EXHIBIT 10(b)
SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (this
"SECOND AMENDMENT"), dated as of April 21, 1995, is made by and among La
Quinta Inns, Inc., a Texas corporation ("LA QUINTA"), NationsBank of Texas,
N.A., as Administrative Lender ("ADMINISTRATIVE LENDER"), Citicorp USA, Inc.,
The Frost National Bank, Texas Commerce Bank National Association, Bank of
Scotland, Bank of America Illinois, successor by merger with Continental
Bank, Bank One, Texas, N.A., First Interstate Bank of Texas, N.A. and U.S.
Bank of Washington, National Association (singly, a "LENDER", and
collectively, the "LENDERS").
BACKGROUND.
A. La Quinta, Administrative Lender and Lenders entered into the
Amended and Restated Credit Agreement, dated as of January 25, 1994, as
amended by that certain First Amendment to Amended and Restated Credit
Agreement, dated as of June 30, 1994 (said Amended and Restated Credit
Agreement, as amended, the "CREDIT AGREEMENT"; capitalized terms used herein
and not otherwise defined herein shall have the same meaning given to them in
the Agreement).
B. La Quinta has requested that Lenders, among other things, (i)
increase the Revolving Credit Commitment and decrease and modify the Term
Loan Commitment, (ii) revise the pricing of the Revolving Credit Advances and
the Term Loan Advances, and (iii) extend the Revolving Credit Maturity Date
and the Term Loan Maturity Date.
C. Administrative Lender, Lenders and La Quinta desire to amend the
Agreement.
AGREEMENT.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are all hereby acknowledged,
La Quinta, Administrative Lender and Lenders agree as follows:
1. AMENDMENTS.
The Credit Agreement is amended as follows:
1.1 SECTION 1.1 of the Credit Agreement is amended by deleting the
following definitions therefrom:
"Adjusted EBITDA", "AEtna", "AEtna Advance", "Applicable Revolving
Margin", "Applicable Term Margin", "EBIT", "Maintenance Capital
Expenditures", "Net Cash Distributions", and "Parent Company".
1.2 SECTION 1.1 of the Credit Agreement is hereby amended by adding the
definition of "ADJUSTMENT DATE" thereto in proper alphabetical order to read
as follows:
"'ADJUSTMENT DATE' means, for purposes of the Applicable Margin,
the commitment fees payable pursuant to Section 2.4(a) hereof and the
Letter of Credit fees payable pursuant to Sections 2.16(f)(i) and
2.16(f)(ii) 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 5.1(A) or 5.1(B), as applicable, of the Master Covenant
Agreement which results in a change in the Applicable Margin and
(ii) when the Applicable Margin and such 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."
1.3 The definition of "AMORTIZATION DATE" is amended by deleting
"November 30, 1994" and substituting, IN LIEU thereof, "May 30, 1997".
1.4 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "APPLICABLE MARGIN" thereto in proper alphabetical order to
read as follows:
"APPLICABLE MARGIN" shall mean the following per annum percentages,
applicable in the following situations:
PRIME RATE LIBOR CD
APPLICABILITY BASIS BASIS BASIS
------------- ----------- ------- ------
(a) INITIAL PRICING PERIOD. 0.00 0.875 1.00
(b) SUBSEQUENT PRICING PERIOD.
CATEGORY 1 - The Leverage Ratio is not less 0.00 1.00 1.12
than 3.75 to 1
CATEGORY 2 - The Leverage Ratio is less 0.00 0.875 1.00
than 3.75 to 1 but not less than 3.25 to 1
CATEGORY 3 - The Leverage Ratio is 0.00 0.75 0.875
less than 3.25 to 1 but not less than
2.75 to 1 or the Index Debt Rating is
any two of the following: BBB- by S&P,
BBB- by ARA or Baa3 by Moody's
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CATEGORY 4 - The Leverage Ratio is less 0.00 0.625 0.75
than 2.75 to 1 but 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 Moody's
CATEGORY 5 - The Leverage Ratio is less 0.00 .50 0.625
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 Moody's
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 5.1(A) or 5.1(B), as
applicable, of the Master Covenant Agreement, the Applicable Margin shall be
determined as if the Leverage Ratio is not less than 3.75 to 1, (c) if the
Index Debt Rating established by ARA shall fall within a different category
than Moody's or S&P, the Applicable Margin shall be determined by reference
to Moody's or S&P and (d) if the Index Debt Rating established by Moody's and
S&P shall fall within different categories, the Applicable Margin shall be
determined by reference to the superior (or numerically higher) category, but
not to exceed two rating levels higher than the other rating agency. If the
rating system of Moody's, S&P or ARA shall change prior to the Term Loan
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."
1.5 SECTION 1.1 of the Credit Agreement is hereby amended by adding the
definition of "ARA" thereto in proper alphabetical order to read as follows:
"'ARA' means a nationally recognized rating agency approved in
writing by the Determining Lenders which shall have a rating system
identical to S&P."
1.6 The definition of "BOND LETTER OF CREDIT COMMITMENT" is amended by
deleting "$56,844,995.21" and substituting, IN LIEU thereof, "$52,187,838.56".
