EXHIBIT 10(b)
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$50,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
(Facility B)
AMONG
LA QUINTA INNS, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
September 12, 1995
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS.......................................... 1
Section 1.2 AMENDMENTS AND RENEWALS................................ 19
Section 1.3 CONSTRUCTION........................................... 19
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES........................................... 19
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT................... 20
Section 2.3 INTEREST............................................... 21
(a) ON BASE RATE ADVANCES.................................. 21
(b) ON LIBOR ADVANCES...................................... 22
(c) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE
BASIS.................................................. 22
(d) INTEREST AFTER AN EVENT OF DEFAULT..................... 22
Section 2.4 FEES................................................... 23
(a) FACILITY FEE........................................... 23
(b) CLOSING FEE............................................ 24
(c) OTHER FEES............................................. 24
Section 2.5 PREPAYMENT............................................. 24
(a) VOLUNTARY PREPAYMENTS.................................. 24
(b) MANDATORY PREPAYMENT................................... 24
(c) PREPAYMENTS, GENERALLY................................. 24
Section 2.6 REDUCTION OF COMMITMENT................................ 25
(a) VOLUNTARY REDUCTION.................................... 25
(b) MANDATORY REDUCTION.................................... 25
(c) GENERAL REQUIREMENTS................................... 25
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER...... 25
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES....................... 25
(a) END OF INTEREST PERIOD................................. 26
(b) COMMITMENT REDUCTION................................... 26
(c) MATURITY DATE.......................................... 26
Section 2.9 REIMBURSEMENT.......................................... 26
Section 2.10 MANNER OF PAYMENT...................................... 26
Section 2.11 LIBOR LENDING OFFICES.................................. 27
Section 2.12 SHARING OF PAYMENTS.................................... 27
Section 2.13 CALCULATION OF RATES................................... 27
Section 2.14 BOOKING LOANS.......................................... 28
Section 2.15 TAXES.................................................. 28
Section 2.16 EXTENSION OF MATURITY DATE............................. 31
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCES........... 31
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES................... 33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES......................... 34
(a) ORGANIZATION; POWER; QUALIFICATION..................... 34
(b) AUTHORIZATION.......................................... 34
(c) COMPLIANCE WITH OTHER LOAN PAPERS AND CONTEMPLATED
TRANSACTIONS........................................... 35
(d) LICENSES, ETC.......................................... 35
(e) COMPLIANCE WITH LAW.................................... 35
(f) TITLE TO PROPERTIES.................................... 35
(g) LITIGATION............................................. 36
(h) TAXES.................................................. 36
(i) FINANCIAL STATEMENTS; MATERIAL LIABILITIES............. 36
(j) NO ADVERSE CHANGE...................................... 36
(k) ERISA.................................................. 36
(l) COMPLIANCE WITH REGULATIONS G, T, U AND X.............. 38
(m) GOVERNMENTAL REGULATION................................ 38
(n) ABSENCE OF DEFAULT..................................... 38
(o) INVESTMENT COMPANY ACT................................. 38
(p) ENVIRONMENTAL MATTERS.................................. 39
(q) CERTAIN FEES........................................... 39
(r) NECESSARY AUTHORIZATIONS............................... 39
(s) PATENTS, ETC........................................... 40
(t) DISCLOSURE............................................. 40
(u) SOLVENCY............................................... 40
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC........ 40
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ARTICLE 5
BUSINESS COVENANTS
Section 5.1 MAINTENANCE OF PROPERTY, INSURANCE, ACCOUNTING
PRACTICES, CORPORATE EXISTENCE......................... 41
Section 5.2 INSPECTION OF PROPERTIES AND BOOKS..................... 42
Section 5.3 MERGER AND SALE OF ASSETS.............................. 42
Section 5.4 NET WORTH.............................................. 43
Section 5.5 CONTINGENT LIABILITIES................................. 43
Section 5.6 INCURRENCE AND RETENTION OF DEBT....................... 43
Section 5.7 INVESTMENTS............................................ 43
Section 5.8 NOTICE OF LITIGATION................................... 43
Section 5.9 TOTAL DEBT RATIO....................................... 44
Section 5.10 CASH FLOW RATIO........................................ 44
Section 5.11 SENIOR DEBT RATIO...................................... 44
Section 5.12 LIENS.................................................. 44
Section 5.13 ACCOUNTING CHANGES..................................... 44
Section 5.14 AMENDMENT AND MODIFICATION OF SUBORDINATED DEBT
DOCUMENTS............................................. 45
Section 5.15 LEASE-BACKS............................................ 45
Section 5.16 ENVIRONMENTAL MATTERS.................................. 45
Section 5.17 ERISA COMPLIANCE....................................... 46
Section 5.18 BUSINESS............................................... 46
Section 5.19 DEBT................................................... 47
Section 5.20 TRANSACTIONS WITH AFFILIATES........................... 47
Section 5.21 USE OF PROCEEDS........................................ 47
Section 5.22 INDEMNITY.............................................. 47
ARTICLE 6
INFORMATION
Section 6.1 FINANCIAL STATEMENTS AND OTHER REPORTS BY THE
BORROWER.............................................. 49
Section 6.2 OFFICER'S CERTIFICATE.................................. 51
ARTICLE 7
DEFAULT
Section 7.1 EVENTS OF DEFAULT...................................... 51
Section 7.2 REMEDIES............................................... 53
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ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.1 LIBOR BASIS DETERMINATION INADEQUATE.................. 54
Section 8.2 ILLEGALITY............................................ 54
Section 8.3 INCREASED COSTS....................................... 55
Section 8.4 EFFECT ON BASE RATE ADVANCES.......................... 56
Section 8.5 CAPITAL ADEQUACY...................................... 56
ARTICLE 9
AGREEMENT AMONG LENDERS
Section 9.1 AGREEMENT AMONG LENDERS............................... 57
(a) ADMINISTRATIVE LENDER................................. 57
(b) REPLACEMENT OF ADMINISTRATIVE LENDER.................. 57
(c) EXPENSES.............................................. 58
(d) DELEGATION OF DUTIES.................................. 58
(e) RELIANCE BY ADMINISTRATIVE LENDER..................... 58
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY....... 58
(g) LIABILITY AMONG LENDERS............................... 59
(h) RIGHTS AS LENDER...................................... 59
Section 9.2 LENDER CREDIT DECISION................................ 59
Section 9.3 BENEFITS OF ARTICLE................................... 60
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES............................................... 60
Section 10.2 EXPENSES.............................................. 60
Section 10.3 WAIVERS............................................... 61
Section 10.4 DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING... 61
Section 10.5 SET-OFF............................................... 62
Section 10.6 ASSIGNMENT............................................ 62
Section 10.7 COUNTERPARTS.......................................... 64
Section 10.8 SEVERABILITY.......................................... 64
Section 10.9 INTEREST AND CHARGES.................................. 64
Section 10.10 CONFIDENTIALITY....................................... 65
Section 10.11 HEADINGS.............................................. 65
Section 10.12 AMENDMENT AND WAIVER.................................. 65
Section 10.13 EXCEPTION TO COVENANTS................................ 66
Section 10.14 TERMINATION OF PARTICIPATIONS IN BOND LETTERS OF
CREDIT................................................ 66
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Section 10.15 TERMINATION OF COMMITMENT............................. 66
Section 10.16 GOVERNING LAW........................................ 66
Section 10.17 WAIVER OF JURY TRIAL................................. 66
Section 10.18 ENTIRE AGREEMENT..................................... 67
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SCHEDULES AND EXHIBITS
Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Litigation
Schedule 3: Subsidiaries and Unincorporated Ventures
Schedule 4: Existing Investments
Schedule 5: Investment Policy
Schedule 6: Unincorporated Ventures to be Purchased
Schedule 7: Benefit Agreements With Former Employees
Schedule 8: Insolvent Unincorporated Ventures
Schedule 9: Existing Letters of Credit
Schedule 10: Significant Investments
Schedule 11: Guaranteed Contingent Obligations
Schedule 12: Existing Liens
Exhibit A: Promissory Note
Exhibit B: Subsidiary Guaranty
Exhibit C: Assignment Agreement
Exhibit D: Confidentiality Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
(Facility B)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (Facility B) is dated as of
September 12, 1995, among LA QUINTA INNS, INC., a Texas corporation
("Borrower"), the Lenders from time to time party hereto, and NATIONSBANK OF
TEXAS, N.A., a national banking association, as administrative agent for the
Lenders.
BACKGROUND
The Borrower, certain of the Lenders and the Administrative Lender are
parties to that Credit Agreement dated as of January 25, 1994 (said Credit
Agreement, as amended, the "Existing Credit Agreement"). The Borrower has
requested that the Lenders amend and restate the Existing Credit Agreement by
making a credit facility available to the Borrower in the maximum principal
amount of (i) $200,000,000 pursuant to the Facility A Credit Agreement (as
herein defined) and (ii) $50,000,000 pursuant to this Agreement. The Lenders
have agreed to provide the $50,000,000 credit facility, subject to the terms
and conditions set forth below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement is amended and
restated in its entirety, together with the Facility A Credit Agreement, as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. For purposes of this Agreement:
"ADDITIONAL COSTS" has the meaning set forth in Section 8.5 hereof.
"ADJUSTMENT DATE" means, for purposes of the Applicable Margin and the
facility fees payable pursuant to Section 2.4(a) hereof, (i) when the
Applicable Margin and such fees are based on the Leverage Ratio, the date of
receipt by the Administrative Lender of the financial statements required to
be delivered pursuant to Section 6.1(a) or 6.1(b) hereof which results in a
change in the Applicable Margin and (ii) when the Applicable Margin and the
facility fees are based on the Index Debt Rating, the effective date of any
issuance of, or change in, the Index Debt Rating which results in a change in
the Applicable Margin.
"ADMINISTRATIVE LENDER" means NationsBank of Texas, N.A., a national
banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 9.1(b) hereof.
"ADVANCE" means an Advance made pursuant to Section 2.1(a) hereof.
"AFFILIATE" means any Person that directly or indirectly through one or
more Subsidiaries Controls, or is Controlled By or Under Common Control with,
the Borrower.
"AGREEMENT" means this Credit Agreement, as amended, modified,
supplemented and restated from time to time.
"AGREEMENT DATE" means the date of this Agreement.
"APPLICABLE ENVIRONMENTAL LAWS" means applicable laws pertaining to
health or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and its properties,
including, without limiting the foregoing, all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in
question is a party, and (b) in respect of contracts relating to interest or
finance charges that are made or performed in the State of Texas, "APPLICABLE
LAW" shall mean the laws of the United States of America, including without
limitation 12 USC 85 and 86, as amended from time to time, and any other
statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit,
and the laws of the State of Texas, including, without limitation, Article
5069-1.04, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("Art.
1.04"), and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree that the provisions of Chapter
15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall not
apply to Advances, this Agreement, the Notes or any other Loan Papers.
"APPLICABLE MARGIN" means the following per annum percentages,
applicable in the following situations:
BASE RATE LIBOR
APPLICABILITY BASIS BASIS
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CATEGORY 1 - The Leverage Ratio is not less than 3.50 to 1 0.00 0.75
or the Index Debt Rating is any two of the following: BB
by S&P, BB by ARA or Ba2 by ▇▇▇▇▇'▇
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BASE RATE LIBOR
APPLICABILITY BASIS BASIS
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CATEGORY 2 - The Leverage Ratio is less than 3.50 to 1 but 0.00 0.60
not less than 3.00 to 1 or the Index Debt Rating is any two
of the following: BB+ by S&P, BB+ by ARA or Ba1 by ▇▇▇▇▇'▇
CATEGORY 3 - The Leverage Ratio is less than 3.00 to 1 but 0.00 0.50
not less than 2.50 to 1 or the Index Debt Rating is any two
of the following: BBB- by S&P, BBB- by ARA or Baa3 by ▇▇▇▇▇'▇
CATEGORY 4 - The Leverage Ratio is less than 2.50 to 1 but 0.00 0.40
not less than 2.0 to 1 or the Index Debt Rating is any two of
the following: BBB by S&P, BBB by ARA or Baa2 by ▇▇▇▇▇'▇
CATEGORY 5 - The Leverage Ratio is less than 2.00 to 1 or the 0.00 0.325
Index Debt Rating is any two of the following: BBB+ or better
by S&P, BBB+ or better by ARA or Baa1 or better by ▇▇▇▇▇'▇
The Applicable Margin payable by the Borrower on the Advances outstanding
hereunder shall be adjusted on each Adjustment Date if determined based on
the (i) Leverage Ratio, according to the performance of the Borrower for the
most recent fiscal quarter or (ii) the Index Debt Rating, according to the
most recent determination of the Index Debt Rating. For purposes of the
foregoing, (a) if the Index Debt Rating and the Leverage Ratio are in
different categories, the Applicable Margin shall be determined on whichever
of the Index Debt Rating or the Leverage Ratio falls within the superior (or
numerically higher) category, (b) if the Applicable Margin is determined
based on the Leverage Ratio and the financial statements of the Borrower
setting forth the Leverage Ratio are not received by the Administrative
Lender by the date required pursuant to Section 6.1(a) or 6.1(b), the
Applicable Margin shall be determined as if the Leverage Ratio is not less
than 3.50 to 1 until such time as the financial statements are received, (c)
if the Index Debt Rating established by ARA shall fall within a different
category than both ▇▇▇▇▇'▇ and S&P, the Applicable Margin shall be determined
by reference to ▇▇▇▇▇'▇ or S&P, whichever is the superior (or numerically
higher) category, but not to exceed two rating levels higher than the other
rating agency. If the rating system of ▇▇▇▇▇'▇, S&P or ARA shall change
prior to the Maturity Date, the Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings in this definition to
reflect such changed rating system.
"ARA" means Duff & ▇▇▇▇▇▇ Credit Ratings Company or Fitch Investor
Services or any other nationally recognized rating agency approved in writing
by the Determining Lenders which shall have a rating system identical to S&P.
"ART. 1.04" has the meaning specified in the definition of "Applicable
Law."
"ASSIGNEES" means any assignee of a Lender pursuant to an Assignment
Agreement and has the meaning specified in Section 10.6 hereof.
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"ASSIGNMENT AGREEMENT" has the meaning specified in Section 10.6 hereof.
"AUTHORIZED OFFICER" means any of the following officers of the
Borrower: President, Senior Vice President-Accounting & Administration, Senior
Vice President-Finance, Vice President & General Counsel or Vice
President-Treasurer.
"AUTHORIZED SIGNATORY" means such senior personnel of the Borrower as
may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to
request Advances hereunder.
"BASE RATE ADVANCE" means an Advance which the Borrower requests to be
made as a Base Rate Advance or which is reborrowed as a Base Rate Advance, in
accordance with the provisions of Section 2.2 hereof.
"BASE RATE BASIS" means, for any day, a per annum interest rate equal
to the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day, plus (iii) the Applicable Margin, or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Margin. The Base Rate Basis shall
be adjusted automatically as of the opening of business on the effective date
of each change in the Prime Rate to account for such change.
"BOND LETTERS OF CREDIT" has the meaning specified in the Existing
Credit Agreement.
"BORROWER" means La Quinta Inns, Inc., a Texas corporation.
"BUSINESS DAY" means a day on which banks are open for the transaction
of business in Dallas, Texas and New York, New York, and, with respect to any
LIBOR Advance, in London, England.
"CAPITAL LEASES" mean all capital leases and subleases, as defined in
the Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 13, dated November 1976, as amended.
"CAPITAL STOCK" means, with respect to any Person, any capital stock,
partnership or joint venture interests of such Person and shares, interests,
participations or other ownership interests (however designated) of any Person
and any rights (other than debt securities convertible into corporate stock),
warrants or options to purchase any of the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means that portion of any obligation of
the Borrower or any Subsidiary as lessee under a lease which at the time would
be required to be capitalized on a balance sheet prepared in accordance with
GAAP.
"CHANGE OF CONTROL" means (a) any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable), is or becomes the "beneficial owner" (as that term is used in
Rules 13d-3 and 13d-5 under the
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Exchange Act, whether or not applicable, except that a person shall be deemed
to have "beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time, directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of Capital Stock then
outstanding of the Borrower normally entitled to vote in elections of
directors, PROVIDED, that for the purposes of this clause (a), neither ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ & Co., Trust for the benefit of ▇▇. ▇▇▇▇▇▇'▇ son, ▇▇▇ ▇. ▇▇▇▇,
Inc., ▇▇▇ ▇. ▇▇▇▇, Inc., The Bass Management Trust, ▇▇▇▇▇ ▇. ▇▇▇▇ Trust for
▇▇▇ ▇. ▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇ Trust for ▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trusts nor
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, each of which is a principal shareholder of the Borrower as
of the Agreement Date, nor any person who on the Agreement Date is, or at any
time thereafter becomes, a member of any group which includes any of such
entities and persons, shall be deemed to be a "person" or "group" for
purposes of this definition, or (b) during any period of 24 consecutive
months after September 12, 1995, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any
new directors whose election by such Board or whose nomination for election
by the shareholders of the Borrower was approved by a vote of a majority of
the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved), cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office.
"CODE" means the Internal Revenue Code of 1986, as amended, together
with all regulations thereunder.
"COMBINED" means, with respect to financial statements, the combined
accounts of the Borrower, its Subsidiaries and Unincorporated Ventures which
are included in the Borrower's Annual Report to Shareholders and in the
Borrower's Form 10-K filed with the Securities and Exchange Commission (the
"Combined Financial Statements").
"COMMITMENT" means $50,000,000, as reduced pursuant to Section 2.6
hereof.
"CONFIDENTIALITY AGREEMENT" has the meaning specified in Section 10.10
hereof.
"CONSOLIDATED NET INCOME" means, for any period, determined in
accordance with GAAP on a Combined basis, consolidated net income for such
period.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of voting securities, by
contract or otherwise); provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 10% or more (in number of votes)
of the securities having ordinary voting power for the election of directors
of a corporation shall be conclusively presumed to control such corporation.
"CONTROLLED GROUP" shall mean as of the applicable date, as to any
Person, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are
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treated as a single employer under Section 414(b), (c), (m) or (o) of the Code;
provided, however, that the Subsidiaries and Unincorporated Ventures of the
Borrower shall be deemed to be members of the Borrower's Controlled Group.
"CURRENT MATURITIES" means, with respect to any Person, the principal
portion payable by such Person on Long Term Debt during the twelve-month period
immediately succeeding the date of determination.
"DEBT" of any Person means, at any date, without duplication, all
obligations, contingent or otherwise, (a) of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (b) of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) representing the
balance deferred and unpaid of the purchase price of any property or services
(other than accounts payable or other obligations arising in the ordinary
course of business), if and to the extent any of the foregoing described in
clauses (a), (b) and (c) would appear as a liability on the balance sheet of
such Person, (d) of such Person in respect of bankers' acceptances, letters
of credit or other similar instruments (or reimbursement obligations with
respect thereto), (e) of such Person under Capitalized Lease Obligations, (f)
all liabilities secured by a Lien on any asset of such Person to the extent
of the value of such asset, whether or not such liability is an obligation of
such Person, (g) all liability of others guaranteed by such Person (but only
to the extent of such guarantees), (h) to the extent not otherwise included,
obligations of such Person under currency risk-hedging agreements and
Interest Rate Protection Agreements, (i) the liquidation preference and any
mandatory redemption payment obligations (without duplication) of such
Person's Subsidiaries in respect of preferred stock issued by any such
Subsidiary, (j) in the case of such Person, the liquidation preference and
any mandatory redemption payment obligations (without duplication) in respect
of Disqualified Capital Stock, and (k) in the case of such Person, unfunded
vested benefits under any Plan.
"DEBTOR RELIEF LAWS" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to
time in effect.
"DEFAULT" means an Event of Default and/or any of the events specified
in Section 7.1, regardless of whether there shall have occurred any passage of
time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"DEFAULT RATE" means a simple per annum interest rate equal to the
lesser of (a) the Highest Lawful Rate, or (b) the sum of the Prime Rate plus
three percent.
"DETERMINING LENDERS" means, on any date of determination, any
combination of the Lenders having at least 51% of the aggregate amount of the
Advances hereunder and Revolving Credit Advances (as defined in the Facility A
Credit Agreement) under the Facility A Credit Agreement (which for purpose of
the calculation shall include for each Lender an amount equal to the product of
such Lender's Specified Percentage multiplied by the aggregate principal
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amount of Swing Line Loans (as defined in the Facility A Credit Agreement)
outstanding) then outstanding; provided, however, that if there are no
Advances outstanding hereunder and no Revolving Credit Advances (as defined
in the Facility A Credit Agreement) outstanding under the Facility A Credit
Agreement, "DETERMINING LENDERS" shall mean any combination of Lenders whose
Specified Percentages hereunder and under the Facility A Credit Agreement
aggregate at least 51%.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person any
series or class of Capital Stock of such Person which is or may be required to
be redeemed, in whole or in part, or may be put to such Person or any of its
Subsidiaries, in whole or in part, at the option of the Holder thereof, on or
prior to the final maturity of the Senior Subordinated Notes, or is or may be
convertible or exchangeable into or exercisable for such Capital Stock on or
prior to the final maturity of the Notes; PROVIDED, that Capital Stock will
not be deemed to be Disqualified Capital Stock if it may only be so redeemed or
put solely in consideration of Qualified Capital Stock.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of any state within the United States.
"EBITDA" means, for any period, determined in accordance with GAAP on a
Combined basis, the sum of (a) Operating Income, plus (b) nonrecurring,
non-cash charges which decrease Operating Income, plus (c) depreciation,
amortization and non-cash fixed asset retirements, minus (d) nonrecurring
credits which are included in Operating Income.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA EVENT" means, with respect to the Borrower and its Subsidiaries,
(a) a Reportable Event (other than a Reportable Event not subject to the
provision for 30-day notice to the PBGC under regulations issued under
Section 4043 of ERISA), (b) the withdrawal of any such Person or any member
of its Controlled Group from a Plan subject to Title IV of ERISA during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC, (e) the failure to make required contributions which could
result in the imposition of a lien under Section 412 of the Code or Section
302 of ERISA, or (f) any other event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
the imposition of any liability under Title IV of ERISA other than PBGC
premiums due but not delinquent under Section 4007 of ERISA.
"EVENT OF DEFAULT" means any of the events specified in Section 7.1,
provided that any requirement for notice or lapse of time has been satisfied.
