-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P4mYaqUKEz6ObtHjaNLWaIj7vCD/h5QoBtj/HyN4MslW8NVhf7epE6wDFIQgc5Zf 57EUeoNL8bjUZkfYsHfjbg== 0000950109-97-001517.txt : 19970225 0000950109-97-001517.hdr.sgml : 19970225 ACCESSION NUMBER: 0000950109-97-001517 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19970224 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RENAISSANCE HOTEL GROUP N V CENTRAL INDEX KEY: 0001000178 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 000000000 STATE OF INCORPORATION: P7 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-44915 FILM NUMBER: 97542166 BUSINESS ADDRESS: STREET 1: 17TH FL NEW WORLD TOWER II STREET 2: 18 QUEENS RD, CENTRAL HONG KONG CITY: HONG KONG STATE: K3 BUSINESS PHONE: 2164989090 MAIL ADDRESS: STREET 1: 29800 BAINBRIDGE RD CITY: CLEVELAND STATE: OH ZIP: 44129 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RENAISSANCE HOTEL GROUP N V CENTRAL INDEX KEY: 0001000178 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 000000000 STATE OF INCORPORATION: P7 FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-44915 FILM NUMBER: 97542167 BUSINESS ADDRESS: STREET 1: 17TH FL NEW WORLD TOWER II STREET 2: 18 QUEENS RD, CENTRAL HONG KONG CITY: HONG KONG STATE: K3 BUSINESS PHONE: 2164989090 MAIL ADDRESS: STREET 1: 29800 BAINBRIDGE RD CITY: CLEVELAND STATE: OH ZIP: 44129 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MARRIOTT INTERNATIONAL INC CENTRAL INDEX KEY: 0000905036 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 520936594 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013803000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MARRIOTT INTERNATIONAL INC CENTRAL INDEX KEY: 0000905036 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 520936594 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013803000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 SC 14D1 1 SCHEDULE 14D-1 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 - -------------------------------------------------------------------------------- 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)) Schedule 14D-1 and 13D - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCES OF FUNDS BK, WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON/*/ 16,368,000 - -------------------------------------------------------------------------------- 8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON CO, HC - -------------------------------------------------------------------------------- * 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 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. 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. 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 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. (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 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 14D-1 EXHIBIT INDEX
EXHIBIT DESCRIPTION - ------- ----------- (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
EX-99.A1 2 EXHIBIT 99(A)(1) 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 TABLE OF CONTENTS
PAGE ---- 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
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 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 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 3 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 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 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 6 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. 7 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. 8 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:
HIGH LOW ------- ------- 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
- -------- * 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 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 RENAISSANCE HOTEL GROUP N.V. SUMMARY CONSOLIDATED FINANCIAL INFORMATION ($ IN THOUSANDS, EXCEPT PER SHARE DATA)
SIX MONTHS ENDED DECEMBER 31 FISCAL YEAR ENDED JUNE 30 ----------------- ----------------------------- 1996 1995 1996 1995(1) 1994(1) -------- -------- -------- -------- -------- (UNAUDITED) 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 -- --
- -------- (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 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 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)
36 WEEKS ENDED ---------------- FISCAL YEAR SEPT. 6 SEPT. 8 ----------------------- 1996 1995 1995 1994 1993(1) ------- ------- ------ ------ ------- 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
- -------- (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 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 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 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 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 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. 18 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 19 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 20 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 21 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. 22 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. 23 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 24 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. 25 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 26 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 27 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 28 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 29 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 30 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 31 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 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.
NAME AND TITLE AGE EMPLOYMENT HISTORY - -------------- --- ------------------ 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.
- -------- * Messrs. J.W. Marriott, Jr. and Richard E. Marriott are brothers. I-1
NAME AND TITLE AGE EMPLOYMENT HISTORY - -------------- --- ------------------ 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.
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NAME AND TITLE AGE EMPLOYMENT HISTORY - -------------- --- ------------------ 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.
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NAME AND TITLE AGE EMPLOYMENT HISTORY - -------------- --- ------------------ 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.
I-4 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 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
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) EX-99.A2 3 EXHIBIT 99(A)(2) 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. - -------------------------------------------------------------------------------- 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 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 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 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 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 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 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 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 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 EX-99.A3 4 EXHIBIT 99(A)(3) 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: 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 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 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 WHAT NAME AND NUMBER TO GIVE THE REQUESTER - ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE NAME AND SSN OF: - ---------------------------------------------------- 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) - ---------------------------------------------------- FOR THIS TYPE OF ACCOUNT: GIVE NAME AND EIN OF: - ---------------------------------------------------- 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
- -------------------------------------- - ------- (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 EX-99.A4 5 EXHIBIT 99(A)(4) 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 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 EX-99.A5 6 EXHIBIT 99(A)(5) 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 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 EX-99.A6 7 EXHIBIT 99(A)(6) 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 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 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 EX-99.A7 8 EXHIBIT 99(A)(7) 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 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 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. EX-99.A8 9 EXHIBIT 99(A)(8) 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. 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 EX-99.B2 10 EXHIBIT 99(B)(2) 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 ======================================= TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
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
ii Page ---- ARTICLE VI COVENANTS OF THE BORROWER
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
SCHEDULES --------- Schedule I - List of Applicable Lending Offices Schedule II - Existing Liens 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 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 ---------------- 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:
=============================================================== Public Debt Rating Eurodollar S&P/Moody's Base Rate Rate =============================================================== 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 ---------------------------------------------------------------
Credit Agreement ---------------- 3
=============================================================== Public Debt Rating Eurodollar S&P/Moody's Base Rate Rate =============================================================== Level 5 ------- 0.000% 0.325% BBB-/Baa3 --------------------------------------------------------------- Level 6 ------- 0.125% 0.475% Less than Level 5 ===============================================================
"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:
================================== Public Debt Rating Facility S&P/Moody's Fee ================================== 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 ==================================
"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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 Credit Agreement ---------------- 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: Credit Agreement ---------------- 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. Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 Credit Agreement ---------------- 46 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 Credit Agreement ---------------- 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 ---------------- 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 ---------------- 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. Credit Agreement ---------------- 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. Credit Agreement ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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; Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 Credit Agreement ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- 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 ---------------- EX-99.C1 11 EXHIBIT 99(C)(1) Exhibit 99(c)(1) ACQUISITION AGREEMENT by and between MARRIOTT INTERNATIONAL, INC. and RENAISSANCE HOTEL GROUP N.V. Dated as of February 17, 1997 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 (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. 17 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; 18 (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: 19 (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 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) 21 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. 22 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 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 (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 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 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 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 (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 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 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 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 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 (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 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 (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 (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 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 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 EX-99.C2 12 EXHIBIT 99(C)(2) 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 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 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 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 (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 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 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 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 (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 (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 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 EX-99.C3 13 EXHIBIT 99(C)(3) 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 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- 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, -------- ------- 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. -3- 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. -4- 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 - --------------------------------------------------------- By: /s/ Arne M. Sorenson ------------------------------------------------------ Name: Arne M. Sorenson ------------------------------------------------- Title Senior Vice President, Business Development ------------------------------------------------- Date: January 10, 1997 ------------------------------------------------- -5- -----END PRIVACY-ENHANCED MESSAGE-----