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1.7 The definition of "CD BASIS" is deleted and the following definition
is inserted IN LIEU thereof:
"'CD BASIS' shall mean, with respect to each CD Advance for each
Interest Period, a rate per annum equal to the lesser of (a) the Highest
Lawful Rate and (b) the sum of the following: (i) the CD Base Rate
divided by 1.00 minus the CD Reserve Requirement, plus (ii) the Assessment
Rate, plus (iii) the Applicable Margin."
1.8 The definition of "DEBT" is amended by deleting the last sentence
thereof.
1.9 The definition of "EDITDA" is deleted and the following definition
is inserted IN LIEU thereof:
"'EBITDA' shall mean, 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."
1.10 The definition of "GUARANTY AGREEMENTS" is deleted and the following
definition is inserted IN LIEU thereof:
"'GUARANTY AGREEMENTS' shall mean the LQM Guaranty, the LQ-Big Apple
Guaranty, the LQ-LNL Guaranty, the LQ-East Irvine Guaranty, the Subsidiary
Guaranty, the LQ-I Guaranty, the LQ-II Guaranty, the LQ-Lubbock Guaranty
and the LQ-Puerto Rico Guaranty".
1.11 SECTION 1.1 of the Credit Agreement is amended by adding the
definitions of "INDEX DEBT" and "INDEX DEBT RATING" thereto in proper
alphabetical order to read as follows:
"'Index Debt Rating' shall mean 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."
1.12 The definition of "INITIAL PRICING PERIOD" is deleted and the
following definition is inserted IN LIEU thereof:
"'INITIAL PRICING PERIOD' shall mean that period from April 21, 1995
to and including the Rate Adjustment Date."
1.13 The definition of "LEVERAGE RATIO" is deleted and the following
definition is inserted IN LIEU thereof:
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"'LEVERAGE RATIO' shall mean, 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, in each case 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 of such four fiscal quarters."
1.14 The definition of "LIBOR BASIS" is amended by deleting the first
sentence thereof and substituting, IN LIEU thereof, the following:
"'LIBOR BASIS' shall mean 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."
1.15 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "LQ-I GUARANTY" thereto in proper alphabetical order to read
as follows:
"'LQ-I GUARANTY' shall mean the Guaranty executed by LQ-INVESTMENTS
I, a Texas general partnership, guaranteeing payment and performance of
the Obligations, substantially in the form of EXHIBIT O hereto, as
amended, modified, supplemented or restated from time to time."
1.16 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "LQ-II GUARANTY" thereto in proper alphabetical order to read
as follows:
"'LQ-II GUARANTY' shall mean the Guaranty executed by LQ-
INVESTMENTS II, a Texas general partnership, guaranteeing payment and
performance of the Obligations, substantially in the form of EXHIBIT P
hereto, as amended, modified, supplemented or restated from time to time."
1.17 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "LQ-LUBBOCK GUARANTY" thereto in proper alphabetical order to
read as follows:
"'LQ-LUBBOCK GUARANTY' shall mean the Guaranty executed by La Quinta
Inns of Lubbock, Inc., a Texas corporation, guaranteeing payment and
performance of the Obligations, substantially in the form of EXHIBIT Q
hereto, as amended, modified, supplemented or restated from time to time."
1.18 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "LQ-PUERTO RICO GUARANTY" thereto in proper alphabetical order
to read as follows:
"'LQ-PUERTO RICO GUARANTY' shall mean the Guaranty executed by La
Quinta Inns of Puerto Rico, Inc., a Delaware corporation, guaranteeing
payment and performance of
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the Obligations, substantially in the form of EXHIBIT R hereto, as
amended, modified, supplemented or restated from time to time.
1.19 The definition of "MATERIAL AMOUNT" is deleted and the following
definition is inserted IN LIEU thereof:
"'MATERIAL AMOUNT' shall mean, as of the determination thereof,
an amount equal to the greater of (a) $1,000,000 or (b) the lesser of
(i) $3,000,000 or (ii) 1% of the consolidated revenues of the Borrower
and its Subsidiaries on a Combined basis for the fiscal year preceding
the date of determination."
1.20 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "MOODY'S" thereto in proper alphabetical order to read as
follows:
"'MOODY'S' shall mean Moody's Investors Service, Inc."
1.21 The definition of "QUARTERLY DATE" is amended by deleting
"February 28, 1994" and substituting, IN LIEU thereof, "May 31, 1995."
1.22 The definition of "RATE ADJUSTMENT DATE" is amended by deleting
"June 30, 1994" and substituting, IN LIEU thereof, "March 31, 1995."
1.23 The definition of "REVOLVING CREDIT COMMITMENT" is amended by
deleting "$45,000,000" and substituting, IN LIEU thereof, "$75,000,000".
1.24 The definition of "REVOLVING CREDIT MATURITY DATE" is amended by
deleting "May 30, 1997" and substituting, IN LIEU thereof, "May 31, 1999."
1.25 SECTION 1.1 of the Credit Agreement is amended by adding the
definition of "S&P" thereto in proper alphabetical order to read as follows:
"'S&P' shall mean Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc., a New York corporation."