"EXISTING CREDIT AGREEMENT" means that certain Amended and Restated
Credit Agreement, dated as of January 25, 1994, among the Borrower, the lenders
party thereto, and
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NationsBank of Texas, N.A., as Administrative Lender, as amended, modified,
supplemented or restated from time to time.
"EXISTING INVESTMENTS" means those Investments described on SCHEDULE 4
hereto.
"EXISTING LETTERS OF CREDIT" means those Letters of Credit outstanding
on the Agreement Date, as described on SCHEDULE 9 hereto.
"FACILITY A CREDIT AGREEMENT" means that certain Amended and Restated
Credit Agreement (Facility A), dated as of the Agreement Date, among the
Borrower, the lenders party thereto, and NationsBank of Texas, N.A., as
administrative lender, as amended, restated, supplemented or otherwise modified
from time to time.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Administrative Lender on such day on such transactions as
determined by Administrative Lender.
"FEE LETTER" has the meaning specified in Section 2.4(c) hereof.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" means generally accepted accounting principles, set forth in the
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants, or their successors which are applicable in the
circumstances as of the date in question (except as stated in the last
sentence of this definition). The requisite that such principles be applied
on a consistent basis shall mean that the accounting principles observed in a
current period are comparable in all material respects to those applied in a
preceding period, except as otherwise required by the adoption of Statements
by the Financial Accounting Standards Board. Notwithstanding the foregoing,
each determination and computation with respect to financial covenants and
ratios in this Agreement shall be made in accordance with GAAP as in effect
on the Agreement Date.
"GUARANTY" or "GUARANTEED", as applied to an obligation of another
Person, means and includes (a) a guaranty, direct or indirect, in any manner,
of any part or all of such obligation, and (b) an agreement, direct or
indirect, contingent or otherwise, the practical effect of which is to assure
in any way the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including, without
limiting the foregoing,
- 8 -
any reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit.
"GUARANTY AGREEMENTS" means the Subsidiary Guaranty and any other
Guaranty executed by a Guarantor.
"GUARANTOR" means each Significant Subsidiary.
"HIGHEST LAWFUL RATE" means at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligations
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the indicated rate ceiling described in and computed in accordance with the
provisions of Section (a)(1) of Art. 1.04, or (b) if the parties subsequently
contract as allowed by Applicable Law, the quarterly ceiling or the annualized
ceiling computed pursuant to Section (d) of Art. 1.04; provided, however, that
at any time the indicated rate ceiling, the quarterly ceiling or the annualized
ceiling shall be less than 18% per annum or more than 24% per annum, the
provisions of Sections (b)(1) and (2) of said Art. 1.04 shall control for
purposes of such determination, as applicable.
"INCREASED ADVANCE COSTS" has the meaning specified in Section 8.3
hereof.
"INCREASED ADVANCE COSTS RETROACTIVE EFFECTIVE DATE" has the meaning
specified in Section 8.3 hereof.
"INCREASED ADVANCE COSTS SET DATE" has the meaning specified in Section
8.3 hereof.
"INDEMNIFIED MATTERS" has the meaning specified in Section 5.22 hereof.
"INDEMNITEES" has the meaning specified in Section 5.22 hereof.
"INDEX DEBT RATING" means the rating applicable to the Borrower's
senior, unsecured, non-credit-enhanced long term indebtedness for borrowed
money ("Index Debt") or the implied rating established by Moody's, S&P or ARA
as if the Borrower had outstanding Index Debt.
"INSOLVENT UNINCORPORATED VENTURES" means those Unincorporated Ventures
specified on SCHEDULE 8 hereto.
"INTEREST EXPENSE" of any Person means, for any period, the aggregate
interest expense in respect of Debt (including amortization of original issue
discount and non-cash interest payments or accruals, and dividends on
Disqualified Capital Stock, but excluding amortization
- 9 -
of Debt issuance costs) of such Person and all commissions, discounts, other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and costs associated with currency and Interest Rate
Protection Agreements, all in accordance with GAAP; PROVIDED, that interest
expense attributable to that portion of the Debt of another Person that is a
direct or indirect, contingent or primary, recourse obligation of such Person
subsequent to the Agreement Date shall be added thereto.
"INTEREST PERIOD" means (a) for any Base Rate Advance, the period
beginning on the day the Advance was made and ending on the Maturity Date, and
(b) for any LIBOR Advance, the period beginning on the day such Advance is made
and ending one, two, three, six months or twelve months thereafter (as the
Borrower shall select).
"INTEREST RATE PROTECTION AGREEMENT" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower or
any Subsidiary and other Person.
"INVESTMENT" means, in one or a series of related transactions, any
direct or indirect acquisition of all or substantially all assets of any
Person, or any direct or indirect purchase or other acquisition of, or
beneficial interest in, capital stock or other securities of any other
Person, or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution or
transfer of property, assets or value to, or investment, in any other Person,
including without limitation the incurrence or sufferance of Debt or the
purchase of accounts receivable of any other Person that are not current
assets or do not arise in the ordinary course of business.
"INVESTMENT POLICY" means that certain Amended and Restated La Quinta
Inns, Inc. Statement of Investment Policy as of October 1989 in effect on the
Agreement Date as specified on SCHEDULE 5 hereto.
"ISSUING BANK" means NationsBank of Texas, N.A. in its capacity as
issuer of the Letters of Credit.
"LENDER" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a Commitment or is owed
any part of the Obligations (including the Administrative Lender in its
individual capacity), and each Assignee that hereafter becomes party hereto
pursuant to Section 10.6 hereof.
"LEVERAGE RATIO" means, for any date of determination, the ratio of (i)
Total Debt as of the fiscal quarter immediately preceding the date of
determination to (ii) EBITDA, for the four consecutive fiscal quarters
preceding the date of determination. For purposes of calculation of EBITDA,
there shall be (i) included in EBITDA (without duplication) the EBITDA of any
assets acquired during any such four fiscal quarters and (ii) excluded from
EBITDA the EBITDA of any asset disposed during any such four fiscal quarters.
- 10 -
"LIBOR ADVANCE" means an Advance which the Borrower requests to be made
as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance
with the provisions of Section 2.2 hereof.
"LIBOR BASIS" means, with respect to each LIBOR Advance for each
Interest Period, a rate per annum equal to the lesser of (a) the Highest
Lawful Rate or (b) the sum of the LIBOR Rate plus the Applicable Margin.
"LIBOR LENDING OFFICE" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on SCHEDULE 1 attached hereto, and such
other office of the Lender or any of its affiliates hereafter designated by
notice to the Borrower and the Administrative Lender.
"LIBOR RATE" means, for any Interest Period, the interest rate per annum
(rounded upward to the nearest one-sixteenth (1/16th) of one percent) at which
deposits in United States Dollars are offered to the Administrative Lender by
leading banks reasonably selected by the Administrative Lender in the London
interbank market at approximately 11:00 a.m. (London time), two Business Days
before the first day of such Interest Period, in an amount approximately equal
to the principal amount of, and for a length of time approximately equal to the
Interest Period for, the LIBOR Advance sought by the Borrower.
"LIEN" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other
encumbrance of any kind in respect of such property, whether or not ▇▇▇▇▇▇,
vested or perfected.
"LOAN PAPERS" means this Agreement, the Notes, the Guaranty Agreements,
the Fee Letter, and any other document or agreement executed or delivered from
time to time by the Borrower, any Subsidiary or any other Person in connection
herewith or as security for all or any part of the Obligations.
"LOAN PARTY" means the Borrower and each Guarantor.
"LONG TERM DEBT" means any obligation which is due one year or more from
the date of creation thereof which under GAAP is shown as a liability, plus
(without duplication) amounts equal to the aggregate net rentals (after making
allowances for any interest, taxes or other expenses included therein) payable
more than one year from the date of creation thereof under Capital Leases.
"MAINTENANCE CAPITAL EXPENDITURES" means, for any date of determination,
an amount equal to the product of (a) 5% multiplied by (b) room revenues (as
disclosed in the Borrower's Form 10-K and 10-Q) of the Borrower, its
Subsidiaries and Unincorporated Ventures, for the four consecutive fiscal
quarters preceding the date of determination.
- 11 -
"MASTER COVENANT AGREEMENT" means the Fifth Amended and Restated Master
Covenant Agreement dated as of the Agreement Date, by and between the Borrower
and NationsBank of Texas, N.A., as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"MATERIAL ADVERSE CHANGE OR EFFECT" means any act or circumstance or
event which (a) is material and adverse to the combined or consolidated
financial condition of the Borrower, its Subsidiaries and Unincorporated
Ventures as represented in the Combined Financial Statements most recently
delivered to the Lenders at the time of any determination thereof or be
material and adverse to the combined or consolidated business operations or
properties of the Borrower, its Subsidiaries and Unincorporated Ventures or
(b) impairs the ability of the Borrower, any Subsidiary or any other Person
to perform in any material respect their respective obligations under the
Loan Papers.
"MATERIAL AMOUNT" means, as of the determination thereof, an amount
equal to the greater of (a) $1,000,000 or (b) the lesser of (i) $4,000,000 or
(ii) 1% of the consolidated revenues of the Borrower and its Subsidiaries
computed on a Combined basis for the fiscal year preceding the date of
determination.
"MATURITY DATE" means September 9, 1996, or the earlier date of
termination in whole of the Commitment pursuant to Section 2.6 or 7.2 hereof,
or such later date as agreed to by the Borrower and the Lenders pursuant to
Section 2.17 hereof.
"MAXIMUM AMOUNT" means the maximum amount of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.
"NECESSARY AUTHORIZATION" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with,
any governmental or other regulatory authority necessary or appropriate to
enable the Borrower or any Subsidiary or Unincorporated Venture to maintain
and operate its business and properties.
"NET CASH PROCEEDS" means the aggregate amount of cash received by the
Borrower in respect of the sale of Capital Stock of the Borrower, less the sum
of all fees, commissions and other expenses incurred in connection with such
sale.
"NET INCOME" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, as determined in accordance with
GAAP.
- 12 -
"NET INTEREST EXPENSE" means, with respect to any Person for any period,
the sum of (i) Interest Expense of such Persons for such period minus (ii)
interest income of such Person for such period as reflected on an income
statement of such Person prepared in accordance with GAAP.
"NET WORTH" means an amount equal to the sum of the Capital Stock and
additional paid-in-capital plus retained earnings (or minus accumulated
deficit) of the Borrower and its Subsidiaries, less (i) treasury stock and
(ii) amounts attributable to the extent included, (1) to any write-up in book
value of assets resulting from a revaluation thereof subsequent to June 30,
1995, and (2) to Disqualified Capital Stock, all in accordance with GAAP.
"NOTE" means any Promissory Note of the Borrower evidencing Advances
hereunder, substantially in the form of EXHIBIT A hereto, together with any
extension, renewal or amendment thereof or substitution therefor.
"OBLIGATIONS" means (a) all obligations of any nature (whether matured
or unmatured, fixed or contingent) of the Borrower, any Subsidiary or any
other Person to the Lenders under the Loan Papers as they may be amended from
time to time, and (b) all obligations of the Borrower, any Subsidiary or any
other Person for losses, damages, expenses or any other liabilities of any
kind that any Lender may suffer by reason of a breach by the Borrower, any
Subsidiary or any other Person of any obligation, covenant or undertaking
with respect to any Loan Paper.
"OBLIGOR" means Borrower or each other Person liable for performance of
any of the Obligations or the property of which secures any of the Obligations.
"OPERATING INCOME" means, with respect to any Person for any period, the
operating income (loss) of such Person, as determined in accordance with GAAP.
"OPERATING LEASE" means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"OTHER TAXES" has the meaning specified in Section 2.15 hereof.
"PARENT COMPANY" means, with respect to financial statements, the
uncombined, consolidated financial statements of the Borrower and its
Subsidiaries, including equity method investments, as defined by GAAP, in
Unincorporated Ventures and designated "La Quinta Inns, Inc. (Parent Company
and Wholly-Owned Subsidiaries)" on the Borrower's audit report.
"PARTICIPANT" has the meaning specified in Section 10.6(c) hereof.
"PARTICIPATION" has the meaning specified in Section 10.6(c) hereof.
- 13 -
"PARTNERS' CAPITAL" means the equity in the net assets of Unincorporated
Ventures of all the partners or venturers (other than the Borrower or a
Subsidiary) of such Unincorporated Ventures, or minority interest holders, as
determined in accordance with GAAP.
"PAYMENT DATE" means the last day of the Interest Period for any
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENT" means Investments in (i) wholly-owned Domestic
Subsidiaries (a) that are subject to the provisions of this Agreement, (b)
that concurrently therewith unconditionally guarantee the performance of the
Borrower's obligations under this Agreement and (c) that concurrently deliver
to the Lenders (1) an opinion acceptable to the Lenders with respect to the
validity and enforceability of such guarantee and (2) such other documents,
such as corporate resolutions, certificates of incumbency, by-laws and
articles of incorporation, as the Lenders shall reasonably require, (ii)
Investments in any Person other than a wholly-owned Subsidiary in any one or
a series of related transactions with a fair market value not in excess of
$25,000,000 in the aggregate for all Investments in all such Persons, (iii)
Investments for the purpose of satisfying the Borrower's or any Subsidiary's
guarantee obligations with respect to the Debt of any Person in which the
Borrower or any Subsidiary owned any interest and which obligation was in
existence as of the Agreement Date; (iv) Investments in Subsidiaries and
Unincorporated Ventures which do not guarantee the performance of the
Borrower's obligations under this Agreement made in the ordinary course of
business, consistent with past practices for the purpose of providing for the
day to day operating requirements of such Subsidiary or Unincorporated
Venture, PROVIDED, that such Investments shall (a) not be used for
acquisition or conversion of any inns and (b) be evidenced by a note or other
evidence of indebtedness and (c) not at any time exceed $10,000,000 in
aggregate principal amount, (v) Investments permitted by Sections II.B.,
II.C. (provided that, notwithstanding Section II.C.3. of the Investment
Policy, banks shall be required to have at least $150,000,000 in capital and
surplus), II.E. and II.H. of the Investment Policy, (vi) loans or advances to
employees as compensation for services in the ordinary course of business not
in excess of $2,000,000 aggregate principal amount, (vii) Investments in the
ordinary course of business, consistent with past practice, in the Borrower's
National Advertising Fund, (viii) Existing Investments, (ix) Investments in
Capital Stock of Subsidiaries and Unincorporated Ventures listed on SCHEDULE
3 hereto for the purpose of acquiring no less than 100% of the capital stock
or partnership interests, as appropriate, of such Subsidiaries and
Unincorporated Ventures, (x) Investments in notes payable to the Borrower as
a result of the sale of inns in an aggregate principal amount not in excess
of $10,000,000, provided that the Borrower shall obtain and continue to hold
a perfected first Lien (subject to Permitted Liens) in such inns, and (xi)
Investments in wholly-owned Foreign Subsidiaries (a) that are subject to the
provisions of this Agreement and (b) not to exceed in aggregate amount
$1,000,000 for all Investments in all Foreign Subsidiaries. For purposes of
the calculation of the amount of any Investments permitted hereunder,
Investments will be calculated at all times at the amount of the original
Investment with no reduction for write-offs or write-downs. No Investment
which is a Permitted Investment other than pursuant to clause (ii) of the
- 14 -
definition of "PERMITTED INVESTMENTS" shall reduce the amount of Investments
permitted pursuant to such clause (ii).
"PERMITTED LIENS" means, as applied to any Person:
(i) any Lien in favor of the Administrative Lender or a trustee on its
behalf to secure the Obligations;
(ii) (a) Liens on real estate for real estate taxes not yet
delinquent, (b) Liens created by lease agreements to secure the payments of
rental amounts and other sums not yet due thereunder, (c) Liens on leasehold
interests created by the lessor in favor of any mortgagee of the leased
premises, and (d) Liens for taxes, assessments, governmental charges, levies
or claims that are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on such
Person's books, but only so long as no foreclosure, restraint, sale or
similar proceedings have been commenced with respect thereto;
(iii) Liens of carriers, warehousemen, mechanics, laborers and
materialmen and other similar Liens incurred in the ordinary course of
business for sums not yet due or being contested in good faith, if such
reserve or appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iv) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or similar legislation;
(v) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person;
(vi) Liens created to secure the purchase price of fixed assets
acquired by such Person, which is incurred solely for the purpose of
financing the acquisition of such assets and incurred at the time of
acquisition, so long as (a) each such Lien shall at all times be confined
solely to the asset or assets so acquired (and proceeds thereof), (b) the
Liens were placed on such assets at the time such assets were acquired and
(c) the aggregate principal amount of Debt secured by such Liens does not
exceed, together with the principal amount of Debt secured by Liens permitted
pursuant to clause (vii) below, $25,000,000, and refinancings thereof so long
as any such Lien remains solely on the asset or assets acquired and the
amount of Debt related thereto is not increased;
(vii) Liens existing on any property acquired by such Person prior to
the acquisition of such property by such Person, provided (a) such Lien shall
at all times be confined solely to the property so acquired (and proceeds
thereof) and (b) the aggregate principal amount of Debt secured by such Liens
does not exceed, together with the principal amount of Debt secured by Liens
permitted pursuant to clause (vi) above, $25,000,000 and refinancings thereof
so long as any such Lien remains solely on the asset or assets acquired and
the amount of Debt related thereto is not increased;
- 15 -
(viii) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been secured,
provided that (a) such Person shall have established adequate reserves for such
judgments or awards, (b) such judgments or awards shall be fully insured and the
insurer shall not have denied coverage, or (c) such judgments or awards shall
have been bonded to the satisfaction of the Lenders;
(ix) Any Liens existing on the Agreement Date which are described on
SCHEDULE 12 hereto, and Liens resulting from the refinancing of the related
Debt, provided that the Debt secured thereby shall not be increased and the
Liens shall not cover additional assets of the Borrower;
(x) any obligations or duties, affecting any property, to any
municipality or public authority with respect to any franchise, grant, license
or permit which do not materially impair the use of any material property for
the purposes for which such property is held by such Person;
(xi) zoning laws or ordinances and municipal regulations which do not
materially impair the use of any material property for the purposes for which
such property is held by such Person;
(xii) Liens, minor irregularities in or deficiencies of title on any
property which do not materially impair the use of any material property for the
purposes for which such property is held by such Person; and
(xiii)Liens otherwise permitted or contemplated by the Loan Papers.
"PERSON" means and includes an individual, corporation, partnership,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA (including a Multiemployer Plan that is covered by Title IV of ERISA)
pursuant to which any employees of the Borrower, its Subsidiaries,
Unincorporated Ventures or any member of their Controlled Group participate;
PROVIDED, HOWEVER, "Plan" shall not include those agreements with former
employees of any of such Persons described on SCHEDULE 7 hereto, the
obligations pursuant to which do not exceed $450,000 in aggregate amount.
"PRIME RATE" means, at any time, the prime interest rate announced or
published by the Administrative Lender from time to time as its reference rate
for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by the Administrative Lender as
its "prime rate;" it being understood that such rate may not be the lowest rate
of interest charged by the Administrative Lender.
- 16 -
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Borrower that
is not Disqualified Capital Stock.
"QUARTERLY DATE" means the last Business Day of each February, May,
August and November, beginning November 30, 1995.
"REFINANCING ADVANCE" means any Advance which is used to pay the
principal amount (or any portion thereof) of an Advance at the end of its
Interest Period and which, after giving effect to such application, does not
result in an increase in the aggregate amount of outstanding Advances.
"REGULATORY MODIFICATION RETROACTIVE EFFECTIVE DATE" has the meaning
specified in Section 8.5 hereof.
"REGULATORY MODIFICATION SET DATE" has the meaning specified in Section
8.5 hereof.
"RELEASE DATE" means the date on which the Notes have been paid, all
other Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"REPORTABLE EVENT" has the meaning specified in Section 4043(b) of
ERISA.
"RIGHTS" means rights, remedies, powers and privileges.
"S&P" means Standard & Poor's Ratings Group, a Division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., a New York corporation.
"S.E.C." means the United States Securities and Exchange Commission.
"SENIOR DEBT" means Total Debt of the Borrower, its Subsidiaries and
Unincorporated Ventures, as appropriate, other than Subordinated Debt.
"SENIOR NOTES" means the Borrower's $100,000,000 senior unsecured notes
due 2005.
"SENIOR SUBORDINATED NOTES" means the Borrower's $120,000,000 9-1/4%
Senior Subordinated Notes due May 15, 2003 issued pursuant to the Senior
Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture pursuant to
which the Senior Subordinated Notes may be issued, as the same may be amended,
supplemented or otherwise modified.
"SIGNIFICANT INVESTMENTS" means those investments of the Borrower in the
joint ventures or partnerships set forth on SCHEDULE 10 hereto.
- 17 -
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Borrower (a) the
revenues attributable to which for the then most recently completed four fiscal
quarters constituted (or, with respect to Subsidiaries acquired during such four
fiscal quarters, would have constituted had the revenues of such Subsidiary been
included for such period) 2.5% or more of the consolidated revenues of the
Borrower and its Subsidiaries for such period, or (b) the assets of which as of
the end of such period constituted 2.5% or more of the consolidated assets of
the Borrower and its Subsidiaries as of the end of such period.
"SOLVENT" means, with respect to any Person, that the fair value of the
assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and such Person does not
have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"SPECIAL COUNSEL" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.C., or such other legal counsel as the Administrative Lender may select.
"SPECIFIED PERCENTAGE" means, as to any Lender, the percentage indicated
beside its name on the signature pages hereof, or if applicable, specified in
its most recent Assignment Agreement.
"SUBSIDIARY" with respect to any Persons, means (a) a corporation at
least a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person or (b) a partnership, joint venture or
similar entity in which 100% of the ownership, capital, interest or profits is
at the time, directly or indirectly, owned by such Person, by such Person and
one or more Subsidiaries of such Person or by one or more Subsidiaries of such
Person.
"SUBSIDIARY GUARANTY" means the Guaranty executed by each Significant
Subsidiary guaranteeing payment and performance of the Obligations,
substantially in the form of EXHIBIT B hereto, as such agreement may be
amended, modified, supplemented or restated from time to time.
"SUBORDINATED DEBT" means any debt, obligation or liability (whether
primary, contingent or otherwise) of the Borrower, a Subsidiary or an
Unincorporated Venture which by its terms is subordinate in right of payment to
the Obligations, provided that the Banks approve the terms thereof prior to or
at the time of the issuance thereof.
- 18 -
"TAXES" has the meaning specified in Section 2.15 hereof.
