the
Administrative Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
----------------
keep, proper books of record and account as are necessary to prepare
Consolidated financial statements in accordance with GAAP, in which full
and correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary in accordance
with GAAP.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
-------------------------------
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and
Credit Agreement
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58
condition, ordinary wear and tear excepted, except where failure to do so
would not have a Material Adverse Effect.
(i) Reporting Requirements. Furnish to the Lenders:
----------------------
(i) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, quarterly condensed and consolidated balance sheets and
consolidated statement of cash flows of the Borrower as of the end of
such quarter and statements of income of the Borrower for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, certified by the chief accounting officer of the
Borrower (or another appropriate officer of the Borrower designated by
said chief accounting officer) and certificates as to compliance with
the terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 6.01(j)
and (k), provided that in the event of any change in GAAP used in
--------
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section
6.01(j) or (k), a statement of reconciliation conforming any
information in such certificates with GAAP;
(ii) as soon as available and in any event within 105 days after
the end of each fiscal year of the Borrower, certificates as to
compliance with the terms of this Agreement which are otherwise
provided under clause (i) above at the end of each fiscal quarter
other than the last fiscal quarter of the fiscal year and a copy of
the annual report for such year for the Borrower, containing audited
financial statements for such year certified by (a) Arthur Andersen
LLP, (b) any other "Big Six" accounting firm or (c) other independent
public accountants acceptable to the Required Lenders;
(iii) as soon as possible and in any event within five days after
the Borrower obtains notice of the occurrence of each Event of Default
and each Default continuing on the date of such statement, a statement
of the chief accounting officer of the Borrower setting forth details
of such Event of Default or Default and the action which the Borrower
has taken and proposes to take with respect thereto;
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59
(iv) promptly after request therefor, copies of all regular and
periodic financial and/or other reports which the Borrower may from
time to time make available to any of its public security holders or
bond holders;
(v) promptly and in any event within 15 days after the Borrower
or any ERISA Affiliate knows or should reasonably know that any ERISA
Event has occurred with respect to which the liability or potential
liability of the Borrower or any of its ERISA Affiliates exceeds or
could reasonably be expected to exceed $10,000,000, a statement of a
principal financial officer of the Borrower describing such ERISA
Event and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(vi) promptly and in any event within 10 Business Days after
receipt thereof by the Borrower or any ERISA Affiliate, copies of each
notice from the PBGC stating its intention to terminate any Plan or to
have a trustee appointed to administer any Plan where such action
would have a Material Adverse Effect;
(vii) with respect to liabilities or potential liabilities of the
Borrower or any of its ERISA Affiliates of $10,000,000 or more,
promptly and in any event within 20 Business Days after receipt
thereof by the Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Borrower or
any ERISA Affiliate concerning (1) the imposition of Withdrawal
Liability by a Multiemployer Plan, (2) the reorganization or
termination, within the meaning of Title IV of ERISA, of any
Multiemployer Plan or (3) the amount of liability incurred, or which
may be incurred, by the Borrower or any ERISA Affiliate in connection
with any event described in clause (1) or (2) above; and
(viii) promptly after request therefor, such other business and
financial information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries
that any Lender through the Administrative Agent may from time to time
reasonably request.
Credit Agreement
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60
(j) Minimum Net Worth. Maintain, as at the last day of each fiscal
-----------------
quarter of the Borrower ending after the date hereof, a net worth of not
less than:
(i) $500,000,000 minus
-----
(ii) the lesser of (x) the aggregate consideration paid by the
Borrower in respect of the purchase by the Borrower of its common
stock during the period from December 30, 1995 through and including
the date of determination and (y) $200,000,000 plus
----
(iii) 25% of the cumulative Consolidated net income of the
Borrower (if positive) for the fiscal years (if any) ended during the
period from December 30, 1995 through and including the date of
determination.
(k) Leverage Ratio. Maintain, as at the last day of each fiscal
--------------
quarter of the Borrower ending after the date hereof, a Leverage Ratio of
not greater than 4.0 to 1.0.
(l) Acquisition Documents. Deliver to the Administrative Agent,
---------------------
promptly after execution and delivery thereof or filing with the Securities
and Exchange Commission, a true, correct and complete copy of each
Acquisition Document and each amendment thereto and waiver thereunder.
SECTION 6.02 Negative Covenants. So long as any obligations under
------------------
this Agreement or any Note shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, unless the Required Lenders shall
otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
-----------
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign,
any right to receive income, other than:
(i) Permitted Liens;
(ii) Liens outstanding on July 12, 1996 and described on Schedule
II ("Existing Liens"), and any renewal, extension or replacement (or
--------------
successive renewals, extensions or replacements) thereof which
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61
does not encumber any property of the Borrower or its Subsidiaries
other than (1) the property encumbered by the Lien being renewed,
extended or replaced, (2) property acquired by the Borrower or its
Subsidiaries in the ordinary course of business to replace property
covered by Existing Liens, and (3) de minimis other property
incidental to the property referred to in clause (1) or (2) above;
(iii) Purchase Money Liens;
(iv) Liens on properties of (X) MVCI, any SLS Entity or any of
their respective Subsidiaries, and (Y) MICC and any other Subsidiary
of the Borrower principally engaged in the business of finance,
banking, credit, leasing, insurance or other similar operations;
(v) Liens on properties of Subsidiaries of the Borrower, which
properties are located outside the United States of America;
(vi) Liens securing COLI Debt; and
(vii) other Liens securing an aggregate principal amount of
Indebtedness or other obligations not to exceed $300,000,000 at any
time outstanding.
(b) Restrictions on Fundamental Changes. Not, and not permit any of
-----------------------------------
its Material Subsidiaries to:
(i) merge or consolidate with or into, or
(ii) convey, transfer, lease or otherwise dispose of (whether
in one transaction or a series of transactions) all or substantially
all of the property (whether now owned or hereafter acquired) of the
Borrower and its Subsidiaries, taken as a whole, to, or
(iii) convey, transfer, lease or otherwise dispose of (whether
in one transaction or a series of transactions, and whether by or
pursuant to merger, consolidation or any other arrangement), any
property (whether now owned or hereafter acquired) essential to the
conduct of the lodging group or contract services group of the
Borrower and its Subsidiaries, taken as a whole, to, or
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----------------
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62
(iv) enter into any partnership, joint venture, syndicate, pool
or other combination with,
any Person, in each case unless:
(w) no Default shall have occurred and then be continuing or
would result therefrom, and
(x) in the case of a merger or consolidation of the Borrower,
(1) the Borrower is the surviving entity or (2) the surviving entity
expressly assumes by an amendment to this Agreement duly executed by
such surviving entity all of the Borrower's obligations hereunder and
under the other the Loan Documents in a manner satisfactory to the
Administrative Agent and the Required Lenders.
(c) Transactions with Affiliates. Enter into, or permit any of its
----------------------------
Subsidiaries to enter into, any transaction with an Affiliate of the
Borrower (other than the Borrower's Subsidiaries) that would be material in
relation to the Borrower and its Subsidiaries, taken as a whole, even if
otherwise permitted under this Agreement, except on terms that are fair and
reasonable to the Borrower and its Subsidiaries and on terms no less
favorable to the Borrower or such Subsidiary (considered as a whole in
conjunction with all other existing arrangements and relationships with
such Affiliate) than the Borrower or such Subsidiary would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
(d) Dividends, Etc. Declare or make any dividend payment or other
---------------
distribution of assets, properties, cash, rights, obligations or securities
on account of any shares of any class of capital stock of the Borrower, or
purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of any class of capital stock of the
Borrower or any warrants, rights or options to acquire any such shares, now
or hereafter outstanding, in each case if, at the time thereof or after
giving effect thereto, an Event of Default has occurred and is continuing.
(e) Change in Nature of Business. Engage in, or permit any of its
----------------------------
Subsidiaries to engage in, any business that is material to the Borrower
and its Subsidiaries, taken as a whole, that is not carried on by the
Borrower or its Subsidiaries as of the Closing Date (or directly related to
Credit Agreement
----------------
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63
a business carried on as of such date) and which would have a Material
Adverse Effect.
(f) Accounting Changes. Make or permit, or permit any of its
------------------
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.
(g) Margin Stock. Permit more than 25%, after applying the proceeds
------------
of each Loan, of the value of the assets of the Borrower and its
Subsidiaries (as determined in good faith by the Borrower) that are subject
to Section 6.02(a) or Section 6.02(b) to consist of or be represented by
Margin Stock.
(h) Amendments to Tender Offer, Etc. (i) Make any amendment to or
--------------------------------
other modification of the Tender Offer or any of the Acquisition Documents,
in each case other than a Permitted Modification, without the prior written
consent of the Required Lenders; or (ii) make any reference in the Tender
Offer Materials to this Agreement, to Citibank or to any other Person in
its capacity as Lender or agent hereunder, without the prior consent of the
Person so referred to, such consent not to be unreasonably withheld or
delayed.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
- -------------------
(a) (i) The Borrower shall fail to pay any principal of any Loan when
the same becomes due and payable; or (ii) the Borrower shall fail to pay
any interest on any Loan, or any other payment under any Loan Document, for
a period of three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material respect when
made; or
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64
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 6.01(j) or (k) or in Section
6.02(b), (c), (d), (e), (g) or (h), or (ii) any other term, covenant or
agreement contained in this Agreement on its part to be performed or
observed if the failure to perform or observe such other term, covenant or
agreement shall remain unremedied for 30 days after written notice thereof
shall have been given to the Borrower by the Administrative Agent or the
Required Lenders; or
(d) The Borrower or any of its Material Subsidiaries shall fail to
pay any principal of or premium or interest on any Indebtedness which is
outstanding in a principal amount of at least $50,000,000 in the aggregate
(but excluding Indebtedness evidenced by the Notes and Non-Recourse
Indebtedness) of the Borrower or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment,
including, without limitation, a prepayment required in connection with the
sale of the sole asset or all assets securing such Indebtedness), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease
such Indebtedness shall be required to be made, in each case prior to the
stated maturity thereof; provided, however, that if there is acceleration
-------- -------
or an event permitting acceleration of any Indebtedness which is included
under this clause (d) solely because of a Guarantee by the Borrower or one
of its Material Subsidiaries, an Event of Default will not exist under this
clause (d) so long as the Borrower or such Material Subsidiary, as the case
may be, fully performs its obligations in a timely manner under such
Guarantee upon demand therefor by the beneficiary thereof; or
(e) The Borrower or any of its Material Subsidiaries shall generally
not pay its debts as such debts become due,
Credit Agreement
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65
or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or any of its
Material Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding
shall remain undismissed or unstayed for a period of 60 days, or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of
its property) shall occur; or the Borrower or any of its Material
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower or any of its Material
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(g) A Change of Control shall occur; or
(h) Any ERISA Event shall have occurred with respect to a Plan and
the sum (determined as of the date of occurrence of such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other
Plans with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Borrower or any ERISA Affiliate related to
such ERISA Event) exceeds $20,000,000; or
(i) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount which, when aggregated
with all other amounts
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66
required to be paid to Multiemployer Plans by the Borrower and its ERISA
Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $20,000,000 or requires payments exceeding
$10,000,000 per annum; or
(j) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans which are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of such Multiemployer
Plans immediately preceding the plan year in which the reorganization or
termination occurs by an amount exceeding $20,000,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the express consent, of the Required Lenders, by notice to the
Borrower, declare the obligation of each Lender to make Loans to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the express consent, of the Required Lenders, by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
-------- -------
an order for relief with respect to the Borrower or any of its Material
Subsidiaries under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Loans shall automatically be terminated and (B) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
Credit Agreement
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67
ARTICLE VIII
THE ADMINISTRATIVE AGENT, ETC.
SECTION 8.01. Authorization and Action. Each Lender hereby appoints
------------------------
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided that the
--------
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 8.02. Reliance, Etc.
--------------
(a) None of the Administrative Agent, any Managing Agent or
Documentation Agent or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with the Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may treat the payee of any Note as
the holder thereof until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender which is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, as provided in Section
9.07; (ii) may consult with legal counsel (including counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall have no duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this
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68
Agreement on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
(b) No Managing Agent, as such, or Documentation Agent, as such,
shall have any duties or obligations whatsoever with respect to this Agreement,
the Notes or any other document or any matter related thereto.
SECTION 8.03. Citibank and Affiliates. With respect to its
-----------------------
respective Commitment, the Loans made by it and the Notes issued to it, Citibank
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank in its individual capacity. Citibank and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Administrative
Agent, and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that
----------------------
it has, independently and without reliance upon the Administrative Agent, any
Managing Agent or Documentation Agent or any other Lender and based on the
financial statements referred to in Section 5.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, any
Managing Agent or Documentation Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 8.05. Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent and each Managing Agent and Documentation Agent (in each
case to the extent not reimbursed by
Credit Agreement
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69
the Borrower), ratably according to their respective pro rata share, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent or any Managing Agent or Documentation Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent or any Managing Agent or Documentation Agent under this
Agreement in their respective capacities as an agent hereunder, provided that no
--------
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's or any Managing Agent's or
Documentation Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent and each Managing Agent and Documentation Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including counsel fees but
excluding normal administrative expenses expressly excluded under Section
9.04(a)) incurred by the Administrative Agent, such Managing Agent or such
Documentation Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the
Administrative Agent, such Managing Agent or such Documentation Agent is not
reimbursed for such expenses by the Borrower as required under Section 9.04(a).
SECTION 8.06. Successor Administrative Agent. The Administrative
------------------------------
Agent may resign at any time by giving written notice thereof to the Lenders and
the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent with the
consent of the Borrower, which consent shall not be unreasonably withheld. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be an Eligible Assignee and a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Administrative Agent
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70
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
----------------
provision of this Agreement or the Revolving Loan Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
-------- -------
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 4.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Loan
Notes or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Loan Notes
or any fees or other amounts payable hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Revolving Loan
Notes, or the number of Lenders, which shall be required for the Lenders or any
of them to take any action hereunder or (f) amend this Section 9.01; and
provided further that (1) no amendment, waiver or consent shall, unless in
- -------- -------
writing and signed by the Administrative Agent, a Documentation Agent or a
Managing Agent, as the case may be, in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent, such
Documentation Agent or such Managing Agent, as the case may be, under this
Agreement or any Note and (2) no amendment, waiver or consent shall, unless in
writing and signed by a Lender that has made a Competitive Bid Loan, in addition
to the Lenders required above to take such action, affect the rights or duties
of such Lender in respect of such Competitive Bid Loan.
Credit Agreement
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71
SECTION 9.02. Notices, Etc. All notices and other communications
-------------
provided for hereunder shall be in writing (including telecopy, telegraphic,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered, if to the Borrower, to its address at 10400 Fernwood Road,
Bethesda, Maryland 20817, Attention: Assistant Treasurer, Dept. 52/924.11, with
a copy to the same address, Attention: Assistant General Counsel - Corporate
Finance, Dept. 52/923; if to any Bank, to its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, to its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Administrative Agent, at its address at 1 Court
Square, Long Island City, New York 11120, Attention: Lei Tang (or her
successors), telephone number (718) 248-4490, telecopier number (718) 248-4844;
or to the Borrower or the Administrative Agent, at such other address as shall
be designated by such party in a written notice to the other parties and, to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, (a) when mailed, be effective three Business Days
after the same is deposited in the mails, (b) when mailed for next day delivery
by a reputable freight company or reputable overnight courier service, be
effective one Business Day thereafter, and (c) when sent by telegraph, telecopy,
telex or cable, be effective when the same is telegraphed, telecopied and
receipt thereof is confirmed by telephone or return telecopy, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Administrative Agent pursuant to Article II, III or
VIII shall not be effective until received by the Administrative Agent.
SECTION 9.03. No Waiver; Remedies. No failure on the part of any
-------------------
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses.
------------------
(a) The Borrower agrees to pay, whether or not any of the
transactions contemplated hereby are consummated, on demand (x) all reasonable
costs and expenses in connection with the preparation (excluding normal travel
and related expenses
Credit Agreement
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72
incurred by the personnel of the Administrative Agent), execution, delivery,
administration (excluding those which are customarily borne by the
Administrative Agent), modification and amendment of this Agreement, the Notes
and the other documents to be delivered hereunder, and (y) the reasonable fees
and expenses of counsel to the Administrative Agent and with respect to advising
the Administrative Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all reasonable expenses
of the Lenders (including, without limitation, reasonable counsel (including,
without duplication, internal counsel) fees and expenses) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, reasonable counsel fees and expenses in
connection with the enforcement of rights under this Section 9.04(a).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Managing Agent and Documentation Agent, each Lender
and each of their Affiliates and their officers, directors, employees, agents
and advisors (each, an "Indemnified Party") from and against any and all claims,
-----------------
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party in its agent or lending capacity under, or
otherwise in connection with, the Basic Documents, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with Acquisition, the Basic Documents, the proposed
or actual use of the proceeds of the Loans or any of the other transactions
contemplated hereby, whether or not such investigation, litigation or proceeding
is brought by the Borrower, its shareholders or creditors or an Indemnified
Party or any other Person or an Indemnified Party is otherwise a party thereto
and whether or not the Acquisition or the other transactions contemplated hereby
are consummated, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
(c) If (i) any payment of principal of any Eurodollar Rate Loan is
made other than on the last day of the Interest Period for such Loan, as a
result of a payment pursuant to Section 3.03 or acceleration of the maturity of
the Notes pursuant to Section 7.01 or for any other reason, or (ii) the
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73
Borrower gives notice of a Loan conversion pursuant to Section 2.07(c), then the
Borrower shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such
Revolving Loan.
SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during
----------------
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 7.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held (other than deposits at any account with respect to which such
account states that the Borrower is acting in a fiduciary capacity) and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and any Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
--------
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
SECTION 9.06. Binding Effect. This Agreement shall become effective
--------------
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Bank that
such Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent, each Managing Agent, each
Documentation Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
Credit Agreement
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74
SECTION 9.07. Assignments and Participations.
------------------------------
(a) Each Lender may assign to one or more banks or other entities all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Loans owing to it
and the Note or Notes held by it); provided, however, that:
-------- -------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement (other than
any Competitive Bid Loans or Competitive Bid Loan Notes),
(ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment other than an assignment to
another Lender (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $10,000,000
and shall be an integral multiple of $1,000,000 in excess thereof,
(iii) each such assignment shall be to an Eligible Assignee, and
(unless such assignment shall be to a Subsidiary of the assigning Lender or
to a Subsidiary of the bank holding company of which the assigning Lender
is a Subsidiary) the Borrower and the Administrative Agent shall have
consented to such assignment (which consents shall not be unreasonably
withheld or delayed),
(iv) after giving effect to such assignment, the assigning Lender
(together with all Affiliates of such Lender) shall continue to hold no
less than 25% (or, in the case of Citibank, 12.5%) of its original
Commitment hereunder and of the Loans owing to it, unless the Borrower
shall otherwise agree, and
(v) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes
subject to such assignment and a processing and recordation fee of $2,500.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
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75
Lender assignor thereunder shall relinquish its rights and be released from its
obligations under this Agreement, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance.
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, any Managing Agent or Documentation
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred
to in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Revolving Loans
owing to, each Lender from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes,
Credit Agreement
----------------
<PAGE>
76
absent manifest error, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. The Administrative Agent shall
provide the Borrower with a copy of the Register upon request.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Loan Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C-1 hereto, (1) accept such
Assignment and Acceptance, (2) record the information contained therein in the
Register and (3) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Revolving Loan Note or Notes a new Revolving Loan Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and a new Revolving Loan Note to
the order of the assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Revolving Loan Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Revolving Loan Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A-l hereto. Such surrendered Revolving Note or Notes shall be marked
"canceled" and shall be returned promptly to the Borrower.
(e) Each Lender may sell participations to one or more banks or other
entities in or to a portion of its rights and obligations under this Agreement
(including, without limitation, a portion of its Commitment, the Loans owing to
it and the Note or Notes held by it); provided, however, that (i) such Lender's
-------- -------
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (v)
the parties to each such participation shall execute a participation
Credit Agreement
----------------
<PAGE>
77
agreement in substantially the form of the Participation Agreement, and (vi) no
participant under any such participation shall have any right to approve any
amendment to or waiver of any provision of any Loan Document, or any consent to
any departure by the Borrower therefrom, except to the extent that such
amendment, waiver or consent would alter the principal of, or interest on, the
Loan or Loans in which such participant is participating or any fees or other
amounts payable to the Lenders hereunder, or postpone any date fixed for any
payment of principal of, or interest on, the Loans or any fees or other amounts
payable hereunder. Each Lender shall provide the Borrower with a list of
entities party to all Participation Agreements with such Lender upon request.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information, including Confidential Information, relating to
the Borrower furnished to such Lender by or on behalf of the Borrower; provided
--------
that, prior to any such disclosure of Confidential Information, the assignee or
participant or proposed assignee or participant shall be informed of the
confidential nature of such Confidential Information and shall agree to (i)
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender and (ii) be bound by the provisions of
Section 9.10.
(g) Notwithstanding any other provision in this Section 9.07, no
Lender may assign its interest to an Eligible Assignee if, as of the effective
date of such assignment, such assignment would increase the amount of taxes or
increased costs payable under Sections 2.10 or 3.03, respectively.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time and without the consent of the Administrative Agent
or the Borrower create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Loans owing to it and
the Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
(i) Notwithstanding Sections 9.07(a) and (e), Citibank may not
assign, or sell participations in, all or any portion of its rights or
obligations under this Agreement (including, without limitation, all or any
portion of its Commitment, the Loans owing to it or the Note or Notes held by
it) without the
Credit Agreement
----------------
<PAGE>
78
Borrower's prior consent until the date (the "Specified Date") that is the
--------------
earlier of the date on which the initial Loan is made and June 30, 1997.
Although Citibank may assign or sell participations in its rights and
obligations hereunder (to the extent otherwise permitted hereunder) on and as of
the Specified Date, Citibank's obligation hereunder to make the initial Loan in
the full amount of the Commitments shall not in any way be affected by the
occurrence (or failure to occur) of any such assignment or participation,
provided that Citibank's obligation hereunder to fund the initial Loan as
- --------
aforesaid shall be reduced by the amount, if any, of Loans actually timely made
by the other Lenders on the date of the initial Loan. This Section 9.07(i)
shall be of no force and effect at any time after the Specified Date.
SECTION 9.08. Governing Law. This Agreement and the Notes shall be
-------------
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.09. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 9.10. Confidentiality. None of the Administrative Agent, any
---------------
Managing Agent or Documentation Agent or any Lender shall disclose any
Confidential Information to any Person without the consent of the Borrower,
other than (a) to such Person's Affiliates and their officers, directors,
employees, agents, counsel, auditors and advisors of such Person or such
Person's Affiliates, (b) to a proposed assignee or to a proposed participant;
provided that prior to any such disclosure, the proposed assignee or the
- --------
participant shall deliver to the Borrower a written agreement to preserve the
confidentiality of any Confidential Information to the extent required by this
Agreement, and then only on a confidential basis, (c) as required by any law,
rule or regulation or judicial process and (d) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking or
any aspects of any Lender's activities.
Credit Agreement
----------------
<PAGE>
79
SECTION 9.11. Jurisdiction, Etc.
------------------
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents in
the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
SECTION 9.12. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT, THE MANAGING AGENTS AND DOCUMENTATION AGENTS AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOANS OR THE
ACTIONS OF THE ADMINISTRATIVE AGENT, THE MANAGING AGENTS OR DOCUMENTATION AGENTS
OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Credit Agreement
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<PAGE>
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MARRIOTT INTERNATIONAL, INC.
By /s/ Raymond G. Murphy
---------------------------------
Title: Sr. Vice President and
Treasurer
Administrative Agent
--------------------
CITIBANK, N.A.,
as Administrative Agent
By /s/ Stuart Miller
---------------------------------
Title: Vice President
Commitment Banks
- ---------- -----
$400,000,000.00 CITIBANK, N.A.
By /s/ Stuart Miller
---------------------------------
Title: Vice President
$400,000,000.00 Total of the Commitments
Credit Agreement
----------------
<PAGE>
Exhibit 99(c)(1)
ACQUISITION AGREEMENT
by and between
MARRIOTT INTERNATIONAL, INC.
and
RENAISSANCE HOTEL GROUP N.V.
Dated as of February 17, 1997
<PAGE>
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT dated as of February 17, 1997 (this
"Agreement"), by and between Marriott International, Inc., a Delaware
corporation (the "Purchaser") and Renaissance Hotel Group N.V., a company
organized under the laws of The Netherlands with its statutory seat in Amsterdam
(the "Company").
RECITALS
WHEREAS, the Board of Managing Directors of the Company has determined
that the acquisition of the Company by the Purchaser, upon the terms and subject
to the conditions set forth in this Agreement (the "Acquisition"), is fair to,
and in the best interests of, the Company and its stockholders; and
WHEREAS, the Board of Directors of the Purchaser has determined that
the Acquisition is in the best interests of the Purchaser and its stockholders;
and
WHEREAS, the Boards of Directors of the Company and the Purchaser have
each approved and adopted this Agreement and approved the Acquisition and the
other transactions contemplated hereby and recommended, in the case of the
Company, acceptance of the Offer by its stockholders; and
WHEREAS, concurrently with the execution of this Agreement, New World
Hotel Holdings Ltd. ("New World") and Diamant Hotel Investments N.V.
("Diamant"), which are the majority stockholders of the Company, have entered
into a Shareholder Agreement (the "Shareholder Agreement") pursuant to which
such entities have agreed, among other things, to tender all Shares (as defined
below) held by them into the Offer (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I.
THE OFFER
Section 1.1. The Offer. (a) As promptly as practicable following the
---------
execution hereof, the Purchaser shall make a public announcement pursuant to
Rule 14d-2(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and, promptly thereafter, the Purchaser shall commence or shall
cause a wholly-owned subsidiary to commence (within the meaning of Rule 14d-2
under the Exchange Act) an offer (the "Offer") to purchase all of the issued and
outstanding shares of common stock, par value 0.01 Netherlands Guilders per
share, of the Company (referred to herein as either the "Shares" or "Company
Common
2
<PAGE>
Stock") for (i) $30.00 per Share, net of fees and commissions, to the seller in
cash (the "Offer Price"), subject to there being, at the expiration of the
Offer, validly tendered and not withdrawn that number of Shares which represent
at least ninety percent (90%) of the capital stock entitled to vote and then
outstanding (the "Minimum Condition") and to the other conditions set forth in
Section 6.1 hereof. The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
pay for Shares tendered as soon as practicable after it is permitted to do so
under the Exchange Act (the "Closing Date"). The obligations of the Purchaser to
commence the Offer and to accept for payment and to pay for any Shares validly
tendered on or prior to the expiration of the Offer and not withdrawn shall be
subject only to the Minimum Condition and the other conditions set forth in
Section 6.1 hereof. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") containing the Minimum Condition and the other
conditions set forth in Section 6.1 hereof. Without the written consent of the
Company (such consent to be authorized by the Board of Directors of the Company
or a duly authorized committee thereof), the Purchaser shall not (i) decrease
the Offer Price or change the form of consideration payable pursuant to the
Offer (other than as set forth below), (ii) decrease the number of Shares sought
or extend the Offer (other than as set forth below), or (iii) impose any
additional conditions or amend any condition of the Offer in any manner adverse
to the holders of the Shares; provided, however, that if on the scheduled
expiration date of the Offer (as it may be extended), all conditions to the
Offer shall not have been satisfied or waived, the Offer may be extended by the
Purchaser from time to time to permit the satisfaction of such conditions until
termination of this Agreement, without the consent of the Company, to permit
satisfaction of such conditions. In addition, the Purchaser may, without the
consent of the Company, increase the Offer Price and extend the Offer to the
extent required by law.
(b) As soon as practicable on the date the Offer is commenced, the
Purchaser shall file with the United States Securities and Exchange Commission
(the "Commission") a Tender Offer Statement on Schedule 14D-1 with respect to
the Offer (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-1") which will include, as exhibits, the
Offer to Purchase and a form of letter of transmittal and summary advertisement
with respect to the Offer (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Purchaser represents that the
Offer Documents will comply in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder, and all other applicable
federal securities laws and, on the date filed with the Commission and on the
date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Purchaser with respect
to information supplied by the Company for inclusion in the Schedule 14D-1. The
Purchaser further agrees to take all steps necessary to cause the Offer
Documents to be filed with the Commission and to be disseminated to holders of
Shares, in each case as and to the extent required by the Exchange Act and other
applicable federal securities laws. The Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information provided
by it for
3
<PAGE>
use in the Offer Documents if and to the extent that it shall have become false
and misleading in any material respect, and the Purchaser further agrees to take
all steps necessary to cause the Offer Documents, as so corrected, to be filed
with the Commission and to be disseminated to holders of Shares, in each case as
and to the extent required by the Exchange Act or other applicable federal
securities laws. The Company and its counsel shall be given the opportunity to
review and comment on the Offer Documents before they are filed with the
Commission. In addition, the Purchaser agrees to provide the Company and its
counsel in writing any comments the Purchaser or its counsel may receive from
time to time from the Commission or its staff with respect to the Schedule 14D-l
promptly after receipt of such comments.
Section 1.2. Company Stock Options. (a) At the Closing Date, all
---------------------
outstanding options and other rights to acquire shares under any stock option or
purchase plan, program or similar arrangement (each, as amended, an "Option
Plan" and such options and other rights, "Stock Options") of the Company, shall
vest in full and the Purchaser shall pay to the holder of each outstanding Stock
Option an amount equal to the difference between the Offer Price and the
exercise price of each such Stock Option, unless the Purchaser and the pertinent
holder agree otherwise in writing. Such amount shall be paid by the Purchaser in
cash. If and to the extent required by the terms of the Option Plans or the
terms of any Stock Option granted thereunder, the Company shall use its best
efforts to obtain the consent of each holder of outstanding Stock Options to the
foregoing treatment of such Stock Options and to take any other action necessary
to effectuate the foregoing provisions.
(b) Except as provided herein or as otherwise agreed to by the parties
and to the extent permitted by the Option Plans, the Option Plans of the Company
shall terminate as of the Closing Date and any rights under any provisions in
any other plan, program or arrangement providing for the issuance or grant by
the Company of any interest in respect of the capital stock of the Company shall
be canceled as of the Closing Date.
Section 1.3. Company Actions. (a) The Company hereby consents to the
---------------
Offer and represents that its Board of Managing Directors, at a meeting duly
called and held, has unanimously (i) determined that the Offer is fair to and in
the best interests of the Company's stockholders, (ii) approved this Agreement
and the transactions contemplated hereby, including the Offer, and (iii)
resolved to recommend that the stockholders of the Company accept the Offer and
tender their Shares thereunder to the Purchaser. Morgan Stanley & Co.
Incorporated has delivered to the Board of Managing Directors of the Company its
opinion that the Offer Price to be received by the holders of Shares pursuant to
the Offer is fair to such holders from a financial point of view.
(b) Concurrently with the commencement of the Offer, the Company shall
file with the Commission a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule 14D-9") which shall contain the recommendation
referred to in clause (iii) of Section 1.3(a) hereof. The Company represents
that the Schedule 14D-9 will comply in all material respects with the provisions
of the Exchange Act and any other applicable federal securities laws. No
4
<PAGE>
representation is made by the Company with respect to information supplied by
the Purchaser for inclusion in the Schedule 14D-9. The Company further agrees to
take all steps necessary to cause the Schedule 14D-9 to be filed with the
Commission and to be disseminated to holders of Shares, in each case as and to
the extent required by the Exchange Act and any other applicable federal
securities laws. Each of the Company, on the one hand, and the Purchaser, on the
other hand, agrees promptly to correct any information provided by it for use in
the Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
Commission and to be disseminated to holders of the Shares to the extent
required by applicable federal securities laws. The Purchaser and its counsel
shall be given the opportunity to review the Schedule 14D-9 before it is filed
with the Commission. In addition, the Company agrees to provide the Purchaser,
and its counsel in writing with any comments the Company or its counsel may
receive from time to time from the Commission or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
furnish the Purchaser with such information and assistance as the Purchaser or
its agents may reasonably request in communicating the Offer to the stockholders
of the Company. Subject to the requirements of law, and except for such steps as
are necessary to disseminate the Offer Documents, the Purchaser, and each of its
affiliates and associates shall hold in confidence the information contained in
any such labels, lists and files, shall use the information contained in any
such labels, lists and files only in connection with the Offer and, if this
Agreement shall be terminated pursuant to Article VII hereof, shall deliver to
the Company all copies and extracts of such information then in their possession
or under their control.
Section 1.4. Directors. (a) The Company shall, promptly upon the
---------
purchase of and payment for any Shares by the Purchaser or any other subsidiary
of the Purchaser pursuant to the Offer which represent at least a majority of
the outstanding Shares take all actions necessary and available (including, if
requested by Purchaser, calling a General Meeting of holders of Shares) to cause
the Company's Board of Managing Directors to consist solely of persons
designated by Purchaser.
(b) The Company's obligations under Section 1.4(a) shall be subject to
Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder. The
Company shall promptly take all actions required pursuant to such Section 14(f)
and Rule 14f-1 in order to effectuate the changes contemplated by Section
1.4(a), including mailing to stockholders as part of the Schedule 14D-9 the
information required by such Section 14(f) and Rule 14f-1, as is necessary to
enable the Purchaser's designees to be elected to the Company's Board of
Directors. The Purchaser will supply the Company and be solely responsible for
any information with respect to either of them and their nominees, officers,
directors and affiliates
5
<PAGE>
required by such Section 14(f) and Rule 14f-1. The provisions of Section 1.4(a)
are in addition to and shall not limit any rights which the Purchaser or any of
its affiliates may have as a holder or beneficial owner of Shares as a matter of
law with respect to the election of directors or otherwise.