1.26 The definition of "SUBSIDIARY GUARANTY" is deleted and the following
definition is substituted IN LIEU thereof:
"'SUBSIDIARY GUARANTY' shall mean the Guaranty executed by each
Significant Subsidiary (other than LQM, LQ-Big Apple Joint Venture, LQ-
LNL Limited Partnership, LQ-INVESTMENTS, I, a Texas general partnership,
and LQ-INVESTMENTS, II, a Texas general partnership, La Quinta Inns of
Lubbock, Inc., a Texas corporation, and La Quinta Inns of Puerto Rico,
Inc., a Delaware corporation) guaranteeing payment and performance of
the Obligations, substantially in the form of EXHIBIT D hereto, as such
agreement may be amended, modified, supplemented or restated from time
to time."
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1.27 The definition of "TERM LOAN COMMITMENT" is amended by deleting
"$184,000,000" and substituting, IN LIEU thereof, "$141,500,000".
1.28 The definition of "TERM LOAN MATURITY DATE" is amended by deleting
"May 31, 2000" and substituting, IN LIEU thereof, "May 31, 2002."
1.29 The definition of "TOTAL COMMITMENT" is amended by deleting
"$285,844,955.21" and substituting, IN LIEU thereof, "$268,687,838.56."
1.30 The definition of "TOTAL DEBT" is deleted and the following
definition is substituted IN LIEU thereof:
"'TOTAL DEBT' shall mean, as of any date of determination, the
sum (without duplication) of (a) all Debt of the Borrower and its
Subsidiaries, minus (b) all Debt of the Borrower and its Subsidiaries of
the type described in (i) clauses (f) and (g) of the definition of "DEBT"
herein which are set forth in EXHIBIT E to the Master Covenant Agreement
and (ii) clauses (h) and (k) of the definition of "DEBT" herein."
1.31 SECTION 2.4(a) is deleted and the following is substituted IN
LIEU thereof:
"(a) COMMITMENT FEE. Subject to Section 9.9 hereof, the Borrower
agrees to pay to the Administrative Lender, for the ratable account of
the Lenders, a commitment fee on the daily average unused portion of
the Revolving Credit Commitment at the following per annum percentages,
applicable in the following situations:
APPLICABILITY PERCENTAGE
-------------- -----------
(a) INITIAL PRICING PERIOD 0.250
(b) SUBSEQUENT PRICING PERIOD
CATEGORY 1 - The Leverage Ratio is not less 0.250
than 2.75 to 1
CATEGORY 2 - The Leverage Ratio is less than 0.200
2.75 to 1 but 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 Moody's
CATEGORY 3 - The Leverage Ratio is less than 0.1875
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 Moody's
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Such fee shall be payable (i) in arrears on each Quarterly Date and on
the Revolving Credit Maturity Date, fully earned when due and, subject
to Section 9.9 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. For purposes of the foregoing, (a) outstanding Letters
of Credit from time to time will reduce the unused portion of the
Revolving Credit Commitment, (b) if the Index Debt Rating and the Leverage
Ratio are in different categories, the commitment fee shall be determined
on whichever of the Index Debt Rating or the Leverage Ratio falls within
the superior (or numerically higher) category, (c) if the commitment 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 5.1(A)
or 5.1(B), as applicable, of the Master Covenant Agreement, the commitment
fee shall be determined as if the Leverage Ratio is not less than 2.75
to 1, (d) if the Index Debt Rating established by ARA shall fall within a
different category than Moody's or S&P, the commitment fee shall be
determined by reference to Moody's or S&P, (e) if the Index Debt Rating
established by Moody's and S&P shall fall within different categories,
the commitment fee shall be determined by reference to the superior (or
numerically higher) category, but not to exceed two rating levels higher
than the other rating agency and (f) 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 Index Debt Rating, according to the most recent determination
of the Index Debt Rating. If the rating system of Moody's, S&P or ARA
shall change prior to the Revolving Credit 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.
