CONFORMED COPY
AMENDMENT AGREEMENT dated as of September 6,
1996, among MANOR CARE, INC., a Delaware corporation
(the "Company"), MANOR HEALTHCARE CORP., a Delaware
Subsidiary, CHOICE HOTELS INTERNATIONAL, INC., a
Delaware Subsidiary, QUALITY HOTELS EUROPE, INC., a
Delaware Subsidiary, QUALITY HOTELS EUROPE (JENA)
GMBH, a German Subsidiary, and the other BORROWING
SUBSIDIARIES, (collectively, and together with the
Company, the "Borrowers"); the lenders listed in
Annex I hereto under the captions "Departing Lenders"
(the "Departing Lenders") and "Continuing Lenders"
(the "Continuing Lenders" and, together with the
Departing Lenders, the "Lenders"); and THE CHASE
MANHATTAN BANK, as agent for the Lenders (in such
capacity, the "Agent").
A. The Borrowers, the Continuing Lenders and the Departing
Lenders are parties to the Original Credit Agreement (such term and each other
capitalized term used and not otherwise defined herein having the meaning
assigned to it in the Amended Credit Agreement referred to in paragraph B
below).
B. The Borrowers have requested the Continuing Lenders, and
such Lenders are willing, to amend and restate the Original Credit Agreement in
the form of the agreement attached hereto as Exhibit A (the "Amended Credit
Agreement") and to extend credit in the form of Loans provided for in the
Amended Credit Agreement in an aggregate principal amount at any time
outstanding not exceeding $250,000,000. The proceeds of such Loans are to be
used for general corporate purposes of the Borrowers and their subsidiaries,
including working capital, capital expenditures, acquisitions and equity
investments.
C. At the time the amendment and restatement of the Original
Credit Agreement becomes effective, the commitments of the Departing Lenders
under the Original Credit Agreement will terminate and the Departing Lenders
shall cease to be parties to such Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
contained in this Amendment 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 of Credit Agreement; Termination of
certain Loan Documents. (a) The Original Credit Agreement is hereby amended and
restated, effective as of the Amendment Effective Date (as hereinafter defined),
in the form of the Amended Credit Agreement. Upon the effectiveness of such
amendment and restatement, all loans outstanding under the Original Credit
Agreement will be deemed to be Loans outstanding under the Amended Credit
Agreement and, in the case of the Eurodollar Loans, to have initial Interest
Periods ending on the dates designated in writing by the Borrowers to the Agent
prior to the Amendment Effective Date.
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(b) The Loan Documents (as defined in the Original Credit
Agreement), other than the Original Credit Agreement, are terminated as of the
Amendment Effective Date.
SECTION 2. Assignment. (a) Subject to the conditions referred
to in Section 5, on and as of the Amendment Effective Date, each Lender shall
sell and assign or purchase, as the case may be, the interests in the Loans
outstanding under the Amended Credit Agreement by virtue of Section 1 above, in
order that, after giving effect to all such sales, assignments and purchases,
such Loans will be held by the Continuing Lenders ratably in accordance with
their Commitments as set forth in Schedule 2.01 of the Amended Credit Agreement.
Such assignments and purchases shall be without recourse, warranty or
representation, except that each assigning Lender (collectively, the "Assigning
Lenders") shall be deemed to have represented that it is the legal and
beneficial owner of the Loans assigned by it and that such Loans are free and
clear of any adverse claim. The purchase price for each such sale, assignment
and purchase shall equal the principal amount of the subject Loans. Each Lender
purchasing Loans hereunder (collectively, the "Purchasing Lenders") shall be
deemed to have purchased the Loans purchased by it from each of the Assigning
Lenders pro rata based on the amounts of the Loans being sold by such Assigning
Lenders. As of the Amendment Effective Date, each Departing Lender shall cease
to be a party to the Original Credit Agreement; provided, however, that,
notwithstanding the foregoing, each Departing Lender shall retain all its rights
under the Original Credit Agreement in respect of indemnification and expense
reimbursement obligations, including under Sections 2.13, 2.15, 2.19 and 10.05
thereof.