ARTICLE II.
THE COMPULSORY BUY-OUT
Section 2.1. The Compulsory Buy-Out. Subject to the terms and conditions
----------------------
of this Agreement, and in accordance with the provisions of the Dutch Civil Code
(the "DCC"), as soon as practicable after the Closing Date, Purchaser may, at
its sole discretion, take all actions necessary and proper under the DCC to
commence the process leading to a Compulsory Buy-Out (the "Buy-Out") in
accordance with Section 2:92a of the DCC to acquire all the issued and
outstanding Company Common Stock not acquired by Purchaser pursuant to the
Offer. In order to bring Purchaser and/or any of its affiliates in a position
to exercise their rights under Section 2:92a of the DCC, the Company shall
provide Purchaser with such information regarding the Company and take such
actions as are reasonably necessary in order for Purchaser and/or an affiliate
of Purchaser to be in a position to establish the value or price of a share in
the issued capital of the Company for the purposes of the Buy-Out. The Buy-Out
shall become effective in accordance with the applicable provisions of the DCC.
Section 2.2. Statutory Merger. If the Purchaser shall acquire less than
----------------
95% of the outstanding Shares pursuant to the Offer then Purchaser may elect, to
the extent permitted by the DCC, to effectuate a statutory merger (a "Statutory
Merger") involving the Company as a disappearing entity pursuant to Section
2.308 et seq. of the DCC, in which case, to the extent permitted by the DCC, the
merger consideration shall be the same as (or shall provide equivalent value as)
the Offer Price. The Company shall use its best efforts to facilitate such a
Statutory Merger.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
Section 3.1. Organization and Qualification. The Company is a limited
------------------------------
liability company in the form of a "naamloze vennootschap" duly organized and
validly existing under the laws of The Netherlands and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted. The Company is duly
qualified or licensed to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so qualified, licensed or in good standing would not have a material adverse
effect on the business, operations, prospects,
6
<PAGE>
properties, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole ("Company Material Adverse Effect"). The Company
has heretofore delivered to the Purchaser true and complete copies of the
articles of incorporation and other charter or organization documents, each as
amended to date, of the Company.
Section 3.2. Capitalization. (a) The authorized capital stock of the
--------------
Company consists of 100,000,000 shares of Company Common Stock. As of September
30, 1996, (i) 30,100,000 shares of Company Common Stock were issued and
outstanding, (ii) the number of shares of Company Common Stock set forth on
Section 3.2 of the Disclosure Schedule delivered by the Company to the Purchaser
concurrently with the execution of this Agreement (the "Company Disclosure
Schedule"), and identified thereon as "Company Option Shares", were reserved for
future issuance upon exercise of outstanding options to purchase Company Common
Stock ("Company Options"), granted to directors, officers, employees and
consultants of the Company pursuant to the Company's Stock Option Plan (the
"Company Stock Plan"), and (iii) no shares of Company Common Stock were held in
the treasury of the Company. Since such date, no additional shares of capital
stock of the Company have been issued or reserved for issuance (except for
shares of Company Common Stock issued upon exercise of Company Options granted
as aforesaid), and no options or other rights to purchase or otherwise acquire
shares of capital stock of the Company have been issued or granted (other than
the Company Options identified on Section 3.2 of the Company Disclosure Schedule
as having been granted as aforesaid). Except as set forth above in this
paragraph, no shares of capital stock or other equity or voting securities or
equivalents of the Company are issued, reserved for issuance, or outstanding.
All of the outstanding shares of capital stock of the Company are, and all
shares thereof which may be issued upon exercise of Company Options will upon
issuance be, duly authorized, validly issued, fully paid and nonassessable, and
free of any preemptive rights except as provided in the Company's articles of
incorporation.
(b) Except as set forth in Section 3.2 of the Company Disclosure
Schedule, (i) no bonds, debentures, notes or other indebtedness or obligations
of the Company or any of its subsidiaries entitling the holders thereof to have
the right to vote (or which are convertible into, or exercisable or exchangeable
for, securities entitling the holders thereof to have the right to vote) with
the stockholders of the Company or any of its subsidiaries on any matter are
issued, reserved for issuance, or outstanding, (ii) there are no options,
warrants, calls, subscriptions, convertible or exchangeable securities, or other
rights, agreements or commitments of any character obligating the Company or any
of its subsidiaries to grant, issue, transfer or sell, or cause to be granted,
issued, transferred or sold, any shares of capital stock, or any other equity or
voting security or equity or voting interest, of the Company or any of its
subsidiaries or obligating the Company or any of its subsidiaries to grant,
issue, extend or enter into any right, agreement or commitment with respect to
the foregoing, (iii) there are no obligations (absolute, contingent or
otherwise) of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock, or other equity or voting
security or equity or voting interest, of the Company or any of its
subsidiaries, and (iv) other than this Agreement, there are no voting trusts,
proxies or other agreements or understandings to which the Company or any of its
subsidiaries is a party or by
7
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which the Company or any of its subsidiaries is bound with respect to the voting
of any shares of capital stock, or any other equity or voting security or
interest, of the Company or any of its subsidiaries.
Section 3.3. Subsidiaries. (a) Each of the subsidiaries of the Company
------------
whose operations are material to the Company and its subsidiaries taken as a
whole (a "Material Subsidiary") is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each subsidiary of the
Company is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified, licensed or in good
standing would not have a Company Material Adverse Effect.
(b) All of the outstanding shares of capital stock of, or other equity
interests in, each of the Material Subsidiaries are duly authorized and validly
issued and (in the case of shares of capital stock) are fully paid and
nonassessable, and (except as set forth in Section 3.3 of the Company Disclosure
Schedule) all such shares or other equity interests owned directly or indirectly
by the Company are owned free and clear of all liens, security interests,
claims, pledges, rights of first refusal, limitations on voting rights, charges
or other encumbrances of any nature whatsoever.
Section 3.4. Authorization, Validity and Enforceability. The Company has
------------------------------------------
all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Acquisition and the other transactions contemplated hereby to be consummated by
the Company. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the Acquisition and the other
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize the execution,
delivery and performance of this Agreement or the consummation of the
Acquisition or the other transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and except as the
availability of equitable remedies may be limited by the application of general
principles of equity (regardless of whether such equitable principles are
applied in a proceeding at law or in equity).
Section 3.5. No Conflict or Violation. Subject to (i) making the filings
------------------------
and obtaining the approvals identified in Section 3.6 and (ii) obtaining the
material non-governmental consents identified in Section 3.5 of the Company
Disclosure Schedule, the execution and
8
<PAGE>
delivery of this Agreement by the Company do not, and the performance by the
Company of its obligations hereunder and the consummation by the Company of the
Acquisition and the other transactions pursuant hereto will not, (a) conflict
with or violate the articles or certificate of incorporation, bylaws,
partnership agreement or other charter or organization document of the Company
or any of its Material Subsidiaries, (b) conflict with or violate any material
law, statute, rule, regulation, order, judgment, writ, injunction or decree
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets, or (c) result in a violation or breach of or constitute a
default under (or an event which with the giving of notice or the lapse of time
or both would constitute a default under), require any consent, approval or
authorization under, result in the loss of a benefit or result in any provision
becoming applicable or effective under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any of its subsidiaries pursuant to, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any property or
asset of the Company or any of its subsidiaries may be bound or affected, except
in the case of each of clauses (b) and (c) for any such conflicts, violations,
breaches, defaults or other occurrences which would not, individually or in the
aggregate, be reasonably likely to result in a Company Material Adverse Effect
or prevent the Company from performing its obligations under this Agreement in
any material respect.
Section 3.6. Consents and Approvals. The execution and delivery of this
----------------------
Agreement by the Company do not, and the performance by the Company of its
obligations hereunder and the consummation by the Company of the Acquisition and
the other transactions contemplated hereby will not, require the Company to
obtain any consent, approval, authorization or permit of, or to make any filing
with or notification to, any United States, Dutch or foreign national, federal,
state, local or other governmental, judicial or regulatory authority (each, a
"Governmental Entity"), except (a) for (i) applicable requirements, if any, of
the Securities Act, the Exchange Act and state securities or "blue sky" laws
("Blue Sky Laws"), (ii) the pre-merger notification and report requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder (the "HSR Act"), (iii) consents, approvals,
authorizations, orders, permits, filings or registrations related to, or arising
out of, compliance with statutes, rules or regulations regulating the
consumption, sale or serving of alcoholic beverages and (iv) as set forth in
Section 3.6 of the Company Disclosure Schedule and (b) where the failure to
obtain such consents, approvals, authorizations and permits, or to make such
filings or notifications, would not, individually or in the aggregate, prevent
the Company from performing its obligations under this Agreement in any material
respect or from consummating the Acquisition or any other transaction pursuant
hereto, or following the Acquisition constitute a Company Material Adverse
Effect.
Section 3.7. SEC Documents and Financial Statements. (a) The Company has
--------------------------------------
filed all forms, reports, statements and other documents required to be filed by
it with the Commission since September 26, 1995 (such forms, reports, statements
and other documents
9
<PAGE>
are hereinafter referred to as the "Company SEC Documents"). The Company SEC
Documents filed by the Company with the Commission prior to and after the date
of this Agreement (i) complied, or will comply, when filed, in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder, and (ii) did not, or will not,
when filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes or schedules thereto) contained in or incorporated by
reference in the Company SEC Documents filed prior to and after the date of this
Agreement (i) have been or will be prepared in accordance with the published
rules and regulations of the Commission and United States generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited consolidated quarterly statements, as permitted by Form 10-Q
of the Commission) and (ii) fairly present or will fairly present in all
material respects the consolidated financial position of the Company and its
subsidiaries as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company and its subsidiaries for the periods
indicated therein (subject, in the case of unaudited interim financial
statements, to normal recurring year-end audit adjustments).
Section 3.8. No Material Undisclosed Liabilities. Neither the Company nor
-----------------------------------
any of its subsidiaries has any debts, liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on, or disclosed or reserved against in, a consolidated balance
sheet of the Company and its subsidiaries or in the notes thereto, prepared in
accordance with GAAP consistently applied, except for (a) debts, liabilities and
obligations that were so reserved on, or disclosed or reflected in, the
consolidated balance sheet of the Company and its subsidiaries as of December
31, 1996 and the notes thereto, included in the Report on Form 6-K of the
Company for the quarter then ended, or the consolidated balance sheet of the
Company and its subsidiaries as of June 30, 1996 and the notes thereto, included
in the Annual Report on Form 20-F of the Company for the year then ended and (b)
debts, liabilities or obligations arising in the ordinary course of business
since September 30, 1996.
Section 3.9. Absence of Certain Changes. Since December 31, 1996, except
--------------------------
as disclosed in the Company SEC Documents filed with the Commission prior to the
date of this Agreement or as specifically contemplated by this Agreement or as
set forth in Section 3.9 of the Company Disclosure Schedule, (a) the Company and
its Material Subsidiaries have conducted their respective businesses only in the
ordinary course and in a manner consistent with past practice and (b) there has
not been (i) any change, event, occurrence or circumstance in the business,
operations, properties, financial condition or results of operations of the
Company or any of its subsidiaries which, individually or in the aggregate, has
had or is reasonably likely to have a Company Material Adverse Effect (except
for changes, events,
10
<PAGE>
occurrences or circumstances (A) with respect to general economic or industry
conditions or (B) arising as a result of the transactions contemplated hereby),
(ii) any material change by the Company in its accounting methods, principles or
practices, (iii) any declaration, setting aside or payment of any dividend or
distribution or capital return in respect of any capital stock of, or other
equity interest in, the Company or any of its subsidiaries, (iv) any material
revaluation for financial statement purposes by the Company or any of its
subsidiaries of any asset (including, without limitation, any writing down of
the value of any property, investment or asset or writing off of notes or
accounts receivable), (v) other than payment of compensation for services
rendered to the Company or any of its subsidiaries in the ordinary course of
business consistent with past practice or the grant of Company Options as
described in (and in amounts consistent with) Section 3.2 or any transactions
described in Section 3.12 of the Company Disclosure Schedule, any material
transactions between the Company or any of its subsidiaries, on the one hand,
and any (A) officer or director of the Company or any of its subsidiaries, (B)
record or beneficial owner of five percent (5%) or more of the voting securities
of the Company, or (C) affiliate of any such officer, director or beneficial
owner, on the other hand, or (vi) other than pursuant to the terms of the plans,
programs or arrangements specifically referred to in Section 3.12 or in the
ordinary course of business consistent with past practice, any increase in or
establishment of any bonus, insurance, welfare, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other employee
benefit plan, or any other increase in the compensation payable or to become
payable to any employees, officers, directors or consultants of the Company or
any of its subsidiaries, which increase or establishment, individually or in the
aggregate, will result in a material liability.
Section 3.10. Litigation. Except as disclosed in Section 3.10 of the
----------
Company Disclosure Schedule, there is no action, suit, claim, proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries or any properties or assets of the
Company or any of its subsidiaries by or before any court, other Governmental
Entity or arbitrator which (i) could reasonably be expected to have a Company
Material Adverse Effect or (ii) could reasonably be expected to prevent or
substantially delay consummation of the Acquisition or any of the other
transactions contemplated hereby, or otherwise prevent the Company from
performing its obligations under this Agreement in any material respect. Except
as disclosed in the Company SEC Documents filed with the Commission prior to the
date of this Agreement, neither the Company nor any of its subsidiaries nor any
property or asset of the Company or any of its subsidiaries is subject to any
order, writ, injunction, judgment, decree or award which is material or which
could reasonably be expected to prevent or substantially delay consummation of
the Acquisition or any of the other transactions pursuant hereto in any material
respect, or otherwise prevent the Company from performing its obligations under
this Agreement in any material respect.
Section 3.11. Compliance. Except as set forth in Section 3.11 of the
----------
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
in conflict with, or in default or violation of, (a) its respective articles or
certificate of incorporation, bylaws, or
11
<PAGE>
other charter or organization documents, (b) any law, statute, rule, regulation,
order, judgment, writ, injunction or decree applicable to the Company or any of
its subsidiaries or any of their respective properties or assets, the effect of
which conflict, default or violation, either individually or in the aggregate,
would be reasonably likely to have a Company Material Adverse Effect, or (c) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any property or asset of the Company or any of its subsidiaries may be bound or
affected, the effect of which conflict, default or violation, either
individually or in the aggregate, would be reasonably likely to have a Company
Material Adverse Effect. The Company and its subsidiaries hold all material
licenses, permits, approvals and other authorizations of Governmental Entities,
and are in substantial compliance with all applicable laws and governmental
regulations in connection with their businesses as now being conducted.
Section 3.12. Employee Benefit Plans. (a) Section 3.12(a) of the Company
----------------------
Disclosure Schedule sets forth each plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and each other
material agreement, arrangement or commitment which is an employment or
consulting agreement, executive or incentive compensation plan, bonus plan,
deferred compensation agreement, employee pension, profit sharing, savings or
retirement plan, employee stock option or stock purchase plan, group life,
health, or accident insurance or other employee benefit plan, agreement,
arrangement or commitment, including, without limitation, any commitment arising
under the laws of any jurisdiction, severance, holiday, vacation, Christmas or
other bonus plans, currently maintained by the Company or any of its
subsidiaries for the benefit of any present or former employees, officers or
directors of the Company or any of its subsidiaries ("Company Personnel") or
with respect to which the Company or any of its subsidiaries has liability or
makes or has an obligation to make contributions, other than any Foreign Plan
(as defined in Section 3.12(l) (each such plan, agreement, arrangement or
commitment set forth on Section 3.12(a) being hereinafter referred to as a
"Company Employee Plan").
(b) The Company has made available to the Purchaser (i) copies of all
Company Employee Plans or in the case of an unwritten plan, a written
description thereof, (ii) copies of the most recent annual, financial and, if
applicable, actuarial reports and Internal Revenue Service determination letters
relating to such Company Employee Plans and (iii) copies of all summary plan
descriptions relating to such Company Employee Plans and distributed to Company
Personnel.
(c) Except as disclosed in Section 3.12(c) of the Company Disclosure
Schedule, there are no Company Personnel who are entitled to any medical, dental
or life benefits to be paid under any Company Employee Plans after termination
of employment other than as required by Section 601 of ERISA, Section 4980B of
the Code or applicable state law.
(d) Each Company Employee Plan that is an employee welfare benefit plan
under Section 3(1) of ERISA is either (i) funded through an insurance company
contract and is
12
<PAGE>
not a "welfare benefit fund" within the meaning of Section 419 of the Code or
(ii) is unfunded. There is no liability in the nature of a retroactive rate
adjustment or loss-sharing or similar arrangement, with respect to any Company
Employee Plan which is an employee welfare benefit plan, which is reasonably
likely to result in a Company Material Adverse Effect.