"TOTAL DEBT" means, as of any date of determination, the sum (without
duplication) of (a) all Debt of the Borrower and its Subsidiaries, minus (b)(i)
the aggregate face amount of Bond Letters of Credit outstanding and (ii) all
Debt of the Borrower and its Subsidiaries of the type described in (A) clauses
(f) and (g) of the definition of "DEBT" herein which are set forth on
SCHEDULE 11 hereto and (B) clauses (h) and (k) of the definition of "DEBT"
herein.
"TRIBUNAL" means any state, commonwealth, federal, foreign territorial,
or other court or governmental department, commission, board, bureau, agency or
instrumentality.
"UCC" means the Uniform Commercial Code of Texas, as amended from time
to time.
"UNINCORPORATED VENTURES" means those Persons designated as
"Unincorporated Ventures" on SCHEDULE 3 hereto.
Section 1.2 AMENDMENTS AND RENEWALS. Each definition of an agreement in
this Article 1 shall include such agreement as amended to date, and as amended
or renewed from time to time in accordance with its terms, but only with the
prior written consent of the Determining Lenders.
Section 1.3 CONSTRUCTION. The terms defined in this Article 1 (except
as otherwise expressly provided in this Agreement) for all purposes shall have
the meanings set forth in Section 1.1 hereof, and the singular shall include the
plural, and vice versa, unless otherwise specifically required by the context.
All accounting terms used in this Agreement which are not otherwise defined
herein shall be construed in accordance with GAAP on a consolidated basis for
the Borrower and its Subsidiaries, unless otherwise expressly stated herein.
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES. Each Lender severally agrees, upon the terms
and subject to the conditions of this Agreement, to make Advances to the
Borrower from time to time up to and including the Maturity Date in an aggregate
amount not to exceed an amount equal to its Specified Percentage of the
Commitment for the purposes set forth in Section 5.21 hereof. Notwithstanding
the immediately preceding sentence, at no time shall the aggregate principal
amount of Advances outstanding, exceed the Commitment. Subject to Section 2.9
hereof, Advances may be repaid and then reborrowed. Any Advance shall, at the
option of the Borrower as provided in Section 2.2 hereof (and, in the case of
LIBOR Advances, subject to availability and to the provisions of Article 8
hereof), be made as a Base Rate Advance or a LIBOR Advance; provided that there
shall not be outstanding to any Lender, at any one time,
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more than six LIBOR Advances. On the Maturity Date unless sooner paid as
provided herein, the outstanding Advances shall be repaid in full.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) In the case of Base Rate Advances other than a Refinancing Advance,
the Borrower, through an Authorized Signatory, shall give the Administrative
Lender prior to 10:30 a.m., Dallas, Texas time, on the date of any proposed Base
Rate Advance irrevocable written notice, or irrevocable telephonic notice
followed immediately by written notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow or reborrow a Base Rate Advance
hereunder. Such notice of borrowing shall specify the requested funding date,
which shall be a Business Day, and the amount of the proposed aggregate Base
Rate Advances to be made by Lenders. Each Base Rate Advance shall have an
Interest Period beginning on the date such Advance is made and ending on the
Quarterly Date next following the date the Advance is made; provided that no
such Interest Period shall extend past the Maturity Date.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least three Business Days'
irrevocable written notice for LIBOR Advances, or irrevocable telephonic notice
followed immediately by written notice (provided, however, that the Borrower's
failure to confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow or reborrow a LIBOR Advance
hereunder. Notice shall be given to the Administrative Lender prior to 11:00
a.m., Dallas, Texas time, in order for such Business Day to count toward the
minimum number of Business Days required. LIBOR Advances shall in all cases be
subject to availability and to Article 8 hereof. For LIBOR Advances, the notice
of borrowing shall specify the requested funding date, which shall be a Business
Day, the amount of the proposed aggregate LIBOR Advances, to be made by Lenders
and the Interest Period selected by the Borrower, provided that no such Interest
Period shall extend past the Maturity Date.
(c) Subject to Sections 2.1 and 2.9 hereof, at least three Business Days
prior to each Payment Date for a LIBOR Advance, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender irrevocable written
notice, or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), specifying whether all or
a portion of such LIBOR Advance outstanding on the Payment Date (i) is to be
repaid and then reborrowed in whole or in part as a Base Rate Advance or a LIBOR
Advance, or (ii) is to be repaid and not reborrowed; provided, however,
notwithstanding anything in this Agreement to the contrary, if on any Payment
Date a Default shall exist, such LIBOR Advance may only be reborrowed as a Base
Rate Advance. Upon such Payment Date, such LIBOR Advance shall, subject to the
provisions hereof, be so repaid and, as applicable, reborrowed.
(d) Subject to Sections 2.1 and 2.9 hereof, upon irrevocable written
notice to the Administrative Lender prior to 11:00 a.m., Dallas, Texas, time on
each Payment Date (or three
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Business Days if the Borrower wishes to reborrow a LIBOR Advance, through an
Authorized Signatory, or irrevocable telephonic notice followed immediately by
written notice (provided, however, that the Borrower's failure to confirm any
telephonic notice in writing shall not invalidate any notice so given), the
Borrower may repay a Base Rate Advance on its Payment Date, and (i) reborrow all
or a portion of the principal amount thereof as a Base Rate Advance, (ii)
reborrow all or a portion of the principal amount thereof as one or more LIBOR
Advances, or (iii) not reborrow all or any portion of such Base Rate Advance.
Upon such Payment Date or date of repayment, such Base Rate Advance shall,
subject to the provisions hereof, be so repaid and, as applicable, reborrowed.
(e) The aggregate amount of Base Rate Advances to be made by the Lenders
on any day shall be in a principal amount which is at least $1,000,000 and which
is an integral multiple of $100,000; provided, however, that such amount may
equal the unused amount of the Commitment. The aggregate amount of LIBOR
Advances having the same Interest Period and to be made by the Lenders on any
day shall be in a principal amount which is at least $3,000,000 and which is an
integral multiple of $500,000.
(f) The Administrative Lender shall promptly notify the Lenders of each
notice received from the Borrower pursuant to this Section. Failure of the
Borrower to give any notice in accordance with Sections 2.2(c) and (d) hereof
shall result in a repayment of any such existing Advance on the applicable
Payment Date by a Refinancing Advance which is a Base Rate Advance. Each Lender
shall, not later than 1:00 p.m., Dallas, Texas time, on the date of any Advance
that is not a Refinancing Advance, deliver to the Administrative Lender, at its
address set forth herein, such Lender's Specified Percentage of such Advance in
immediately available funds in accordance with the Administrative Lender's
instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date of any
Advance hereunder that is not a Refinancing Advance, the Administrative Lender
shall, subject to satisfaction of the conditions set forth in Article 3,
disburse the amounts made available to the Administrative Lender by the Lenders
by (i) transferring such amounts by wire transfer pursuant to the Borrower's
instructions, or (ii) in the absence of such instructions, crediting such
amounts to the account of the Borrower maintained with the Administrative
Lender. All Advances shall be made by each Lender according to its Specified
Percentage.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of each Base Rate Advance, from the date such Advance is
made until it is due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) or repaid, which shall be payable as
set forth in Section 2.3(a)(ii) hereof, at a simple interest rate per
annum equal to the Base Rate Basis for such Base Rate Advance as in effect
from time to time, provided that interest on such Base Rate Advance shall
not exceed the Maximum Amount. If at any time the Base Rate Basis would
exceed the Highest Lawful
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Rate, interest payable on such Base Rate Advance shall be limited to the
Highest Lawful Rate, but the Base Rate Basis shall not thereafter be
reduced below the Highest Lawful Rate until the total amount of interest
accrued on such Advance equals the amount of interest that would have
accrued if the Base Rate Basis had been in effect at all times.
(ii) Interest on each Base Rate Advance shall be computed on the
basis of a year of 365 or 366 days, as applicable, for the number of days
actually elapsed, and shall be payable in arrears on each Quarterly Date
and on the Maturity Date.
(b) ON LIBOR ADVANCES.
(i) The Borrower shall pay interest on the unpaid principal amount
of each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction,
or otherwise) or repaid, at a rate per annum equal to the LIBOR Basis for
such Advance. The Administrative Lender, whose determination shall be
conclusive, shall determine the LIBOR Basis on the second Business Day
prior to the applicable funding date and shall notify the Borrower and the
Lenders of such LIBOR Basis.
(ii) Subject to Section 10.9 hereof, interest on each LIBOR Advance
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on the applicable Payment
Date and on the Maturity Date; provided, however, that if the Interest
Period for such Advance exceeds three months, interest shall also be due
and payable in arrears on each Quarterly Date during such Interest Period.
(c) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE BASIS. If the
Borrower fails to give the Administrative Lender timely notice of its selection
of a LIBOR Basis or an Interest Period for a LIBOR Advance, or if for any reason
a determination of a LIBOR Basis for any Advance is not timely concluded due to
the fault of the Borrower, the appropriate Base Rate Basis shall apply to such
Advance.
(d) INTEREST AFTER AN EVENT OF DEFAULT. (i) After an Event of Default
(other than an Event of Default specified in Section 7.1(f) hereof) and during
any continuance thereof, at the option of Determining Lenders, and (ii) after an
Event of Default specified in Section 7.1(f) hereof and during any continuance
thereof, automatically and without any action by the Administrative Lender or
any Lender, the Obligations shall bear interest at a rate per annum equal to the
Default Rate. Such interest shall be payable on the earlier of demand or the
Maturity Date, and shall accrue until the earlier of (i) waiver or cure (to the
satisfaction of the Determining Lenders) of the applicable Event of Default,
(ii) agreement by the Lenders to rescind the charging of interest at the Default
Rate, or (iii) payment in full of the Obligations. The Lenders shall not be
required to accelerate the maturity of the Advances, to exercise any other
rights or remedies under the Loan Papers, or to give notice to the Borrower of
the decision
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to charge interest at the Default Rate. The Lenders will undertake to notify
the Borrower, after the effective date, of the decision to charge interest at
the Default Rate.
Section 2.4 FEES.
(a) FACILITY FEE. Subject to Section 10.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for the ratable account of the Lenders, a
facility fee on the daily average amount of the Commitment at the following per
annum percentages, applicable in the following situations:
APPLICABILITY PERCENTAGE
------------- ----------
CATEGORY 1 - The Leverage Ratio is not less than
3.50 to 1 or the Index Debt Rating is any two of
the following: BB by S&P, BB by ARA or Ba2 by ▇▇▇▇▇'▇ 0.25
CATEGORY 2 - The Leverage Ratio is less than 3.50
to 1 but not less than 3.0 to 1 or the Index Debt
Rating is any two of the following: BB+ by S&P, BB+
by ARA or Ba1 by ▇▇▇▇▇'▇ 0.20
CATEGORY 3 - The Leverage Ratio is less than 3.00
to 1 but not less than 2.0 to 1 or the Index Debt
Rating is any two of the following: BBB- or
better by S&P, BBB- or better by ARA or Baa3 or
better by ▇▇▇▇▇'▇ 0.15
CATEGORY 4 - The Leverage Ratio is less than 2.00
to 1 or the Index Debt Rating is any two of the
following: BBB+ or better by S&P, BBB+ or better by
ARA or Baa1 or better by ▇▇▇▇▇'▇ 0.125
Such fee shall accrue on the date of the initial advance under the Facility A
Credit Agreement and shall be payable (i) in arrears on each Quarterly Date and
on the Maturity Date, fully earned when due and, subject to Section 10.9 hereof,
nonrefundable when paid and (ii) computed on the basis of a year of 365 or 366
days, as applicable, for the actual number of days elapsed. (a) If the Index
Debt Rating and the Leverage Ratio are in different categories, the facility fee
shall be determined on whichever of the Index Debt Rating or the Leverage Ratio
falls within the superior (or numerically higher) category, (b) if the facility
fee is determined based on the Leverage Ratio and the financial statements of
the Borrower setting the Leverage Ratio are not received by the Administrative
Lender by the date required pursuant to Section 6.1(a) or 6.1(b) hereof, the
facility fee shall be determined as if the Leverage Ratio is not less than 3.50
to 1 until such time as the financial statements are received, (c) if the Index
Debt Rating established by ARA shall fall within a different category than both
▇▇▇▇▇'▇ and S&P, the facility fee shall be determined by reference to ▇▇▇▇▇'▇ or
S&P, whichever is the superior (or numerically higher) category, but not to
exceed two rating levels higher than the other rating agency and (e) such fee
shall be adjusted on each Adjustment Date if determined based on the (i)
Leverage Ratio, according to the performance of the Borrower for the most recent
fiscal quarter or (ii) the
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Index Debt Rating, according to the most recent determination of the Index Debt
Rating. If the rating system of ▇▇▇▇▇'▇, S&P or ARA shall change prior to the
Maturity Date, the Borrower and the Lenders shall negotiate in good faith to
amend the references to specific ratings to reflect such changed rating system.
(b) CLOSING FEE. Subject to Section 10.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for the account of the Lenders a closing
fee equal to 0.10% of each Lender's portion of the Commitment. Such fee shall
be payable on the date of the initial Advance under the Facility A Agreement,
fully earned when due and, subject to Section 10.9 hereof, nonrefundable when
paid.
(c) OTHER FEES. Subject to Section 10.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for its account and not the account of the
Lenders, the fees provided for in the letter agreement ("Fee Letter"), dated as
of the Agreement Date, between the Borrower and the Administrative Lender on the
date and in the amounts specified therein.
Section 2.5 PREPAYMENT.
(a) VOLUNTARY PREPAYMENTS. The principal amount of any Base Rate
Advance may be prepaid in full or in part at any time, without penalty and
without regard to the Payment Date for such Advance, upon notice as required for
a repayment of a Base Rate Advance as provided in Section 2.2(d) hereof. LIBOR
Advances may be voluntarily prepaid upon notice as required for repayments of
LIBOR Advances as provided in Section 2.2(c) hereof, but only so long as the
Borrower concurrently reimburses the Lenders in accordance with Section 2.9
hereof. Any notice of prepayment shall be irrevocable.
(b) MANDATORY PREPAYMENT. On or before the date of any reduction of
the Commitment, the Borrower shall prepay outstanding Advances in an amount
necessary to reduce the same to an amount less than or equal to the Commitment
as so reduced. The Borrower shall first prepay all Base Rate Advances and shall
thereafter prepay LIBOR Advances. To the extent that any prepayment requires
that a LIBOR Advance be repaid on a date other than the last day of its Interest
Period, the Borrower shall reimburse each Lender in accordance with Section 2.9
hereof. To the extent that outstanding Advances exceed the Commitment after any
reduction thereof, the Borrower shall repay any such excess amount and all
accrued interest thereon on the date of such reduction.
(c) PREPAYMENTS, GENERALLY. Any prepayment of an Advance shall be
accompanied by interest accrued on the principal amount being prepaid. Any
voluntary partial prepayment of a Base Rate Advance shall be in a principal
amount of $100,000 or an integral multiple thereof. All voluntary prepayments
shall be applied in the order directed in writing by the Borrower to the
Administrative Lender. If the Borrower fails to so direct the Administrative
Lender or if the prepayment occurs during the occurrence and continuance of an
Event of Default, such prepayment shall be applied in the inverse order of
maturity.
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Section 2.6 REDUCTION OF COMMITMENT.
(a) VOLUNTARY REDUCTION. The Borrower shall have the right, upon not
less than 10 Business Days' notice (provided no notice shall be required for a
termination in whole of the Commitment) by an Authorized Signatory to the
Administrative Lender (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify the
Lenders, to terminate or reduce the Commitment, in whole or in part. Each
partial termination shall be in an aggregate amount which is at least $1,000,000
and which is an integral multiple of $100,000, and no voluntary reduction in the
Commitment shall cause any LIBOR Advance to be repaid prior to the last day of
its Interest Period.
(b) MANDATORY REDUCTION. On the Maturity Date, the Commitment shall
automatically reduce to zero.
(c) GENERAL REQUIREMENTS. Upon any reduction of the Commitment
pursuant to this Section, the Borrower shall immediately make a repayment of
applicable Advances in accordance with Section 2.5(b) hereof. The Borrower
shall reimburse each Lender for any loss or out-of-pocket expense incurred by
each Lender in connection with any such payment, as set forth in Section 2.9
hereof to the extent applicable. The Borrower shall not have any right to
rescind any termination or reduction. Once reduced, the Commitment may not be
increased or reinstated.
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER. Unless
the Administrative Lender shall have been notified by a Lender prior to the date
of any proposed Advance (which notice shall be effective upon receipt) that such
Lender does not intend to make the proceeds of such Advance available to the
Administrative Lender, the Administrative Lender may assume that such Lender has
made such proceeds available to the Administrative Lender on such date, and the
Administrative Lender may in reliance upon such assumption (but shall not be
required to) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Lender
by such Lender, the Administrative Lender shall, without prejudice to the
Borrower's rights against such Lender, be entitled to recover such amount on
demand from such Lender (or, if such Lender fails to pay such amount forthwith
upon such demand, from the Borrower) together with interest thereon in respect
of each day during the period commencing on the date such amount was available
to the Borrower and ending on (but excluding) the date the Administrative Lender
receives such amount from the Lender, at a per annum rate equal to the lesser of
(i) the Highest Lawful Rate or (ii)(a) in the case of such Lender, the Federal
Funds Rate or (b) in the case of the Borrower, the interest rate applicable to
such Advance. No Lender shall be liable for any other Lender's failure to fund
an Advance hereunder.
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES. The Borrower agrees to
pay the principal amount of the Advances to the Administrative Lender for the
account of the Lenders as follows:
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(a) END OF INTEREST PERIOD. The principal amount of each Advance
hereunder shall be due and payable on its Payment Date, which principal payment
(other than in respect of a Bid Rate Advance) may be made by means of a
Refinancing Advance.
(b) COMMITMENT REDUCTION. On the date of reduction of the Commitment
pursuant to Section 2.6 hereof, including the Maturity Date, the aggregate
amount of the Advances outstanding on such date of reduction in excess of the
Commitment as reduced shall be due and payable, which principal payment may not
be made by means of Refinancing Advances.
(c) MATURITY DATE. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Advances, all accrued
interest and fees thereon, and all other Obligations related thereto, shall be
due and payable in full on the Maturity Date.
Section 2.9 REIMBURSEMENT. Whenever any Lender shall sustain or incur
any losses or reasonable out-of-pocket expenses in connection with (a) failure
by the Borrower to borrow any LIBOR Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
the Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3 hereof), or (b) any prepayment for any reason
of any LIBOR Advance in whole or in part, the Borrower agrees to pay to any such
Lender, upon its demand, an amount sufficient to compensate such Lender for all
such losses and out-of-pocket expenses, subject to Section 10.9 hereof. Such
Lender's good faith determination of the amount of such losses or out-of-pocket
expenses, calculated in its usual fashion, absent manifest error, shall be
binding and conclusive. Such losses shall include, without limiting the
generality of the foregoing, lost profits and reasonable expenses incurred by
such Lender in connection with the re-employment of funds prepaid, repaid,
converted or not borrowed, converted or paid, as the case may be. Upon request
of the Borrower, such Lender shall provide a certificate setting forth the
amount to be paid to it by the Borrower hereunder and calculations therefor.
Section 2.10 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Advances, fees, and any other amount owed under
this Agreement or any other Loan Paper shall be made not later than 12:00 noon
(Dallas, Texas time) on the date specified for payment under this Agreement to
the Administrative Lender at the Administrative Lender's office, in lawful money
of the United States of America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Paper shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day, unless such Business Day falls
in another calendar month, in which case payment shall be made on the preceding
Business Day. Any extension of time shall in such case be included in computing
interest and fees, if any, in connection with such payment.
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(c) The Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Papers without deduction for set-off or counterclaim
or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are received
by the Administrative Lender, the Administrative Lender shall apply such amounts
in the following order of priority: (i) to the payment of the Administrative
Lender's expenses incurred on behalf of the Lenders then due and payable, if
any; (ii) to the payment of all other fees and amounts then due and payable
under the Loan Papers; (iii) to the payment of interest then due and payable on
the Advances; and (iv) to the payment of principal then due and payable on the
Advances.
(e) Each payment by the Borrower in respect of obligations relating to
an Advance (whether for principal, interest, fees or otherwise) shall be made to
the Administrative Lender for the account of the Lenders pro rata in accordance
with their respective Specified Percentages.
Section 2.11 LIBOR LENDING OFFICES. Each Lender's initial LIBOR Lending
Office is set forth opposite its name in SCHEDULE 1 attached hereto. Each
Lender shall have the right at any time and from time to time to designate a
different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer (except any such transfer which is made by a Lender
pursuant to Section 8.2 or 8.3 hereof, or otherwise for the purpose of complying
with Applicable Law). Increased costs for expenses resulting from a change in
law occurring subsequent to any such designation or transfer shall be deemed not
to result solely from such designation or transfer.
Section 2.12 SHARING OF PAYMENTS. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of set-off,
or otherwise) on account of its Advances (other than pursuant to Sections 2.15,
2.16(d), 8.3 or 8.5), in excess of its Specified Percentage of all payments made
by the Borrower with respect to Advances, shall purchase from each other Lender
such participation in the Advances made by such other Lender as shall be
necessary to cause such purchasing Lender to share the excess payment pro rata
according to Specified Percentages with each other Lender; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section, to the fullest extent permitted by law, may exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.13 CALCULATION OF RATES. The provisions of this Agreement
relating to calculation of the LIBOR Rate are included only for the purpose of
determining the rate of interest or other amounts to be paid hereunder that are
based upon such rate, it being understood
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that each Lender shall be entitled to fund and maintain its funding of all or
any part of a LIBOR Advance as it sees fit.
Section 2.14BOOKING LOANS. Any Lender may make, carry or transfer
Advances at, to or for the account of any of its branch offices or the office of
any Affiliate.
