EXHIBIT 10.2
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement (this "Agreement") is
entered into as of November 19, 1997, by and between HFS INCORPORATED, a
Delaware corporation (the "Company") having an office at 339 Jefferson Road,
Parsippany, New Jersey 07054-0278, and THE CHASE MANHATTAN BANK (the "Bank"),
having an office at 270 Park Avenue, New York, New York 10017.
Preliminary Statement
The Company and the Bank entered into a Credit Agreement dated as of
October 1, 1997, as amended by Amendment No. 1 dated as of October 31, 1997 (the
"Original Agreement"). The parties hereto wish to amend and restate the Original
Agreement to make the modifications set forth below. Accordingly, the parties
hereto agree as follows:
1. Commitment. The Bank agrees to make loans to the Company hereunder ("Loans"),
at any time and from time to time from and including October 1, 1997 to but
excluding the earliest of (a) January 31, 1998, (b) the date on which the
commitment is terminated under Section 4 of this Agreement and (c) the Merger
Date (as defined in the Second Amendment dated as of September 18, 1997 to the
Five Year Credit and Revolving Credit Agreement (as defined below))(such
earliest date is hereinafter referred to as the "Commitment Termination Date"),
which in aggregate principal amount outstanding shall not, at any one time,
exceed $500,000,000. The Company shall have the right, upon 3 business days'
notice to the Bank, at any time or from time to time, to reduce permanently (in
multiples of $1,000,000) or to terminate the unutilized portion of the
commitment. The Company promises to pay the unpaid principal amount of all Loans
on March 31, 1998 (the "Maturity Date"). Notwithstanding anything in this
Agreement to the contrary, the obligation of the Bank to make any Loan hereunder
is subject to the conditions precedent that (i) the representations and
warranties made by the Company in both (x) the $750,000,000 Five Year
Competitive Advance and Revolving Credit Agreement dated as of October 2, 1996
among the Company, the lenders referred to therein and the Bank as
Administrative Agent (as in effect on the date hereof, the "Five Year Credit
Agreement"), and (y) the $750,000,000 364-Day Competitive Advance and Revolving
Credit Agreement dated as of October 2, 1996 among the Company, the lenders
referred to therein and the Bank as Administrative Agent (as in effect on the
date hereof, the "Revolving Credit Agreement"), shall be true and correct in all
material respects on and as of the date of each request for, and disbursement
of, a Loan (except to the extent that such representations and warranties
expressly relate to an earlier date), with the same effect as if made on and as
of such date, and (ii) no event of default as described in Section 4 of this
Agreement, or "Default" as such term is defined in the Five Year Credit
Agreement and the Revolving Credit Agreement, shall have occurred and be
continuing. Each request for a Loan and receipt of the proceeds thereof shall be
deemed to be a representation and warranty by the Company as to the matters
described in the preceding sentence. The proceeds of Loans shall be used for
working capital and general corporate purposes. The holder of the promissory
note of the Company executed in connection with this Agreement is authorized to
endorse on the schedule attached thereto, or on any continuation of such
schedule, the date, amount, borrowing period, interest rate, payment and
remaining balance of all Loans.
2. Commission. The Company agrees to pay the Bank a commitment commission
equal to the product of (i) the rate per annum used to determine the "Facility
Fee" as defined in Section 2.7(a) of the Revolving
Credit Agreement, times (ii) the amount of the commitment, whether used or
unused, computed for the actual number of days elapsed in a year of 360 days,
for the period from the date hereof and ending on the Commitment Termination
Date or, if earlier, the date on which the Company shall have terminated the
commitment in full. Such commission shall be payable on the date of any
reduction or termination of the commitment, as to the amount of the commitment
so reduced or terminated, and on the Commitment Termination Date.
3. Interest Rate on Loans. (a) The Company may borrow a Loan bearing interest at
a floating base rate by notifying the Bank of the amount thereof prior to 1:00
p.m. (New York City time) on the same day on which such Loan is to be disbursed.
Interest on any such Loan shall (i) be calculated on a year of 365 days, based
on the actual number of days elapsed, (ii) accrue from day to day at that rate
per annum which the Bank determines from time to time to be its base rate for
domestic commercial loans or the equivalent thereof, changing when and as such
base rate changes, and (iii) be due and payable on the Maturity Date.