(e) All contributions or payments due with respect to any periods prior to
the Closing Date under any Company Employee Plan have been made or appropriate
charges have been made on the financial statements. Except as disclosed in
Section 3.12(e) of the Company Disclosure Schedule, each Company Employee Plan
by its terms and operation is in compliance in all material respects with all
applicable laws (including, but not limited to, ERISA, the Code and the Age
Discrimination in Employment Act of 1967, as amended).
(f) There are no actions, suits or claims pending or, to the knowledge of
the Company, threatened (other than routine noncontested claims for benefits),
against any Company Employee Plan or, to the knowledge of the Company, any
administrator or fiduciary of any such Company Employee Plan, which is
reasonably likely to result in a Company Material Adverse Effect. As to each
Company Employee Plan for which an annual report is required to be filed under
ERISA or the Code, all such filings, including schedules, have been made on a
timely basis and, with respect to the most recent report regarding each such
Company Employee Plan, which is a funded pension benefit plan, liabilities do
not exceed assets, and no material adverse change has occurred with respect to
the financial materials covered thereby.
(g) Except as disclosed in Section 3.12(g) of the Company Disclosure
Schedule:
(x) neither the Company nor any of its subsidiaries (nor any entity that
is treated as a single employer with the Company or any of its subsidiaries
under Section 414(b), (c), (m) or (o) of the Code) maintains, contributes to or
is required to contribute to any plan under which more than one employer makes
contributions (within the meaning of Section 4064(a) of ERISA) or any plan that
is a multiemployer plan within the meaning of Section 3(37) of ERISA;
(y) neither the Company nor any of its subsidiaries (nor any entity that
is or was at the relevant time treated as a single employer with the Company or
any of its subsidiaries under Section 414(b), (c), (m) or (o) of the Code) has
at any time incurred any liability to the Pension Benefit Guaranty Corporation
or otherwise under Title IV of ERISA (other than the payment of premiums none of
which are overdue) which liability has not been satisfied and which can result
in a Company Material Adverse Effect; and
(z) neither the Company nor any of its subsidiaries (nor any entity that
is or was at the relevant time treated as a single employer with the Company or
any of its subsidiaries under Section 414(b), (c), (m) or (o) of the Code) has
at any time incurred liability in connection with an "accumulated funding
deficiency" within the meaning of Section 412 of
13
<PAGE>
the Code, whether or not waived which liability has not been satisfied and which
can result in a Company Material Adverse Effect. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA, for which the 30-day
reporting requirement has not been waived has been required to be filed for any
Company Employee Plan.
(h) The Renaissance Hotels and Resorts 401(k) Plan maintained by the
Company (the "401(k) Plan") has received a favorable determination letter from
the Internal Revenue Service which provides that the 401(k) Plan is qualified
under Sections 401(a) and 401(k) of the Code (the "Company IRS Letter"). To the
knowledge of the Company, nothing has occurred since the date of the most recent
Company IRS Letter to cause such letter to be no longer valid or effective,
except for changes in the law which may be in effect but with respect to which
amendments to such Plan do not have to be adopted on or before the date hereof.
(i) Neither the Company nor any of its subsidiaries (or, to the knowledge
of the Company, any other person, including any fiduciary) has engaged in any
"prohibited transaction" (as defined in Section 4975 of the Code or Section 406
of ERISA), which could subject any of the Company Employee Plans (or their
trusts), the Company, any of its subsidiaries or any person whom the Company or
any of its subsidiaries has an obligation to indemnify, to any material tax or
penalty imposed under Section 4975 of the Code or Section 502 of ERISA.
(j) None of the assets of the Company Employee Plans is invested in any
property constituting employer real property or an employer security within the
meaning of Section 407(d) of ERISA.
(k) Except as disclosed in Section 3.12(k) of the Company Disclosure
Schedule, the events contemplated by this Agreement (either alone or together
with any other event) will not (i) entitle any Company Personnel to severance
pay or other similar payments under any Company Employee Plan, (ii) accelerate
the time of payment or vesting or increase the amount of benefits due under any
Company Employee Plan or compensation to any Company Personnel residing in the
U.S., (iii) result in any payments (including parachute payments) under any
Company Employee Plan becoming due to any Company Personnel, or (iv) terminate
or modify or give a third party a right to terminate or modify the provisions or
terms of any Company Employee Plan. Section 3.12(k) of the Company Disclosure
Schedule sets forth, for each employee of the Company or any of its subsidiaries
that will receive any parachute payment within the meaning of Section 280G of
the Code, a preliminary calculation of the base amount for such employee and of
the amount of each such parachute payment, based upon information currently
known by the Company and assuming all circumstances that could give rise to such
payment occur.
(l) Except as disclosed in Section 3.12(l) of the Company Disclosure
Schedule, each Foreign Plan has been maintained in substantial compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has
14
<PAGE>
been maintained, where required, in good standing with applicable regulatory
authorities. Except as disclosed in Section 3.12(l) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has incurred any
material obligation in connection with the termination or withdrawal from any
Foreign Pension Plan. Except as disclosed in Section 3.12(l) of the Company
Disclosure Schedule, the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan which is funded,
determined as of the end of the most recently ended fiscal year of the Company
on the basis of actuarial assumptions, each of which is reasonable, did not
exceed the current value of the assets of such Foreign Pension Plan, and for
each Foreign Pension Plan which is not funded, the obligations of such Foreign
Pension Plan are properly accrued. For purposes of this Section 3.12, (i)
"Foreign Plan" shall mean any plan, fund or other similar program established or
maintained outside the United States of America by the Company or any of its
subsidiaries primarily for the benefit of employees of the Company or such
subsidiaries residing outside the United States of America and which plan is not
subject to ERISA, or any such plan as to which the Company or any of its
subsidiaries may have any liability, and (ii) "Foreign Pension Plan" shall mean
any Foreign Plan which plan, fund (including, without limitation, any
superannuation fund) or other similar program provides or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, except for any severance payments mandated
by applicable laws, statutes, rules, regulations or orders. Section 3.12(l) of
the Company Disclosure Schedule lists each non-statutory Foreign Plan.
Section 3.13. Labor Matters. Except as set forth in Section 3.13 of the
-------------
Company Disclosure Schedule, neither the Company nor any of its subsidiaries is
a party to any collective bargaining or other labor union contracts applicable
to any person employed by the Company or any of its subsidiaries. There is no
pending or, to the knowledge of the Company, threatened material labor dispute,
strike or work stoppage against the Company or any of its subsidiaries. Neither
the Company nor its subsidiaries, nor their respective representatives or
employees, has committed any material unfair labor practices in connection with
the operation of the respective businesses of the Company or its subsidiaries,
and there is no pending or, to the knowledge of the Company, threatened charge
or complaint against the Company or its subsidiaries by the National Labor
Relations Board or any comparable state or foreign governmental agency which, if
adversely determined, would have a Company Material Adverse Effect. The Company
and its subsidiaries are in compliance in all material respects with all
applicable laws and regulations respecting employment, employment practices,
labor relations, employment discrimination, safety and health, wages, hours and
terms and conditions of employment. There is no pending or, to the knowledge of
the Company, threatened grievance alleging a violation of any collective
bargaining agreement or other labor union contract which, if adversely
determined, would have a Company Material Adverse Effect. To the knowledge of
the Company, the Company and its subsidiaries have complied and are complying in
all material respects with the terms and conditions of any collective bargaining
or other labor union contracts applicable to it or them.
15
<PAGE>
Section 3.14. Tax Matters. (a) For purposes of this Agreement: (i)
-----------
"Taxes" means any taxes, charges, fees, levies, or other assessments imposed by
any U.S. or foreign governmental entity, whether national, state, county, local
or other political subdivision, including, without limitation, all net income,
gross income, sales and use, value added, ad valorem, transfer, gains, profits,
excise, franchise, real and personal property, gross receipt, capital stock,
business and occupation, disability, employment, payroll, license, estimated, or
withholding taxes or charges imposed by any governmental entity, and includes
any interest and penalties on or additions to any such taxes (and includes Taxes
for which the Company and/or any of its subsidiaries, as the case may be, may be
liable in its own right, or as the transferee of the assets of, or as successor
to, any other corporation, association, partnership, joint venture, or other
entity, or under Treasury Regulation Section 1.1502-6 or any similar provision
of foreign, state or local law); and (ii) "Tax Return" means a report, return or
other information required to be supplied to a governmental entity with respect
to Taxes including, where permitted or required, group, combined or consolidated
returns for any group of entities that includes the Company or any of its
subsidiaries.
(b) Except as set forth in Section 3.14(b) of the Company Disclosure
Schedule, the Company and each of its subsidiaries, and any affiliated or
combined group of which the Company or any of its subsidiaries is or was a
member for applicable Tax purposes, have (i) filed all federal income and all
other material Tax Returns required to be filed by applicable law and all such
federal income and other material Tax Returns (A) reflect the liability for
Taxes of the Company and each of its subsidiaries, and (B) were filed on a
timely basis and (ii) within the time and in the manner prescribed by law, paid
(and until the Closing Date will pay within the time and in the manner
prescribed by law) all Taxes that were or are due and payable as set forth in
such Tax Returns.
(c) Each of the Company and, where applicable, the Company's subsidiaries
has established (and until the Closing Date will maintain) on its books and
records reserves adequate to pay all Taxes of the Company or such respective
subsidiary, as the case may be, in accordance with GAAP, which are reflected in
the most recent consolidated financial statements of the Company and its
subsidiaries contained in the Company SEC Documents, as applicable, to the
extent required by GAAP.
(d) Except as disclosed in Section 3.14(d) of the Company Disclosure
Schedule, neither the Company nor any Material Subsidiary thereof has requested
any extension of time within which to file any income, franchise or other
material Tax Return, which Tax Return has not been filed as of the date hereof.
(e) Except as disclosed in Section 3.14(d) of the Company Disclosure
Schedule, neither the Company nor any subsidiary thereof has executed any
outstanding waivers or comparable consents regarding the application of the
statute of limitations with respect to any income, franchise or other material
Taxes or Tax Returns.
16
<PAGE>
(f) Except as disclosed in Section 3.14(f) of the Company Disclosure
Schedule, no deficiency for any Tax which, alone or in the aggregate with any
other deficiency or deficiencies, would exceed $1,000,000, has been proposed,
asserted, or assessed against the Company and/or any subsidiary thereof that has
not been resolved and paid in full or otherwise settled, no audits or other
administrative proceedings are presently in progress or pending or threatened in
writing with regard to any Taxes or Tax Returns of the Company and/or any
subsidiary thereof, and no written claim is currently being made by any
authority in a jurisdiction where any of the Company or any subsidiary thereof,
as the case may be, does not file Tax Returns that it is or may be subject to
Tax in that jurisdiction.
(g) Except as disclosed on Section 3.14(g) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to any
agreement relating to allocating or sharing of the payment of, or liability for,
Taxes.
(h) The Company does not constitute and for the past five years has not
constituted a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.
Section 3.15. Properties. Section 3.15 of the Company Disclosure Schedule
----------
contains a true and complete list (identifying the relevant owners, lessors and
lessees) of all real properties owned or leased by the Company or any of its
subsidiaries. Each of the Company and its subsidiaries has good and marketable
title to all properties, assets and rights of any kind whatsoever (whether real,
personal or mixed, and whether tangible or intangible) owned by it
(collectively, the "Company Assets"), in each case free and clear of any
mortgage, security interest, deed of trust, claim, charge, title defect or other
lien or encumbrance, except (a) as shown on the consolidated balance sheet of
the Company and its subsidiaries dated September 30, 1996 and the notes thereto,
and the consolidated balance sheet of the Company and its subsidiaries dated as
of June 30, 1996 and the notes thereto, each as contained in the Company SEC
Documents, (b) for any mortgage, security interest, deed of trust, claim,
charge, title defect or other lien or encumbrance arising by reason of (i)
taxes, assessments or governmental charges not yet delinquent or which are being
contested in good faith, (ii) deposits to secure public or statutory obligations
in lieu of surety or appeal bonds entered into in the ordinary course of
business, and (iii) operation of law in favor of carriers, warehousemen,
landlords, mechanics, materialmen, laborers, employees or suppliers, incurred in
the ordinary course of business for sums which are not yet delinquent or are
being contested in good faith by negotiations or by appropriate proceedings
which suspend the collection thereof ("Permitted Liens"), or (c) as set forth on
Section 3.15 of the Company Disclosure Schedule. Except as set forth in Section
3.15 of the Company Disclosure Schedule, there are no pending or, to the
knowledge of the Company, threatened condemnation proceedings against or
affecting any material Company Assets, and none of the material Company Assets
is subject to any commitment or other arrangement for its sale to a third party
outside the ordinary course of business.
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Section 3.16. Environmental Matters. Neither the Company nor any of its
---------------------
subsidiaries is the subject of any governmental investigation, and neither the
Company nor any of its subsidiaries has received any notice or claim, nor
entered into any negotiations or agreements with any third party, relating to
any material liability or remedial action or potential material liability or
remedial action under any Environmental Laws (as defined below). There are no
pending or, to the knowledge of the Company, threatened actions, suits, claims
or proceedings against or affecting the Company or any of its subsidiaries or
any of their properties, assets or operations in connection with any such
Environmental Laws. The properties, assets and operations of the Company and its
subsidiaries are in compliance in all material respects with all applicable
United States, Dutch or foreign national, federal, state and local laws, rules
and regulations, orders, decrees, judgments, permits and licenses relating to
public and worker health and safety and to the protection and clean-up of
natural environment and activities or conditions relating thereto, including,
without limitation, those relating to the generation, handling, disposal,
transportation or release of hazardous materials (collectively, "Environmental
Laws"), except as disclosed in the "Phase I" and other reports if any,
identified in Section 3.16 of the Company Disclosure Schedule.
Section 3.17. Material Contracts and Commitments. (a) Section 3.17 of
----------------------------------
the Company Disclosure Schedule contains a true and complete list of all of the
following contracts, agreements and commitments, whether oral or written
("Contracts"), to which the Company or any of its subsidiaries is a party or by
which any of them or any of their material Company Assets are bound, as each
such contract or commitment may have been amended, modified or supplemented:
(i) all Contracts pursuant to which the Company or its
subsidiaries holds a leasehold interest in or otherwise has an
economic interest in one or more hotel facilities;
(ii) all Contracts providing for management of any hotel or hotel
business by the Company or any of its subsidiaries;
(iii) all Contracts granting a franchise or license to utilize a
brand name or other rights of a hotel chain or system, or granting a
license or sublicense of any material trademark, trade name,
copyright, patent, service mark or trade secret, or any rights therein
or application therefor;
(iv) all partnership or joint venture Contracts;
(v) all loan agreements, notes, bonds, debentures, debt
instruments, evidences of indebtedness, debt securities, or other
Contracts relating to any indebtedness of the Company or any of its
subsidiaries in an amount in excess of $1,000,000, or involving the
direct or indirect guaranty or suretyship by the Company or any of its
subsidiaries of any indebtedness in an amount in excess of $1,000,000;
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(vi) all Contracts that, after the date hereof, obligate the
Company or any of its subsidiaries to pay, pledge, or encumber or
restrict assets in an amount in excess of $500,000;
(vii) all Contracts by which the Company has committed to extend
credit in a material amount to third parties; and
(viii) all Contracts that limit or restrict the ability of the
Company or any of its affiliates to compete or otherwise to conduct
business in any material manner or place.
(b) The Company has heretofore made available to the Purchaser true
and complete copies of all of the Contracts required to be set forth in Section
3.17 of the Company Disclosure Schedule. Each such Contract is valid and binding
in accordance with its terms, and is in full force and effect (except as set
forth in Section 3.17 of the Company Disclosure Schedule). Neither the Company
nor any of its subsidiaries is in default in any material respect with respect
to any such Contract, nor (to the knowledge of the Company) does any condition
exist that with notice or lapse of time or both would constitute such a material
default thereunder or permit any other party thereto on terminate such Contract.
To the knowledge of the Company, no other party to any such Contract is in
default in any material respect with respect to any such Contract. Except as set
forth in Section 3.17 of the Company Disclosure Schedule, no party has given any
written or (to the knowledge of the Company) oral notice of termination or
cancellation of any such Contract or that it intends to assert a breach of, or
seek to terminate or cancel, any such Contract, whether as a result of the
transactions contemplated hereby or otherwise. Each Contract identified in
Section 3.17 of the Company Disclosure Schedule in response to any item under
this Section 3.17 shall be deemed incorporated by reference to all other items
in this Section 3.17.
Section 3.18. Intangible Property.
-------------------
(a) The Company has made available to Purchaser a list of the
Intangible Property (as defined below) which is material to the Company and its
subsidiaries in which the Company or any of its subsidiaries has an interest.
Except as set forth on Section 3.18 of the Company Disclosure Schedule, (i) the
Company and its subsidiaries do not use any material Intangible Property by
consent of any other person and do not make any payments to others with respect
thereto; (ii) the Company and its subsidiaries have performed all material
obligations required to be performed by them, and are not in default under any
material contract or arrangement relating to any of the foregoing; and (iii)
neither the Company nor any of its subsidiaries has received any notice to the
effect (or is otherwise aware) that any material Intangible Property or the use
thereof by the Company or any of its subsidiaries conflicts with any rights of
any Person.