Section 2.15TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, EXCLUDING, in the case
of each Lender and the Administrative Lender, taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise taxes,
doing business taxes or minimum taxes imposed on it, (i) by the jurisdiction
under the laws of which such Lender or the Administrative Lender (as the case
may be) is organized and in which it has its applicable lending office or any
political subdivision thereof; (ii) by any other jurisdiction, or any political
subdivision thereof, other than those imposed by reason of (A) an asserted
relation of such jurisdiction to the transactions contemplated by this
Agreement, (B) the activities of the Borrower in such jurisdiction, or (C) the
activities in connection with the transactions contemplated by this Agreement of
a Lender or the Administrative Lender; (iii) by reason of failure by the Lender
or the Administrative Lender to comply with the requirements of paragraph (e) of
this Section 2.15; and (iv) in the case of any Lender, any Taxes in the nature
of transfer, stamp, recording or documentary taxes resulting from a transfer
(other than as a result of foreclosure) by such Lender of all or any portion of
its interest in this Agreement, the Notes or any other Loan Papers (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Lender, (x) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.15) such Lender or the Administrative Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(y) the Borrower shall make such deductions and (z) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than (i) Taxes described in clause (iv) of the first
sentence of Section 2.15(a) and (ii) mortgage taxes payable in Oklahoma) that
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Paper (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Lender for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes
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imposed by any jurisdiction on amounts payable under this Section 2.15) paid by
such Lender or the Administrative Lender (as the case may be) and all
liabilities (including penalties, additions to tax, interest and reasonable
expenses) arising therefrom or with respect thereto whether or not such Taxes or
Other Taxes were correctly or legally asserted, other than penalties, additions
to tax, interest and expenses arising as a result of gross negligence on the
part of such Lender or the Administrative Lender, PROVIDED, HOWEVER, that
the Borrower shall have no obligation to indemnify such Lender or the
Administrative Lender unless and until such Lender or the Administrative Lender
shall have delivered to the Borrower a certificate setting forth in reasonable
detail the basis of the Borrower's obligation to indemnify such Lender or the
Administrative Lender pursuant to this Section 2.15. This indemnification shall
be made within 30 days from the date such Lender or the Administrative Lender
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Lender the original or a certified copy of a
receipt evidencing payment thereof. If no Taxes are payable in respect of any
payment hereunder, the Borrower will furnish to the Administrative Lender a
certificate from each appropriate taxing authority, or an opinion of counsel
acceptable to the Administrative Lender, in either case stating that such
payment is exempt from or not subject to Taxes, PROVIDED, HOWEVER, that such
certificate or opinion need only be given if: (i) the Borrower makes any
payment from any account located outside the United States, or (ii) the payment
is made by a payor that is not a United States Person. For purposes of this
Section 2.15 the terms "United States" and "United States Person" shall have the
meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of
a Lender which becomes a party hereto pursuant to Section 10.6 after the
Agreement Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower through the Administrative Lender, with a copy to
the Administrative Lender:
(A) if any lending office is located in the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service Form 4224 or any successor thereto
("Form 4224"),
(B) if any lending office is located outside the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto
("Form 1001").
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees for
the account of such lending office or lending offices under this Agreement
free from withholding of United States Federal income tax;
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(ii) if at any time such Lender changes its lending office or
lending offices or selects an additional lending office it shall, at the
same time or reasonably promptly thereafter but only to the extent the
forms previously delivered by it hereunder are no longer effective,
deliver to the Borrower through the Administrative Lender, with a copy to
the Administrative Lender, in replacement for the forms previously
delivered by it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of
Form 1001,
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees for
the account of such changed or additional lending office under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause
(ii) above) requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of the same be
lawful, deliver to the Borrower through the Administrative Lender with a
copy to the Administrative Lender, two (2) accurate and complete original
signed copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation
as may be required from time to time by any applicable law, treaty, rule
or regulation in order to establish such Lender's tax status for
withholding purposes; and
(v) it shall notify the Borrower within 30 days after any event
(including an amendment to, or a change in any applicable law or
regulation or in the written interpretation thereof by any regulatory
authority or any judicial authority, or by ruling applicable to such
Lender of any governmental authority charged with the interpretation or
administration of any law) shall occur that results in such Lender no
longer being capable of receiving payments without any deduction or
withholding of United States federal income tax.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the payment in full of principal and interest
hereunder.
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(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.15 shall use its reasonable best efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
lending office, if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the reasonable judgment of such Lender, be materially
disadvantageous to such Lender.
(h) Each Lender (and the Administrative Lender with respect to payments
to the Administrative Lender for its own account) agrees that (i) it will take
all reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; PROVIDED,
HOWEVER, the Lenders and the Administrative Lender shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.15 and the Lender or the Administrative Lender receives a refund of
any or all of such sums, such refund shall be applied to reduce any amounts then
due and owing under this Agreement or, to the extent that no amounts are due and
owing under this Agreement at the time such refunds are received, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided that no Default or Event of Default is in existence at such
time.
Section 2.16 EXTENSION OF MATURITY DATE. The Borrower may notify the
Administrative Lender in writing 30 days prior to each Maturity Date, commencing
August 9, 1996, of its desire to extend the Maturity Date for an additional 364
days beyond the present Maturity Date. If such notice is given by the Borrower,
the Administrative Lender, no later than 10 days after such notice is given by
the Borrower may notify the Borrower in writing of the Lenders' decision whether
to extend the Maturity Date for a period of 364 days after the date that such
notice, if any, is given by the Administrative Lender. Extension of the
Maturity Date shall be at the sole option and discretion of the Lenders, and the
decision to extend the Maturity Date shall require the consent of all Lenders.
If either the Borrower or the Administrative Lender fail to give notice within
the time prescribed above, the Maturity Date shall be the then present Maturity
Date. Any extension of the Maturity Date pursuant to this SECTION 2.16 shall
not require any renewal Note or amendment or supplement to this Agreement or any
other Loan Papers unless otherwise determined or requested by the Administrative
Lender.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCES. The obligation
of each Lender to make any Advance is subject to receipt by the Administrative
Lender of the following,
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in form and substance satisfactory to each Lender, with a copy (except for the
Notes) for each Lender, or satisfaction of the following:
(a) a loan certificate of the Borrower certifying as to the accuracy of
its representations and warranties in the Loan Papers, certifying that no
Default has occurred, and including a certificate of incumbency with respect to
each Authorized Signatory, and including (i) a copy of the articles of
incorporation of the Borrower, certified to be true, complete and correct by the
secretary of state of its state of incorporation, (ii) a copy of the by-laws of
the Borrower, as in effect on the Agreement Date, (iii) a copy of the
resolutions of the Borrower authorizing it to execute, deliver and perform this
Agreement, the Notes and the other Loan Papers to which it is a party, and (iv)
a copy of a certificate of good standing and a certificate of existence for its
state of incorporation and each state in which it is qualified to do business;
(b) a certificate of an officer acceptable to the Lenders of each
Significant Subsidiary, certifying as to the incumbency of the officers signing
the Loan Papers to which it is a party, and including (i) a copy of its articles
of incorporation (or articles of partnership or other appropriate governing
documents), certified as true, complete and correct by the secretary of state of
its state of incorporation or organization, (ii) a copy of its by-laws (or
partnership agreement or other appropriate governing document), as in effect on
the Agreement Date, (iii) a copy of the resolutions authorizing it to execute,
deliver and perform the Loan Papers to which it is a party, and (iv) a copy of a
certificate of good standing and a certificate of existence for its state of
incorporation;
(c) duly executed Notes, payable to the order of each Lender and in an
amount for each Lender equal to its Specified Percentage of the Commitment;
(d) opinions of counsel to the Borrower and the Subsidiaries addressed
to the Lenders and in form and substance satisfactory to the Lenders, dated the
Agreement Date, and covering the matters set forth in Sections 4.1(a), (b), (c),
(g), (l), (m) and (o) and such other matters incident to the transactions
contemplated hereby as the Administrative Lender or Special Counsel may
reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable fees and expenses rendered through the Agreement Date;
(f) evidence that all corporate or other proceedings of the Borrower and
Subsidiaries taken in connection with the transactions contemplated by this
Agreement and the other Loan Papers shall be reasonably satisfactory in form and
substance to the Lenders and Special Counsel; and the Lenders shall have
received copies of all documents or other evidence which the Administrative
Lender, Special Counsel or any Lender may reasonably request in connection with
such transactions;
(g) the closing fee as required pursuant to Sections 2.4(b);
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(h) the duly executed and completed Guaranty Agreements, dated as of the
Agreement Date;
(i) any fees required to be paid pursuant to the Fee Letter;
(j) the duly executed Master Covenant Agreement;
(k) a certificate of an officer acceptable to the Lenders, in form and
substance satisfactory to the Lenders, certifying that the execution, delivery
and performance by the Obligors of the Loan Papers will not violate or result in
a default in respect of any of the terms of the Senior Subordinated Notes;
(l) payment in full of all accrued and outstanding obligations under the
Existing Credit Agreement (other than in respect of the Existing Letters of
Credit) whereupon all obligations of the Borrower (excluding those obligations
which expressly survive termination of the Existing Credit Agreement) and the
lenders (including but not limited to, the participations of the Lenders in the
Bond Letters of Credit) shall terminate;
(m) closing and funding of the Senior Notes pursuant to terms acceptable
to the Lenders, and delivery of an executed final copy of the Indenture with
respect to the Senior Notes;
(n) the duly executed Facility A Credit Agreement and all documents
related thereto;
(o) payment in full of all accrued and outstanding obligations under the
Amended and Restated Credit Agreement, dated as of April 21, 1995, among La
Quinta Development Partners, L.P., a Delaware limited partnership, the lenders
party thereto, NationsBank of Texas, NA., as Administrative Lender, and
Citibank, N.A., as Co-Administrative Lender; and
(p) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation the status,
organization or authority of the Borrower or any Subsidiary or any other Person
executing a Loan Paper, and the enforceability of the Obligation.
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of
each Lender to make each Advance hereunder is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with each such
Advance or issuance:
(a) With respect to Advances other than Refinancing Advances, all of the
representations and warranties of the Borrower under this Agreement, which,
pursuant to Section 4.2 hereof, are made at and as of the time of such Advance
or issuance, shall be true and correct at such time in all material respects,
both before and after giving effect to the application of the proceeds of the
Advance;
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(b) The incumbency of the Authorized Signatories shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to Section 3.1(a) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Lender. The Lenders
may, without waiving this condition, consider it fulfilled and a representation
by the Borrower made to such effect if no written notice to the contrary, dated
on or before the date of such Advance, is received by the Administrative Lender
from the Borrower prior to the making of such Advance;
(c) There shall not exist a Default hereunder, with respect to Advances
other than Refinancing Advances, or an Event of Default, with respect to any
Refinancing Advance, and, with respect to each Advance other than a Refinancing
Advance, the Administrative Lender shall have received written or telephonic
certification thereof by an Authorized Signatory (which certification, if
telephonic, shall be followed promptly by written certification);
(d) The aggregate Advances, after giving effect to such proposed
Advance, shall not exceed the maximum principal amount then permitted to be
outstanding hereunder; and
(e) The Administrative Lender shall have received all such other
certificates, reports, statements, opinions of counsel or other documents as the
Administrative Lender or any Lender may reasonably request.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to each Lender as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. As of the Agreement Date, the
respective jurisdiction of incorporation and percentage ownership by the
Borrower or another Subsidiary of the Subsidiaries and Unincorporated Ventures
listed on SCHEDULE 3 are true and correct. Each of the Borrower and its
Subsidiaries and Unincorporated Ventures is a corporation or partnership, as
designated on SCHEDULE 3, duly organized, validly existing and in good
standing under the laws of its state of organization. Each of the Borrower and
its Subsidiaries has the corporate or other power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted. Each of the Borrower and its Subsidiaries and Unincorporated
Ventures is duly qualified, in good standing and authorized to do business in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization except where the failure
to be so qualified or authorized would not have a Material Adverse Effect.
(b) AUTHORIZATION. The Borrower has corporate power and has taken all
necessary corporate action to authorize it to borrow hereunder. Each of the
Loan Parties has corporate
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or other power and has taken all necessary corporate or other action to execute,
deliver and perform the Loan Papers to which it is party in accordance with the
terms thereof, and to consummate the transactions contemplated thereby. Each
Loan Paper has been duly executed and delivered by the Loan Party executing it.
Each of the Loan Papers to which the Loan Parties are party is a legal, valid
and binding respective obligation of the Loan Party executing it, enforceable in
accordance with its terms, subject to the following qualifications: (i)
equitable principles generally, and (ii) Debtor Relief Laws (insofar as any such
law relates to the bankruptcy, insolvency or similar event of any Loan Party).
(c) COMPLIANCE WITH OTHER LOAN PAPERS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance by the Loan Parties of the Loan Papers
to which they are respectively a party, and the consummation of the transactions
contemplated thereby, do not and will not (i) require any consent or approval
not already obtained, (ii) violate any Applicable Law, (iii) conflict with,
result in a breach of, or constitute a default under the articles of
incorporation, by-laws, articles of partnership, partnership agreements or
similar governing documents of any Loan Party, or under any Necessary
Authorization, indenture, agreement or other instrument, to which any Loan Party
is a party or by which they or their respective properties may be bound, or (iv)
result in or require the creation or imposition of any Lien upon or with respect
to any property now owned or hereafter acquired by any Loan Party, except
Permitted Liens.
(d) LICENSES, ETC. All Necessary Authorizations which are material
have been duly obtained, and are in full force and effect without any known
conflict with the rights of others and free from any unduly burdensome
restrictions which could reasonably be expected to have a Material Adverse
Effect. The Borrower and its Subsidiaries and Unincorporated Ventures are and
will continue to be in compliance in all material respects with all provisions
thereof. No circumstance exists which might impair the utility of the Necessary
Authorization or the right to renew such Necessary Authorization the effect of
which would have a Material Adverse Effect. No Necessary Authorization which
could reasonably be expected to have a Material Adverse Effect is the subject of
any pending or, to the best of the Borrower's knowledge, threatened challenge,
suspension, cancellation or revocation.
(e) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries and
Unincorporated Ventures are in compliance in all respects with all Applicable
Laws, except where the failure to so comply would not have a Material Adverse
Effect.
(f) TITLE TO PROPERTIES. The Borrower and its Subsidiaries and
Unincorporated Ventures have good and indefeasible title to, or a valid
leasehold interest in, all of their material assets. None of their assets are
subject to any Liens, except Permitted Liens. No effective financing statement
or other Lien filing (except relating to Permitted Liens) is on file in any
state or jurisdiction that names the Borrower or any of its Subsidiaries or
Unincorporated Ventures as debtor or covers (or purports to cover) any assets of
the Borrower or any of its Subsidiaries or Unincorporated Ventures. The
Borrower and its Subsidiaries and Unincorporated Ventures
- 35 -
have not signed any such financing statement or filing, nor any security
agreement authorizing any Person to file any such financing statement or filing.
(g) LITIGATION. Except as reflected on SCHEDULE 2 hereto, there is
no action, suit or proceeding pending against, or, to the best of the Borrower's
knowledge, threatened against the Borrower, or in any other manner relating
directly and adversely to the Borrower or any of its Subsidiaries or
Unincorporated Ventures, or any of their properties, in any court or before any
arbitrator of any kind or before or by any governmental body in which the amount
claimed (in excess of applicable insurance) exceeds a Material Amount.
(h) TAXES. All federal, state and other tax returns of the Borrower
and its Subsidiaries and Unincorporated Ventures required by law to be filed
have been duly filed and all federal, state and other taxes, assessments and
other governmental charges or levies upon the Borrower, its Subsidiaries or
Unincorporated Ventures or any of their respective properties, income, profits
and assets, which are due and payable, have been paid, unless the same are being
diligently contested in good faith by appropriate proceedings, with adequate
reserves established therefor, and no Lien (other than a Permitted Lien) has
attached and no foreclosure, distraint, sale or similar proceedings have been
commenced. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries and Unincorporated Ventures in respect of their respective
taxes are, in the judgment of the Borrower, adequate.
(i) FINANCIAL STATEMENTS; MATERIAL LIABILITIES. The Borrower has
furnished or caused to be furnished to the Lenders copies of its December 31,
1994 and June 30, 1995 financial statements, which present fairly in accordance
with GAAP the financial position of the Borrower and its Subsidiaries and
Unincorporated Ventures as at such dates and the results of operations for the
periods then ended. The Borrower and its Subsidiaries and Unincorporated
Ventures taken as a whole have no material liabilities, contingent or otherwise,
nor material losses, except (i) as set forth in the December 31, 1994 financial
statements, (ii) in respect of the Senior Notes and (iii) the "AEW Transaction"
as defined and described in the Borrower's Form S-3 dated August 11, 1995.
(j) NO ADVERSE CHANGE. Since December 31, 1994, no event or
circumstances has occurred or arisen that could have a Material Adverse Effect.
(k) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan other than those disclosed to the Administrative Lender
in writing. Each such Plan (other than any Multiemployer Plan) is in compliance
in all material respects with the applicable provisions of ERISA, the Code, and
any other applicable Federal or state law, rule or regulation. With respect to
each Plan (other than any Multiemployer Plan) of the Borrower and each member of
its Controlled Group, all reports required under ERISA or any other Applicable
Law to be filed with any governmental authority, the failure of which to file
could reasonably result in liability of the Borrower or any member of its
Controlled Group in excess of a Material Amount, have been duly filed. All such
reports are true and correct in all material respects as of the date given. No
Plan of the Borrower or any member of its Controlled Group has been
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terminated under Section 4041(c) of ERISA nor has any accumulated funding
deficiency (as defined in Section 412(a) of the Code) been incurred (without
regard to any waiver granted under Section 412 of the Code), nor has any funding
waiver from the Internal Revenue Service been received or requested the result
of which could reasonably be expected to have Material Adverse Effect. None of
the Borrower or any member of its Controlled Group has failed to make any
contribution or pay any amount due or owing as required under the terms of any
such Plan, or by Section 412 of the Code or Section 302 of ERISA by the due date
under Section 412 of the Code and Section 302 of ERISA the result of which could
reasonably be expected to have Material Adverse Effect. There has been no ERISA
Event or any event requiring disclosure under Section 4041(c)(3)(C) or 4063(a)
of ERISA with respect to any Plan or its related trust of the Borrower or any
member of its Controlled Group since the effective date of ERISA. The present
value of the benefit liabilities, as defined in Title IV of ERISA, of each Plan
subject to Title IV of ERISA (other than a Multiemployer Plan) of the Borrower
and each member of its Controlled Group does not exceed by more than $10,000,000
the present value of the assets of each such Plan as of the most recent
valuation date using each such Plan's actuarial assumptions at such date. There
are no pending, or to the best of the Borrower's knowledge threatened, claims,
lawsuits or actions (other than routine claims for benefits in the ordinary
course) asserted or instituted against, and neither the Borrower nor any member
of its Controlled Group has knowledge of any threatened litigation or claims
against, the assets of any Plan or its related trust or against any fiduciary of
a Plan with respect to the operation of such Plan the result of which could
reasonably be expected to have Material Adverse Effect. None of the Borrower
or, to the best of the Borrower's knowledge, any member of its Controlled Group
has engaged in any prohibited transactions, within the meaning of Section 406 of
ERISA or Section 4975 of the Code, in connection with any Plan the result of
which could reasonably be expected to have Material Adverse Effect. None of the
Borrower or any member of its Controlled Group has withdrawn from any
Multiemployer Plan, nor has incurred or reasonably expects to incur (A) any
liability under Title IV of ERISA (other than premiums due under Section 4007 of
ERISA to the PBGC), (B) any withdrawal liability (and no event has occurred
which with the giving of notice under Section 4219 of ERISA would result in such
liability) under Section 4201 of ERISA as a result of a complete or partial
withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from a
Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the PBGC
or to a trustee appointed under Section 4042 of ERISA. None of the Borrower,
any member of its Controlled Group, or any organization to which the Borrower or
any member of its Controlled Group is a successor or parent corporation within
the meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069 the result of which could reasonably be expected
to have Material Adverse Effect. None of the Borrower or any member of its
Controlled Group maintains or has established any Plan, which is a material
welfare benefit plan within the meaning of Section 3(1) of ERISA and which
provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment, except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and the regulations thereunder.
Each of Borrower and its Controlled Group which maintains a Plan which is a
welfare benefit plan within the meaning of Section 3(1) of ERISA has complied in
all material respects with any applicable notice and continuation requirements
of COBRA and
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the regulations thereunder, except to the extent that the failure to so comply
could not reasonably be expected to have a Material Adverse Effect. None of the
Borrower or any member of its Controlled Group maintains, has established, or
has ever participated in a multiemployer welfare benefit arrangement within the
meaning of Section 3(40)(a) of ERISA.
(l) COMPLIANCE WITH REGULATIONS G, T, U AND X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, and no part of the proceeds of the Advances will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. No assets of the Borrower
and its Subsidiaries and Unincorporated Ventures are margin stock. None of the
Borrower and its Subsidiaries nor any agent acting on their behalf, have taken
or will knowingly take any action which might cause this Agreement or any other
Loan Papers to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934, in each case
as in effect now or as the same may hereafter be in effect.
(m) GOVERNMENTAL REGULATION. The Borrower and its Subsidiaries and
Unincorporated Ventures are not required to obtain any Necessary Authorization
that has not already been obtained from, or effect any material filing or
registration that has not already been effected with, any federal, state or
local regulatory authority in connection with the execution and delivery of this
Agreement or any other Loan Paper, or the performance thereof (other than any
enforcement of remedies by the Administrative Lender on behalf of the Lenders,
in accordance with their respective terms, including any borrowings hereunder.
(n) ABSENCE OF DEFAULT. The Borrower and its Subsidiaries and
Unincorporated Ventures are in compliance in all respects with all of the
provisions of their articles of incorporation, by-laws, articles of partnership,
partnership agreement or other governing documents, and no event has occurred or
failed to occur, which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or which with the passage of time or giving
of notice or both would constitute, (i) an Event of Default or (ii) a default by
the Borrower or any of its Subsidiaries or Unincorporated Ventures under any
material indenture, agreement or other instrument, or any judgment, decree or
order to which the Borrower or any of its Subsidiaries or Unincorporated
Ventures or by which they or any of their material properties is bound.
(o) INVESTMENT COMPANY ACT. The Borrower is not required to register
under the provisions of the Investment Company Act of 1940, as amended. Neither
the entering into or performance by the Borrower of this Agreement nor the
issuance of the Notes violates any provision of such act or requires any
consent, approval, or authorization of, or registration with, the Securities and
Exchange Commission or any other governmental or public body of authority
pursuant to any provisions of such act.