(b) On the Amendment Effective Date, (i) each Purchasing
Lender shall pay the amount to be paid by it pursuant to paragraph (a) above by
wire transfer to such account in New York City as the Agent may designate in
Federal funds not later than 12:00 (noon), New York City time, and (ii) the
Agent shall pay each Assigning Lender, solely from the amounts received by it
pursuant to clause (i) above or the next sentence, the amounts to be received by
such Assigning Lender pursuant to paragraph (a) above by wire transfer of
Federal funds not later than 3:00 p.m., New York City time to the account of
such Assigning Lender designated on the Administrative Questionnaire submitted
to the Agent by such Assigning Lender or, in the case of any Departing Lender,
to the account of such Assigning Lender designated in writing to the Agent. The
Borrowers agree that if any Lender shall default in the payment of any amount
due from it under this Section 2, the Borrowers shall promptly pay the defaulted
amount to the Agent by wire transfer of immediately available funds, together
with interest on such amount at the Alternate Base Rate from the Amendment
Effective Date to the date of payment. Upon any such payment by the Borrowers,
(i) the Borrowers shall be subrogated to all rights of the assigning Lender
against the defaulting Lender and (ii) the Borrowers shall have the right, at
the defaulting Lender's expense, upon notice to the defaulting Lender and to the
Agent, to require such defaulting Lender to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in Section 10.04
of the Amended Credit Agreement) all its interests, rights and obligations under
the Amended Credit Agreement to another financial institution which shall assume
such interests, rights and obligations; provided that (A) no such assignment
shall conflict with any law, rule or regulation or order of any Governmental
Authority
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and (B) the assignee shall pay to the defaulting Lender, in immediately
available funds on the date of such assignment, the outstanding principal of and
interest accrued to the date of payment on the Loans made or deemed made by such
defaulting Lender under the Amended Credit Agreement, if any, and all other
amounts accrued for such defaulting Lender's account or owed to it under the
Amended Credit Agreement.
SECTION 3. Fees; Interest. (a) On the Amendment Effective
Date, simultaneously with the effectiveness of the assignments provided for in
Section 2, the Borrowers shall pay (i) to the Agent, for its own account or the
accounts of the Departing Lenders and Continuing Lenders, as the case may be,
the fees that have accrued to but excluding the Amendment Effective Date but not
been paid under the Original Credit Agreement and (ii) for the accounts of the
Agent and the Lenders entitled thereto, the Fees referred to in Section 5(e).
The fees referred to in this Section will be payable in immediately available
funds and, once paid, will not be refundable, absent manifest error.
(b) On the Amendment Effective Date, simultaneously with the
effectiveness of the assignments provided for in Section 2, the Borrowers shall
pay to the Agent, for the accounts of the Departing Lenders and the Continuing
Lenders, all unpaid interest accrued to but excluding the Amendment Effective
Date on the loans outstanding under the Original Credit Agreement.
(c) Any sale of a Loan by a Lender under this Amendment
Agreement shall be deemed a prepayment of such Loan for purposes of Section 2.15
of the Original Credit Agreement. In addition, any reduction in the length of an
existing Interest Period pursuant to Section 1 above shall be deemed a
prepayment of the subject Loan as of the date of the last day of such reduced
Interest Period and the Company hereby agrees to treat such prepayment in
accordance with Section 2.15 of the Original Credit Agreement.
(d) The Agent will, upon receipt thereof, promptly pay to the
Departing Lenders and Continuing Lenders any fees and unpaid interest received
pursuant to clause (a) or (b) above for their account.
SECTION 4. Representations and Warranties. Each Borrower
represents and warrants to the Agent and to each of the Lenders that:
(a) This Amendment and the Amended Credit Agreement have been
duly authorized, executed and delivered by it and constitute its legal,
valid and binding obligations enforceable in accordance with their
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, or by general equity
principles (whether enforcement is sought by proceedings in equity or
at law), including but not limited to principles governing the
availability of the remedies of specific performance and injunctive
relief.
(b) The representations and warranties set forth in Article
III of the Amended Credit Agreement and in the other Loan Documents are
true and correct in all material respects with the same effect as if
made on the date hereof, except to the extent such representations and
warranties expressly relate to an earlier
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date, in which case they were true and correct in all material respects
on and as of such earlier date.
(c) As of the date hereof, no Default or Event of Default
has occurred and is continuing.
SECTION 5. Effectiveness. The sales, assignments and purchases
provided for in Section 2 shall become effective on September 6, 1996, but only
upon satisfaction of the following conditions precedent (such date, in the event
such conditions shall be satisfied, being the "Amendment Effective Date"):
(a) The Agent shall have received on behalf of itself and the
Lenders a favorable written opinion of Xxxxx X. Xxxxx, Esq., General
Counsel of the Company, dated the Amendment Effective Date and
addressed to the Agent and the Lenders, substantially to the effect set
forth in Exhibit B hereto and satisfactory to Cravath, Swaine & Xxxxx,
counsel for the Agent. The Company hereby instructs such counsel to
deliver such opinion.