1.32 SECTION 2.6(c) is amended by deleting the table set forth therein
and substituting, in lieu thereof, the following:
DATE AMOUNT
----- -------
May, 1997 $12,500,000
November, 1997 $12,500,000
May, 1998 $12,500,000
November, 1998 $12,500,000
May, 1999 $12,500,000
November, 1999 $12,500,000
May, 2000 $12,500,000
November, 2000 $12,500,000
May, 2001 $12,500,000
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>
November, 2001 $12,500,000
May, 2002 $16,500,000
1.33 SECTION 2.16(f)(i) is amended by deleting the table therefrom and
substituting, in lieu thereof, the following:
APPLICABILITY PERCENTAGE
-------------- -----------
(A) INITIAL PRICING PERIOD 0.875
(B) SUBSEQUENT PRICING PERIOD
CATEGORY 1 - The Leverage Ratio is not less than 1.00
3.75 to 1
CATEGORY 2 - The Leverage Ratio is less than 3.75 0.875
to 1 but not less than 3.25 to 1
CATEGORY 3 - The Leverage Ratio is less than 3.25 0.75
to 1 but not less than 2.75 to 1 or the Index Debt
Rating is any two of the following: BBB- by S&P,
BBB- by ARA or Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less than 2.75 0.625
to 1 but not less than 2.00 to 1 or the Index Debt
Rating is any two of the following: BBB by S&P, BBB
by ARA or Baa2 by Moody's
CATEGORY 5 - The Leverage Ratio is less than 2.00 0.50
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 Moody's
1.34 SECTION 2.16(f)ii) is amended by deleting the table and
substituting, in lieu thereof, the following:
APPLICABILITY PERCENTAGE
------------- -----------
(A) INITIAL PRICING PERIOD 0.4375
(B) SUBSEQUENT PRICING PERIOD
CATEGORY 1 - The Leverage Ratio is not less than 0.50
3.75 to 1
CATEGORY 2 - The Leverage Ratio is less than 3.75 0.4375
to 1 but not less than 3.25 to 1
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CATEGORY 3 - The Leverage Ratio is less than 0.375
3.25 to 1 but not less than 2.75 to 1 or the
Index Debt Rating is any two of the following:
BBB- by S&P, BBB- by ARA or Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less than 0.3125
2.75 to 1 but not less than 2.00 to 1 or the
Index Debt Rating is any two of the following:
BBB by S&P, BBB by ARA or Baa2 by Moody's
CATEGORY 5 - The Leverage Ratio is less than 0.25
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 Moody's
1.35 SECTION 2.16(f)(iii) is deleted and the following is inserted in
lieu thereof:
"(iii) ADJUSTMENT OF LETTER OF CREDIT FEE. The fee payable in respect
of the Letters of Credit shall be adjusted on each Adjustment Date
if determined based on the (i) Leverage Ratio, on a quarterly
basis 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 commitment 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 Letter of Credit fee 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
5.1(A) or 5.1(B), as applicable, of the Master Covenant Agreement,
the Letter of Credit fee shall be determined as if the Leverage
Ratio is not less than 3.75 to 1, (c) if the Index Debt Rating
established by ARA shall fall within a different category than
Moody's or S&P, the Letter of Credit fee shall be determined by
reference to Moody's or S&P, and (d) if the Index Debt Rating
established by Moody's and S&P shall fall within different
categories, the Letter of Credit fee shall be determined by
reference to the superior (or numerically higher) category, but
not to exceed two rating levels higher than the other rating
agency. If the rating system of Moody's, S&P or ARA shall change
prior to the Revolving Credit 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."
1.36 SECTION 3.3 is deleted.
1.37 SECTION 4.1(i) is amended by deleting "December 31, 1992" wherever
it appears and substituting, IN LIEU thereof, "December 31, 1994".
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1.38 SECTION 4.1(k) is amended by deleting "$7,600,000" and
substituting, IN LIEU thereof, "$10,000,000".
1.39 SCHEDULE 3 to the Credit Agreement is amended to be in the form
of SCHEDULE 3 attached to this Second Amendment.
1.40 SCHEDULE 6 to the Credit Agreement is amended to be in the form
of SCHEDULE 6 attached to this Second Amendment.
1.41 SCHEDULE 8 to the Credit Agreement is amended to be in the form
of SCHEDULE 8 attached to this Second Amendment.
1.42 EXHIBITS O, P, Q AND R are added to the Credit Agreement to be in
the form of EXHIBITS O, P, Q AND R attached to this Second Amendment
2. EVENT OF DEFAULT. La Quinta acknowledges and agrees that the failure to
comply with the requirements of clause (i) of the definition of
"PERMITTED INVESTMENT" set forth in the Master Covenant Agreement with respect
to La Quinta's investment in LQ-Baton Rouge Joint Venture and LQ-Denver
Peoria St., LTD by June 30, 1995 shall be an Event of Default under the
Credit Agreement with the same force and effect as if fully set forth in the
Credit Agreement.
3. REPRESENTATIONS AND WARRANTIES. La Quinta represents and warrants to
Lenders that, as of the date hereof and after giving effect to the amendments
provided in SECTION 1:
a. La Quinta and its Subsidiaries are in compliance with all of
the terms, provisions and covenants of the Agreement;
b. the representations and warranties contained in the Agreement
(after giving effect to this Second Amendment) are true and correct on
and as of the date hereof and as though made on and as of such dates;
c. no event has occurred and is continuing which constitutes a
Default or an Event of Default;
d. La Quinta and each Subsidiary, as appropriate, has full power
and authority to execute and deliver this Second Amendment, the Revolving
Credit Notes and the Term Loan Notes referred to in Section 3(b) of this
Second Amendment, and all other documents and agreements executed in
connection with this Second Amendment (collectively, the "Amendment Loan
Papers") and this Second Amendment and the Agreement, as amended hereby,
constitute the legal, valid and binding obligation of La Quinta or each
Subsidiary, as appropriate, enforceable in accordance with their terms,
except as enforceability may be limited by debtor relief laws and except
as rights to indemnity may be limited by federal or state securities
laws; and
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e. no authorization, approval, consent or other action by, notice
to, or filing with, any Person, is required for the execution, delivery
or performance by La Quinta or any Subsidiary, as appropriate, of this
Second Amendment or the other Amendment Loan Papers.