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(p) ENVIRONMENTAL MATTERS. Neither the Borrower nor any Subsidiary or
Unincorporated Venture has any actual knowledge or reason to believe that any
substance deemed hazardous by any Applicable Environmental Law, has been
installed on any real property now owned by the Borrower or any of its
Subsidiaries or Unincorporated Ventures which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries and Unincorporated Ventures have complied in all respects
with all Applicable Environmental Laws except to the extent that the failure to
so comply, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect. The Borrower and its Subsidiaries and
Unincorporated Ventures are not in violation in any respects of or subject to
any existing, pending or, to the best of the Borrower's knowledge, threatened
investigation or inquiry by any governmental authority or to any material
remedial obligations under any Applicable Environmental Laws, except to the
extent that the results of such investigation, inquiry or remedial obligation
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect, and this representation and warranty would continue to
be true and correct following disclosure to the applicable governmental
authorities of all relevant facts, conditions and circumstances, if any,
pertaining to any real property of the Borrower and its Subsidiaries and
Unincorporated Ventures. The Borrower and its Subsidiaries and Unincorporated
Ventures have obtained all material permits, licenses or similar authorizations
necessary to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property of the Borrower or
any Subsidiary or Unincorporated Venture by reason of any Applicable
Environmental Laws, except where the failure to obtain such authorization would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. The Borrower and its Subsidiaries and Unincorporated Ventures
undertook, at the time of acquisition of any real property, reasonable inquiry
into the previous ownership and uses of such real property consistent with good
commercial or customary practice as applied and used in the real estate industry
at the time of each such acquisition. The Borrower and its Subsidiaries and
Unincorporated Ventures have taken all reasonable steps to determine, and the
Borrower and its Subsidiaries and Unincorporated Ventures have no actual
knowledge or reason to believe, after reasonable investigation, that any
hazardous substances or solid wastes have been disposed of or otherwise released
on or to the real property of the Borrower or any of its Subsidiaries or
Unincorporated Ventures, within the meaning of the Applicable Environmental
Laws, except to the extent that the failure to so depose or release,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(q) CERTAIN FEES. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Commitments or the Advances hereunder. The
Borrower agrees to indemnify and hold harmless the Administrative Lender and
each Lender from and against any claims, demand, liability, proceedings, costs
or expenses asserted with respect to or arising in connection with any such fees
or commissions.
(r) NECESSARY AUTHORIZATIONS. No event has occurred which permits (or
with the passage of time would permit) the revocation or termination of any
Necessary Authorization, or
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which could result in the imposition of any restriction thereon, of such a
nature that could reasonably be expected to have a Material Adverse Effect.
(s) PATENTS, ETC. The Borrower and its Subsidiaries and
Unincorporated Ventures have obtained all patents, trademarks, service-marks,
trade names, copyrights, licenses and other rights, free from burdensome
restrictions, that are necessary for the operation of their business as
presently conducted and as proposed to be conducted. Nothing has come to the
attention of the Borrower or any of its Subsidiaries or Unincorporated Ventures
to the effect that (i) any process, method, part or other material presently
contemplated to be employed by the Borrower or any Subsidiary or Unincorporated
Venture may infringe any patent, trademark, service-▇▇▇▇, trade name, copyright,
license or other right owned by any other Person, or (ii) there is pending or
overtly threatened any claim or litigation against or affecting the Borrower or
any Subsidiary or Unincorporated Venture contesting its right to sell or use any
such process, method, part or other material, provided with respect to clauses
(i) and (ii) that such events are limited to those which could reasonably be
expected to have a Material Adverse Effect.
(t) DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement which has been furnished to any Lender by or on behalf
of the Borrower or any Subsidiary or Unincorporated Venture in connection
herewith contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statement contained herein and
therein not misleading at the time it was furnished. There is no fact known to
the Borrower and not known to the public generally that could reasonably be
expected to materially adversely affect the assets or business of the Borrower
and its Subsidiaries and Unincorporated Ventures, or in the future could
reasonably be expected (so far as the Borrower can now foresee) to have a
Material Adverse Effect, which has not been set forth in this Agreement or in
the documents, certificates and statements furnished to the Lenders by or on
behalf of the Borrower prior to the date hereof in connection with the
transaction contemplated hereby.
(u) SOLVENCY. The Borrower is, and Borrower and its Subsidiaries and
Unincorporated Ventures on a consolidated basis are, Solvent.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Papers shall be deemed to be made at and as of the Agreement Date and at and as
of the date of each Advance, and each shall be true and correct when made,
except to the extent (a) previously fulfilled in accordance with the terms
hereof, (b) applicable to a specific date or otherwise subsequently inapplicable
or modified to give effect to the transactions expressly permitted hereby, or
(c) previously waived in writing by the Determining Lenders with respect to any
particular factual circumstance. All such representations and warranties shall
survive, and not be waived by, the execution hereof by any Lender, any
investigation or inquiry by any Lender, or by the making of any Advance under
this Agreement.
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ARTICLE 5
BUSINESS COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 5.1 MAINTENANCE OF PROPERTY, INSURANCE, ACCOUNTING PRACTICES,
Corporate Existence. The Borrower covenants and agrees to, and will cause each
Subsidiary and Unincorporated Venture to:
(a) Maintain its material property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto, consistent with sound business practice and as is customary in the case
of corporations or other entities of established reputation engaged in the same
or a similar business and similarly situated;
(b) Maintain, with financially sound and reputable insurers, or through
its own program of self-insurance, insurance with respect to its material
properties and business against such casualties and contingencies, of such
types, and in such amounts as is customary in the case of corporations or other
entities of established reputation engaged in the same or a similar business and
similarly situated;
(c) Keep books of record and accounts in which entries will be made of
all of its business transactions, and will reflect in it financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP;
(d) Do or cause to be done all things necessary to preserve and keep in
full force and effect its material rights;
(e) Do or cause to be done all things necessary to preserve and keep in
full force and effect its existence (except as may be specifically permitted by
this Agreement); and
(f) Cause to be paid and discharged (i) all lawful tax assessments and
governmental charges imposed from the income or profits of the Borrower, its
Subsidiaries and Unincorporated Ventures or upon any property belonging to the
Borrower, any Subsidiary or any Unincorporated Venture and (ii) all lawful
claims, whether for labor, materials, supplies, services or anything else, which
have become due and payable and which by law have or may become a Lien upon the
property of the Borrower or any of its Subsidiaries or Unincorporated Ventures;
PROVIDED, HOWEVER, that the Borrower, its Subsidiaries and Unincorporated
Ventures shall not be required to cause to be paid or discharged any such tax
assessment, charge or claim so long as the amount, applicability or validity
thereof shall be contested in good faith by appropriate proceedings, and
adequate book reserves shall have been established to the extent required by
GAAP with respect thereto.
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Section 5.2 INSPECTION OF PROPERTIES AND BOOKS. The Borrower covenants
and agrees that it will permit, and will cause each Subsidiary and
Unincorporated Venture to permit, any Lender, upon (i) reasonable request, if
such request is prior to the occurrence of a Default or an Event of Default or
(ii) request, if such request is after the occurrence of a Default or an Event
of Default, to any Authorized Officer, to visit and inspect any of the
properties of, to examine the books of account and records of the Borrower, any
Subsidiary or Unincorporated Venture and to take extracts therefrom and to
discuss the affairs, finances or accounts of the Borrower, any Subsidiary or
Unincorporated Venture, and to be advised as to the same by the officers of the
Borrower, at all such times during normal business hours, in such detail and
through such agents and representatives as such Bank may reasonably desire.
Section 5.3 MERGER AND SALE OF ASSETS.
(a) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, directly or indirectly sell,
transfer or otherwise dispose of any of its assets (whether now owned or
hereafter acquired, and including any interest in a joint venture or
partnership) unless immediately prior to, and after giving effect to, such sale,
transfer or other disposition, the Borrower, its Subsidiaries and Unincorporated
Ventures are and will be in compliance with all covenants hereunder and there
shall otherwise be no Default or Event of Default hereunder; and
(b) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, merge into or consolidate
with any other Person; provided, however, if after giving effect to any such
merger or consolidation, (i) the business of the Borrower or any Subsidiary or
Unincorporated Venture, as appropriate, will not be materially changed and (ii)
the Borrower or any Subsidiary or Unincorporated Venture, as appropriate, will
not be in default in respect of any of the covenants contained in any material
agreement, including, without limitation, this Agreement, to which the Borrower
or any Subsidiary or Unincorporated Venture is a party or by which its property
may be bound,
(1) any corporation, partnership or joint venture may merge or
consolidate with the Borrower, provided that the Borrower shall be the
continuing and surviving corporation,
(2) any Subsidiary may merge with or consolidate with any
corporation, partnership or joint venture, provided that, unless such
merger or consolidation shall be with the Borrower, such Subsidiary shall
be the continuing and surviving corporation, and
(3) any Unincorporated Venture may merge with or consolidate with
any corporation, partnership or joint venture, provided that, unless such
merger or consolidation shall be with the Borrower or a Subsidiary, such
Unincorporated Venture shall be the continuing and surviving person.
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Section 5.4 NET WORTH. The Borrower covenants and agrees that it will
not allow its Net Worth at any time to be less than the sum of (i) $285,000,000
plus (ii) 50% of Consolidated Net Income (excluding Consolidated Net Income for
any fiscal quarter in which Consolidated Net Income was a negative number)
earned on or after the Agreement Date, plus (iii) 75% of the Net Cash Proceeds
of any equity issues of the Borrower's Capital Stock after the Agreement Date.
Section 5.5 CONTINGENT LIABILITIES. The Borrower covenants and agrees
that it will not, and will cause each Subsidiary and Unincorporated Venture to
not, guarantee, endorse, contingently agree to purchase, or otherwise become
liable, directly or indirectly, upon the obligation of or in connection with the
earnings, the assets, the stock, or the dividends of any other Person (other
than the Borrower or any Subsidiary), including obligations of the Borrower,
each Subsidiary and Unincorporated Venture arising solely by virtue of any of
them being a general partner or venturer of any Unincorporated Venture, except
(i) the obligations in respect of the written agreements in existence on the
Agreement Date in respect of any Significant Investments, (ii) the guarantees
and other contingent obligations set forth on SCHEDULE 11 hereto, (iii)
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection, (iv) guarantees of loans to any employee; PROVIDED,
THAT any such guaranty of an employee loan shall not exceed the amount of
$100,000 per employee, and the amount of such guaranties of employee loans,
together with the amount of Investments permitted pursuant to clause (vi) of the
definition of "Permitted Investments," shall not exceed, in the aggregate, more
than $2,000,000, and (v) guarantees and contingent obligations incurred after
the Agreement Date not to exceed $20,000,000 in aggregate principal amount.
Section 5.6 INCURRENCE AND RETENTION OF DEBT. The Borrower covenants
and agrees that it will not, and will cause each Subsidiary and Unincorporated
Venture to not, incur, create, assume, or suffer to exist any Debt (other than
Debt existing on the Agreement Date) unless, immediately prior to, and after the
incurrence of, such Debt, the Borrower, its Subsidiaries and Unincorporated
Ventures are and will be in compliance with all covenants hereunder and there
shall otherwise be no Default or Event of Default hereunder.
Section 5.7 INVESTMENTS. The Borrower will not, and will cause each
Subsidiary and Unincorporated Venture to not, make or permit to remain any
Investment other than a Permitted Investment.
Section 5.8 NOTICE OF LITIGATION. The Borrower covenants and agrees
that it will, and will cause each Subsidiary and Unincorporated Venture to,
promptly give notice in writing to the Lenders (i) of any litigation to which
the Borrower, any Subsidiary or Unincorporated Venture becomes a party, if (A)
the amount in controversy exceeds $500,000 and (B) the Borrower's insurance
carrier does not acknowledge coverage with respect to such litigation, and (ii)
of all proceedings before any governmental or regulatory agencies (A) affecting
or potentially affecting the business or property of the Borrower, any
Subsidiary or Unincorporated Venture in an amount in excess of $500,000 or (B)
materially affecting the ability of the Borrower, any
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Subsidiary or Unincorporated Venture to perform their respective covenants and
obligations hereunder or under any other obligations owed any Lender.
Section 5.9 TOTAL DEBT RATIO. The Borrower covenants and agrees that it
will not allow the ratio of (i) Total Debt to (ii) EBITDA, in each case for the
four consecutive fiscal quarters immediately preceding the date of
determination, to be greater than 4.00 to 1 at the end of any fiscal quarter.
For purposes of this Section 5.9, with respect to assets not owned at all times
during the four consecutive quarters immediately preceding the date of
determination of EBITDA, there shall be (i) included in EBITDA (without
duplication) the EBITDA of any assets acquired during any such four consecutive
fiscal quarters immediately preceding the date of determination and (ii)
excluded from EBITDA the EBITDA of any asset disposed of during any such four
consecutive fiscal quarters immediately preceding the date of determination.
Section 5.10 CASH FLOW RATIO. The Borrower covenants and agrees that it
will not allow the ratio of (i)(a) EBITDA, plus (b) lease expense pursuant to
Operating Leases, minus (c) Maintenance Capital Expenditures to (ii)(a) Net
Interest, plus (b) lease expense pursuant to Operating Leases, plus (c) Current
Maturities, in each case other than Current Maturities (which, with respect to
Current Maturities, shall be for the four consecutive fiscal quarters
immediately succeeding the date of determination) for the four consecutive
fiscal quarters immediately preceding the date of determination, to be less than
1.50 to 1 at the end of any fiscal quarter.
Section 5.11 SENIOR DEBT RATIO. The Borrower covenants and agrees that
it will not allow the ratio of (i) Senior Debt to (ii) EBITDA, in each case for
the four consecutive fiscal quarters immediately preceding the date of
determination, to be greater than 3.0 to 1 at the end of any fiscal quarter. For
purposes of this Section 5.11, with respect to assets not owned at all times
during the four consecutive quarters immediately preceding the date of
determination of EBITDA, there shall be (i) included in EBITDA (without
duplication) the EBITDA of any assets acquired during any such four consecutive
fiscal quarters immediately preceding the date of determination and (ii)
excluded from EBITDA the EBITDA of any asset disposed of during any such four
consecutive fiscal quarters immediately preceding the date of determination.
Section 5.12 LIENS. The Borrower covenants and agrees that it will not
create, assume or suffer to exist, or permit any Subsidiary or Unincorporated
Venture to create, assume or suffer to exist, any Lien on any asset now owned or
hereafter acquired by it except Permitted Liens. Other than with respect to
Senior Notes, the Borrower shall not, and shall not permit any Subsidiary or
Unincorporated Venture to, agree with any Person that it shall not create,
assume, incur, permit or suffer to exist or to be created, assumed, incurred or
permitted to exist, directly or indirectly, any Lien on any of its assets.
Section 5.13 ACCOUNTING CHANGES. The Borrower covenants and agrees that
it will not, and will not permit an of its Subsidiaries or Unincorporated
Ventures to, make any change in its accounting treatment or financial reporting
practices, except as permitted or required by GAAP in effect from time to time.
The Borrower will not change its fiscal year or the calculation of its fiscal
quarter ends.
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Section 5.14 AMENDMENT AND MODIFICATION OF SUBORDINATED DEBT DOCUMENTS.
The Borrower covenants and agrees that it will not, and it will not permit any
Subsidiary or Unincorporated Venture to, directly or indirectly, amend, modify,
supplement, waive compliance with, or assent to noncompliance with, any term,
provision or condition of any of the documents governing or evidencing the
Subordinated Debt, which (i) the Lenders deem material (including, without
limitation, relating to events of default, acceleration rights, interest rates,
tenor, maturity date, subordination, covenants, prohibition against amending any
documents related to this Agreement and definitions with respect thereto
(including, without limitation, the definition of "Senior Debt")) or (ii) places
any further restrictions on the Borrower, its Subsidiaries or Unincorporated
Ventures or increases the obligations of the Borrower, its Subsidiaries or
Unincorporated Ventures thereunder or confers on the holders thereof any
additional rights.
Section 5.15 LEASE-BACKS. The Borrower covenants and agrees that it will
not, and will not permit any Subsidiary or Unincorporated Venture to, enter into
any arrangements, directly or indirectly, with any Person, whereby the Borrower,
any Subsidiary or Unincorporated Venture shall sell or transfer any property,
whether now owned or hereafter acquired, used or useful in its business, and
thereafter rent or lease the property so sold or transferred in an aggregate
amount (determined at the greater of fair market value or net book value) in
excess of $20,000,000 during the term of this Agreement.
Section 5.16 ENVIRONMENTAL MATTERS.
(a) The Borrower covenants and agrees that it will not, and will not
permit any of its Subsidiaries or Unincorporated Ventures to, use, generate,
manufacture, produce, store, release, discharge or dispose of on, under or about
any real property owned or leased by the Borrower or any of its Subsidiaries or
Unincorporated Ventures (such owned or leased real property, the "Property"), or
transport to or from the Property, any Hazardous Substance (as defined below),
or (to the extent within the Borrower's or such Subsidiary's or Unincorporated
Venture's control) permit any other Person to do so, where such could reasonably
be expected to have a Material Adverse Effect.
(b) The Borrower shall keep and maintain and shall cause each Subsidiary
and Unincorporated Venture to keep and maintain, the Property in compliance with
any Environmental Law (as defined below) where the failure to do so could
reasonably be expected to have a Material Adverse Effect.
(c) In the event that any investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature (the
"Remedial Work") with respect to the Property is required to be performed by the
Borrower or any of its Subsidiaries or Unincorporated Ventures under any
applicable local, state or federal law or regulation, any judicial order, or by
any governmental entity because of, or in connection with, the current or future
presence, suspected presence, release or suspected release of a Hazardous
Substance in or into the air, soil, groundwater or surface water at, on, under
or within the Property (or any portion thereof), the Borrower or such Subsidiary
or Unincorporated Venture shall within thirty
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(30) days after written demand for performance thereof by the Lenders (or such
shorter period of time as may be required under any applicable law, regulation,
order or agreement), commence and thereafter diligently prosecute to completion,
all such Remedial Work.
(d) The Borrower will defend, indemnify and hold harmless the Lenders,
and their respective employees, agents, officers and directors, from and against
any claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under any Environmental Law applicable to the
operations of the Borrowers or any Subsidiary or Unincorporated Venture or the
Property, or any orders, requirements or demands of Tribunal related thereto,
including, without limitation, attorneys' and consultants' fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. This
indemnity shall continue in full force and effect regardless of the termination
of this Agreement.
(e) As used herein, (i) "Environmental Law" means any federal, state
or local law, statute, ordinance, or regulation now or hereafter in effect
pertaining to health, industrial hygiene, or the environmental conditions on,
under or about the Property, and (ii) the term "Hazardous Substance" means
those substances included within the definitions of "hazardous substances",
"hazardous materials", "toxic substances", or "solid waste" under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601 ET SEQ., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ. and the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 ET SEQ., and in the
regulations laws, and such other substances, materials and wastes which are
or become regulated under applicable local, state or federal law, or which
are classified as hazardous or toxic under federal, state, or local laws or
regulations.
Section 5.17 ERISA COMPLIANCE. The Borrower covenants and agrees that it
shall, and shall cause each Subsidiary and Unincorporated Venture to (i) at all
times, make prompt payment of all contributions required under all Plans and
required to meet the minimum funding standard set forth in ERISA with respect to
its Plans, (ii) after the discovery by an Authorized Officer, notify the Lenders
immediately of any fact, including, but not limited to, any Reportable Event
arising in connection with any of its Plans, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such Plan, together with a
statement, if requested by any Lender, as to the reason therefor and the action,
if any, proposed to be taken with respect thereto, and (iii) not permit any Plan
to be subject to any involuntary termination proceedings.
Section 5.18 BUSINESS. The Borrower covenants and agrees that it will
not, and will not permit any Subsidiary or Unincorporated Venture to, engage in,
directly or through other Persons, any business other than the businesses now
carried on and other businesses directly related thereto.
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Section 5.19 DEBT. The Borrower covenants and agrees that it will not,
and will cause each Subsidiary and Unincorporated Venture to not, (i) default,
beyond any notice, grace or cure period, in any payment equal to or exceeding
the aggregate amount of $1,000,000 of principal of or interest on any Debt with
respect to which recourse may be made against the Borrower or any Subsidiary or
Unincorporated Venture beyond any period of grace provided with respect thereto,
or (ii) default, beyond any notice, grace or cure period, in the performance of
any other agreement, term, covenant or condition contained in any agreement or
instrument under or by which any such Debt, the unpaid principal amount of which
then equals or exceeds $1,000,000 is created, evidenced or secured if the effect
of such default is to cause such Debt to become due before its stated maturity.
Section 5.20 TRANSACTIONS WITH AFFILIATES. The Borrower covenants and
agrees that it will not, and will not permit any Subsidiary or Unincorporated
Venture to, directly or indirectly, enter into any transaction (including, but
not limited to, the sale or exchange of property or the rendering of service)
with any of its Affiliates, other than in the ordinary course of business and
upon fair and reasonable terms no less favorable than the Borrower or any
Subsidiary or Unincorporated Venture could obtain or could become entitled to in
an arm's-length transaction with a Person which was not an Affiliate.
Section 5.21 USE OF PROCEEDS. The Borrower shall use the proceeds of the
Commitment to refinance the debt outstanding under the Existing Credit Agreement
and for working capital and general corporate purposes, including repayment of
Debt.
Section 5.22 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES, AND
EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING
(COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES
IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING,
WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT
OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR
OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST, PRESENT OR
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FUTURE OPERATIONS OF THE BORROWER OR ITS PREDECESSORS IN INTEREST, OR THE PAST,
PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER), IN ANY
MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE LOAN PAPERS, OR ANY
ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR TRANSACTION RELATING OR
ATTENDANT THERETO, THE MAKING OF ANY PARTICIPATIONS IN THE ADVANCES AND THE
MANAGEMENT OF THE ADVANCES, INCLUDING IN CONNECTION WITH, OR AS A RESULT, IN
WHOLE OR IN PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE LENDER OR ANY LENDER
(OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT AGAINST THE
ADMINISTRATIVE LENDER OR ANY LENDER AND NOT THE BORROWER), OR THE USE OR
INTENDED USE OF THE PROCEEDS OF THE ADVANCES HEREUNDER, OR IN CONNECTION WITH
ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (i) ANY
CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, AND (ii) MATTERS RAISED BY ONE LENDER AGAINST ANOTHER
LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR ITS MANAGEMENT
(COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT THAT ANY INDEMNIFIED
MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL USE THE SAME
LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION DETERMINES THAT
CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH REPRESENTATION.