(b) The Company may borrow a Loan at a rate per annum other than the
base rate described in Section 3(a) if the Company and the Bank shall agree in
writing on such a rate (the "Agreed Rate"). If the Company and the Bank agree
upon an Agreed Rate, the Company may borrow a Loan bearing interest at the
Agreed Rate by notifying the Bank of the amount thereof prior to 1:00 p.m. (New
York City time) on the same day on which such Loan is to be disbursed, or at
such earlier time as may be required by the Bank in order to advance a Loan at
the Agreed Rate. Interest on any such Loan shall (i) be calculated on a year of
360 days, based on the actual number of days elapsed, (ii) accrue from day to
day at the Agreed Rate and (iii) be due and payable on the date agreed to by the
Company and the Bank, provided, however, that all accrued and unpaid interest
shall be due and payable on the Maturity Date.
(c) Any Loan may be repaid, together with interest accrued thereon, on
any business day upon giving the Bank notice thereof by 1:00 p.m. (New York City
time) on such day; provided, however, that if there is any payment (whether by
voluntary prepayment, acceleration or otherwise) of a Loan accruing interest at
the Agreed Rate on a date other than the maturity date of such Loan, the Company
shall pay to the Bank on demand such amount as will be sufficient in the
reasonable opinion of the Bank to compensate it for any loss, cost or expense
which the Bank determines is attributable thereto. Notwithstanding the
foregoing, if any principal of or interest on any Loan or any commitment fee or
other amount payable by the Company hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to 2% plus
the rate applicable to Loans bearing interest at the floating base rate as
provided in Section 3(a).
4. Events of Default. Upon the occurrence of any of the following events (an
"Event of Default"), the Bank may, by written notice to the Company, declare all
indebtedness hereunder to become immediately due and payable, together with
accrued interest, commitment commission and any other charges, without
presentment, demand, protest, or other notice, all of which are hereby expressly
waived, and declare the commitment hereunder to be terminated, except that if
the event described in Section 4.4 shall occur, such indebtedness shall
automatically become due and payable, without presentment, demand, protest or
other notice, all of which are hereby expressly waived, and the commitment shall
automatically terminate.
4.1 Principal and Interest. The Company shall default in the due and punctual
payment of any principal of or interest on any Loan, or with respect to the due
and punctual payment of any commitment commission, and in the case of payments
of interest or commissions, such default shall continue unremedied for five
business days;
4.2 Other Borrowings. Any "Event of Default" as defined in Article 7 of the
Five Year Credit Agreement shall occur, or any "Event of Default" as defined in
Article 7 of the Revolving Credit Agreement shall occur;
4.3 Representations. Any representation, warranty or statement made by the
Company herein or otherwise in writing in connection herewith shall be breached
or shall prove to be untrue or incorrect in any material respect when made; or
4.4 Insolvency. The Company shall become insolvent (however such condition may
be evidenced) or become the subject of a proceeding under the Federal Bankruptcy
Code, provided that in the event of any involuntary case, proceeding or other
action against the Company, such proceeding or action (i) results in the entry
of any order for relief against it or (ii) shall remain undismissed for a period
of sixty (60) days.
5. Participations. The Bank may, without the consent of the Company, sell
participations to one or more banks or other financial institutions in all or a
portion of the Bank's rights and obligations under this Agreement (including all
or a portion of its commitment and the Loans); provided that (i) the Bank's
obligations under this Agreement shall remain unchanged, (ii) the Bank shall
remain solely responsible for the performance of such obligations and (iii) the
Company shall continue to deal solely and directly with the Bank in connection
with the Bank's rights and obligations under this Agreement. The Bank may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of the Bank, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment of a security interest shall release the Bank from any
of its obligations hereunder or substitute any such pledgee or assignee for the
Bank as a party hereto.
6. Law and Expenses. This Agreement is subject to the laws of the state of
New York. The Company agrees to pay the Bank all reasonable out-of-pocket
expenses that the Bank may incur, including reasonable fees and disbursements of
counsel, in connection with the enforcement of this Agreement.