(b) Except as set forth on Section 3.18 of the Company Disclosure
Schedule:
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(i) to the best of the Company's knowledge, the Company and its
subsidiaries own and have the right to use, sell, license or dispose of all
Intangible Property primarily used for the conduct of its business as
presently conducted;
(ii) to the best of the Company's knowledge, the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not breach, violate or conflict with
any material Intangible Property, will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of, or in
any material way impair the right of the Company or any of its subsidiaries
to use, sell, license or dispose of or to bring any action for the
infringement of, any material Intangible Property or material portion
thereof;
(iii) to the best of the Company's knowledge, there are no
royalties, honoraria, fees or other payments payable by the Company or any
of its subsidiaries to any person by reason of the ownership, use, license,
sale or disposition of any material Intangible Property; and
(iv) to the best of the Company's knowledge, the conduct of the
business by the Company and its subsidiaries does not violate any license
or agreement with any third party or infringe any Intangible Property of
any other person.
(c) As used herein "Intangible Property" means all intellectual
property rights, including patents, patent applications (pending or otherwise),
computer software, research findings, market and competitive analyses, brand
names, copyrights, service marks, trademarks, tradenames, and all registrations
or applications for registration of any of the foregoing.
Section 3.19. Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of Morgan Stanley & Co. Incorporated to the effect that the
consideration to be received by the stockholders of the Company pursuant to the
Acquisition is fair to such stockholders from a financial point of view.
Section 3.20. Brokers. No broker, finder or investment banker is entitled
-------
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any of its affiliates, other than Morgan Stanley &
Co. Incorporated (the fees and expenses of which shall be paid in full by the
Company). The Company has heretofore furnished to the Purchaser a true and
complete copy of all agreements between the Company and such firm pursuant to
which such firm would be entitled to any payment relating to the Acquisition or
the transactions contemplated hereby.
Section 3.21. Aggregation. The representations and warranties set forth
-----------
in this Article III would in the aggregate be true and correct without regard to
the materiality exceptions or qualifications contained therein except for such
exceptions and qualifications which, in the
20
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aggregate for all such representations and warranties, would not constitute and
would not be reasonably expected to constitute a Company Material Adverse
Effect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as
follows:
Section 4.1. Organization and Qualification. The Purchaser is a
------------------------------
corporation duly organized, validly existing and in good standing under the laws
of Delaware and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted. The Purchaser is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified, licensed or in good standing would not have a material adverse effect
on the business, operations, properties, financial condition or results of
operations of the Purchaser and its subsidiaries, taken as a whole (a "Purchaser
Material Adverse Effect").
Section 4.2. Authorization, Validity and Enforceability. The Purchaser
------------------------------------------
has all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Acquisition and the other transactions contemplated hereby to be consummated by
the Purchaser. The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the Acquisition and the other
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Purchaser and no other corporate
proceedings on the part or the Purchaser are necessary to authorize the
execution, delivery and performance of this Agreement or the consummation of the
Acquisition or the other transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Purchaser and constitutes the legal,
valid and binding obligation of each of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally, and
except as the availability of equitable remedies may be limited by the
application of general principles of equity (regardless of whether such
equitable principles are applied in a proceeding at law or in equity).
Section 4.3. No Conflict or Violation. Subject to making the filings and
------------------------
obtaining the approvals identified in Section 4.4, the execution and delivery of
this Agreement by the Purchaser do not, and the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
Acquisition and the other transactions pursuant hereto will not, (a) conflict
with or violate the certificate of incorporation, by-laws or other charter or
organization document of the Purchaser or any material subsidiary of the
Purchaser, (b)
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conflict with or violate any material law, statute, rule, regulation, order,
judgment, writ, injunction or decree applicable to the Purchaser or any of its
subsidiaries or any of their respective properties or assets, or (c) result in a
violation or breach of or constitute a default under (or an event which with the
giving of notice or the lapse of time or both would constitute a default under),
require any consent, approval or authorization under, result in the loss of a
material benefit or result in any provision becoming applicable or effective
under, or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Purchaser or any of its subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Purchaser or
any of its subsidiaries is a party or by which the Purchaser or any of its
subsidiaries or any material property or asset of the Purchaser or any of its
subsidiaries may be bound or affected, except in the case of each of clauses (b)
and (c) for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, be reasonably
likely to result in a Purchaser Material Adverse Effect or prevent the Purchaser
from performing its obligations under this Agreement in any material respect.
Section 4.4. Consents and Approvals. The execution and delivery of this
----------------------
Agreement by the Purchaser do not, and the performance by the Purchaser of its
obligations hereunder and the consummation by the Purchaser of the transactions
contemplated hereby will not, require the Purchaser to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification
to, any Governmental Entity, except (a) for (i) applicable requirements, if any,
of the Securities Act, the Exchange Act, Blue Sky Laws, and (ii) the pre-merger
notification and report requirements of the HSR Act, (iii) consents, approvals,
authorizations, orders, permits, filings or registrations related to, or arising
out of, compliance with statutes, rules or regulations regulating the
consumption, sale or serving of alcoholic beverages and (iv) as set forth in
Section 4.4 of the Purchaser Disclosure Schedule, and (b) where the failure to
obtain such consents, approvals, authorizations and permits, or to make such
filings or notifications, would not, individually or in the aggregate, prevent
the Purchaser from performing its obligations under this Agreement in any
material respect or from consummating the Acquisition or any other transaction
pursuant hereto.
Section 4.5. Brokers. No broker, finder or investment banker is entitled
-------
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any of its affiliates, other than Salomon Brothers
Inc (the fees and expenses of which shall be paid in full by the Purchaser).
Section 4.6. Financing. The Purchaser has adequate cash resources
---------
available to consummate the Offer.
ARTICLE V.
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<PAGE>
COVENANTS
Section 5.1. Interim Operations. From the date of this Agreement until
------------------
the Closing Date, except as set forth in Section 5.1 of the Company Disclosure
Schedule or as expressly contemplated by any other provision of this Agreement,
unless the Purchaser has consented in writing thereto, the Company shall, and
shall cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary
course of business consistent with past practice;
(b) use all reasonable efforts to preserve intact the business
organizations, goodwill, rights, licenses, permits and franchises of
the Company and its subsidiaries and maintain their existing
relationships with customers, suppliers and other persons having
business dealings with them;
(c) use its commercially reasonable efforts to keep in full
force and effect adequate insurance overages and maintain and keep its
properties and assets in good repair, working order and condition,
normal wear and tear excepted;
(d) not amend or modify its respective articles or certificate
of incorporation, by-laws, partnership agreement or other charter or
organization documents;
(e) not authorize for issuance, issue, sell, grant, deliver,
pledge or encumber or agree or commit to issue, sell, grant, deliver,
pledge or encumber any shares of any class or series of capital stock
of the Company or any of its subsidiaries or any other equity or
voting security or equity or voting interest in the Company or any of
its subsidiaries, any securities convertible into or exercisable or
exchangeable for any such shares, securities or interests, or any
options, warrants, calls, commitments, subscriptions or rights to
purchase or acquire any such shares, securities or interests (other
than issuances of Company Common Stock upon exercise of Company
Options granted prior to the date of this Agreement to directors,
officers, employees and consultants of the Company in accordance with
the Company Stock Plan as currently in effect);
(f) not (A) split, combine or reclassify any shares of its
capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of, or in substitution for,
shares of its capital stock, (B) in solely the case of the Company,
declare, set aside or pay any dividends on, or make other
distributions in respect of, any of the Company's capital stock, or
(C) repurchase, redeem or otherwise acquire, or agree or commit to
repurchase,
23
<PAGE>
redeem or otherwise acquire, any shares of capital stock or other
equity or debt securities or equity interests of the Company or any of
its subsidiaries;
(g) not amend or otherwise modify the terms of any Company
Options or the Company Stock Plan the effect of which shall be to make
such terms more favorable to the holders thereof or persons eligible
for participation therein;
(h) other than regularly scheduled seniority increases in the
ordinary course of business consistent with past practice, not
increase the compensation payable or to become payable to any
directors, officers or employees of the Company or any of its
subsidiaries, or grant any severance or termination pay to, or enter
into any employment or severance agreement with any director or
officer of the Company or any of its subsidiaries, or establish,
adopt, enter into or amend in any material respect or take action to
accelerate any material rights or benefits under any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any director, officer
or employee of the Company of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without
limitation, by merger, consolidation, or acquisition of stock, equity
securities or interests, or assets) any corporation, partnership,
joint venture, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets of any
other person outside the ordinary course of business consistent with
past practice or any interest in any real properties (whether or not
in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed
money (including draw-downs on letters or lines of credit) or issue or
sell any notes, bonds, debentures, debt instruments, evidences of
indebtedness or other debt securities of the Company or any of its
subsidiaries or any options, warrants or rights to purchase or acquire
any of the same, except for (A) renewals of existing bonds and letters
of credit in the ordinary course of business not to exceed $10,000,000
and (B) advances, loans or other indebtedness in the ordinary course
of business consistent with past practice in an aggregate amount not
to exceed $5,000,000;
(k) not sell, lease, license, encumber or otherwise dispose of,
or agree to sell, lease, license, encumber or otherwise dispose of,
any material properties or assets of the Company or any of its
subsidiaries;
24
<PAGE>
(l) not authorize or make any capital expenditures (including by
lease) in excess of $5,000,000 in the aggregate for the Company and
all of its subsidiaries;
(m) not make any material change in any of its accounting or
financial reporting (including Tax accounting and reporting) methods,
principles or practices, except as may be required by GAAP;
(n) not make any material tax election or settle or compromise
any material United States, Dutch or foreign tax liability;
(o) except in the ordinary course of business consistent with
past practice, not amend, modify or terminate any Contract required to
be listed in Section 3.17 of the Company Disclosure Schedule or waive,
release or assign any material rights or claims thereunder;
(p) not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its subsidiaries;
(q) not take any action that would, or would be reasonably
likely to, result in any of the representations and warranties set
forth in this Agreement not being true and correct in any material
respect or any of the conditions set forth in Article VI not being
satisfied; and
(r) not agree or commit in writing or otherwise to do (or, in
the case of clauses (i) through (iii), to do anything inconsistent
with) any of the foregoing.
Section 5.2. No Solicitation. Prior to the Closing Date, the Company
---------------
agrees (a) that neither it nor any of its subsidiaries shall, nor shall it or
any of its subsidiaries authorize or permit their respective officers,
directors, employees, agents and representatives (including, without limitation,
any investment banker, financial advisor, attorney, accountant, consultant or
other advisor, agent, representative or expert retained by or acting on behalf
of it or any of its subsidiaries) (collectively, "Representatives") to, directly
or indirectly, initiate, solicit, negotiate, encourage, or provide confidential
information to facilitate any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to any of its
stockholders) concerning, or that may reasonably be expected to lead to, an
Alternative Transaction (any such proposal or offer being hereinafter referred
to as an "Alternative Transaction Proposal"), and (b) that it will notify the
Purchaser promptly if any such inquiries or proposals are received by, any
information or documents is requested from, or any negotiations or discussions
are sought to be initiated or continued with, the Company or any of its
subsidiaries; provided, however, that (i) nothing contained in this Section 5.2
------------------
shall prohibit the Board of Directors of the Company from, to the extent
applicable, complying with Rule 14e-2 promulgated under the Exchange Act with
regard to an Alternative Transaction Proposal
25
<PAGE>
and (ii) the Company and its subsidiaries and Representatives may furnish
confidential information to and participate in negotiations with a person making
or proposing to make an Alternative Transaction Proposal if (x) the Company's
Board of Directors is advised by one or more of its financial advisors that such
person has the financial wherewithal to consummate an Alternative Transaction,
(ii) the Board of Directors reasonably determines, after receiving advice from
the Company's financial advisor, that such person has proposed an Alternative
Transaction that involves consideration to the Company's stockholders that is
superior to the consideration provided for under this Agreement and (iii) based
upon the advice of counsel to such effect, the Company's Board of Directors
determines in good faith that it is necessary so to furnish information and/or
negotiate in order to comply with its fiduciary duty to stockholders of the
Company. The Company agrees that prior to furnishing any such information to, or
entering into any discussions or negotiations with, any person or entity
concerning an Alternative Transaction Proposal, the Company shall (i) receive
from such person or entity an executed confidentiality agreement in customary
form on terms not less favorable to the Company than the confidentiality
provisions contained in the Confidentiality Agreement dated January, 1997
between the Purchaser and the Company (the "Confidentiality Agreement"),
providing for confidentiality of information furnished by the Company to the
Purchaser and its Representatives in connection with the transactions
contemplated hereby, and (ii) provide written notice to the Purchaser to the
effect that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity. The Company shall provide the
Purchaser with a summary of the terms of any Alternative Transaction Proposal
received by the Company, or its subsidiaries or Representatives. For purposes of
this Agreement, "Alternative Transaction" shall mean any of the following
involving the Company or any of its subsidiaries: (i) any merger, consolidation,
Buy-Out, business combination or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 20% or more
of the assets of the Company and its subsidiaries, determined on a consolidated
basis in accordance with GAAP; (iii) any tender offer, exchange offer or other
offer for 20% or more of the outstanding shares of capital stock of the Company
or the filing of a registration statement under the Securities Act in connection
therewith; (iv) the acquisition by any person or entity of beneficial ownership
or the right to acquire beneficial ownership of, or the formation or existence
of any "group" (as such term is defined under Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder) which beneficially owns,
or has the right to acquire beneficial ownership of, 20% or more of the then
outstanding shares of capital stock of the Company; or (v) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement or commitment to engage in any of the foregoing.
Section 5.3. Access to Information. From the date of this Agreement until
---------------------
the Closing Date, upon reasonable prior notice, the Company shall (and shall
cause each of its subsidiaries to) give the Purchaser and its Representatives
(including lenders to and financing sources for such party) full access, during
normal business hours and at other reasonable times without disruption to the
Company's normal business affairs, to the officers, employees, agents, books,
records, contracts, commitments, properties, offices, hotels and other
facilities of it and its subsidiaries, and shall furnish promptly to the
Purchaser and its Representatives such
26
<PAGE>
financial and operating data and other information concerning the business,
operations, properties, contracts, records and personnel of the Company and its
subsidiaries as the Purchaser may from time to time reasonably request. All
information obtained by the Purchaser pursuant to this Section 5.3 shall be kept
confidential in accordance with the confidentiality provisions of the
Confidentiality Agreement. No representations and warranties or conditions to
the consummation of the Acquisition contained herein or in any certificate or
instrument delivered in connection herewith shall be deemed waived or otherwise
affected by any investigation made by the parties or their respective
Representatives.
Section 5.4. Notice of Certain Matters. The Company shall give prompt
-------------------------
notice to the Purchaser, and the Purchaser shall give prompt notice to the
Company, of (a) the occurrence or non-occurrence of any event which would be
likely to cause (i) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect or (ii) any covenant,
condition or agreement contained in this Agreement not to be complied with or
satisfied in all material respects and (b) any failure of the Company or of the
Purchaser, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder in any material
respect; provided that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 5.5. Further Actions. (a) Each of the parties hereto shall use
---------------
all commercially reasonable good faith efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, and consult and fully cooperate
with and provide reasonable assistance to each other party hereto and their
respective Representatives in order, to consummate and make effective the
Acquisition and the other transactions contemplated by this Agreement as
promptly as practicable hereafter, including, without limitation, (i) using all
commercially reasonable good faith efforts to make all filings, applications,
notifications, reports, submissions and registrations with, and to obtain all
consents, approvals, authorizations or permits of, Governmental Entities or
other persons or entities as are necessary for the consummation of the
Acquisition and the other transactions contemplated hereby (including, without
limitation, pursuant to the HSR Act, the Securities Act, the Exchange Act, Blue
Sky Laws and other applicable laws and regulations in effect in the United
States, The Netherlands or any other jurisdiction), and (ii) taking such actions
and doing such things as any other party hereto may reasonably request in order
to cause any of the conditions to such other party's obligation to consummate
the Acquisition as specified in Article VI of this Agreement to be fully
satisfied. Prior to making any application to or filing with any Governmental
Entity or other person or entity in connection with this Agreement, the Company,
on the one hand, and the Purchaser, on the other hand, shall provide the other
with drafts thereof and afford the other a reasonable opportunity to comment on
such drafts.
(b) Without limiting the generality of the foregoing, each of the
Purchaser and the Company agree to cooperate and use all commercially reasonable
efforts to vigorously contest and resist any action, suit, proceeding or claim,
and to have vacated, lifted, reversed
27
<PAGE>
or overturned any injunction, order, judgment or decree (whether temporary,
preliminary or permanent), that delays, prevents or otherwise restricts the
consummation of the Acquisition or any other transaction contemplated by this
Agreement, and to take any and all actions (including, without limitation, the
disposition of assets, divestiture of businesses, or the withdrawal from doing
business in particular jurisdictions) as may be required by Governmental
Entities as a condition to the granting of any such necessary approvals or as
may be required to avoid, vacate, lift, reverse or overturn any injunction,
order, judgment, decree or regulatory action (provided, however, that in no
event shall any party hereto take, or be required to take, any action that could
reasonably be expected to have a Company Material Adverse Effect or that,
individually or in the aggregate, could reasonably be expected to have a
Purchaser Material Adverse Effect).