(b) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL EXPENSES
(INCLUDING THE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN CONNECTION
WITH ANY INDEMNIFIED MATTER. IF FOR ANY REASON THE FOREGOING INDEMNIFICATION IS
UNAVAILABLE TO ANY INDEMNITEE OR INSUFFICIENT TO HOLD ANY INDEMNITEE HARMLESS
WITH RESPECT TO INDEMNIFIED MATTERS, THEN THE BORROWER SHALL CONTRIBUTE TO THE
AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A RESULT OF SUCH LOSS, CLAIM,
DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY THE
RELATIVE BENEFITS RECEIVED BY THE BORROWER AND THE BORROWER'S STOCKHOLDERS ON
THE ONE HAND AND SUCH INDEMNITEE ON THE OTHER HAND BUT ALSO THE RELATIVE FAULT
OF THE BORROWER AND SUCH INDEMNITEE, AS WELL AS ANY OTHER RELEVANT EQUITABLE
CONSIDERATIONS. THE REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER
THIS SECTION SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY
OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH
INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF ANY
SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE
ADMINISTRATIVE LENDER, THE LENDERS AND ALL OTHER INDEMNITEES. THIS
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SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE
OBLIGATIONS.
ARTICLE 6
INFORMATION
Section 6.1 FINANCIAL STATEMENTS AND OTHER REPORTS BY THE BORROWER. The
Borrower will deliver to each Lender:
(a) As soon as practicable after the end of each of the first three
quarterly fiscal periods in each fiscal year of the Borrower, and in any event
within 45 days thereafter, duplicate copies of
(1) Combined balance sheets, statements of earnings, shareholders'
equity and cash flows for the portion of the fiscal year ending with such
quarter; all in reasonable detail and accompanied by an Officer's
Certificate certifying that the aforementioned financial statements
present fairly the financial position of the Borrower (Combined Basis) at
the end of such quarter and the results of operations and the changes in
financial position for the portion of the fiscal year ending with such
quarter, determined in accordance with GAAP; and
(2) An Officer's Certificate (with calculations and a new
SCHEDULE 11 attached thereto) certifying (i) as to any increases or
reductions in interest in the Significant Investments, and (ii) compliance
with Sections 5.4, 5.5, 5.9, 5.10 and 5.11.
(b) As soon as practicable after the end of each fiscal year of the
Borrower and in any event within 120 days thereafter, duplicate copies of:
(1) Combined balance sheets, statements of earnings, shareholders'
equity and cash flows of the Borrower for such year; all in reasonable
detail, prepared on a basis consistent with the financial statements
delivered to all Lenders in prior periods and accompanied by an
unqualified opinion and report of KPMG Peat Marwick, or other independent
certified accountants of recognized standing selected by the Borrower and
reasonably consented to by Lenders, which report shall state that no
default under this Agreement and no condition or event which after notice
or lapse of time or both would constitute a default under this Agreement
has come to the knowledge of such accountants or, if such is not the case,
the details of such default or such condition or event; and
(2) An Officer's Certificate (with calculations and a new
SCHEDULE 11 attached thereto) certifying (i) as to any increases or
reductions in interest in the Significant Investments, and (ii) compliance
with Sections 5.4, 5.5, 5.9, 5.10 and 5.11.
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(c) As soon as practicable after the Borrower or any Subsidiary files
with the S.E.C. any of the following documents and in any event within 10 days
thereafter, a copy of:
(1) Any final Registration Statement filed for the registration of
any securities under the Securities Act of 1933, as amended (except a
Registration Statement on Form S-8 for the registration of stock to be
issued in connection with any Stock Plan);
(2) Each Annual and Periodic Report filed under Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended;
(3) Each definitive Proxy Statement filed pursuant to the
Securities Exchange Act of 1934, as amended; and
together with any other document filed with the S.E.C. or the New York
Stock Exchange, Inc., as may be requested by any Lender.
(d) Upon request by any Lender, copies of the following:
(1) Each annual report/return, as well as all schedules and
attachments required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the regulations promulgated
thereunder, in connection with each of its Plans for each Plan year; and
(2) Such additional information concerning any of its Plans as may
be reasonably requested.
(e) On the date of receipt by the Borrower of any change in the Index
Debt Rating, a copy of such change.
(f) Promptly upon the occurrence of a Default or Event of Default, a
written notice specifying the nature and period of existence thereof and what
action is being taken or is proposed to be taken with respect thereto.
(g) Promptly upon becoming aware thereof, notice of the commencement or
filing (or of a threat to commence or file) of any action, suit or proceeding
before any court or any federal, state, municipal or other governmental agency
or authority involving claims for damages, fines or penalties in excess of
$500,000 (after deducting any amount with respect to which the Borrower, any
Subsidiary or Unincorporated Venture is insured) against or in any other way
relating to the Borrower, any Subsidiary or any Unincorporated Venture or any of
their respective properties or businesses.
(h) With reasonable promptness, such other data and information as from
time to time may be reasonably requested by any Lender.
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(i) Notwithstanding anything in this Section 6.1 to the contrary, (i) if
the terms of any Subordinated Debt of the Borrower requires delivery of Parent
Company financial statements and (ii) any Lender shall request delivery of
Parent Company financial statements, the Borrower shall also deliver to such
Lender the financial statements required to be delivered pursuant to (1) Section
6.1(a) on a Parent Company basis within 60 days after the end of the first three
quarterly fiscal periods of the Borrower and (2) Section 6.1(b) on a Parent
Company basis within 120 days after the end of each fiscal year of the Borrower.
Section 6.2 OFFICER'S CERTIFICATE. Each set of financial statements
delivered pursuant to Sections 6.1(a) and (b) shall be accompanied by an
Officer's Certificate stating whether there exists on the date of such
certificate any condition or event which then constitutes, or which after notice
or lapse of time or both, would constitute, a breach of any covenant herein, and
if any such condition or event then exists, specifying the nature and period of
existence thereof and the action the Borrower is taking or proposes to take with
respect thereto.
ARTICLE 7
DEFAULT
Section 7.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or
non-governmental body:
(a) The Borrower fails to make any payment of principal on any Note on
the date such payment is due;
(b) The Borrower fails to make any payment of interest on any Note or
any other costs, fees, expenses or other amounts payable hereunder or under the
other Loan Papers within one Business Day after the date such payment is due;
(c) The Borrower or any Subsidiary or Unincorporated Venture fails to
perform or observe (i) any covenant contained in Sections 5.3, 5.4, 5.5, 5.6,
5.7, 5.9, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.19, 5.20 or 5.21 of this
Agreement or (ii) any other covenant in this Agreement or any other Loan Paper
(other than the Master Covenant Agreement) to be performed or observed by it and
such failure with respect to such other covenants continues for a period of 30
days after any Lender has given written notice specifying such failure to the
Borrower;
(d) Any material warranty or representation by or on behalf of the
Borrower or any Subsidiary or Unincorporated Venture contained in this Agreement
or any other Loan Paper is false or misleading in any material respect;
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(e) The Borrower or any Subsidiary or Unincorporated Venture fails to
make any payment due on any other Debt in an aggregate amount of at least
$1,000,000 beyond any applicable grace period, including any extension thereof,
or the Company, or any Subsidiary fails to perform or observe any other
provision contained in any such Debt or any agreement securing or relating to
such Debt if and only if the effect of such failure to make such payment or to
perform or observe such other provision is to cause or permit the holder of such
Debt or any Person acting on such holder's behalf to cause such Debt to become
due prior to its stated maturity;
(f) The Borrower or any Significant Subsidiary or Unincorporated Venture
(other than Insolvent Unincorporated Ventures) (i) shall become insolvent, (ii)
shall fail to pay its debts generally as they become due, (iii) shall make a
general assignment for the benefit of creditors, (iv) shall voluntarily seek,
consent to, or acquiesce in the benefit of any Debtor Relief Law, (v) shall
become a party to or is made the subject of any proceeding provided for by any
Debtor Relief Law, other than as a creditor or claimant (unless, in the event
such proceeding is involuntary, the petition instituting same is dismissed
within 60 days after its filing), or (vi) take any corporate or other action for
the purpose of effecting any of the foregoing;
(g) The Borrower or any Subsidiary or Unincorporated Venture fails to
have discharged, within a period of 45 days after the expiration of all rights
of appeal, any judgment, warrant of attachment, sequestration, or similar
proceeding against any of its respective assets with a value, individually or
collectively, in excess of a Material Amount;
(h) The Borrower or any Subsidiary or Unincorporated Venture shall fail
to perform or observe, beyond any grace period provided with respect thereto and
provided that the Borrower has been given a notice of default with respect to,
any covenant contained in that certain Master Covenant Agreement;
(i) Any material provision of any Loan Paper after delivery thereof
hereunder shall for any reason cease to be valid and binding on the Person
(other than any Lender) executing such Loan Paper, or the Borrower or such
Person shall so state in writing;
(j) A final judgment or judgments for the payment of money shall be
entered by a court or courts against the Borrower or any Subsidiary or
Unincorporated Venture and such judgment or judgments remain unstayed or
undischarged for a period of 30 days from the date of entry thereof and the
aggregate amount of all such judgments exceeds a Material Amount (net of actual
insurance coverage if the Lenders receive evidence satisfactory to them that
coverage exists);
(k) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person shall engage in transactions which in
the aggregate would reasonably result in a direct or indirect liability to the
Borrower or any member of its Controlled Group in excess of $100,000 under
Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or
any member of
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its Controlled Group shall incur any accumulated funding deficiency, as defined
in Section 412 of the Code, in the aggregate in excess of $100,000, or request a
funding waiver from the Internal Revenue Service for contributions in the
aggregate in excess of $100,000; (iii) the Borrower or any member of its
Controlled Group shall incur any withdrawal liability in the aggregate in excess
of $100,000 as a result of a complete or partial withdrawal within the meaning
of Section 4203 or 4205 of ERISA, or any other liability with respect to a Plan
in excess of $100,000, unless the amount of such liability has been funded
within the Plan or pursuant to one or more insurance contracts; (iv) the
Borrower or any member of its Controlled Group shall fail to make a required
contribution by the due date under Section 412 of the Code or Section 302 of
ERISA which would result in the imposition of a lien under Section 412 of the
Code or Section 302 of ERISA; (v) the Borrower, any member of its Controlled
Group or any Plan sponsor shall notify the PBGC of an intent to terminate, or
the PBGC shall institute proceedings to terminate, or the PBGC shall institute
proceedings to terminate, any Plan subject to Title IV of ERISA; (vi) a
Reportable Event shall occur with respect to a Plan subject to Title IV of
ERISA, and within 15 days after the reporting of such Reportable Event to the
Administrative Lender, the Administrative Lender shall have notified the
Borrower in writing that the Determining Lenders have made a determination that,
on the basis of such Reportable Event, there are reasonable grounds for the
termination of such Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan and as a
result thereof an Event of Default shall have occurred hereunder; (vii) a
trustee shall be appointed by a court of competent jurisdiction to administer
any Plan or the assets thereof; (viii) the benefits of any Plan shall be
increased, or the Borrower or any member of its Controlled Group shall begin to
maintain, or begin to contribute to, any Plan, without the prior written consent
of the Determining Lenders; or (ix) any ERISA Event with respect to a Plan
subject to Title IV of ERISA shall have occurred, and 30 days thereafter (a)
such ERISA Event, other than such event described in clause (f) of the
definition of ERISA Event herein, (if correctable) shall not have been corrected
and (b) the then present value of such Plan's benefit liabilities, as defined in
Title IV of ERISA, shall exceed the then current value of assets accumulated in
such Plan; provided, however, that the events listed in subsections (v) through
(ix) shall constitute Events of Default only if, as of the date thereof or any
subsequent date, the amount of liability that the Borrower or any member of its
Controlled Group reasonably is likely to incur in the aggregate under Section
4062, 4063, 4064, 4219 or 4023 of ERISA or any other provision of law with
respect to all such Plans, computed by the actuary of the Plan taking into
account any applicable rules and regulations of the PBGC at such time, and based
on the actuarial assumptions used by the Plan, resulting from or otherwise
associated with such event exceeds $100,000; or
(l) A Change of Control shall have occurred.
Section 7.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in Section
7.1(f) hereof, the Administrative Lender shall, upon the direction of the
Determining Lenders, terminate the
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Commitment and/or declare the principal of and interest on the Advances and all
Obligations and other amounts owed under the Loan Papers to be forthwith due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived, anything in the Loan Papers to the contrary
notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Section
7.1(f) hereof, such principal, interest and other amounts shall thereupon and
concurrently therewith become due and payable and the Commitment shall
automatically forthwith terminate, all without any action by the Administrative
Lender, any Lender or any holders of the Notes and without presentment, demand,
protest or other notice of any kind, all of which are expressly waived, anything
in the Loan Papers to the contrary notwithstanding.
(c) The Administrative Lender, and the Lenders may exercise all of the
post-default rights granted to them under the Loan Papers or under Applicable
Law.
(d) The rights and remedies of the Administrative Lender and the Lenders
hereunder shall be cumulative, and not exclusive.
ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.1 LIBOR BASIS DETERMINATION INADEQUATE. If with respect to
any proposed LIBOR Advance for any Interest Period, any Lender determines that
(i) deposits in dollars (in the applicable amount) are not being offered to that
Lender in the relevant market for such Interest Period or (ii) the LIBOR Basis
for such proposed LIBOR Advance does not adequately cover the cost to such
Lender of making and maintaining such proposed LIBOR Advance for such Interest
Period, such Lender shall forthwith give notice thereof to the Borrower,
whereupon until such Lender notifies the Borrower that the circumstances giving
rise to such situation no longer exist, the obligation of such Lender to make
LIBOR Advances shall be suspended.
Section 8.2 ILLEGALITY. If any applicable law, rule or regulation, or
any change therein or adoption thereof, or interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its LIBOR Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for such Lender (or its LIBOR
Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall
so notify the Borrower and the Administrative Lender. Before giving any notice
to the Borrower pursuant to this Section, the notifying Lender shall designate a
different LIBOR Lending Office or other lending office if such designation will
avoid the need for giving such notice and will not, in the sole judgment of the
Lender, be materially disadvantageous to the Lender. Upon receipt of such
notice, notwithstanding anything contained in Article 2 hereof, the Borrower
shall repay in full the then
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outstanding principal amount of each LIBOR Advance owing to the notifying
Lender, together with accrued interest thereon, on either (a) the last day of
the Interest Period applicable to such Advance, if the Lender may lawfully
continue to maintain and fund such Advance to such day, or (b) immediately, if
the Lender may not lawfully continue to fund and maintain such Advance to such
day. Concurrently with repaying each affected LIBOR Advance owing to such
Lender, notwithstanding anything contained in Article 2 hereof, the Borrower
shall borrow a Base Rate Advance from such Lender, and such Lender shall make
such Base Rate Advance, in an amount such that the outstanding principal amount
of the Advances owing to such Lender shall equal the outstanding principal
amount of the Advances owing immediately prior to such repayment.
Section 8.3 INCREASED COSTS.
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by any Lender
(or its LIBOR Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or compatible
agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any
Tax (net of any tax benefit engendered thereby) with respect to its LIBOR
Advances or its obligation to make such Advances, or shall change the
basis of taxation of payments to a Lender (or to its LIBOR Lending Office)
of the principal of or interest on its LIBOR Advances or in respect of any
other amounts due under this Agreement, as the case may be, or its
obligation to make such Advances (except for changes in the rate of tax on
the overall net income, net worth or capital of the Lender and franchise
taxes, doing business taxes or minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, a Lender's LIBOR Lending Office or shall impose on the Lender (or its
LIBOR Lending Office) or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its
LIBOR Advances or its obligation to make such Advances;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material ("Increased Advance Costs"), then, within 15 days after demand by a
Lender, the Borrower agrees to pay to such Lender such additional amount as will
compensate such Lender for such increased costs or reduced amounts, subject to
Section 10.9 hereof. The affected Lender will as soon as practicable notify the
Borrower of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this Section
and will designate a different LIBOR Lending Office
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or other lending office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole judgment of the
affected Lender made in good faith, be materially disadvantageous to such
Lender. Notwithstanding the foregoing, any Lender's demand for Increased
Advance Costs shall not include any Increased Advance Costs with respect to any
period more than 180 days prior to the date that such Lender gives notice to the
Borrower of such Increased Advance Costs unless the effective date of the
condition which results in the right to receive Increased Advance Costs is
retroactive (the "Increased Advance Costs Retroactive Effective Date"). If any
Increased Advance Costs has an Increased Advance Costs Retroactive Effective
Date and any Lender demands compensation within 180 days after the date setting
the Increased Advance Costs Retroactive Effective Date (the "Increased Advance
Costs Set Date"), such Lender shall have the right to receive such Increased
Advance Costs from the Increased Advance Costs Retroactive Effective Date. If
a Lender does not demand such Increased Advance Costs within 180 days after the
Increased Advance Costs Set Date, such Lender may not receive payment of
Increased Advance Costs with respect to any period more than 180 days prior to
such demand.
(b) A certificate of any Lender claiming compensation under this Section
and setting forth the additional amounts to be paid to it hereunder and
calculations therefor shall be conclusive in the absence of manifest error. In
determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this Section, the
Borrower may at any time, upon at least five Business Days' prior notice to the
Lender, after reimbursement to the Lender by the Borrower in accordance with
this Section of all costs incurred, prepay in full the then outstanding LIBOR
Advances of the Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance from the Lender, and the Lender shall make such Base Rate
Advance, in an amount such that the outstanding principal amount of the Advances
owing to such Lender shall equal the outstanding principal amount of the
Advances owing immediately prior to such prepayment.
Section 8.4 EFFECT ON BASE RATE ADVANCES. If notice has been given
pursuant to Section 8.1, 8.2 or 8.3 hereof suspending the obligation of a Lender
to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be repaid or
prepaid, then, unless and until the Lender notifies the Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as LIBOR Advances shall be made instead
as Base Rate Advances.
Section 8.5 CAPITAL ADEQUACY. If either (a) the introduction of or any
change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by a Lender or any corporation controlling such
Lender, and such Lender determines that the amount of such capital is increased
by or based upon the existence of such Lender's Commitment or Advances hereunder
and other commitments or
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advances of such Lender of this type, then, upon demand by such Lender, subject
to Section 10.9, the Borrower shall immediately pay to such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate
such Lender with respect to such circumstances (collectively, "Additional
Costs"), to the extent that such Lender reasonably determines in good faith such
increase in capital to be allocable to the existence of such Lender's Commitment
hereunder. Notwithstanding the foregoing, any Lender's demand for Additional
Costs shall not include any Additional Costs with respect to any period more
than 180 days prior to the date that such Lender gives notice to the Borrower of
such Additional Costs unless the effective date of the Regulatory Modification
which results in the right to receive Additional Costs is retroactive (the
"Regulatory Modification Retroactive Effective Date"). If any Regulatory
Modification has a Regulatory Modification Retroactive Effective Date and any
Lender demands compensation within 180 days after the date setting the
Regulatory Modification Retroactive Effective Date (the "Regulatory Modification
Set Date"), such Lender shall have the right to receive such Additional Costs
from the Regulatory Modification Retroactive Effective Date. If a Lender does
not demand such Additional Costs within 180 days after the Regulatory
Modification Set Date, such Lender may not receive payment of Additional Costs
with respect to any period more than 180 days prior to such demand. A
certificate as to such amounts submitted to the Borrower by a Lender hereunder,
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
ARTICLE 9
AGREEMENT AMONG LENDERS
Section 9.1 AGREEMENT AMONG LENDERS. The Lenders agree among themselves
that:
(a) ADMINISTRATIVE LENDER. Each Lender hereby appoints the
Administrative Lender as its nominee in its name and on its behalf, to receive
all documents and items to be furnished hereunder; to act as nominee for and on
behalf of all Lenders under the Loan Papers; to, except as otherwise expressly
set forth herein, take such action as may be requested by the Determining
Lenders, provided that, unless and until the Administrative Lender shall have
received such requests, the Administrative Lender may take such administrative
action, or refrain from taking such administrative action, as it may deem
advisable and in the best interests of the Lenders; to arrange the means whereby
the proceeds of the Advances of the Lenders are to be made available to the
Borrower; to distribute promptly to each Lender information, requests and
documents received from the Borrower, and each payment (in like funds received)
with respect to any of such Lender's Advances, fee or other amount; and to
deliver to the Borrower requests, demands, approvals and consents received from
the Lenders. Administrative Lender agrees to promptly distribute to each
Lender, at such Lender's address set forth below information, requests,
documents and payments received from the Borrower.
(b) REPLACEMENT OF ADMINISTRATIVE LENDER. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the
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Administrative Lender or any successor Administrative Lender ever resign as
Administrative Lender, or should the Administrative Lender or any successor
Administrative Lender ever be removed with cause by the Determining Lenders,
then the Lender appointed by the other Lenders shall forthwith become the
Administrative Lender, and the Borrower and the Lenders shall execute such
documents as any Lender may reasonably request to reflect such change. Any
resignation or removal of the Administrative Lender or any successor
Administrative Lender shall become effective upon the appointment by the Lenders
of a successor Administrative Lender; provided, however, that if the Lenders
fail for any reason to appoint a successor within 60 days after such removal or
resignation, the Administrative Lender or any successor Administrative Lender
(as the case may be) shall thereafter have no obligation to act as
Administrative Lender hereunder.
(c) EXPENSES. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any expenses paid by the Administrative Lender directly
and solely in connection with any of the Loan Papers if Administrative Lender
does not receive reimbursement therefor from other sources within 60 days after
the date incurred, unless payment of such fees is being diligently disputed by
such Lender or the Borrower in good faith. Any amount so paid by the Lenders to
the Administrative Lender shall be returned by the Administrative Lender pro
rata to each paying Lender to the extent later paid by the Borrower or any other
Person on the Borrower's behalf to the Administrative Lender.
(d) DELEGATION OF DUTIES. The Administrative Lender may execute any
of its duties hereunder by or through officers, directors, employees, attorneys
or agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably believed
by it or them in good faith to be genuine and correct and to have been signed or
made by the proper Person and, with respect to legal matters, upon opinions of
counsel selected the Administrative Lender. The Administrative Lender may, in
its reasonable judgment, deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither the
Administrative Lender nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Papers or be responsible
for the consequences of any error of judgment, except for its or their own gross
negligence or wilful misconduct. Except as aforesaid, the Administrative Lender
shall be under no duty to enforce any rights with respect to any of the
Advances, or any security therefor. The Administrative Lender shall not be
compelled to do any act hereunder or to take any action towards the execution or
enforcement of the powers hereby created or to prosecute or defend
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any suit in respect hereof, unless indemnified to its satisfaction against loss,
cost, liability and expense. The Administrative Lender shall not be responsible
in any manner to any Lender for the effectiveness, enforceability, genuineness,
validity or due execution of any of the Loan Papers, or for any representation,
warranty, document, certificate, report or statement made herein or furnished in
connection with any Loan Papers, or be under any obligation to any Lender to
ascertain or to inquire as to the performance or observation of any of the
terms, covenants or conditions of any Loan Papers on the part of the Borrower.