7. Indemnity. The Company agrees to indemnify and hold harmless the Bank and its
directors, officers, employees and agents (each, an "Indemnified Party") from
and against any and all expenses (including reasonable fees and disbursements of
counsel), losses, claims, damages and liabilities arising out of any claim,
litigation, investigation or proceeding (regardless of whether any such
Indemnified Party is a party thereto) in any way relating to the transactions
contemplated hereby, but excluding therefrom all expenses, losses, claims,
damages, and liabilities arising out of or resulting from the gross negligence
or willful misconduct of the Indemnified Party seeking indemnification, provided
that the Company shall not be liable for the fees and expenses of more than one
separate firm for all such Indemnified Parties in connection with any one such
action or any separate but substantially similar or related actions in the same
jurisdiction, nor shall the Company be liable for any settlement of any
proceeding effected without the Company's written consent, and provided further
that this Section 7 shall not be construed to expand the scope of the
reimbursement obligations specified in Section 6. The obligations of the Company
under this Section 7 shall survive the termination of this Agreement and/or
payment of the Loans.
8. Submission to Jurisdiction. The Company hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Company at its
address set forth above or at such other address of which the Bank shall have
been notified; and
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction.
9. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT
THE PROVISIONS OF THIS SECTION 9 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE
OTHER PARTY HAS RELIED, IS RELYING AND WILL RELY IN ENTERING INTO THIS
AGREEMENT. THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 9 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY
TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
10. Effectivness. (a) This Agreement will become effective on the date (the
"Effective Date") when the Bank shall have received (i) counterparts of this
Agreement duly executed by the Company and the Bank; and (ii) a note
substantially in the form of Exhibit A duly executed by the Company.
(b) On the Effective Date, the Original Agreement will be automatically
amended and restated in its entirety to read as set forth herein. On and after
the Effective Date the rights and obligations of the parties hereto shall be
governed by this Agreement; provided that the rights and obligations of the
parties hereto with respect to the period prior to the Effective Date shall
continue to be governed by the provisions of the Original Agreement. On or
promptly after the Effective Date, the Bank shall mark the note issued under the
Original Agreement "Renewed", and shall retain such note as additional evidence
of the indebtedness of the Borrower outstanding under this Agreement.
THE CHASE MANHATTAN BANK HFS INCORPORATED
By: /s/ Carol A. Ulman By: /s/ Terry Kridler
Name: Carol A. Ulman Name: Terry Kridler
Title: Vice President Title: Senior Vice President & Treasurer
EXHIBIT A
AMENDED AND RESTATED REVOLVING LOAN NOTE
$500,000,000 October 1, 1997
FOR VALUE RECEIVED, HFS INCORPORATED, a Delaware corporation (the
"Company"), hereby promises to pay to the order of THE CHASE MANHATTAN BANK (the
"Bank") at such date or dates as may be provided by, or designated pursuant to,
the Credit Agreement of this date between the Company and the Bank (the
"Agreement"), at the Bank's office indicated in the Agreement, or at such other
place as the holder hereof may hereafter designate in writing, in lawful money
of the United States of America, the principal sum of FIVE HUNDRED MILLION
DOLLARS or, if less than such principal sum, the aggregate unpaid principal
amount of all Loans made by the Bank to the Company pursuant to the Agreement
and outstanding hereunder. The Company further promises to pay interest at such
office, in like money, from the date hereof on the principal amount owing
hereunder from time to time, at the rates per annum provided for in Section 3 of
the Agreement, payable at the time stated in such Section, at maturity (whether
by acceleration or otherwise), and upon demand therefor after maturity.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement. The Company hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
This Note and the rights and obligations of the Company and the payee
hereunder shall be governed by and construed and enforced in accordance with the
laws of the state of New York applicable to contracts made and to be performed
wholly within such state.
HFS INCORPORATED
By: /s/ Terry Kridler
Name: Terry Kridler
Title: Senior Vice President & Treasurer
REVOLVING LOAN SCHEDULE
Amount Amount of Balance
of Borrowing Interest Principal Remaining Notation
Date Loan Period Rate * Paid Unpaid Made By
---- ---- ------ ------ ---- ------ -------
- ------------------
* If the Loan is accruing interest at a floating base rate, indicate "FBR"; if
it is a Loan accruing interest at the Agreed Rate, indicate the applicable rate.