(c) The Company shall, and shall cause its respective representatives
to, fully cooperate with the Purchaser and its respective representatives in the
preparation of the Registration Statement, and shall, upon request, furnish the
Purchaser with all information concerning it and its affiliates, directors,
officers and stockholders as the Purchaser may reasonably request in connection
with the preparation of the Registration Statement. Without limiting the
generality of the foregoing, the Company shall notify the Purchaser as promptly
as practicable upon becoming aware of any event or circumstance which should be
described in an amendment of, or a supplement to, the Registration Statement.
Section 5.6. Compulsory Buy-Out. (a) The Company acknowledges that the
------------------
Purchaser may desire to obtain all of the outstanding shares of Company Common
Stock and Company Options pursuant to the consummation of the Offer and the
Acquisition. In order to bring the Purchaser and/or any of its affiliates in a
position to exercise their rights under Section 2:92a of the DCC, the Company
shall at the request of the Purchaser: (i) inform the Purchaser of the fact that
the Purchaser and/or one or more of its affiliates jointly holds 95% or more of
the issued share capital in the Company, as soon as the Company has become aware
of that fact; (ii) provide the Purchaser with extracts from and/or copies of the
shareholders' register of the Company if so required by the Purchaser; and (iii)
provide the Purchaser and/or any auditor instructed by the Purchaser with such
information regarding the Company in order for the Purchaser and/or such auditor
to be in a position to establish the value or price of a share in the issued
capital of the Company for the purposes of proceedings pursuant to Section 2:92a
of the DCC.
(b) The Company further acknowledges that upon expiration of the Offer
and acceptance of the shares of Company Common Stock thereunder, the Purchaser
may from time to time purchase or acquire beneficial ownership of shares of
Company Common Stock in the open market at market prices then prevailing and
such prices may be greater or lower than the consideration offered pursuant to
the Offer.
Section 5.7. Public Announcements. Unless otherwise required by
--------------------
applicable law or stock exchange requirements, at all times prior to the earlier
of the Closing Date or the termination of this Agreement, no party hereto shall
or shall permit any of its subsidiaries to
28
<PAGE>
(and each party shall use its reasonable best efforts to cause its affiliates
and Representatives not to) issue any press release concerning this Agreement,
the Acquisition or any other transaction contemplated hereby, without prior
consultation with the other parties hereto.
Section 5.8. Expenses. Whether or not the Acquisition is consummated,
--------
subject to Section 7.2 hereof, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including, without
limitation, fees and disbursements of Representatives) shall be borne by the
party which incurs such cost or expense; provided, however, that (a) the filing
fee in connection with the filings under the HSR Act required in connection
herewith, and (b) all out-of-pocket costs and expenses related to the printing,
filing and mailing (as applicable) of the Offer Documents, and all Commission
and other regulatory filing fees incurred in connection with the Offer, shall be
borne by the Purchaser.
Section 5.9. Indemnification. (a) From and after the Closing Date, the
---------------
Purchaser shall, and shall cause the Company to, indemnify and hold harmless
each person who is now, or has been at any time prior to the date hereof, an
officer or director of the Company or any of its subsidiaries (the "Indemnified
Parties") against any losses, claims, damages, judgments, settlements,
liabilities, costs or expenses (including without limitation reasonable
attorneys' fees and out-of-pocket expenses) incurred in connection with any
claim, action, suit, proceeding or investigation arising out of or pertaining to
acts or omissions, or alleged acts or omissions, by them in their capacities as
such occurring at or prior to the Closing Date (including, without limitation,
in connection with the Acquisition and the other transactions contemplated by
this Agreement), to the fullest extent that the Company or such subsidiaries
would have been permitted, under applicable law and the articles of
incorporation or by-laws of the Company or the organizational documents of such
subsidiaries each as in effect on the date of this Agreement, to indemnify such
person (and the Purchaser or the Company shall also advance expenses as incurred
to the fullest extent permitted under applicable law upon receipt from the
Indemnified Party to whom expenses are advanced of a written undertaking to
repay such advances). The Purchaser and the Company shall pay all expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing this Section 5.9. If the indemnity provided by this Section 5.9(a) is
not available with respect to any Indemnified Party, then the Purchaser and the
Company, on the one hand, and the Indemnified Party, on the other hand, shall
contribute to the amount payable in such proportion as is appropriate to reflect
relative faults and benefits.
(b) In the event of any such claim, action, suit, proceeding or
investigation, (i) any Indemnified Party wishing to claim indemnification under
this Section 5.9 shall, upon becoming aware of any such claim, action, suit,
proceeding or investigation, promptly notify the Company thereof (provided that
the failure to provide such notice shall not relieve the Purchaser or the
Company of any liability or obligation it may have to such Indemnified Party
under this Section unless such failure materially prejudices the Purchaser or
the Company, (ii) the Purchaser or the Company shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which counsel shall be
reasonably acceptable to the Purchaser and the Company, (iii) the Purchaser and
the Company shall cooperate in the defense of any such
29
<PAGE>
matter; provided, however, that neither the Purchaser nor the Company shall be
liable for any settlement effected without its prior written consent (not to be
unreasonably withheld); and provided, further, that neither the Purchaser nor
the Company shall be liable under this Section 5.9 for the fees and expenses of
more than one counsel for all Indemnified Parties in any single claim, action,
suit, proceeding or investigation, except to the extent that, in the opinion of
counsel for the Indemnified Parties, two or more of such Indemnified Parties
have conflicting interests in the outcome of such claim, action, suit,
proceeding or investigation such that additional counsel is required to be
retained by such Indemnified Parties under applicable standards of professional
conduct.
(c) From and after the Closing Date until the sixth anniversary
thereof, the Purchaser shall cause the Company to maintain, without any gaps or
lapses in coverage, directors' and officers' liability insurance covering the
Indemnified Parties who are covered, in their capacities as directors and
officers of the Company, by the existing directors' and officers' liability
insurance of the Company in force on the date of this Agreement, with respect to
losses or claims arising out of acts or omissions, or alleged acts or omissions,
by them in their capacities as such occurring at or prior to the Closing Date,
and upon terms no less favorable to the Indemnified Parties than such existing
directors' and officers' liability insurance; provided, however, that the
Company shall not be required in order to maintain or procure such coverage to
pay an annual premium in excess of 150% of the current annual premium paid by
the Company for its existing coverage, and that if equivalent coverage cannot be
obtained, or can be obtained only by paying an annual premium in excess of such
limit, the Company shall only be required to obtain as much coverage as can be
obtained by paying an annual premium equal to such limit.
(d) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified Parties and their respective heirs and
legal representatives.
Section 5.10. Employee Benefit Matters. (a) The Purchaser acknowledges
------------------------
that the Company is bound by the Employee Severance Plans applicable to
employees of the Company, and Purchaser agrees to cause the Company to perform
the terms thereof.
(b) Before the Closing Date, the Company shall, or shall cause one of
its Subsidiaries to take such action as is necessary to avoid the requirement
under the Renaissance Hotels Executive Supplemental 401(k) Plan and Renaissance
Hotels Deferred Incentive Plan (together, the "Plans") that, upon a change in
control of the Company or one of its Subsidiaries, the liabilities under the
Plans be funded through an irrevocable trust. Effective as of the Closing Date,
the Purchaser shall assume the Company's and any of the Company's Subsidiaries
liabilities and obligations under the Plans, except for the obligation to
establish an irrevocable trust to fund the liabilities. The Company and the
Purchaser agree that employees of the Company or any of its Subsidiaries who
participate in the Plans shall be fully vested in their accrued benefits under
the Plans as of the Closing Date. The Purchaser shall use its best efforts to
ensure that the intended timing of distributions under the Plans and the
intended tax consequences to participants in the Plans shall be maintained on
and after the Closing Date,
30
<PAGE>
except to the extent modified by written agreement between the Purchaser and
such participants.
ARTICLE VI.
CONDITIONS TO THE OFFER
Section 6.1. Conditions to the Offer. (a) Notwithstanding any other
-----------------------
provisions of the Offer, Purchaser shall not be required to accept for payment
or, subject to any applicable rules and regulations of the Commission including
Rule 14e-l(c) under the Exchange Act (relating to Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restrictions referred to above, the payment for, any tendered Shares, and may
amend the Offer consistent with the terms of this Agreement or terminate the
Offer if (i) any applicable waiting period under the HSR Act has not expired or
terminated prior to the expiration of the Offer, (ii) the Minimum Condition has
not been satisfied, or (iii) at any time on or after February 17, 1997 and at or
before the time of acceptance of Shares for payment pursuant to the Offer, any
of the following events shall occur:
(A) from the date of this Agreement until the Closing Date,
there shall have occurred any change, event, occurrence or
circumstance in the business, operations, properties, financial
condition or results of operations of the Company or any of its
subsidiaries which, individually or in the aggregate, has had or
is reasonably likely to have a Company Material Adverse Effect
(except for changes, events, occurrences or circumstances with
respect to general economic or industry conditions);
(B) any Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which (1) makes the acceptance
for payment of, or the payment for, some or all of the Shares
illegal or otherwise prohibits or restricts consummation of the
Offer, (2) imposes material limitations on the ability of the
Purchaser to acquire or hold or to exercise any rights of
ownership of the Shares, or effectively to manage or control the
Company and its business, assets and properties or (3) has had or
is reasonably likely to have a Company Material Adverse Effect;
provided, however, that the parties shall use all commercially
-----------------
reasonable efforts (subject to the proviso in Section 5.5(b)) to
cause any such decree, judgment or other order to be vacated or
lifted;
(C) the representations and warranties of the Company set
forth in this Agreement shall not (i) have been true and correct
in any material respect on the date hereof or (ii) be true and
correct in any respect as of the scheduled
31
<PAGE>
expiration date (as such date may be extended) of the Offer as
though made on or as of such date or the Company shall have
breached or failed in any respect to perform or comply with any
material obligation, agreement or covenant required by this
Agreement to be performed or complied with by it except, in each
case with respect to clause (ii), (x) for changes specifically
permitted by this Agreement and (y) (A) for those representations
and warranties that address matters only as of a particular date
which are true and correct as of such date or (B) where the
failure of representations and warranties (without regard to
materiality qualifications therein contained) to be true and
correct, or the performance or compliance with such obligations,
agreements or covenants, would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect;
(D) this Agreement shall have been terminated in accordance
with its terms;
(E) it shall have been publicly disclosed or Purchaser shall
have learned that any person, entity or "group" (as that term is
defined in Section 13(d)(3) of the Exchange Act), other than
Purchaser or its affiliates, shall have acquired beneficial
ownership (as determined pursuant to Rule 13d-3 of the Exchange
Act) of 20% or more of the Shares, or shall have entered into a
definitive agreement with the Company with respect to a tender
offer or exchange offer for any Shares or merger, consolidation or
other business combination with or involving the Company or any of
its subsidiaries;
(F) the Board of Managing Directors of the Company shall have
withdrawn or modified in a manner adverse to Purchaser its
approval or recommendation of the Offer, shall have recommended to
the Company's shareholders another offer or shall have adopted any
resolution to effect any of the foregoing;
(G) any of the consents, approvals, authorizations, orders or
permits required to be obtained by the Company, the Purchaser, or
their respective subsidiaries in connection with the Acquisition
from, or filings or registrations required to be made by any of
the same prior to the Closing Date with, any Governmental Entity
in connection with the execution, delivery and performance of this
Agreement shall not have been obtained or made or shall have been
obtained or made subject to conditions or requirements, except (i)
where the failure to have obtained or made any such consent,
approval, authorization, order, permit, filing or registration or
such conditions or requirements could not reasonably be expected
to (1) have a Company Material Adverse Effect or a Purchaser
Material Adverse Effect or (2) impose material limitations on the
ability of the Purchaser to acquire or hold or to exercise any
rights of ownership of the Shares, or effectively to manage or
control the
32
<PAGE>
Company and its business, assets and properties and (ii) for any
such consent, approval, authorization, order, permit, filing or
registration related to, or arising out of, compliance with
statutes, rules or regulations regulating the consumption, sale or
serving of alcoholic beverages; or
(H) there shall have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on the
New York Stock Exchange, Inc., (2) the declaration of a banking
moratorium or any suspension of payments in respect of banks in
the United States (whether or not mandatory), (3) the commencement
of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States and
having had or being reasonably likely to have a Company Material
Adverse Effect or materially adversely affecting (or materially
delaying) the consummation of the Offer, (4) any limitation or
proposed limitation (whether or not mandatory) by any United
States or Dutch governmental authority or agency, or any other
event, that materially adversely affects generally the extension
of credit by banks or other financial institutions, (5) from the
date of this Agreement through the date of termination or
expiration of the Offer, a decline of at least 25% in the Standard
& Poor's 500 Index or (6) in the case of any of the situations
described in clauses (1) through (5) inclusive, existing at the
date of the commencement of the Offer, a material acceleration,
escalation or worsening thereof;
which, in the reasonable judgment of Purchaser, in any such case, and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment or payments.
(b) The conditions set forth in Section 6.1(a) are for the sole
benefit of Purchaser and may be asserted by Purchaser regardless of any
circumstances giving rise to any condition and may be waived by Purchaser, in
whole or in part at any time and from time to time in the sole discretion of
Purchaser. The failure by Purchaser (or any affiliate of Purchaser) at any time
to exercise any of the foregoing rights will not be deemed a waiver of any right
and each right will be deemed an ongoing right which may be asserted at any time
and from time to time.
ARTICLE VII.
TERMINATION
Section 7.1. Termination. This Agreement may be terminated and the Offer
-----------
and the Acquisition may be abandoned at any time prior to the Closing Date:
(a) by mutual consent of the Purchaser and the Company; or
33
<PAGE>
(b) by action of the Board of Directors of either the Purchaser or
the Company if:
(i) (x) the Closing Date shall not have occurred on or
before June 30, 1997 (provided that the right to terminate this
Agreement under this clause (i) shall not be available to any
party whose breach of any representation or warranty or failure to
fulfill any covenant or agreement under this Agreement has been
the cause of or resulted in the failure of the Acquisition to
occur on or before such date); or (y) the Offer shall have expired
or been terminated and the Purchaser shall not have purchased any
shares of Company Common Stock pursuant to the Offer unless, in
the case of termination by the Purchaser, the Purchaser's
obligation to purchase shares of Company Common Stock pursuant to
the Offer shall not have been satisfied by reason of any failure
of the Purchaser to fulfill its obligations hereunder; or
(ii) a United States federal or state or Dutch court of
competent jurisdiction or United States federal or state or Dutch
governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and non-
appealable (provided, that the party seeking to terminate this
Agreement pursuant to this clause (ii) shall have used all
commercially reasonable efforts (subject to the provisions of
Section 5.5.(b)) to remove such injunction, order or decree); or
(c) by action of the Board of Managing Directors of the Company on
five days' prior written notice to Purchaser if the Board of Managing
Directors of the Company withdraws its approval or recommendation of the
Offer, the Acquisition or this Agreement, by reason of an Alternative
Transaction Proposal, and the Company pays to the Purchaser the fee
provided in Section 7.2; or
(d) by action of the Board of Directors of the Purchaser, if the
Board of Managing Directors of the Company shall not have issued, or shall
have withdrawn or modified (including by amendment of the Schedule 14D-9)
in a manner materially adverse to the Purchaser, its approval or
recommendation of the Offer, the Acquisition or this Agreement or shall
have recommended an Alternative Transaction Proposal to the stockholders
of the Company, or shall have adopted any resolution to effect any of the
foregoing.
Section 7.2. Effect of Termination. (a) In the event that any person
---------------------
shall have made an Alternative Transaction Proposal for the Company and this
Agreement is terminated by either party, or in the event that this Agreement is
otherwise terminated under Section 7.1(d) pay the Purchaser a fee of $27,500,000
and, notwithstanding Section 5.8, reimburse the Purchaser for its documented
out-of-pocket expenses in connection with the transactions
34
<PAGE>
contemplated hereby not exceeding $1,000,000, which amount shall be payable by
wire transfer of same day funds prior to or upon termination of this Agreement.
The Company acknowledges that the agreements contained in this Section 7.2(a)
are an integral part of the transactions contemplated in this Agreement, and
that, without these agreements, the Purchaser would not enter into this
Agreement.
(b) In the event of the termination of this Agreement and the
abandonment of the Acquisition pursuant to this Article VII, all future
obligations and liabilities of the parties hereto shall terminate, except the
obligations of the parties pursuant to this Section 7.2.