(b) All legal matters incident to this Amendment Agreement and
the Amended Credit Agreement, the borrowings and extensions of credit
thereunder and the other Loan Documents shall be satisfactory to the
Lenders and the Agent and to Cravath, Swaine & Xxxxx, counsel for the
Agent.
(c) The Agent shall have received (i) a copy of all amendments
to the certificate or articles of incorporation (or analogous
documents) of each of the Borrowers, since December 1, 1994, certified
as of a recent date by the Secretary of State (or other appropriate
Governmental Authority) of the state or country of its organization,
and a certificate as to the good standing (or such other analogous
certification to the extent available) of such Borrower as of a recent
date, from such Secretary of State (or other appropriate Governmental
Authority) or such other evidence as is reasonably satisfactory to the
Agent; (ii) a certificate of the Secretary or Assistant Secretary of
such Borrower dated the Amendment Effective Date and certifying (A)
that attached thereto is a true and complete copy of the by-laws (or
such analogous documents to the extent available) of such Borrower as
in effect on the Amendment Effective Date and at all times since a date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Borrower authorizing the
execution, delivery and performance of this Amendment Agreement, the
Amended Credit Agreement and the other Loan Documents and the
borrowings thereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation (or analogous
documents) of such Borrower have not been amended since the date of the
last amendment thereto shown on the certificate of good standing (or
other analogous certification or such other evidence reasonably
satisfactory to the Agent) furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer
executing this Amendment Agreement, the Amended Credit Agreement or any
Loan Document or other document
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delivered in connection herewith on behalf of such Borrower; (iii) a
certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and (iv) such other documents as
the Lenders or their counsel or Cravath, Swaine & Xxxxx, counsel for
the Agent, may reasonably request.
(d) The Agent shall have received a certificate of each of the
Borrowers, dated the Amendment Effective Date and signed, in the case
of the Company, by a Financial Officer of the Company, and in the case
of each Borrower other than the Company, a Responsible Officer of such
Borrower, confirming compliance with the conditions precedent set forth
in paragraphs (b) and (c) of Section 4.01 of the Amended Credit
Agreement.
(e) The Agent shall have received all Fees and other amounts
due and payable on or prior to the Amendment Effective Date hereunder
or under the Amended Credit Agreement.
(f) The Agent shall have received counterparts of this
Amendment Agreement and the Amended Credit Agreements which, when taken
together, bear the signatures of all the parties hereto and thereto.
On or prior to the Amendment Effective Date, the Departing
Lenders and the Continuing Lenders shall deliver to the Agent, for delivery to
and cancelation by the Borrowers, all notes issued by the Borrowers under the
Original Credit Agreement and then held by them (collectively, the "Old Notes").
Upon the effectiveness of the assignments referred to in Section 2 of this
Amendment Agreement, the Agent shall release and deliver the Old Notes of the
Borrowers for cancellation. Each of the Lenders that fails so to deliver its Old
Notes hereby agrees to indemnify the Borrowers against any loss resulting from
such failure. Notwithstanding the foregoing, no Departing Lender shall be
obligated to deliver any Old Note except against receipt of payments as set
forth in Sections 2(b) and 3 hereof.
SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
SECTION 7. Counterparts. This Amendment Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
contract. Delivery of an executed counterpart of a signature page by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment.
SECTION 8. Expenses. The Company agrees to reimburse the Agent
for its reasonable out-of-pocket expenses in connection with this Amendment
Agreement and the Amended Credit Agreement, including the reasonable fees,
charges and disbursements of Cravath, Swaine & Xxxxx, counsel for the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment Agreement to be duly executed by their respective authorized officers
as of the day and year first written above.
