Orbitz 2008 Annual Report Download - page 60

used the remaining net proceeds primarily to pay fees and expenses related to the IPO and for general corporate purposes. At December 31, 2007, $599 million
was outstanding on the Term Loan and $1 million was outstanding on the Revolver.
Our Term Loan and Revolver are both secured by substantially all of our and our domestic subsidiaries' tangible and intangible assets, including a pledge of
100% of the outstanding capital stock or other equity interests of substantially all of our direct and indirect domestic subsidiaries and 65% of the capital stock or
other equity interests of certain of our foreign subsidiaries, subject to certain exceptions. Our Term Loan and Revolver are also guaranteed by substantially all of
our domestic subsidiaries.
The Credit Agreement contains various customary restrictive covenants that limit our and our subsidiaries' ability to, among other things:
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incur additional indebtedness or guarantees;
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enter into sale or leaseback transactions;
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make investments, loans or acquisitions;
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grant or incur liens on our assets;
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sell our assets;
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engage in mergers, consolidations, liquidations or dissolutions;
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engage in transactions with affiliates; and
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make restricted payments.
The Credit Agreement requires us to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, each as defined in the Credit
Agreement. As of December 31, 2007, we were in compliance with these covenants.
In addition, beginning with the year ending December 31, 2008, we will be required to make mandatory prepayments on the Term Loan in an amount up to
50% of our excess cash flow, as defined in the Credit Agreement.
As a wholly owned subsidiary of Cendant and then Travelport, each of Cendant and Travelport provided guarantees, letters of credit and surety bonds on
our behalf under our commercial agreements and leases and for the benefit of certain regulatory agencies. At December 31, 2006, there were $113 million of
guarantees, letters of credit and surety bonds issued by Travelport on our behalf. Under the separation agreement entered into at the time of our IPO, we were
required to have Travelport released from any then outstanding guarantees and surety bonds. Travelport no longer provides surety bonds on our behalf or
guarantees in connection with commercial agreements or leases entered into or replaced by us. At December 31, 2007, there were $74 million of letters of credit
issued by Travelport on our behalf. Although currently, under the terms of the separation agreement, Travelport is not required to issue new, or renew existing,
letters of credit on our behalf, we expect to enter into an amendment to the separation agreement to extend Travelport's obligation to issue letters of credit on our
behalf in an amount not to exceed $75 million.
Financial Obligations
Commitments and Contingencies
We and certain of our affiliates are parties to cases brought by consumers and municipalities and other U.S. governmental entities involving hotel occupancy
taxes. We believe that we have meritorious defenses and we are vigorously defending against these claims (see Note 10—Commitments and Contingencies of the
Notes to Consolidated Financial Statements for additional information).
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Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008