To the extent not reimbursed by the Borrower, each Lender hereby jointly and
severally indemnifies and holds harmless the Administrative Lender, pro rata
according to its Specified Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and/or disbursements of any kind or nature whatsoever which may be
imposed on, asserted against, or incurred by the Administrative Lender in any
way with respect to any Loan Papers or any action taken or omitted by the
Administrative Lender under the Loan Papers (including any negligent action of
the Administrative Lender), except to the extent the same result from gross
negligence or wilful misconduct by the Administrative Lender.
(g) LIABILITY AMONG LENDERS. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Papers) to any other Lender, except for acts or
omissions in bad faith.
(h) RIGHTS AS LENDER. With respect to its commitment hereunder, the
Advances made by it and Note issued to it, the Administrative Lender shall have
the same rights as a Lender and may exercise the same as though it were not the
Administrative Lender, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Lender in its individual
capacity. The Administrative Lender or any Lender may accept deposits from, act
as trustee under indentures of, and generally engage in any kind of business
with, the Borrower and any of its Affiliates, and any Person who may do business
with or own securities of the Borrower or any of its Affiliates, all as if the
Administrative Lender were not the Administrative Lender hereunder and without
any duty to account therefor to the Lenders.
Section 9.2 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements delivered to such Lender by
the Borrower, and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Lender or any other Lender and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Papers.
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Section 9.3 BENEFITS OF ARTICLE. None of the provisions of this Article
shall inure to the benefit of any Person other than Lenders; consequently, no
Person shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Lender or any Lender to comply
with such provisions.
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES.
(a) All notices and other communications under this Agreement shall be
in writing and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after deposit
in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, or one day after being delivered to the telegraph
office or sent out by telex addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, at:
La Quinta Inns, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Treasurer
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President
(iii) If to a Lender, at its address shown below its name on the
signature pages hereof, or if applicable, set forth in its
Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 10.2 EXPENSES. The Borrower shall promptly pay:
- 60 -
(a) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Papers, the transactions contemplated hereunder and
thereunder, and the making of Advances hereunder, including without limitation
the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and attorneys' fees of the
Administrative Lender in connection with the administration of the transactions
contemplated in this Agreement and the other Loan Papers and the preparation,
negotiation, execution and delivery of any waiver, amendment or consent by the
Lenders relating to this Agreement or the other Loan Papers; and
(c) all costs, out-of-pocket expenses and attorneys' fees of the
Administrative Lender and each Lender incurred for enforcement, collection,
restructuring, refinancing and "work-out", or otherwise incurred in obtaining
performance under the Loan Papers, and all costs and out-of-pocket expenses of
collection if default is made in the payment of the Notes, which in each case
shall include without limitation fees and expenses of consultants, counsel for
the Administrative Lender and any Lender, and administrative fees for the
Administrative Lender.
Section 10.3 WAIVERS. The rights and remedies of the Lenders under this
Agreement and the other Loan Papers shall be cumulative and not exclusive of any
rights or remedies which they would otherwise have. No failure or delay by the
Administrative Lender or any Lender in exercising any right shall operate as a
waiver of such right. The Lenders expressly reserve the right to require strict
compliance with the terms of this Agreement in connection with any funding of a
request for an Advance. In the event that any Lender decides to fund an Advance
at a time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by such Lender shall not be deemed to constitute an
undertaking by the Lender to fund any further requests for Advances or preclude
the Lenders from exercising any rights available under the Loan Papers or at law
or equity. Any waiver or indulgence granted by the Lenders shall not constitute
a modification of this Agreement, except to the extent expressly provided in
such waiver or indulgence, or constitute a course of dealing by the Lenders at
variance with the terms of the Agreement such as to require further notice by
the Lenders of the Lenders' intent to require strict adherence to the terms of
the Agreement in the future. Any such actions shall not in any way affect the
ability of the Administrative Lender or the Lenders, in their discretion, to
exercise any rights available to them under this Agreement or under any other
agreement, whether or not the Administrative Lender or any of the Lenders are a
party thereto, relating to the Borrower.
Section 10.4 DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING. Any
material determination required or expressly permitted to be made by the
Administrative Lender or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be conclusive and binding on all parties.
- 61 -
Section 10.5 SET-OFF. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender and any subsequent holder of any
Note, and any assignee or participant in any Note is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or any
other Person, any such notice being hereby expressly waived, to set-off,
appropriate and apply any deposits (general or special (except trust and escrow
accounts), time or demand, including without limitation Debt evidenced by
certificates of deposit, in each case whether matured or unmatured) and any
other Debt at any time held or owing by such Lender or holder to or for the
credit or the account of the Borrower, against and on account of the Obligations
and other liabilities of the Borrower to such Lender or holder, irrespective of
whether or not (a) the Lender or holder shall have made any demand hereunder, or
(b) the Lender or holder shall have declared the principal of and interest on
the Advances and other amounts due hereunder to be due and payable as permitted
by Section 7.2 and although such obligations and liabilities, or any of them,
shall be contingent or unmatured. Any sums obtained by any Lender or by any
assignee, participant or subsequent holder of any Note shall be subject to pro
rata treatment of all Obligations and other liabilities hereunder.
Section 10.6 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Papers without the prior written
consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
(c) With the prior written consent of the Borrower (which consent may be
withheld for any reason or for no reason), a Lender may at any time sell
participations in all or any part of its Advances, its portion of the
Commitment, and all other interests of such Lender under this Agreement and the
other Loan Papers (collectively, "Participations") to any banks or other
financial institutions ("Participants") provided that such Participation shall
not confer on any Person (other than the parties hereto) any right to vote on,
approve or sign amendments or waivers, or any other independent benefit or any
legal or equitable right, remedy or other claim under this Agreement or any
other Loan Papers, other than the right to vote on, approve, or sign amendments
or waivers or consents with respect to items that would result in (i) any
increase in the commitment of any Participant; or (ii)(A) the extension of the
date of maturity of, or (B) the extension of the due date for any payment of
principal, interest or fees respecting, or (C) the reduction of the amount of
any installment of principal or interest on or the change or reduction of any
mandatory reduction required hereunder, or (D) a reduction of the rate of
interest on, the Advances, or change in Applicable Margin; or (iii) the release
of security for the Obligations having a value in excess of a Material Amount,
including without limitation any guarantee; or (iv) the reduction of any fees
payable hereunder. Notwithstanding the foregoing, the Borrower agrees that the
Participants shall be entitled to the benefits of Article 8 and Section 10.5
hereof as though they were Lenders and the Lenders may provide copies of all
financial information received from the Borrower to such Participants. To the
fullest extent it
- 62 -
may effectively do so under Applicable Law, the Borrower agrees that any
Participant may exercise any and all rights of banker's lien, set-off and
counterclaim with respect to this Participation as fully as if such Participant
were the holder of the Advances in the amount of its Participation.
Notwithstanding anything in this Section 9.6(c) to the contrary, a Lender may
sell Participations to its affiliates without the prior written consent of the
Borrower.
(d) Each Lender may assign to one or more financial institutions or
funds organized under the laws of the United States, or any state thereof, or
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "Assignee")
its rights and obligations under this Agreement and the other Loan Papers;
PROVIDED, HOWEVER, that (i) except as otherwise provided herein, each such
assignment shall be subject to the prior written consent of the Administrative
Lender and the Borrower (which consent shall not be unreasonably withheld), (ii)
each such assignment shall be of a constant, and not a varying, percentage of
the Lender's rights and obligations under this Agreement and the Facility A
Credit Agreement, (iii) the amount of the Commitment and Advances being assigned
pursuant to each such assignment (determined as of the date of the assignment
with respect to such assignment), together with the amount of the commitment and
advances being assigned pursuant to the Facility A Credit Agreement, shall in no
event be less than $10,000,000, (iv) the applicable Lender, Administrative
Lender and applicable Assignee shall execute and deliver to the Administrative
Lender an Assignment and Acceptance Agreement (an "Assignment Agreement") in
substantially the form of EXHIBIT C hereto, together with the Notes subject to
such assignment, (v) the Assignee or the Lender executing the Assignment as the
case may be, shall deliver to the Administrative Lender a processing fee of
$3,500 (for both this Agreement and the Facility A Credit Agreement), and (vi)
the Administrative Lender shall give the Borrower notice of any proposed
assignment no later than 5 days prior to any assignment by any Lender. Upon
such execution, delivery and acceptance from and after the effective date
specified in each Assignment, which effective date shall be at least three
Business Days after the execution thereof, (A) the Assignee thereunder shall be
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment, have the rights and obligations of a
Lender hereunder and (B) the assigning Lender shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assignment,
relinquish such rights and be released from such obligations under this
Agreement. Notwithstanding anything in this clause (d) to the contrary, any
Lender may assign its rights and obligations under this Agreement to an
affiliate of such Lender without the prior written consent of the Administrative
Lender and the Borrower, but otherwise subject to the restrictions set forth
herein.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of F.R.S.
Board and any Operating Circular issued by such Federal Reserve Bank; provided,
however, that no such assignment under this clause (e) shall release the
assignor Lender from its obligations hereunder.
- 63 -
(f) Upon its receipt of an Assignment Agreement executed by a Lender and
an Assignee, and any Note subject to such assignment, the Borrower shall, within
three Business Days after its receipt of such Assignment Agreement, at its own
expense, execute and deliver to the Administrative Lender in exchange for the
surrendered Note a new Note to the order of such Assignee in an amount equal to
the portion of the Advances and Commitment assigned to it pursuant to such
Assignment Agreement and a new Note to the order of the assigning Lender in an
amount equal to the portion of the Advances and Commitment retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note, shall be dated the
effective date of such Assignment Agreement and shall otherwise be in
substantially the form of EXHIBIT A hereto.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 10.6, disclose
to the assignee or Participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower.
(h) Except as specifically set forth in this Section 10.6, nothing in
this Agreement or any other Loan Papers, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Papers.
(i) Notwithstanding anything in this Section 10.6 to the contrary, no
Assignee or Participant shall be entitled to receive any greater payment under
Section 2.15 or Section 8.3 than such assigning or participating Lender would
have been entitled to receive with respect to the interest assigned or
participated to such Assignee or Participant.
Section 10.7 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 10.8 SEVERABILITY. Any provision of this Agreement which is for
any reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 10.9 INTEREST AND CHARGES. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Papers, no Lender shall ever be entitled to receive, collect or apply, as
interest on the Obligations, any amount in excess of the Maximum Amount. If any
Lender or participant ever receives, collects or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a partial
repayment of principal and treated hereunder as such; and if principal is paid
in full, any remaining excess
- 64 -
shall be paid to the Borrower. In determining whether or not the interest paid
or payable, under any specific contingency, exceeds the Maximum Amount, the
Borrower and the Lenders shall, to the maximum extent permitted under Applicable
Law, (a) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (b) exclude voluntary prepayments and the effect
thereof, and (c) amortize, prorate, allocate and spread in equal parts, the
total amount of interest throughout the entire contemplated term of the
Obligations so that the interest rate is uniform throughout the entire term of
the Obligations; provided, however, that if the Obligations are paid and
performed in full prior to the end of the full contemplated term thereof, and if
the interest received for the actual period of existence thereof exceeds the
Maximum Amount, the Lenders shall refund to the Borrower the amount of such
excess or credit the amount of such excess against the total principal amount of
the Obligations owing, and, in such event, the Lenders shall not be subject to
any penalties provided by any laws for contracting for, charging or receiving
interest in excess of the Maximum Amount. This Section shall control every
other provision of all agreements pertaining to the transactions contemplated by
or contained in the Loan Papers.
Section 10.10 CONFIDENTIALITY. Each Lender and the Administrative Lender
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the Borrower pursuant to
this Agreement which is identified by the Borrower as being confidential at the
time the same is delivered to the Lenders or the Administrative Lender, provided
that nothing herein shall limit the disclosure of any such information (a) to
the extent required by statute, rule, regulation or judicial process, (b) to
counsel for any Lender or the Administrative Lender, (c) to bank examiners,
auditors or accountants of any Lender, (d) to the Administrative Lender or any
other Lender, (e) in connection with any litigation to which any one or more of
Lenders is a party, provided, further, that, unless specifically prohibited by
Applicable Law or court order, each Lender shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any such non-public
information (i) by any governmental agency or representative thereof (other than
any such request in connection with an examination of such Lender's financial
condition by such governmental agency) or (ii) pursuant to legal process, or (f)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender an agreement (a "Confidentiality
Agreement") in substantially the form of EXHIBIT D hereto; and provided
finally that in no event shall any Lender or the Administrative Lender by
obligated or required to return any materials furnished by the Borrower.
Section 10.11 HEADINGS. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 10.12 AMENDMENT AND WAIVER. The provisions of this Agreement may
not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such amendment,
modification or waiver shall
- 65 -
be made (a) without the consent of all Lenders, if it would (i) increase the
Specified Percentage or commitment of any Lender, or (ii) extend the date of
maturity of, extend the due date for any payment of principal or interest on,
reduce the amount of any installment of principal or interest on, or reduce the
rate of interest on, any Advance or other amount owing under any Loan Papers, or
(iii) release any security for or guaranty of the Obligations (except pursuant
to this Agreement), or (iv) reduce the fees payable hereunder, or (v) revise
this Section 10.12, or (vi) waive the date for payment of any of the
Obligations, or (vii) amend the definition of Determining Lenders; or (b)
without the consent of the Administrative Lender, if it would alter the rights,
duties or obligations of the Administrative Lender. Neither this Agreement nor
any term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Administrative Lender
and, in the case of an amendment, by the Borrower.
Section 10.13 EXCEPTION TO COVENANTS. Neither the Borrower nor any
Subsidiary shall be deemed to be permitted to take any action or fail to take
any action which is permitted as an exception to any of the covenants contained
herein or which is within the permissible limits of any of the covenants
contained herein if such action or omission would result in the breach of any
other covenant contained herein.
Section 10.14 TERMINATION OF PARTICIPATIONS IN BOND LETTERS OF CREDIT.
Upon satisfaction of all conditions set forth in Section 3.1 hereof, any
obligation of any Lender to participate in the Bond Letters of Credit shall
automatically terminate without any further action being taken with respect
thereto.
Section 10.15 TERMINATION OF COMMITMENT. The Commitment shall terminate
on December 31, 1995 if the conditions precedent set forth in Sections 3.1 and
3.2 have not been satisfied by such date.
SECTION 10.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(b), TITLE
79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE
PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS
AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE OTHER LOAN
PAPERS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER AGREES THAT
THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE
JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
LOAN PAPERS.
SECTION 10.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY,
IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW,
ALL RIGHT TO TRIAL BY JURY IN
- 66 -
ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN PAPERS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING
INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER.
SECTION 10.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN PAPERS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
=============================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
=============================================================================
- 67 -
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
BORROWER: LA QUINTA INNS, INC.
By:_________________________________
Name:___________________________
Title:__________________________
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.,
as a Lender
Specified Percentage:
16.0%
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
- 68 -
CITIBANK, N.A.
Specified Percentage:
14.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 6
New York, New York 10043
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
- 69 -
THE FROST NATIONAL BANK
Specified Percentage:
8.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
- 70 -
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
Specified Percentage:
10.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
- 71 -
BANK OF AMERICA ILLINOIS
Specified Percentage:
14.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
- 72 -
FIRST INTERSTATE BANK OF TEXAS,
N.A.
Specified Percentage:
14.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇. ▇▇. ▇▇▇▇'▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
- ▇▇ -
▇▇▇▇▇▇ ▇▇▇▇▇▇ NATIONAL BANK OF
OREGON
Specified Percentage:
8.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
- 74 -
▇▇▇▇▇ FARGO BANK, N.A.
Specified Percentage:
8.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
- 75 -
SOCIETE GENERALE, SOUTHWEST
AGENCY
Specified Percentage:
8.0%
By:_________________________________
Name:___________________________
Title:__________________________
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
- ▇▇ -
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ $_____________ September 12, ▇▇▇▇
▇▇ ▇▇▇▇▇▇ INNS, INC., a Texas corporation (the "Borrower"), for value
received, promises to pay to the order of ____________________ ("Lender"), at
the principal office of ____________________________________, in lawful money
of the United States of America, the principal sum of ______________________
DOLLARS ($__________), or such lesser sum as shall be due and payable from
time to time hereunder, as hereinafter provided. All terms used by not
defined herein shall have the meaning set forth in the Credit Agreement
described below.
The Borrower promises to pay principal of and interest on the unpaid
principal balance of Advances under this Note from time to time outstanding
as set forth in the Credit Agreement.
This Note is issued pursuant to and evidences Advances under an Amended
and Restated Credit Agreement (Facility B), dated as of September 12, 1995,
among the Borrower, NationsBank of Texas, N.A., as Administrative Lender, and
the lenders parties thereto (as amended, restated, supplemented, renewed,
extended or otherwise modified from time to time, "Credit Agreement"), to
which reference is made for a statement of the rights and obligations of the
Lender and duties and obligations of the Borrower in relation thereto; but
neither this reference to the Credit Agreement nor may provision thereof
shall affect or impair the absolute and unconditional obligation of the
Borrower to pay the principal sum of and interest on this Note when due.
The Borrower and all endorsers, sureties and guarantors of this Note
hereby severally waive demand, presentment for payment, protest, notice of
protests, notice of acceleration, notice of intention to accelerate the
maturity of this Note, and all other notices of any kind, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes
in any manner of or in this Note or in any of its terms, provisions and
covenants, or any releases or substitutions of any security, or any delay,
indulgence or other act of any trustee or any holder hereof, whether before or
after maturity.
THIS NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
LA QUINTA INNS, INC.
By:
----------------------------------
Title:
----------------------------
-2-
EXHIBIT B
GUARANTY
This Guaranty, dated as of September 12, 1995 (this "GUARANTY"), is made
by the entities listed on the signature pages hereof (all such entities being
collectively called the "GUARANTORS").
BACKGROUND.
1. La Quinta Inns, Inc., a Texas corporation ("COMPANY"), NationsBank
of Texas, N.A., as Administrative Lender ("ADMINISTRATIVE LENDER") on behalf
of NationsBank of Texas, N.A. and each other lender, and each other lender
(singly, a "LENDER" and collectively, the "LENDERS") have entered into the
Amended and Restated Credit Agreement (FACILITY B), dated as of September 12,
1995 (as hereafter amended or otherwise modified from time to time, the "CREDIT
AGREEMENT"). The capitalized terms not otherwise defined herein have the
meanings specified in the Credit Agreement.
2. Pursuant to the Credit Agreement, Company may, subject to the terms
of the Credit Agreement and the other Loan Papers, request that Lenders make
Advances.
3. It is a condition precedent to the obligation of Lenders to make
such Advances that Guarantors guarantee repayment thereof upon the terms and
conditions set forth herein.
4. In the case of each Guarantor which is a corporation, the Board of
Directors of each such Guarantor, and in the case of each Guarantor which is
a partnership or joint venture, the Board of Directors of each corporation
which is a partner or a joint venture of such Guarantor, have determined that
the execution, delivery, and performance of this Guaranty is necessary and
convenient to the conduct, promotion, and attainment of such Guarantor's
business and that such Guaranty may reasonably be expected to benefit,
directly or indirectly, such Guarantor.
5. Guarantors desire to induce Lender to make such Advances.
AGREEMENT.
Now, therefore, in consideration of the premises and in order to induce
Lenders to make Advances, Guarantors agree as follows:
1. GUARANTY.
(a) Each Guarantor, jointly and severally, hereby unconditionally
and irrevocably guarantees the punctual payment of, and promises to pay,
when due, whether at stated maturity, by mandatory prepayment, by
acceleration or otherwise, all obligations, indebtedness and liabilities,
and all rearrangements, renewals and extensions of all or any part thereof,
of Company or any other Obligor now or hereafter arising from, by virtue of
or pursuant to the Credit Agreement, the Notes, any other Loan Paper, and
any and all renewals and extensions thereof, or any part thereof, or future
amendments thereto, whether for principal, interest (including, without
limitation, interest, fees and other charges that would accrue or become
owing both prior to and subsequent to and but for the commencement of any
proceeding against or with respect to Company or any other Obligor under
any chapter of the Bankruptcy Code of 1978, 11 U.S.C. Section 101 ET SEQ.
whether or not a claim is allowed for the same in any such proceeding),
premium, fees, commissions, expenses or otherwise (such obligations being
the "OBLIGATION"), and agrees to pay any and all reasonable expenses
(including reasonable counsel fees and expenses) incurred in enforcement
or collection of all or any part thereof, whether such obligations,
indebtedness and liabilities are direct, indirect, fixed, contingent,
joint, several or joint and several, and any rights under this Guaranty.
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving
effect to all other liabilities of Guarantor, contingent or otherwise, that
are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Guarantor in respect of intercompany
indebtedness to Company, other Affiliates of Company or other Obligors to
the extent that such indebtedness would be discharged in an amount equal to
the amount paid by such Guarantor hereunder) and after giving effect as
assets, subject to PARAGRAPH 4(a) hereof, to the value (as determined under
the applicable provisions of Fraudulent Transfer Laws) of any rights to
subrogation or contribution of such Guarantor pursuant to (i) Applicable
Law or (ii) any agreement providing for an equitable allocation among such
Guarantor and other Obligors of obligations arising under guaranties by
such parties.