MANOR CARE, INC., as a
Borrower and as a guarantor,
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
MANOR HEALTHCARE CORP., as a
Borrower,
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
CHOICE HOTELS INTERNATIONAL, INC.,
as a Borrower,
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
by
Name:
Title:
QUALITY HOTELS EUROPE, INC., as a
Borrower,
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
QUALITY HOTELS EUROPE (JENA) GmbH,
as a Borrower,
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
THE CHASE MANHATTAN BANK,
individually and as Agent,
by
/s/ Xxxx Xxx Xxx
Name: Xxxx Xxx Xxx
Title: Vice President
NATIONSBANK, N.A., individually and
as Co-Agent,
by
/s/ X. Xxxxxx Choppin
Name: X. Xxxxxx Choppin
Title: Senior Vice President
AMSOUTH BANK OF ALABAMA,
by
/s/ Laine Little
Name: Laine Little
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
by
/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Managing Director
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH,
by
/s/ J. Xxxxxx Xxx
Name: J. Xxxxxx Xxx
Title: Vice President and
Manager
CITIBANK, N.A.,
by
/s/ Xxxxxxxx AuBrown
Name: Xxxxxxxx AuBrown
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
by
/s/ Farboud Tavangar
Name: Farboud Tavangar
Title: Vice President
CRESTAR BANK,
by
/s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
THE DAI-ICHI KANGYO BANK, LTD.,
by
/s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and
Group Leader
DEUTSCHE BANK AG, New York and/or
Cayman Islands Branches,
by
/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Director
by
/s/ Xxxx Xxxx Xxxxx
Name: Xxxx Xxxx Goyal
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
by
/s/ Xxxxxxxx Xxxxxxxxxxxx
Name: Xxxxxxxx Xxxxxxxxxxxx
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF MARYLAND,
by
/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
by
/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK,
by
/s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
MELLON BANK, N.A.,
by
/s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Banking Officer
PNC BANK, NATIONAL ASSOCIATION,
by
/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
THE SANWA BANK LIMITED,
by
/s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
TORONTO DOMINION (NEW YORK), INC.,
by
/s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Vice President
ANNEX I
Departing Lenders
Amsouth Bank of Alabama
Citibank, N.A.
Continuing Lenders
The Chase Manhattan Bank
NationsBank, N.A.
Bank of America National Trust and Savings Association
The Bank of Tokyo-Mitsubishi, Ltd., New York Branch
Credit Lyonnais New York Branch
Crestar Bank
The Dai-Ichi Kangyo Bank, Ltd.
Deutsche Bank AG, New York and/or Cayman Islands Branches The First
National Bank of Chicago The First National Bank of Maryland First
Union National Bank of North Carolina Fleet National Bank Mellon Bank,
N.A. PNC Bank, National Association The Sanwa Bank Limited Toronto
Dominion (New York), Inc.
EXHIBIT B
FORM OF OPINION
OF XXXXX X. XXXXX, ESQ.
GENERAL COUNSEL FOR THE COMPANY
1. Each of the Borrowers (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business as not conducted and as proposed to be
conducted, (c) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not
result in a Material Adverse Effect, and (d) has the power and authority to
execute, deliver and perform its obligations under the Amendment Agreement and
each of the Loan Documents and each other agreement or instrument contemplated
thereby to which it is or will be a party and to borrow under the Loan
Documents.
2. The execution, delivery and performance by each of the
Borrowers of the Amendment Agreement and each of the Loan Documents and the
borrowings under the Loan Documents by each of the Borrowers (collectively, the
"Transactions") (a) have been duly authorized by all requisite action,
including, if required, stockholder action on the part of each of the Borrowers
and (b) will not (i) violate (A) to my best knowledge after due inquiry, any
provision of law, statute, rule or regulation, (B) any provision of the
certificate or articles of incorporation or other constitutive documents or
by-laws of any Borrower, (C) to my best knowledge after due inquiry, any order
of any Governmental Authority or (D) to my best knowledge after due inquiry, any
provision of any indenture, agreement or other instrument to which any Borrower
is a party or by which any of them or any of their property is or may be bound,
(ii) to my best knowledge after due inquiry, 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 or other instrument or (iii) result
in the creation or imposition of any Lien upon or with respect to any property
or assets now owned or hereafter acquired by any Borrower.
3. The Amendment Agreement has been duly executed and
delivered by each of the Borrowers and constitutes, and each of the Loan
Documents when executed and delivered by each of the Borrowers will constitute,
a legal, valid and binding obligation of each Borrower enforceable against each
Borrower in accordance with its terms.
4. No action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is or will be required in
connection with the Transactions, except such as have been made or obtained and
are in full force and effect.
5. (a) There are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of the Company, threatened against or affecting any Borrower or any
business, property or rights of any such person (i) which involve any Loan
Document or the Transactions (excluding any such actions, suits or proceedings
threatened by the Lenders or the Agent) or (ii) as to which there is a
reasonable probability of any adverse determination and which, if such probable
adverse determination
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occurred, could reasonably be anticipated to result in a Material
Adverse Effect.
(b) None of the Borrowers is in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be anticipated to result in a Material Adverse Effect.
6. None of the Borrowers is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
