Exhibit 4.08
SUPPLEMENT NO. 1 dated as of April 28, 1998, to
the Guarantee Agreement dated as of October 15, 1997, among
each of the subsidiaries listed on Schedule I thereto (each
such subsidiary individually, a "Guarantor" and
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collectively, the "Guarantors") of CHOICE HOTELS
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INTERNATIONAL, INC., a Delaware corporation (the
"Borrower"), and THE CHASE MANHATTAN BANK, a New York
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banking corporation, as agent (the "Agent") for the Secured
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Parties.
A. Reference is made to the Credit Agreement dated as of October 15,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the lenders from time to time party
thereto (the "Lenders") and the Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Guarantee Agreement and
the Credit Agreement.
C. The Guarantors have entered into the Guarantee Agreement in order
to induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.09 of the Credit Agreement, each Subsidiary of
the Borrower with assets greater than or equal to 10% of Consolidated Total
Assets that (a) was not in existence or not a Subsidiary on the date of the
Credit Agreement or (b) did not hold 10% or more of Consolidated Total Assets on
the date of the Credit Agreement is required to enter into the Guarantee
Agreement as a Guarantor upon becoming a Subsidiary or acquiring the requisite
percentage of assets. Section 19 of the Guarantee Agreement provides that
Subsidiaries of the Borrower may become Guarantors under the Guarantee Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Borrower (the "New Guarantor") is executing this
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Supplement in accordance with the requirements of the Credit Agreement to become
a Guarantor under the Guarantee Agreement in order to induce the Lenders to make
additional Loans and the Issuing Bank to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.
Accordingly, the Collateral Agent and the New Guarantor agree as
follows:
SECTION 1. In accordance with Section 19 of the Guarantee Agreement,
the New Guarantor by its signature below becomes a Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as a Guarantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Guarantor thereunder are true and correct on and as of the date hereof.
Each reference to a "Guarantor" in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Guarantor represents and warrants to the Agent and
the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Agent. Delivery of an
executed signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Guarantee
Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision hereof in a particular jurisdiction shall not in and of itself affect
the validity of such provision in any other jurisdiction). The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be in
writing and given as provided in Section 13 of the Guarantee Agreement. All
communications and notices hereunder to the New Guarantor shall be given to it
at the address set forth under its signature below, with a copy to the Borrower.
SECTION 8. The New Guarantor agrees to reimburse the Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, disbursements and other charges of counsel for the Agent.
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IN WITNESS WHEREOF, the New Guarantor and the Agent have duly executed
this Supplement to the Guarantee Agreement as of the day and year first above
written.
QH EUROPE PARTNERSHIP
by: QUALITY HOTELS EUROPE, INC., as partner
by /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice President, Treasurer
Address: 00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
by: CHOICE HOTELS INTERNATIONAL, as partner
by /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice President, Treasurer
Address: 00000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
Address:
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