4. CONDITIONS OF EFFECTIVENESS. The amendments provided for in SECTION 1
of this Second Amendment shall be effective as of April 21, 1995, upon the
receipt by Administrative Lender or Lender or the occurrence or existence of
each of the following, as appropriate:
(a) a certificate of an officer acceptable to Lenders of La Quinta,
and including (i) any amendments to its articles of incorporation since
January 25, 1994, (ii) any amendments to its bylaws since January 25,
1994, (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;
(b) a certificate of an officer acceptable to Lender of La Quinta
Puerto Rico, Inc., a Delaware corporation ("LQ-PUERTO RICO"), certifying
as to the incumbency of the officers signing the Loan Papers to which it
is a party, and including (i) its articles of incorporation, certified by
the Secretary of State of Delaware, (ii) its bylaws, (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) a duly executed Revolving Credit Note and Term Loan Note,
payable to the order of each Lender and in an amount equal to its
Specified Percentage of the Revolving Credit Commitment and the Term
Loan Commitment, respectively, as hereby amended;
(d) receipt by Administrative Lender (and subject to Section 9.9 of
the Agreement), for the ratable account of Lenders, an amendment fee equal
to 0.125% of the Total Commitment;
(e) opinions of counsel to La Quinta and its Subsidiaries addressed
to Administrative Lender and Lenders and in form and substance
satisfactory to Administrative Lender and Lenders, dated the Effective
Date, and covering such matters incident to the transactions contemplated
hereby as the Administrative Lender or Special Counsel may reasonably
request and opinions of local counsel in states other than Texas in
which Facilities are located in form and substance satisfactory to
Administrative Lender regarding the amendments to the Deeds of Trust;
(f) reimbursement for the Administrative Lender for Special
Counsel's reasonable fees and expenses rendered through the date of
this Second Amendment;
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(g) evidence that all corporate or other proceedings of La Quinta
and Subsidiaries taken in connection with the transactions contemplated
by this Second Amendment and the other Loan Papers shall be reasonably
satisfactory in form and substance to Administrative Lender, Lenders and
Special Counsel; and the Lenders shall have received copies of all
documents or other evidence which Administrative Lender, Special Counsel
or any Lender may reasonably request in connection with such transactions;
(h) the duly executed amendments to the Deeds of Trust, in form and
substance satisfactory to Administrative Lender;
(i) the duly executed Fourth Amended and Restated Master Covenant
Agreement;
(j) a certificate of an officer acceptable to Administrative Lender
and Lenders, in form and substance satisfactory to the Administrative
Lender and Lenders, certifying that the execution, delivery and
performance by the Obligors of this Second Amendment and related documents
will not violate or result in a default in respect of any of the terms of
the Senior Subordinated Notes;
(k) the representations and warranties set forth in Section 3 of
this Second Amendment shall be true and correct;
(l) receipt by Administrative Lender of all amounts due under the
letter dated April 21, 1995 between Administrative Lender and La Quinta;
(m) duly executed LQ-Puerto Rico Guaranty; and
(n) Administrative Lender and Lenders shall have received, in form
and substance satisfactory to Administrative Lender and Lenders, such
other documents, certificates, and instruments as Lenders shall require.
5. REFERENCE TO THE AGREEMENT.
5.1 Upon the effectiveness of this Second Amendment, each reference
in the Agreement to "this Agreement", "hereunder", "herein", or words of
like import shall mean and be a reference to the Agreement, as affected
and amended hereby.
5.2 The Agreement, as amended by the amendments referred to above,
shall remain in full force and effect and are hereby ratified and
confirmed.
6. GUARANTOR ACKNOWLEDGEMENT. Each of the Guarantors signing below
acknowledge and agree that its obligations and liabilities under its Guaranty
Agreement and each other Loan Paper executed by each such Guarantor and any
liens or security interests granted thereunder (i) are
-13-
not released, diminished or impaired in any manner by this Second Amendment
or any of the provisions contemplated herein and (ii) cover, among other
things, the Revolving Credit Commitment and the Term Loan Commitment, and as
modified pursuant to the terms of this Second Amendment.
7. AMENDMENT TO REIMBURSEMENT AGREEMENTS. Each of the Lenders acknowledge
and agree to the terms of the Amendment to Reimbursement Agreements in the
form of ANNEX A attached to this Second Amendment.
8. COSTS, EXPENSES AND TAXES. La Quinta shall pay within five days after
demand all costs and expenses of Administrative Lender and Lenders in
connection with the preparation, reproduction, execution and delivery of this
Second Amendment and the other instruments and documents to be delivered
hereunder (including the reasonable fees and out-of-pocket expenses of
counsel for Administrative Lender and Lenders with respect thereto and with
respect to advising Administrative Lender and Lenders as to their rights and
responsibilities under the Agreement, as hereby amended).
9. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same instrument.
10. GOVERNING LAW; BINDING EFFECT. This Second Amendment shall be governed
by and construed in accordance with the laws of the State of Texas and be
binding upon La Quinta, Administrative Lender and Lenders and their
respective successors and assigns.