2. GUARANTY ABSOLUTE. Each Guarantor guarantees that Obligation will
be paid strictly in accordance with the terms of the Credit Agreement, the
Notes, and the other Loan Papers, regardless of any Applicable Law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of Administrative Lender or any Lender with
respect thereto; PROVIDED, HOWEVER, nothing contained in this Guaranty shall
require any Guarantor to make any payment under this Guaranty in violation of
any Applicable Law, regulation or order now or hereafter in effect. The
obligations and liabilities of each Guarantor
-2-
hereunder are independent of the obligations of Company under the Credit
Agreement and of the obligations of each other Obligor under each other Loan
Paper and any Applicable Law. The liability of each Guarantor under this
Guaranty shall be absolute and unconditional irrespective of:
(a) the taking or accepting of any other security or guaranty for any
or all of the Obligation;
(b) any increase, reduction or payment in full at any time or from
time to time of any part of the Obligation, including any increase,
reduction or termination of the Commitment;
(c) any lack of validity or enforceability of the Credit Agreement,
the Notes, or any other Loan Paper or other agreement or instrument
relating thereto, including but not limited by the unenforceability of
all or any part of the Obligation by reason of the fact that (i) the
Obligation, and/or the interest paid or payable with respect thereto,
exceeds the amount permitted by Applicable Law, (ii) the act of creating
the Obligation, or any part thereof, is ULTRA ▇▇▇▇▇, (iii) the officers
creating same acted in excess of their authority, or (iv) for any other
reason;
(d) any lack of corporate, partnership or other power of Company, any
Obligor or any other Person;
(e) any Debtor Relief Law involving Company, any Guarantor, any
Obligor or any other Person;
(f) any renewal, compromise, extension, acceleration or other change
in the time, manner or place of payment of, or in any other term of, all
or any of the Obligation; any adjustment, indulgence, forbearance, or
compromise that may be granted or given by any Lender or Administrative
Lender to Company, any Guarantor or any other Obligor; or any other
modification, amendment, or waiver of or any consent to departure from
the Credit Agreement, the Notes, or any other Loan Paper or other agreement
or instrument relating thereto without notification of any Guarantor (the
right to such notification being herein specifically waived by each
Guarantor);
(g) any exchange, release, sale, subordination, or non-perfection of
any collateral or Lien thereon or any lack of validity or enforceability or
change in priority, destruction, reduction, or loss or impairment of value
of any collateral or Lien thereon;
(h) any release or amendment or waiver of or consent to departure from
any other guaranty for all or any of the Obligation;
(i) the failure by any Lender or Administrative Lender to make any
demand upon or to bring any legal, equitable, or other action against the
Company or any other
-3-
Person (including without limitation any Guarantor or any other Obligor),
or the failure or delay by any Lender or Administrative Lender to, or the
manner in which any Lender or Administrative Lender shall, proceed to
exhaust rights against any direct or indirect security for the Obligation;
(j) the existence of any claim, defense, set-off, or other rights
which Company or Guarantor may have at any time against Company, any
Lender, Administrative Lender, any Guarantor or any other Obligor, or any
other Person, whether in connection with this Guaranty, the Loan Papers,
the transactions contemplated thereby, or any other transaction;
(k) any failure of any Lender or Administrative Lender to notify any
Guarantor of any renewal, extension, or assignment of the Obligation or
any part thereof, or the release of any security, or of any other action
taken or refrained from being taken by any Lender or Administrative Lender,
it being understood that Lenders and Administrative Lender shall not be
required to give any Guarantor any notice of any kind under any
circumstances whatsoever with respect to or in connection with the
Obligation;
(l) any payment by Company to any Lender or Administrative Lender is
held to constitute a preference under any Debtor Relief Law or if for any
other reason any Lender or Administrative Lender is required to refund
such payment or pay the amount thereof to another Person; or
(m) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Company, any Guarantor or any
other Obligor, including without limitation any defense by reason of any
disability or other defense of Company, or the cessation from any cause
whatsoever of the liability of Company, or any claim that Guarantor's
obligations hereunder exceed or are more burdensome than those of Company
or any other Obligor.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Obligation is rescinded or
must otherwise be returned by any Lender or any other Person upon the
insolvency, bankruptcy or reorganization of Company, any Guarantor, any other
Obligor or otherwise, all as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, each
Guarantor hereby waives: (a) promptness, protest, diligence, presentments,
acceptance, performance, demands for performance, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guaranty and notices of the existence, creation or incurrence of new or
additional indebtedness, and any of the events described in SECTION 2 and of
any other occurrence or matter with respect to any of the Obligation, this
Guaranty or any of the other Loan Papers; (b) any requirement that
Administrative Lender or any Lender protect, secure, perfect, or insure any
Lien or security interest or any property subject thereto or exhaust any
right or take any action against Company, any Guarantor, any other Obligor or
any other Person or any collateral
-4-
or pursue any other remedy in Administrative Lender's or any Lender's power
whatsoever, (c) any right to assert against Administrative Lender or any
Lender as a counterclaim, set-off or cross-claim, any counterclaim, set-off
or claim which it may now or hereafter have against Administrative Lender,
any Lender, Company, any Guarantor or any other Obligor, (d) any right to
seek or enforce any remedy or right that Administrative Lender or any Lender
now has or may hereafter have against Company, any Guarantor, any other
Obligor or any other Person (to the extent permitted by Applicable Law);
(e) any right to participate in any collateral or any right benefiting
Administrative Lender or Lenders in respect of the Obligation; and (f) any
right by which it might be entitled to require suit on an accrued right of
action in respect of any of the Obligation or require suit against Company,
any Guarantor, any other Obligor or any other Person, whether arising
pursuant to Section 34.02 of the Texas Business and Commerce Code, as
amended, Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended, Rule 31 of the Texas Rules of Civil Procedure, as amended, or
otherwise.
4. SUBROGATION AND SUBORDINATION.
(a) Notwithstanding any reference to subrogation contained herein to
the contrary, each Guarantor hereby irrevocably waives any claim or other
rights which it may have or hereafter acquires against Company or any other
Obligor that arise from the existence, payment, performance or enforcement
of such Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or
remedy of any Lender or Administrative Lender against Company, any Guarantor
or any other Obligor or any collateral which any Lender or Administrative
Lender now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statutes or common law, including
without limitation, the right to take or receive from Company, any Guarantor
or any other Obligor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Guarantor in violation
of the preceding sentence and the Obligation shall not have been paid in
full, such amount shall be deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, Lenders, and shall
forthwith be paid to Administrative Lender to be credited and applied upon
the Obligation, whether matured or unmatured, in accordance with the terms of
the Credit Agreement. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
the Credit Agreement and that the waiver set forth in the PARAGRAPH 4(a) is
knowingly made in contemplation of such benefit.
(b) If any Guarantor becomes the holder of any indebtedness payable by
Company, any Guarantor or any other Obligor, such Guarantor hereby
subordinates all indebtedness owing to it from Company, any Guarantor and
each other Obligor to all indebtedness of Company, any Guarantor and each
other Obligor to Lenders and Administrative Lender, and agrees that upon the
occurrence and continuance of a Default or an Event of Default, it shall not
accept any payment on the same until final payment in full of the obligations
of Company under the Credit Agreement, the Notes and all other Loan Papers,
and shall in no circumstance whatsoever
-5-
attempt to set-off or reduce any obligations hereunder because of such
indebtedness. If any amount shall nevertheless be paid to such Guarantor by
Company, any Guarantor or any other Obligor prior to payment in full of the
Obligation, such amount shall be held in trust for the benefit of Lenders and
Administrative Lender and shall forthwith be paid to Administrative Lender to
be credited and applied to the Obligation, whether matured or unmatured.
5. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents
and warrants that all representations and warranties as they apply to such
Guarantor only set forth in ARTICLE 4 of the Credit Agreement (each of which
is hereby incorporated by reference) are true and correct. Furthermore, each
Guarantor represents that it is Solvent.
6. COVENANTS. Each Guarantor hereby expressly assumes, confirms, and
agrees to perform, observe, and be bound by all conditions and covenants set
forth in the Credit Agreement, to the extent applicable to it, as if it were a
signatory thereto. Each Guarantor further covenants and agrees (a) punctually
and properly to perform all of such Guarantor's covenants and duties under
all other Loan Papers; (b) from time to time promptly to furnish
Administrative Lender with any information or writings which Administrative
Lender may request concerning this Guaranty; and (c) promptly to notify
Administrative Lender of may claim, action, or proceeding affecting this
Guaranty.
7. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by such
Guarantor, Administrative Lender, and, either all Lenders or Determining
Lenders, as appropriate, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
8. ADDRESSES FOR NOTICES. Unless otherwise provided herein, all
notices, requests, consents and demands shall be in writing and shall be
delivered by hand or overnight courier service, mailed or sent by telecopy to
the respective addresses specified herein, or, as to any party, to such other
addresses as may be designated by it in written notice to all other parties.
All notices, requests, consents and demands hereunder shall be deemed to have
been given on the date of receipt if delivered by hand or overnight courier
service or sent by telecopy, or if mailed, effective on the earlier of actual
receipt or three days after being mailed by certified mail, return receipt
requested, postage prepaid, addressed as aforesaid.
9. NO WAIVER, REMEDIES. No failure on the part of Administrative
Lender or any Lender to exercise, and no delay in exercising, any right
hereunder or under any of the Loan Papers shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder or under any
of the Loan Papers preclude any other or further exercise thereof or the
exercise of any other right. Neither Administrative Lender nor any Lender
shall be required to (a) prosecute collection or seek to enforce or resort to
any remedies against Company, any Guarantor, any other Obligor or any other
Person, (b) join Company, any Guarantor, any other Obligor or any other
Person in any action in which Administrative Lender or any Lender prosecutes
collection or seeks to enforce or resort to any remedies against Company, any
-6-
Guarantor, any other Obligor or any other Person liable on any of the
Obligation, or (c) seek to enforce or resort to any remedies with respect to
any Liens granted to (or benefiting, directly or indirectly) Administrative
Lender or any Lender by Company, any Guarantor, any other Obligor or any
other Person. Neither Administrative Lender nor any Lender shall have any
obligation to protect, secure or insure any of the Liens or the properties or
interests in properties subject thereto. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Applicable Law.
10. RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, each Lender and Administrative Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by Law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or Administrative Lender to or for the credit
or the account of any Guarantor against any and all of the obligations of
such Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not such Lender or Administrative Lender shall have made any
demand under this Guaranty. Each Lender and Administrative Lender agrees
promptly to notify such Guarantor after any such set-off and application,
provided that the failure to give such notice shall not affect the validity
of such set-off and application or provide a defense to such Guarantor's
obligations under this Guaranty. The rights of each Lender and Administrative
Lender under this SECTION 10 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Lender
and Administrative Lender may have.
11. LIENS. To the extent not prohibited by Applicable Law, each
Guarantor agrees that Administrative Lender or any Lender, in its discretion,
without notice or demand and without affecting either the liability of such
Guarantor, Company, any other Guarantor or any other Obligor, or any security
interest or other Lien, may foreclose any deed of trust or mortgage or
similar Lien covering interests in real or personal property, and the
interests in real or personal property secured thereby, by nonjudicial sale.
Each Guarantor waives any defense to the recovery by Administrative Lender or
any Lender hereunder against Company, such Guarantor or any collateral of any
deficiency after a nonjudicial sale and each Guarantor expressly waives any
defense or benefits that may be derived from Chapter 34 of the Texas Business
and Commerce Code, Section 51.003 of the Texas Property Code, or any similar
statute in effect in any other jurisdiction. Without limiting the foregoing,
each Guarantor waives, to the extent not prohibited by Applicable Law, any
defense arising out of any such nonjudicial sale even though such sale
operates to impair or extinguish any right of reimbursement or subrogation or
any other right or remedy of such Guarantor against Company, any other
Guarantor or any other Person or any Collateral or any other collateral. Each
Guarantor agrees that such Guarantor is liable, subject to the limitations of
SECTION 1 hereof, for any part of the Obligation remaining unpaid after any
foreclosure.
12. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is an
irrevocable continuing guaranty of payment and shall (a) remain in full force
and effect until final payment in full (after the Maturity Date) of the
Obligation and all other amounts payable under this
-7-
Guaranty, (b) be binding upon each Guarantor, its successors and assigns, and
(c) inure to the benefit of and be enforceable by Lender and Administrative
Lender and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), to the extent permitted by the Credit
Agreement, each Lender may assign or otherwise transfer its rights under the
Credit Agreement, the Notes or any of the Loan Papers or any interest therein
to any other Person, and such other Person shall thereupon become vested with
all the rights or any interest therein, as appropriate, in respect thereof
granted to such Lender herein or otherwise.
13. INFORMATION. Each Guarantor acknowledges and agrees that it shall
have the sole responsibility for obtaining from Company and each other Obligor
such information concerning Company's and each Obligor's financial condition
or business operations as such Guarantor may require, and that neither
Administrative Lender nor any Lender has any duty at any time to disclose to
Guarantor any information relating to the business operations or financial
conditions of Company or any Obligor.
14. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. WITHOUT EXCLUDING ANY OTHER
JURISDICTION, EACH GUARANTOR AGREES THAT THE STATE AND FEDERAL COURTS OF
TEXAS LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION HEREWITH. THIS GUARANTY IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
15. WAIVER OF JURY TRIAL. EACH GUARANTOR, ADMINISTRATIVE LENDER, AND
LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY
OF THE LOAN PAPERS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION
IS A MATERIAL INDUCEMENT TO LENDER ENTERING INTO THE CREDIT AGREEMENT.
16. RATABLE BENEFIT. This Guaranty is for the ratable benefit of
Lenders and Administrative Lender, each of which shall share any proceeds of
this Guaranty pursuant to the terms of the Credit Agreement.
17. GUARANTOR INSOLVENCY. Should any Guarantor become insolvent, fail
to pay its debts generally as they become due, voluntarily seek, consent to,
or acquiesce in the benefits of any Debtor Relief Law or become a party to or
be made the subject of any proceeding provided for by any Debtor Relief Law
(other than as a creditor or claimant) that could suspend or otherwise
adversely affect the rights of any Lender or Administrative Lender granted
hereunder, then, the obligations of such Guarantor under this Guaranty shall
be, as between such Guarantor and such Lender and Administrative Lender, a
fully-matured, due, and payable obligation of such Guarantor to such Lender
and Administrative Lender (without regard to whether Company or any other
Obligor is then in default under the Credit Agreement or any
-8-
other Loan Paper or whether any part of the Obligation is then due and owing
by Company or any other Obligor to such Lender or Administrative Lender),
payable in full by such Guarantor to such Lender or Administrative Lender
upon demand, which shall be the estimated amount owing in respect of the
contingent claim created hereunder.
18. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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-9-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
LA QUINTA REALTY CORP.
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
LA QUINTA PLAZA, INC.
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
Address for all Guarantors:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ QUINTA FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
LA QUINTA INVESTMENTS, INC.
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
-10-
LQI ACQUISITION CORPORATION
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
LA QUINTA MOTOR INNS LIMITED
PARTNERSHIP
By: La Quinta Realty Corp.,
its General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LA QUINTA ROUGE JOINT VENTURE
By: La Quinta Inns, Inc., its
Managing General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
-▇▇-
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇ STREET, LTD.
By: La Quinta Inns, Inc., its
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LQM OPERATING PARTNERS, L.P.
By: La Quinta Realty Corp., its
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LQ-BIG APPLE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
By: La Quinta Investments, Inc., its
Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
-▇▇-
▇▇-▇▇▇ LIMITED PARTNERSHIP
By: La Quinta Inns, Inc., its Managing
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LQ-EAST IRVINE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
By: La Quinta Investments, Inc., its
Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
-13-
LQ-INVESTMENTS I
By: La Quinta Inns, Inc., its Managing
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
By: La Quinta Investments, Inc., a
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
LQ-INVESTMENTS II
By: La Quinta Inns, Inc., its Managing
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
By: La Quinta Investments, Inc., a
General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
-▇▇-
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, INC.
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
LA QUINTA INNS OF PUERTO RICO,
INC.
By:
----------------------------------
Name:
--------------------------
Title:
-------------------------
LA QUINTA DEVELOPMENT PARTNERS,
L.P.
By: La Quinta Inns, Inc., its
Sole General Partner
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
-15-
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
DATED _____________, 199__
Reference is made to the Amended and Restated Credit Agreement (Facility
B), dated as of September 12, 1995 (the "Credit Agreement") among La Quinta
Inns, Inc., a Texas corporation ("Borrower"), NationsBank of Texas, N.A. as
Administrative Lender ("Administrative Lender"), and the lenders parties
thereto. Terms defined in the Credit Agreement are used herein with the same
meaning.
______________________ ("Assignor") and _____________________
("Assignee") agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, a __% interest in and to all of
Assignor's rights and obligations under the Credit Agreement as of the
Effective Date (as defined below), with respect to such percentage interest
in Assignor's Commitment as in effect on the Effective Date, the principal
amount of Advances owing to Assignor on the Effective Date, and the Note held
by Assignor, and Reimbursement Obligations outstanding on the Effective Date,
subject to the terms and conditions of this Assignment and Acceptance.
2. Assignor (a) represents and warrants that (i) as of the date hereof
its Commitment (without giving effect to assignments thereof which have not
yet become effective) is $______ and, as of the date hereof, the outstanding
principal amount of Advances owing to it (without giving effect to
assignments thereof which have not yet become effective) is $____, (ii) it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to (i)
any statements, warranties, or representations made in or in connection with
the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto or (ii) the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (c) attaches the Note referred to in
Paragraph 1 above to exchange such Note for new Notes as follows: a Note
dated ____________, 199__, in the principal amount of $____ payable to the
order of Assignee, and a Note dated ____________, 199__, in the principal
amount of $____ payable to the order of Assignor.
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement and the other Loan Papers, together with copies of the financial
statements referred to in Section 6.1(a) and 6.1(b) of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (b) agrees that it will, independently and without reliance upon
the Administrative Lender, Assignor, or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action upon the
Credit Agreement and the other Loan Papers; (c) appoints and authorizes the
Administrative Lender to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement, the other Loan Papers, and
this Assignment and Acceptance as are delegated to the Administrative Lender
by the terms thereof and hereof, together with such powers as are reasonably
incidental thereto and hereto; (d) agrees that it will perform in accordance
with its terms all of the obligations which by the terms of the Credit
Agreement, the other Loan Papers, and this Assignment and Acceptance are
required to be performed by it as a Lender, [and] (e) specifies the addresses
set forth in Schedule I attached hereto as its address for the receipt of
notices and as its initial LIBOR Lender Office, respectively[; and (f)
attaches the forms prescribed by the IRS certifying as to Assignee's status
for purposes of determining exception from United States withholding taxes
with respect to all payments to be made to Assignee under the Credit
Agreement, the other Loan Papers, and this Assignment and Acceptance or such
other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty].
4. The effective date for this Assignment and Acceptance shall be
____________, 199__ (the "Effective Date").
5. Upon such acceptance as of the Effective Date and upon the
remittance of a $3,500 processing fee to the Administrative Lender, (a)
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (b) Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
6. Upon such acceptance from and after the Effective Date, whenever the
Administrative Lender shall receive a payment, or whenever the Administrative
Lender shall make an application of funds, in respect of any aggregate
outstanding principal amount of Advances or in respect of any aggregate
amount of interest accrued on Advances, or in respect of the commitment fee
(other than a payment or an application of funds in respect of any amount due
and owing to any Lender or the Administrative Lender under Sections 2.9,
5.22, 8.3, 8.5, or 10.2 of the Credit Agreement), the Administrative Lender
shall pay over to each of the Lenders an amount equal to (i) such Lender's
Pro Rata Share (as defined below) of such aggregate amount of principal, (ii)
such Lender's Pro Rata Share of such aggregate amount of interest, and (iii)
such Lender's Pro Rata Share of such aggregate amount of the commitment fee.
The "Pro Rata Share" of any aggregate amount means, with respect to such
Lender, the amount equal to the product obtained by multiplying (i) such
aggregate amount and (ii) a fraction, the numerator of which is such Lender
Total Commitment, or after the Advances have been made, the principal amount
of the Advances owing
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to such Lender and the denominator of which is the sum of the Commitments of
all of the Lenders, or after the Advances have been made, the aggregate
principal amount of the Advances owing to all of the Lenders.
7. In the event that, after the Administrative Lender has paid to any
Lender its Pro Rata Share of any such payment received by the Administrative
Lender or any such application made by the Administrative Lender; such
payment or application is rescinded or must otherwise be returned or must be
paid over by the Administrative Lender for the reason, such Lender shall,
upon notice by the Administrative Lender, forthwith pay back to the
Administrative Lender such Lender's Pro Rata Share of the amount so rescinded
or so returned or paid over.
8. This Assignment and Acceptance shall be governed by and constructed
in accordance with the laws of the state of Texas and the United States of
America. Without excluding any other jurisdiction, Assignee agrees that the
courts of Texas will have jurisdiction over proceedings in connection
herewith.
9. Assignee's Specified Percentage shall be __%.
10. This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[NAME OF ASSIGNOR]
By:
-----------------------------------
-----------------, ----------------
(Print Name) (Print Title)
[NAME OF ASSIGNEE]
By:
-----------------------------------
-----------------, ----------------
(Print Name) (Print Title)
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Accepted this __ day of ____________, 199__
NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
----------------------------------
-----------------, ---------------
(Print Name) (Print Title)
LA QUINTA INNS, INC.
By:
----------------------------------
-----------------, ---------------
(Print Name) (Print Title)
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SCHEDULE I
ASSIGNEE'S ADDRESS
1. ADDRESS FOR THE ADVANCES AND RECEIPT OF NOTICES
2. INITIAL LIBOR LENDING OFFICE
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EXHIBIT D
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and Address
of Prospective Participant
or Assignee]
Re: Amended and Restated Credit Agreement (Facility B), dated as of
September 12, 1995, among La Quinta Inns, Inc. (the "Borrower"),
the Lenders a party thereto, and NationsBank of Texas, N.A., as
Administrative Lender.
Dear ___________:
As a Lender party to the above-referenced Credit Agreement (the "CREDIT
AGREEMENT"); capitalized terms used herein shall have the same meaning given
to them in the Credit Agreement), we have agreed with the Borrower pursuant
to Section 10.10 of the Credit Agreement to use reasonable precautions to
keep confidential, except as otherwise provided therein, all non-public
information identified by the Borrower as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 10.10, we are permitted to provide you, as a
prospective [PARTICIPANT] [ASSIGNEE], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form.
Such information will not be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [PARTICIPATION] [ASSIGNMENT] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe
and sound banking practices, to keep such information confidential, provided
that nothing herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
your counsel or to counsel for any of the Lenders or the Administrative
Lender, (iii) to bank examiners, auditors or accountants of any of the
Lenders, (iv) to the Administrative Lender, or any other Lender, (v) in
connection with any litigation to which you or any one or more of the Lenders
are a party; provided, further, that, unless specifically prohibited by
Applicable Law or court order, you agree, prior to disclosure thereof, to
notify the Borrower of any request for disclosure of any such non-public
information (x) by any governmental agency or representative thereof (other
than any such request in connection
____________, 199__
Page 2
with an examination of your financial condition by such governmental agency)
or (y) pursuant to legal process; and provided, finally, that in no event
shall you be obligated to return any materials furnished to you pursuant to
this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by signing at
the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
-----------------------------------
By:
--------------------------------
Title:
-----------------------------
THE FOREGOING IS AGREED TO AS OF THE
DATE OF THIS LETTER.
-----------------------------------
By:
--------------------------------
Title:
-----------------------------