Section 7.3. Extension; Waiver. At any time prior to the Closing Date, any
-----------------
party hereto, by action taken by its Board of Directors, may, to the extent
locally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by or on behalf of the party or parties to be bound
thereby.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Nonsurvival of Representations, Warranties and Agreements.
---------------------------------------------------------
All representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to the extent
expressly provided herein to be conditions to the Acquisition and shall not
survive the Acquisition and thereafter neither the Purchaser, the Company, nor
any affiliate, officer, director, employee or shareholder shall have any
liability with respect thereto; provided, however, that the agreements contained
in Articles I and II and Section 5.9, this Article VIII, the Shareholder
Agreement, and any other covenant or agreement which contemplates performance
after the Closing Date shall survive the Acquisition.
Section 8.2. Notices. Any notice required to be given hereunder shall be
-------
sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
35
<PAGE>
(a) if to the Purchaser, to
Marriott International, Inc.
10400 Fernwood Road
Bethesda, Maryland 20857
Attention: General Counsel, Dept. 52/923
Telecopier: (301) 380-6727
with a copy to:
O'Melveny & Myers LLP
555 13th Street, Suite 500 W
Washington, D.C. 20004
Attention: Jeffrey J. Rosen, Esq.
Telecopier: (202) 383-5414
(b) if to the Company, to
Renaissance Hotel Group N.V.
c/o Renaissance Hotels International
29800 Bainbridge Road
Solon, Ohio 66139
Attention: Robert W. Olesen
Telecopier: (216) 498-0750
with a copy to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attention: Stephan H. Haimo, Esq.
Telecopier: (212) 806-6006
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated or personally delivered or on the fifth business day after
being deposited in the United States mail, if mailed.
Section 8.3. Certain Definitions. The following terms shall, when used in
-------------------
this Agreement, have the following respective meanings:
(a) "affiliate" shall have the meaning assigned to such term in
Section 12(b)-2 of the Exchange Act.
36
<PAGE>
(b) "business day" shall have the meaning set forth in Rule 14d-
l(c)(6) under the Exchange Act.
(c) "person" means any natural person, corporation, limited
liability company, partnership, unincorporated organization, government or
department or agency thereof, or other legal entity.
(d) "subsidiary" of any person means any corporation, partnership,
joint venture or other organization, whether incorporated or unincorporated, of
which such person directly or indirectly owns or controls at least 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization, or any
partnership or other organization of which such person directly or indirectly
owns a 50% or greater equity interest.
Section 8.4. Assignment; Binding Effect. Neither this Agreement nor any
--------------------------
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, provided, however, that Purchaser may
-----------------
assign its rights and delegate its obligations hereunder to a wholly-owned
subsidiary of the Purchaser and further provided that such assignment and
delegation shall not relieve Purchaser of its obligations hereunder. Subject to
the preceding sentence, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, except for
the provisions of Section 8.6 nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 8.5. Entire Agreement. This Agreement (including the Company
----------------
Disclosure Schedule), and any documents delivered by the parties in connection
herewith constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.
Section 8.6. Amendment. This Agreement may be amended by the parties
---------
hereto, by action taken by their respective Boards of Directors, at any time by
an instrument in writing signed on behalf of each of the parties hereto. After
the Closing Date, none of the Sections or Articles specified in Section 8.1 may
be amended.
Section 8.7. Waivers. Except as provided in this Agreement, no action
-------
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement.
37
<PAGE>
The waiver by any party hereto of a breach of any provision hereunder shall not
operate or be construed as a waiver of any prior or subsequent breach of the
same or any other provision hereunder.
Section 8.8. Severability. Any term or provision of this Agreement which
------------
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 8.9. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without regard to
its rules of conflict of laws. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America located in the
State of New York (the "New York Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in the New York Courts),
waives any objection to the laying of venue of any such litigation in the New
York Courts and agrees not to plead or claim in any New York Court that such
litigation brought therein has been brought in an inconvenient forum.
Section 8.10. Enforcement of Agreement. The parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any New York Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 8.11. Incorporation of Exhibits. The Company Disclosure Schedule
-------------------------
is hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein. Inclusion of information in the Company Disclosure
Schedule does not constitute an admission or acknowledgment of the materiality
of such information.
Section 8.12. Interpretation. In this Agreement, unless the context
--------------
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders.
Section 8.13. Headings. The headings of the Articles and Sections of this
--------
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
38
<PAGE>
Section 8.14. Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all which counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
MARRIOTT INTERNATIONAL, INC.
By: /s/ Arne Sorenson
-----------------------------------
Name: Arne Sorenson
Title: Senior Vice President
RENAISSANCE HOTEL GROUP N.V.
By: /s/ Henry Cheng Kar-Shun
-----------------------------------
Name: Henry Cheng Kar-Shun
Title: Managing Director
39
<PAGE>
Exhibit 99(c)(2)
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") dated as of February 17,
1997 is by and among Marriott International, Inc., a Delaware corporation
("PARENT"), and Diamant Hotel Investments N.V., a Netherlands Antilles
corporation ("SHAREHOLDER").
W I T N E S S E T H:
-------------------
WHEREAS, simultaneously with the execution of this Agreement, Parent
and Renaissance Hotel Group N.V., a Netherlands corporation (the "COMPANY"),
have entered into an Acquisition Agreement (as such Acquisition Agreement may
hereafter be amended from time to time, the "ACQUISITION AGREEMENT"), pursuant
to which Parent has agreed, among other things, to commence a cash tender offer
(as such tender offer may hereafter be amended from time to time, the "OFFER")
to purchase all shares of common stock of the Company (the "COMPANY COMMON
STOCK");
WHEREAS, as of the date hereof, Shareholder is the record and
beneficial owner of, and has the sole right to vote and dispose of, 16,368,000
shares of Company Common Stock;
WHEREAS, as an inducement and a condition to its entering into the
Acquisition Agreement and incurring the obligations set forth therein, including
the Offer, Parent has required that Shareholder enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained herein
and in the Acquisition Agreement, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Certain Definitions. Capitalized terms used and not defined
-------------------
herein have the respective meanings ascribed to them in the Acquisition
Agreement. In addition, for purposes of this Agreement:
"AFFILIATE" means, with respect to any specified Person, any Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified. For
purposes of this Agreement, with respect to Shareholder, "AFFILIATE" shall not
include the Company and the Persons that directly, or indirectly through one or
more intermediaries, are controlled by the Company.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities means having "BENEFICIAL OWNERSHIP" of such securities (as determined
pursuant to Rule
1
<PAGE>
13d-3 under the Exchange Act), including pursuant to any agreement, arrangement
or understanding, whether or not in writing.
"OWNED SHARES" means the shares of Company Common Stock owned by
Shareholder on the date hereof, together with any other shares of Company Common
Stock, or any other securities of the Company entitled, or which may be
entitled, to vote generally in the election of directors and any securities
convertible into or exercisable or exchangeable for such securities (whether or
not subject to contingencies with respect to any matter or proposal submitted
for the vote or consent of shareholders of the Company) now or hereafter
Beneficially Owned by Shareholder.
"PERSON" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
"TRANSFER" means, with respect to a security, the sale, transfer,
pledge, hypothecation, encumbrance, assignment or disposition of such security
or the Beneficial Ownership thereof, the offer to make such a sale, transfer or
other disposition, and each option, agreement, arrangement or understanding,
whether or not in writing, to effect any of the foregoing. As a verb,
"TRANSFER" shall have a correlative meaning.
2. Tender of Shares. Shareholder hereby agrees to tender (or to
----------------
cause the record owner thereof to tender), pursuant to and in accordance with
the terms of the Offer, all Owned Shares. Shareholder hereby acknowledges and
agrees that Parent's obligation to accept for payment and pay for shares of
Company Common Stock in the Offer, including any Owned Shares tendered by
Shareholder, is subject to the terms and conditions of the Offer. The parties
agree that Shareholder will, for all Owned Shares tendered by Shareholder in the
offer and accepted for payment and paid for by Parent, receive the same per
share consideration paid to other shareholders who have tendered into the Offer.
3. Voting of Owned Shares. Shareholder hereby agrees that during
----------------------
the period commencing on the date hereof and continuing until the earlier of
(x) the consummation of the Offer and (y) termination of the Option Period (as
hereinafter defined) (such period being referred to as the "VOTING PERIOD"), at
any meeting (whether annual or special, and whether or not an adjourned or
postponed meeting) of the Company's shareholders, however called, or in
connection with any written consent of the Company's shareholders, subject to
the absence of a preliminary or permanent injunction or other final order by any
United States federal, state or foreign court barring such action, Shareholder
shall vote (or cause to be voted) all Owned Shares: (i) in favor of the Offer,
the execution and delivery by the Company of the Acquisition Agreement and the
approval and acceptance of the Offer and the terms thereof and each of the other
actions contemplated by the Acquisition Agreement and this Agreement and any
actions required in furtherance thereof and hereof; (ii) against any action or
agreement that would (A) result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the
Acquisition
2
<PAGE>
Agreement or of Shareholder under this Agreement or (B) impede, interfere with,
delay, postpone, or adversely affect the Offer or the transactions contemplated
thereby or hereby; and (iii) except as otherwise agreed to in writing in advance
by Parent, against the following actions (other than the Offer and the
transactions contemplated by the Acquisition Agreement and this Agreement): (A)
any extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or any of its subsidiaries
(including any Alternative Transaction); (B) any sale, lease or transfer of a
substantial portion of the assets or business of the Company or its
subsidiaries, or reorganization, restructuring, recapitalization, special
dividend, dissolution or liquidation of the Company or its subsidiaries; or (C)
any change in the present capitalization of the Company including any proposal
to sell any equity interest in the Company or any of its subsidiaries.
Shareholder shall not enter into any agreement, arrangement or understanding
with any Person the effect of which would be inconsistent or violative of the
provisions and agreements contained in this Section 3.
4. Restrictions on Transfer, Proxies; No Solicitation.
--------------------------------------------------
(a) Shareholder shall not, until the termination of the Option Period,
directly or indirectly: (i) except as provided in Sections 2 and 5
hereof, Transfer (including the Transfer of any securities of an Affiliate which
is the record holder of Owned Shares if, as the result of such Transfer, such
Person would cease to be an Affiliate of Shareholder) to any Person any or all
Owned Shares; (ii) grant any proxies or powers of attorney, deposit any Owned
Shares into a voting trust or enter into a voting agreement, understanding or
arrangement with respect to such Owned Shares; or (iii) take any action that
would make any representation or warranty of Shareholder contained herein untrue
or incorrect or would result in a breach by Shareholder of its obligations under
this Agreement or a breach by the Company of its obligations under the
Acquisition Agreement.
(b) Until the termination of the Option Period, Shareholder shall
not, and shall cause its Representatives not to, directly or indirectly,
(i) initiate, solicit or encourage, or take any action to facilitate the making
of, any offer or proposal which constitutes or is reasonably likely to lead to
any Alternative Transaction or any inquiry with respect thereto, or (ii) in the
event of an unsolicited Alternative Transaction Proposal, engage in negotiations
or discussions with, or provide any information or data to, any Person (other
than Parent, any of its Affiliates or representatives) relating to any
Alternative Transaction. Shareholder agrees to notify Parent orally and in
writing of any such offers, proposals, inquires relating to the purchase or
acquisition by any Person of any Owned Shares (including without limitation the
terms and conditions thereof and the identity of the Person making it), within
24 hours of the receipt thereof. Shareholder shall, and shall cause its
Representatives to, immediately cease and cause to be terminated all existing
activities, discussions and negotiations, if any, with any parties conducted
heretofore with respect to any Alternative Transaction relating to the Company,
other than discussions or negotiations with Parent and its Affiliates.
(c) During the Voting Period, Shareholder will not, directly or
indirectly, make any public comment, statement or communication, or take any
action
3
<PAGE>
that would otherwise require any public disclosure by Shareholder, Parent or any
other Person, concerning the Offer and the other transactions contemplated by
the Acquisition Agreement and this Agreement except for any disclosure
(i) concerning the status of Shareholder as a party to such agreements, the
terms thereof, and its beneficial ownership of Shares required pursuant to
Section 13(d) of the Exchange Act or (ii) required in the Schedule 14D-9 or
otherwise by applicable law.
5. The Option.
----------
(a) Grant of Option. Shareholder hereby grants to Parent an exclusive
----------------
and irrevocable option (the "OPTION") to purchase, during the period and subject
to the conditions set forth in this Section 5, all Owned Shares at the exercise
price specified in Section 5(b) hereof.
(b) Exercise Price. The exercise price for each Owned Share (the "PER
--------------
SHARE EXERCISE PRICE") with respect to which the Option is exercised shall be
$30.00.
(c) Exercise of Option. The Option may be exercised by Parent or any
------------------
holder of the Option at any time during the period (the "OPTION PERIOD"), from
and after the occurrence of a Trigger Event (as defined below) and prior to the
six-month anniversary of such Trigger Event by sending a written notice (a
"NOTICE OF EXERCISE") to Shareholder at the address specified for notice
pursuant to Section 12(f), specifying (i) the location (which shall be in
Washington, D.C.), date and time for the closing (the "CLOSING") of such
purchase (which date shall be no later than 60 business days and no earlier than
two business days after the date such notice is given, and in no event earlier
than the date on or by which the condition specified in Section 5(e)(i) has been
satisfied or waived) and (ii) the Per Share Exercise Price. Parent shall have
the right to revoke or cancel a Notice of Exercise or to postpone the Closing at
any time prior to such Closing, and no such revocation, cancellation or
postponement shall cause the Option to terminate or become unenforceable, and
Parent's rights under this Agreement shall remain in full force and effect.
"TRIGGER EVENT" means any termination of the Acquisition Agreement (x) under
Section 7.1(c) or (d) of the Acquisition Agreement, or (y) so long as Parent
shall not have materially breached the Acquisition Agreement or this Agreement,
under Section 7.1(b)(i)(y) of the Acquisition Agreement if at the expiration or
termination of the Offer there is pending or outstanding an Alternative
Transaction Proposal.
(d) Closing. At the Closing, Parent shall deliver to Shareholder
-------
(x) the Per Share Exercise Price multiplied by (y) the number of Owned Shares,
and Shareholder shall deliver to Parent certificates representing all Owned
Shares free and clear of all liens, claims, charges, encumbrances, rights or
interests of any kind or nature whatsoever, duly endorsed for transfer or
accompanied by stock powers duly executed in blank, and any other documents
necessary to effectuate and evidence the transfer.
4
<PAGE>
(e) Conditions to Closing. The obligations of Parent to proceed with
---------------------
any Closing shall be subject to the satisfaction or waiver by Parent of the
following conditions prior to such Closing:
(i) any waiting period(s) under any applicable laws shall have
expired or been terminated and any required governmental approvals shall
have been obtained; and
(ii) no order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction shall have been enacted, entered, issued,
promulgated or enforced by any court or governmental authority, subsequent
to the date of this Agreement, which prohibits or restricts any of the
transactions contemplated by this Agreement or the Acquisition Agreement.
6. [Intentionally Omitted]
7. Non-Solicitation. For a period of one year from the date hereof,
----------------
neither Shareholder nor any of its Representatives or Affiliates shall solicit
for hire any employees of Parent, or any of its subsidiaries with whom
Shareholder or its Representatives have had contact in connection with this
Agreement and the Acquisition Agreement or any employees of the Company or its
subsidiaries.
8. Representations and Warranties of Shareholder. Shareholder hereby
---------------------------------------------
represents, warrants and covenants to Parent as follows:
(a) Shareholder is a corporation duly organized and validly existing
under the laws of the Netherlands Antilles. Shareholder has all necessary power
and authority to execute and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by Shareholder of this Agreement and the
performance by Shareholder of its obligations hereunder have been duly and
validly authorized by all requisite corporate action on the part of Shareholder,
and no other proceedings or actions on the part of Shareholder are necessary to
authorize the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
(b) This Agreement has been duly and validly executed and delivered by
Shareholder and constitutes the valid and binding agreement of Shareholder,
enforceable against Shareholder in accordance with its terms except (i) to the
extent limited by applicable bankruptcy, insolvency or similar laws affecting
creditors rights and (ii) the remedy of specified performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(c) Shareholder is the sole record holder and Beneficial Owner of
16,368,000 shares of Company Common Stock, and has good and marketable title to
all
5
<PAGE>
of such shares, free and clear of all liens, claims, options, proxies, voting
agreements, security interests, charges and encumbrances. The Owned Shares
constitute all of the capital stock of the Company Beneficially Owned by
Shareholder, and except for the Owned Shares Shareholder does not Beneficially
Own or have any right to acquire (whether currently, upon lapse of time,
following the satisfaction of any conditions, upon the occurrence of any event
or any combination of the foregoing) any shares of Company Common Stock or any
securities convertible into Company Common Stock. Except as provided in Section
2(b) hereof and in this Section 8(c), Shareholder has sole power to vote and to
dispose of the Owned Shares, and sole power to issue instructions with respect
to the Owned Shares to the extent appropriate in respect of the matters set
forth in this Agreement, sole power to demand appraisal rights and sole power to
agree to all of the matters set forth in this Agreement, in each case which
respect to all of the Owned Shares, with no limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the terms
of this Agreement.