11. HEADINGS. Section headings in this Second Amendment are included herein
for convenience of reference only and shall not constitute part of this
Second Amendment for any other purpose.
12. FINAL AGREEMENT. THE AGREEMENT, AS EFFECTED BY THE AMENDMENTS CONTAINED
IN THIS SECOND AMENDMENT, TOGETHER WITH EACH OTHER LOAN PAPER, REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
============================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
=============================================
-14-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
LA QUINTA INNS, INC.
By: /s/ DEWEY W. CHAMBERS
___________________________________
Dewey W. Chambers, Vice President-
Treasurer
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By: /s/ DOUGLAS E. HUTT
____________________________________
Douglas E. Hutt, Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.
By: /s/DOUGLAS E. HUTT
_____________________________________
Douglas E. Hutt, Senior Vice President
CITICORP USA, INC.
By:______________________________________
______________, ______________________
(Print Name) (Print Title)
-15-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
LA QUINTA INNS, INC.
By:
___________________________________
Dewey W. Chambers, Vice President-
Treasurer
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
____________________________________
Douglas E. Hutt, Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.
By:
_____________________________________
Douglas E. Hutt, Senior Vice President
CITICORP USA, INC.
By: /s/ BARBARA COHEN
______________________________________
Barbara Cohen Vice Presdient
______________, ______________________
(Print Name) (Print Title)
-15-
THE FROST NATIONAL BANK
By: /s/ SUZANNE HOUSER
______________________________________
Suzanne Houser Vice President
______________, ______________________
(Print Name) (Print Title)
-16-
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ DAN M. DANELO
______________________________________
Dan M. Danelo Sr. Vice President
______________, ______________________
(Print Name) (Print Title)
-17-
BANK OF SCOTLAND
By: /s/ ELIZABETH WILSON
______________________________________
Elizabeth Wilson Vice President and
Branch Manager
______________, ______________________
(Print Name) (Print Title)
-18-
BANK OF AMERICA ILLINOIS
By: /s/ W. THOMAS BARNETT
______________________________________
W. Thomas Barnett Vice President
_________________, ___________________
(Print Name) (Print Title)
-19-
BANK ONE, TEXAS, N.A.
By: /s/ ALAN L. MILLER
______________________________________
Alan L. Miller Vice President
_______________, _____________________
(Print Name) (Print Title)
-20-
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ CHARLES T. BRIDGMAN
______________________________________
Charles T. Bridgman Vice President
___________________, _________________
(Print Name) (Print Title)
-21-
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By: /s/ BLAKE R. HOWELLS
_____________________________________
Blake R. Howells Vice President
________________, ___________________
(Print Name) (Print Title)
-22-
ACKNOWLEDGED AND AGREED:
LA QUINTA REALTY CORP.
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
LA QUINTA PLAZA, INC.
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
LA QUINTA FINANCIAL CORPORATION
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
LA QUINTA INVESTMENTS, INC.
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
LQI ACQUISITION CORPORATION
By:______________________________________
______________, ______________________
(Print Name) (Print Title)
-23-
ACKNOWLEDGED AND AGREED:
LA QUINTA REALTY CORP.
By:
______________________________________
John F. Schmutz, Vice President
LA QUINTA PLAZA, INC.
By:
______________________________________
John F. Schmutz, Vice President
LA QUINTA FINANCIAL CORPORATION
By:
______________________________________
John F. Schmutz, Vice President
LA QUINTA INVESTMENTS, INC.
By:
______________________________________
John F. Schmutz, Vice President
LQI ACQUISITION CORPORATION
By: /s/ ROLAND B. BLISS
______________________________________
Roland B. Bliss President & Treasurer
______________, ______________________
(Print Name) (Print Title)
-23-
LA QUINTA MOTOR INNS LIMITED
PARTNERSHIP
By: La Quinta Realty Corp., its General
Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
LQM OPERATING PARTNERS, L.P.
By: La Quinta Realty Corp., its General
Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
LQ-BIG APPLE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By: /s/ DEWEY W. CHAMBERS
_________________________________
Dewey W. Chambers,
Vice President-Treasurer
By: La Quinta Investments, Inc.,
its Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
-24-
LQ-LNL LIMITED PARTNERSHIP
By: La Quinta Inns, Inc., its Managing
General Partner
By: /s/ DEWEY W. CHAMBERS
_________________________________
Dewey W. Chambers,
Vice President-Treasurer
LQ-EAST IRVINE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By: /s/ DEWEY W. CHAMBERS
_________________________________
Dewey W. Chambers,
Vice President-Treasurer
By: La Quinta Investments, Inc.,
its Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
-25-
LQ-INVESTMENTS I
By: La Quinta Inns, Inc., its Managing
General Partner
By: /s/ DEWEY W. CHAMBERS
_________________________________
Dewey W. Chambers,
Vice President-Treasurer
By: La Quinta Investments, Inc.,
a General Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
LQ-INVESTMENTS II
By: La Quinta Inns, Inc., its Managing
General Partner
By: /s/ DEWEY W. CHAMBERS
_________________________________
Dewey W. Chambers,
Vice President-Treasurer
By: La Quinta Investments, Inc.,
a General Partner
By: /s/ JOHN F. SCHMUTZ
_________________________________
John F. Schmutz, Vice President
-26-
LA QUINTA INNS OF LUBBOCK, INC.
