Ex. 4.05 CONFORMED COPY
FOURTH AMENDMENT dated as of December 16, 1998 (this
"Amendment"), among CHOICE HOTELS INTERNATIONAL, INC., a Delaware
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corporation (the "Borrower"), the undersigned financial
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institutions party to the Credit Agreement referred to below (the
"Lenders"), and THE CHASE MANHATTAN BANK, as agent for the
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Lenders (in such capacity, the "Agent").
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A. Reference is made to the Competitive Advance and Multi-Currency
Credit Facilities Agreement dated as of October 15, 1997, as amended (the
"Credit Agreement") among the Borrower, the Lenders and the Agent. Capitalized
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terms used but not otherwise defined herein have the meanings assigned to them
in the Credit Agreement.
B. The Borrower has requested that the Lenders amend certain
provisions of the Credit Agreement. The Lenders are willing to do so, subject to
the terms and conditions of this Amendment.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendment to Section 6.13. Section 6.13 of the Credit
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Agreement is hereby replaced in its entirety with the following:
SECTION 6.13. Minimum Consolidated Net Worth. In the case of the
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Borrower, permit the Consolidated Net Worth at any time to be less
than the sum of (x) $40,000,000, (y) 50% of the Borrower's
Consolidated Net Income accrued during the period (treated as one
accounting period) commencing on October 1, 1998 and ending on the
last day of the most recent fiscal quarter for which financial
statements have been delivered pursuant to Section 5.04 (which amount
shall not include Consolidated Net Income for any fiscal quarter in
which the Borrower's Consolidated Net Income is negative) and (z) the
aggregate net cash proceeds received by the Borrower from the issuance
or sale of its capital stock since the date hereof.
SECTION 2. Amendment to Section 6.14. Section 6.14 of the Credit
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Agreement is hereby replaced in its entirety with the following:
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SECTION 6.14. Consolidated Leverage Ratio. In the case of the
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Borrower, permit the Consolidated Leverage Ratio as of the last day of
and for any period of four fiscal quarters ending during the period
from and including (a) December 16, 1998 through December 30, 1999,
3.50 to 1.00, (b) December 31, 1999 through December 30, 2000, 3.25 to
1.00 and (c) December 31, 2000 through the Maturity Date, 3.00. The
Consolidated Leverage Ratio shall be calculated as of the end of each
fiscal quarter based on the period of the four consecutive fiscal
quarters ending on such date.
SECTION 3. Representations, Warranties and Agreements. The Borrower
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hereby represents and warrants to and agrees with each Lender and the Agent
that:
(a) The representations and warranties set forth in Article III of
the Credit Agreement are true and correct in all material respects with the
same effect as if made on the Amendment Effective Date, except to the
extent such representations and warranties expressly relate to an earlier
date.
(b) The Borrower has the requisite power and authority to execute,
deliver and perform its obligations under this Amendment.
(c) The execution, delivery and performance by the Borrower of this
Amendment (i) have been duly authorized by all requisite action and (ii)
will not (A) violate (x) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of the Borrower or any Subsidiary, (y) any order of
any Governmental Authority or (z) any provision of any indenture, agreement
or other instrument to which the Borrower or any Subsidiary is a party or
by which any of them or any of their property is or may be bound, (B) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under any such indenture, agreement for
borrowed money or other agreement or instrument or (C) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by the Borrower.
(d) This Amendment has been duly executed and delivered by the
Borrower. Each of this Amendment and
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the Credit Agreement, as amended hereby, constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by (i)
any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principals of equity.
(e) As of the Amendment Effective Date, no Event of Default or
Default has occurred and is continuing.
SECTION 4. Conditions to Effectiveness. This Amendment shall become
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effective on the date of the satisfaction in full of the following conditions
precedent (the "Amendment Effective Date"):
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(a) The Agent shall have received duly executed counterparts hereof
which, when taken together, bear the authorized signatures of the Borrower,
the Agent and the Required Lenders.
(b) All legal matters incident to this Amendment shall be satisfactory
to the Required Lenders, the Agent and Cravath, Swaine & Moore, counsel for
the Agent.
(d) The Agent shall have received such other documents, instruments
and certificates as it or its counsel shall reasonably request.
SECTION 5. Credit Agreement. Except as specifically stated herein,
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the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof. As used therein, the terms "Agreement", "herein",
"hereunder", "hereto", "hereof" and words of similar import shall, unless the
context otherwise requires, refer to the Loan Agreement as modified hereby.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Counterparts. This Amendment may be executed in any
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number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.
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SECTION 8. Expenses. The Borrower agrees to reimburse the Agent for
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its out-of-pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Moore, counsel
for the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the date first
above written.
CHOICE HOTELS INTERNATIONAL, INC.
by
/s / Michael J. DeSantis
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Name: Michael J. DeSantis
Title: Senior Vice President
THE CHASE MANHATTAN BANK,
individually and as Issuing Bank
and Agent
by
/s/ Carol A. Ulmer
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Name: Carol A. Ulmer
Title: Vice President
BANK OF TOKYO - MITSUBISHI TRUST
COMPANY
by
____________________________
Name:
Title:
CRESTAR BANK
by
/s/ Diane E. Bauman
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Name: Diane E. Bauman
Title: Vice President
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THE DAI-ICHI KANGYO BANK, LTD.
by
/s/ Bertram H. Tang
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Name: Bertram H. Tang
Title: Vice President & Group
Leader
FIRST NATIONAL BANK OF MARYLAND
by
/s/ Michael B. Stueck
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Name: Michael B. Stueck
Title: Vice President
FIRST UNION NATIONAL BANK
by
/s/ Barbara K. Angel
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Name: Barbara K. Angel
Title: Vice President
THE FUJI BANK, LIMITED
by
_____________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
by
/s/ William Kennedy
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Name: William Kennedy
Title: Vice President
THE LONG TERM CREDIT BANK OF JAPAN,
LTD., NEW YORK BRANCH
by
_____________________________
Name:
Title:
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MELLON BANK, N.A.
by
/s/ G. B. Mateer
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Name: G. B. Mateer
Title: Vice President
NATIONSBANK, N.A.
by
/s/ Michael R. Heredia
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Name: Michael R. Heredia
Title: Senior Vice President
THE SANWA BANK, LIMITED,
NEW YORK BRANCH
by
______________________________
Name:
Title:
SUMMIT BANK
by
/s/ Carter Evans
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Name: Carter Evans
Title: Vice President
THE TOYO TRUST & BANKING COMPANY,
LTD., NEW YORK BRANCH
by
/s/ Kazuhiko Yamauchi
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Name: Kazuhiko Yamauchi
Title: Vice President
by
/s/ Howard Tulley Mott
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Name: Howard Tulley Mott
Title: Vice President