(d) Except for filings, authorizations, consents and approvals as may
be required under, and other applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), and the Exchange
Act, (i) no filing will, and no permit, authorization, consent or approval of,
any state or federal governmental body or authority is necessary for the
execution of this Agreement by Shareholder and the consummation by Shareholder
of the transactions contemplated hereby and (ii) none of the execution and
delivery of this Agreement by Shareholder, the consummation by Shareholder of
the transactions contemplated hereby or compliance by Shareholder with any of
the provisions hereof shall (A) conflict with or result in any breach of the
certificate or incorporation or by-laws or other organizational documents of
Shareholder, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
Shareholder is a party or by which Shareholder or any of its properties or
assets (including the Owned Shares) may be bound, or (C) violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
Shareholder or any of its properties or assets.
(e) Shareholder understands and acknowledges that Parent is entering
into the Acquisition Agreement, and is incurring the obligations set forth
therein, in reliance upon Shareholder's execution and delivery of this
Agreement.
(f) Shareholder agrees with and covenants to Parent that Shareholder
shall not request that the Company or Parent, as the case may be, register the
Transfer (book-entry or otherwise) of any certificated or uncertificated
interest representing any of the securities of the Company or of Parent, as the
case may be, unless such Transfer is made in compliance with this Agreement.
6
<PAGE>
9. Representations and Warranties of Parent. Parent hereby
----------------------------------------
represents, warrants and covenants to Shareholder as follows:
(a) Parent is a corporation duly organized and validly existing under
the laws of its jurisdiction of incorporation and is in good standing under the
laws of its jurisdiction of incorporation. Parent has all necessary corporate
power and authority to execute and deliver this Agreement and perform its
respective obligations hereunder. The execution and delivery by Parent of this
Agreement and the performance by Parent of its obligation hereunder have been
duly and validly authorized by the Board of Directors of Parent and no other
corporate proceedings on the part of Parent are necessary to authorize the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
(b) This Agreement has been duly and validly executed and delivered by
Parent and constitutes a valid and binding agreement of Parent, enforceable
against it in accordance with its terms except (i) to the extent limited by
applicable bankruptcy, insolvency or similar laws affecting creditors rights and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) Except for filings, authorizations, consents and approvals as may
be required under, and other applicable requirements of the HSR Act and the
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary for the
execution of this Agreement by Parent and the consummation by Parent of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Parent, the consummation by Parent of the transactions
contemplated hereby or compliance by Parent with any of the provisions hereof
shall (A) conflict with or result in any breach of the certificate of
incorporation or by-laws of Parent, or (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Parent is a party or by which Parent or any of
its properties or assets may be bound, or violate any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to Parent or any of its
properties or assets.
10. Further Assurances. From time to time, at the other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
7
<PAGE>
11. Termination. All representations, warranties and agreements
-----------
contained in this Agreement shall terminate on the third anniversary of the date
hereof unless any such representation, warranty or agreement explicitly
terminates earlier in accordance with the terms of this Agreement.
12. Miscellaneous.
-------------
(a) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
(b) Shareholder agrees that this Agreement and the respective rights
and obligations of Shareholder hereunder shall attach to any shares of Company
Common Stock, and any securities convertible into such shares, that may become
Beneficially Owned by Shareholder.
(c) Except as otherwise provided in this Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, and
Parent, on the one hand, and Shareholder, on the other hand, shall indemnify and
hold the other harmless from and against any and all claims, liabilities or
obligations with respect to any brokerage fees, commissions or finders' fees
asserted by any person on the basis of any act or statement alleged to have been
made by such party or its Affiliates.
(d) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either party (whether by operation
of Law or otherwise) without the prior written consent of the other party;
provided, that Parent may assign its rights and obligations hereunder to any
- --------
subsidiary of Parent, but no such assignment shall relieve Parent of its
obligations hereunder. It is understood that Parent expects to delegate its
rights and obligations hereunder and under the Acquisition Agreement to a
wholly-owned Netherlands subsidiary. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
(e) This Agreement may not be amended, changed, supplemented, or
otherwise modified or terminated, except upon the execution and delivery of a
written agreement executed by each of the parties hereto. The parties may waive
compliance by the other parties hereto with any representation, agreement or
condition otherwise required to be complied with by such other party hereunder,
but any such waiver shall be effective only if in writing executed by the
waiving party.
8
<PAGE>
(f) All notices and other communications hereunder shall be in writing
and shall be deemed given upon (a) transmitter's confirmation of a receipt of a
facsimile transmission, (b) confirmed delivery by a standard overnight carrier
or when delivered by hand or (c) the expiration of five business days after the
day when mailed by certified or registered mail, postage prepaid, addressed at
the following addresses (or at such other address for a party as shall be
specified by like notice):
If to Shareholder:
c/o ABN Amro Trust Company
Pietermaai nr.15
Curacao, Netherlands Antilles
copy to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attn: Stephan H. Haimo, Esq.
If to Parent:
Marriott International, Inc.
10400 Fernwood Road
Bethesda, Maryland 20857
Attn: General Counsel, Dept. 52/923
copy to:
O'Melveny & Myers LLP
555 13th Street, Suite 500 W
Washington, D.C. 20004
Attn: Jeffrey J. Rosen, Esq.
(g) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without affecting the
validity or enforceability of the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. If any provision
of this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
9
<PAGE>
(h) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (a) will waive, in
any action for specific performance, the defense of adequacy of a remedy at law
and (b) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court sitting in New York.
(i) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(j) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to its rules of conflict
of laws. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
New York and of the United States of America located in the State of New York
(the "New York Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in the New York Courts), waives any
objection to the laying of venue of any such litigation in the New York Courts
and agrees not to plead or claim in any New York Court that such litigation
brought therein has been brought in an inconvenient forum.
(k) The descriptive headings used herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement. "Include," "includes," and "including" shall
be deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import.
(l) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
10
<PAGE>
IN WITNESS WHEREOF, Parent and Shareholder have caused this Agreement
to be duly executed as of the day and year first above written.
MARRIOTT INTERNATIONAL, INC.
By: /s/ Arne Sorenson
------------------------------------
Name: Arne Sorenson
Title: Senior Vice President
DIAMANT HOTEL INVESTMENTS N.V.
By: /s/ Robert W. Oleson
-----------------------------------
Name: Robert W. Oleson
Title: Managing Director
New World Hotel (Holdings) Limited, a Hong Kong corporation,
represents that it is the Beneficial Owner of all of the outstanding capital
stock of Shareholder and hereby unconditionally guarantees the performance by
Shareholder of all of its obligations under the foregoing Shareholder Agreement.
NEW WORLD HOTEL (HOLDINGS) LIMITED
By: /s/ Henry Cheng Kar-Shun
------------------------------------
Name: Henry Cheng Kar-Shun
Title: Managing Director
S-1
<PAGE>
Exhibit 99(c)(3)
RENAISSANCE HOTEL GROUP N.V.
29800 Bainbridge Road
Solon, Ohio 44139
Marriott International, Inc.
Marriott Drive
Washington, DC 20058
January 10, 1997
CONFIDENTIALITY AGREEMENT
-------------------------
Ladies and Gentlemen:
In connection with your possible interest in various business combination,
restructuring, sale or other transactions (an "Acquisition Transaction")
involving Renaissance Hotel Group N.V. (the "Company"), you have requested that
we or our representatives furnish you or your representatives with certain
information relating to the Company. All such information (whether written or
oral) furnished (whether before or after the date hereof) by us or our
directors, officers, employees, affiliates, representatives (including, without
limitation, financial advisors, attorneys and accountants) or agents
(collectively, "our Representatives") to you or your directors, officers,
employees, affiliates, representatives (including, without limitation, financial
advisors, attorneys and accountants) or agents or your potential sources of
financing for the Transaction (collectively, "your Representatives") and all
analyses, compilations, forecasts, studies or other documents prepared by you or
your Representatives in connection with your or their review of, or your
interest in, the Company or an Acquisition Transaction which contain or reflect
any such information is hereinafter referred to as the "Information." The term
Information will not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by you or your
Representatives or (ii) is or becomes available to you on a nonconfidential
basis from a source (other than us or our Representatives) which, to the best of
your knowledge after due inquiry, is not prohibited from disclosing such
information to you by a legal, contractual or fiduciary obligation to us.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information confidential and
will not (except as required by applicable law, regulation or legal
process, and only after compliance with paragraph 3 below), without our
prior written consent, disclose any Information in any manner whatsoever,
and (ii) will not use any Information other than solely for the purpose of
evaluating a possible negotiated Acquisition Transaction; provided,
--------
however, that you may reveal the Information to your Representatives (a)
-------
who need to know the Information for the purpose of evaluating a possible
Acquisition
<PAGE>
Transaction, (b) who are informed by you of the confidential nature of the
Information and (c) who agree to act in accordance with the terms of this
letter agreement. You will cause your Representatives to observe the terms
of this letter agreement, and you will be responsible for any breach of
this letter agreement by any of your Representatives.
2. You and your Representatives will not (except as required by applicable
law, regulation or legal process, and only after compliance with paragraph
3 below), without our prior written consent, disclose to any person the
fact that the Information exists or has been made available, that you are
considering an Acquisition Transaction or any other transaction involving
the Company, or that discussions or negotiations are taking or have taken
place concerning an Acquisition Transaction or involving the Company or any
term, condition or other fact relating to an Acquisition Transaction or
such discussions or negotiations, including, without limitation, the status
thereof. The term "person" will be interpreted broadly to include, without
limitation, any individual, corporation, estate, partnership, joint
venture, limited liability company, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or other
entity.
3. In the event that you or any of your Representatives are requested pursuant
to, or required by, applicable law, regulation or legal process to disclose
any of the Information, you will notify us promptly so that we may seek a
protective order or other appropriate remedy or, in our sole discretion,
waive compliance with the terms of this letter agreement. In the event
that no such protective order or other remedy is obtained, or that the
Company waives compliance with the terms of this letter agreement, you will
furnish only that portion of the Information which you are advised by
counsel is legally required and will exercise all reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded the
Information.
4. If you determine not to proceed with an Acquisition Transaction within a
reasonable time, you will promptly inform our Representative, Morgan
Stanley & Co. Incorporated ("Morgan Stanley"), of that decision and, in
that case, and at any time upon the request of the Company or any of our
Representatives, you will either (i) promptly destroy all copies of the
written Information in your or your Representatives' possession and confirm
such destruction to us in writing, or (ii) promptly deliver to the Company
at your own expense all copies of the written Information in your or your
Representatives' possession. Any oral Information will continue to be
subject to the terms of this letter agreement.
5. You acknowledge that neither we, nor Morgan Stanley or its affiliates, nor
our other Representatives, nor any of our or their respective officers,
directors, employees, agents or controlling persons within the meaning of
Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), makes any express or implied representation or warranty as
to the accuracy or completeness of the Information, and you agree that no
such person will have any liability relating to the Information or for any
errors therein or omissions therefrom. You further agree that you are not
entitled to rely on the accuracy or completeness of the Information and
that you will be entitled to rely solely on such
-2-
<PAGE>
representations and warranties as may be included in any definitive
agreement with respect to an Acquisition Transaction, subject to such
limitations and restrictions as may be contained therein.
6. You are aware, and you will advise your Representatives who are informed of
the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the purchase
or sale of securities by any person who has received material, non-public
information from the issuer of such securities and on the communication of
such information to any other person when it is reasonably foreseeable that
such other person is likely to purchase or sell such securities in reliance
upon such information.
7. You agree that, for a period of 18 months from the date of this letter
agreement, neither you nor any of your affiliates will, without the prior
written consent of the Company or its Board of Directors: (i) in any
manner, acquire, attempt to acquire, offer to acquire, or agree to acquire,
directly or indirectly, by purchase or otherwise, any voting securities or
direct or indirect rights to acquire any voting securities of the Company
or any subsidiary thereof, or any assets of the Company or any subsidiary
or division thereof (provided, however, that nothing in this clause shall
be interpreted to prevent you from competing with us in the hotel
management business); (ii) make or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the Securities and Exchange Commission) to vote, or seek to
advise or influence any person or entity with respect to the voting of, any
voting securities of the Company; (iii) make any public announcement with
respect to, or submit a proposal for, or offer of (with or without
conditions) any extraordinary transaction involving the Company or its
securities or assets; (iv) form, join or in any way participate in a
"group" (as defined in Section 13(d)(3) of the Exchange Act) in connection
with any of the foregoing; (v) advise, assist or encourage any other person
in connection with any of the foregoing; or (vi) take any action which
might require the Company to make a public announcement regarding the
possibility of a business combination or merger or other Acquisition
Transaction. You also agree during such period not to request the Company
or any of our Representatives, directly or indirectly, to amend or waive
any provision of this paragraph (including this sentence). You will
promptly advise the Company of any inquiry or proposal made to you with
respect to any of the foregoing.
8. You agree that, for a period of two years from the date of this letter
agreement, you will not, directly or indirectly, solicit for employment or
hire any "Senior Level" employee of the Company or any of its subsidiaries
with whom you have had contact or who became known to you in connection
with your consideration of an Acquisition Transaction; provided, however,
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that the foregoing provision will not prevent you from employing any such
person with whom you have had contact prior to the date hereof or who
contacts you on his or her own initiative without any direct or indirect
solicitation by or encouragement from you. "Senior Level" means any
corporate employee with the title of Vice President or above.
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<PAGE>
9. You agree that all (i) communications regarding an Acquisition Transaction,
(ii) requests for additional information, facility tours or management
meetings, and (iii) discussions or questions regarding procedures with
respect to an Acquisition Transaction, will be first submitted or directed
to Morgan Stanley and not to the Company. You also understand and agree
that no contract or agreement providing for any Acquisition Transaction
involving the Company shall be deemed to exist between you and the Company
and/or stockholders of the Company unless and until a Definitive Agreement
has been executed and delivered, and you also agree that unless and until a
Definitive Agreement between the Company and/or its stockholders and you
with respect to any Acquisition Transaction involving the Company has been
executed and delivered, neither the Company nor its stockholders has any
legal obligation of any kind whatsoever with respect to any such
transaction by virtue of this agreement or any other written or oral
expression with respect to such transaction except, in the case of this
agreement, for the matters specifically agreed to herein. For purposes of
this paragraph, the term "Definitive Agreement" does not include an
executed letter of intent or any other preliminary written agreement, nor
does it include any written or verbal agreement in principal or acceptance
of an offer or bid on your part. You further acknowledge and agree that
(a) we and our Representatives are free to conduct the process leading up
to any Acquisition Transaction as we and our Representatives, in our sole
discretion, determine (including, without limitation, by negotiating with
any prospective buyer and entering into a preliminary agreement or
Definitive Agreement without prior notice to you or any other person), (b)
we reserve the right, in our sole discretion, to change the procedures
relating to our consideration of an Acquisition Transaction at any time
without prior notice to you or any other person, to reject any and all
proposals made by you or any of your Representatives with regard to an
Acquisition Transaction, and to terminate discussions and negotiations with
you at any time and for any reason, and (c) unless and until a written
Definitive Agreement with you concerning an Acquisition Transaction has
been executed, neither we nor any of our Representatives will have any
liability to you with respect to any Acquisition Transaction, whether by
virtue of this letter agreement, any other written or oral expression with
respect to an Acquisition Transaction or otherwise.
10. You acknowledge that remedies at law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you or
by your Representatives, and, without prejudice to any other rights and
remedies otherwise available to us, you agree to the granting of injunctive
relief in our favor without proof of actual damages. In the event of
litigation relating to this letter agreement, if a court of competent
jurisdiction determines that this letter agreement has been breached by you
or by your Representatives, then you will reimburse the Company for its
costs and expenses (including, without limitation, legal fees and expenses)
incurred in connection with all such litigation.
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<PAGE>
11. You agree that no failure or delay by us in exercising any right, power or
privilege hereunder will operate as a waiver thereof, nor will any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any right, power or privilege hereunder.
12. This letter agreement is for the benefit of the Company, Morgan Stanley and
their respective directors, officers, stockholders, owners, affiliates and
agents and will be governed by, and construed in accordance with, the laws
of the State of New York, without giving effect to principles of conflicts
of laws.
13. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications of
this letter agreement or waiver of the terms and conditions hereof will be
binding upon you or us, unless approved in writing by each of you and us.
Please confirm your agreement with the foregoing by signing and returning to the
undersigned the duplicate copy of this letter enclosed herewith.
Very truly yours,
RENAISSANCE GROUP HOTEL N.V.
By: /s/ Robert W. Olesen
------------------------
Name: Robert W. Olesen
Title: Executive Vice President
Accepted and Agreed as of the date
set forth below:
MARRIOTT INTERNATIONAL, INC
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By: /s/ Arne M. Sorenson
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Name: Arne M. Sorenson
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Title Senior Vice President, Business Development
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Date: January 10, 1997
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