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
LA QUINTA INNS OF PUERTO RICO, INC.
By: /s/ JOHN F. SCHMUTZ
______________________________________
John F. Schmutz, Vice President
-27-
SCHEDULE 3
LA QUINTA INNS, INC.
SUBSIDIARIES AND UNINCORPORATED VENTURES
STATE OF
INCORPORATION
OR PERCENTAGE OF
NAME ORGANIZATION OWNERSHIP
---- ------------- -------------
La Quinta Realty Corp. Texas 100
La Quinta Plaza, Inc. Texas 100
La Quinta Financial Corporation Texas 100
La Quinta Investments, Inc. Delaware 100
LQI Acquisition Corporation Delaware 100
LQM Operating Partners, L.P. Delaware 100
LQ-Big Apple Joint Venture Delaware 100
LQ-East Irvine Joint Venture California 100
La Quinta-Houston I.H. 10, Ltd. Texas 50
La Quinta San Antonio-South Joint Venture Texas 50
La Quinta Austin Motor Hotel, Ltd. Texas 66.67
La Quinta-Dallas Central Expressway, Ltd. Texas 64.81
LQ Motor Inn Venture-Austin No. 530* Texas 50
La Quinta-Wichita, Kansas, No. 532, Ltd. Texas 50
LQ-Baton Rouge Joint Venture* Texas 100
LQ-West Bank Joint Venture* Texas 60
LQ-Denver Peoria St., LTD Texas 100
San Antonio Main Avenue Motel, Ltd. Texas 66.67
LQ-LNL Joint Venture Texas 100
LQ Investments I* Texas 100
LQ Investments II* Texas 100
La Quinta Development Partners, L.P.* Delaware 40
La Quinta Inns of Lubbock, Inc. Texas 100
La Quinta Inns of Puerto Rico, Inc. Delaware 100
*Indicates Joint Venture Agreements with a buy/sell provision.
SCHEDULE 6
LA QUINTA INNS, INC.
UNINCORPORATED VENTURES TO BE PURCHASED
La Quinta-Houston I.H. 10, Ltd.
La Quinta-San Antonio South Joint Venture
La Quinta Austin Motor Hotel, Ltd.
La Quinta-Dallas Central Expressway, Ltd.
LQ Motor Inn Venture-Austin No. 530
La Quinta-Wichita, Kansas, No. 532, Ltd.
LQ-West Bank Joint Venture
La Quinta Development Partners, L.P.
San Antonio Main Avenue Motel, Ltd.
SCHEDULE 8
LA QUINTA INNS, INC.
INSOLVENT UNINCORPORATED VENTURES
None
ANNEX A
AMENDMENT TO REIMBURSEMENT AGREEMENTS
THIS AMENDMENT to REIMBURSEMENT AGREEMENTS (this "Amendment"), dated as of
April 21, 1995, is entered into among NationsBank of Texas, N.A. ("Lender"),
La Quinta Inns, Inc. (formerly known as La Quinta Motor Inns, Inc.), a Texas
corporation ("LQMI"), LQ-Baton Rouge Joint Venture, a Texas joint venture
("LQBR"), and La Quinta Development Partners, L.P., a Delaware limited
partnership ("LQDP").
BACKGROUND
1. LQMI and Lender heretofore entered into the following Reimbursement
Agreements:
a. Reimbursement Agreement, dated as of June 1, 1991, between LQMI and
Lender pursuant to which Lender issued a certain irrevocable letter of
credit in the original stated amount of $4,925,344, in favor of The
First National Bank of Chicago in its capacity as Trustee (the
"Trustee") for the benefit of the holders of the Village of Schaumburg,
Cook and DuPage Counties, Illinois Industrial Development Revenue
Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1991;
b. Reimbursement Agreement, dated as of June 1, 1991, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $3,631,355, in favor
of the Trustee for the benefit of the holders of the Savannah Economic
Development Authority Revenue Refunding Bonds (La Quinta Motor Inns,
Inc. Project) Series 1991;
c. Reimbursement Agreement, dated as of July 1, 1991, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $3,314,250, in favor of the
Trustee for the benefit of the holders of the Texarkana, Texas
Industrial Development Corporation Industrial Development Revenue
Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1991;
d. Reimbursement Agreement, dated as of July 1, 1991, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $2,802,792, in favor of the
Trustee for the benefit of the holders of the Economic Development
Corporation of the City of Kalamazoo Economic Development Revenue
Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1991;
e. Reimbursement Agreement, dated as of September 1, 1991, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $2,301,562.50, in
favor of the Trustee for the benefit of the holders of the Industrial
Development Board of the Parish of Bossier, Louisiana, Inc. Refunding
Revenue Bonds (La Quinta Motor Inns, Inc. Project) Series 1991;
f. Reimbursement Agreement, dated as of November 1, 1991, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $2,587,979,17, in
favor of the Trustee for the benefit of the holders of the City of El
Paso Industrial Development Authority, Incorporated Industrial
Development Revenue Refunding Bonds (La Quinta Motor Inns, Inc.
Project) Series 1991;
g. Reimbursement Agreement, dated as of November 1, 1991, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $3,099,437.55, in
favor of the Trustee for the benefit of the holders of the Maverick
County Industrial Development Corporation Industrial Development
Revenue Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series
1991;
h. Reimbursement Agreement, dated as of November 1, 1991, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $3,263,104.17, in
favor of the Trustee for the benefit of the holders of the Wheat Ridge,
Colorado Industrial Development Revenue Refunding Bonds (La Quinta
Motor Inns, Inc. Project) Series 1991;
i. Reimbursement Agreement, dated as of December 1, 1991, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $3,687,614.58, in
favor of the Trustee for the benefit of the holders of the City of
Aurora Industrial Development Revenue Refunding Bonds (La Quinta Motor
Inns, Inc. Project) Series 1991;
j. Reimbursement Agreement, dated as of January 1, 1992, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $6,822,854.17, in favor of
the Trustee for the benefit of the holders of the City of San
Bernardino, California Industrial Development Revenue Refunding Bonds
(La Quinta Motor Inns, Inc. Project) Series 1992;
k. Reimbursement Agreement, dated as of June 1, 1992, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $4,531,655, in favor of the
Trustee for the benefit of the holders of the Peninsula Ports Authority
of Virginia Floating Rate Monthly
-2-
Demand Industrial Development Revenue Bonds, Series 1984 (La Quinta
Motor Inns, Inc. Project);
l. Reimbursement Agreement, dated as of June 1, 1992, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $4,531,655, in favor of the
Trustee for the benefit of the holders of the Village of Elk Grove
Village, Cook and DuPage Counties, Illinois Floating Rate Monthly
Demand Industrial Development Revenue Bonds, Series 1984 (La Quinta
Motor Inns, Inc. Project);
m. Reimbursement Agreement, dated as of November 1, 1992, between LQMI
and Lender pursuant to which Lender has issued a certain irrevocable
letter of credit in the original stated amount of $2,828,364.58, in
favor of the Trustee for the benefit of the holders of the Nacogdoches
Industrial Development Authority, Inc. Industrial Development Revenue
Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1992.
n. Reimbursement Agreement, dated as of May 1, 1993, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $4,091,666.67 in favor of
the Trustee for the benefit of the holders of the City of Oakbrook
Terrace, Illinois Industrial Development Revenue Refunding Bonds (La
Quinta Motor Inns, Inc. Project) Series 1993; and
o. Reimbursement Agreement, dated as of October 1, 1993, between LQMI and
Lender pursuant to which Lender has issued a certain irrevocable letter
of credit in the original stated amount of $3,068,750.00 in favor of
the Trustee for the benefit of the holders of the City of Virginia Beach
Development Authority Industrial Development Revenue Refunding Bonds
(La Quinta Inns, Inc. Project) Series 1993.
(each, as previously amended, modified, supplemented or restated from time
to time, a "LQMI Reimbursement Agreement" and collectively the "LQMI
Reimbursement Agreements").
2. LQBR and Lender heretofore entered into that certain Reimbursement
Agreement, dated as of June 1, 1992, pursuant to which Lender has issued a
certain irrevocable letter of credit in the original stated amount of
$3,554,635.42, in favor of the Trustee for the benefit of the holders of the
Industrial Development Board of the Parish of East Baton Rouge, Louisiana,
Inc. Industrial Development Revenue Refunding Bonds (La Quinta Motor Inns,
Inc. Project) Series 1992 (as previously amended, the "LQBR Reimbursement
Agreement").
3. LQDP, LQMI and Lender heretofore entered into that certain
Reimbursement Agreement, dated as of May 1, 1993, pursuant to which Lender
has issued a certain irrevocable letter of credit in the original stated
amount of $4,296,250 in favor of the Trustee for the benefit
-3-
of the holders of the City of Stockton, California Industrial Development
Revenue Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1993 (as
previously amended, the "LQDP Reimbursement Agreement").
4. The LQMI Reimbursement Agreements, the LQBR Reimbursement Agreement
and the LQDP Reimbursement Agreement are collectively the "Reimbursement
Agreements" and each a "Reimbursement Agreement".
5. The Reimbursement Agreements were amended by that certain Amendment to
Reimbursement Agreements dated as of January 25, 1994.
6. LQMI and Lender desire to further amend the LQMI Reimbursement
Agreements, LQBR and Lender desire to further amend the LQBR Reimbursement
Agreement, and LQDP, LQMI and Lender desire to further amend the LQDP
Reimbursement Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are all hereby acknowledged,
LQMI, LQBR, LQDP, and Lender covenant and agree as follows:
1. AMENDMENTS.
a. Section 1 of each Reimbursement Agreement is hereby amended by adding
the following definitions:
"'ADJUSTMENT DATE' shall have the meaning given thereto in the
Credit Agreement."
"'ARA' shall have the meaning given thereto in the Credit Agreement."
"'INDEX DEBT RATING' shall have the meaning given thereto in the
Credit Agreement"
"'INITIAL PRICING PERIOD' shall have the meaning given thereto in the
Credit Agreement."
"'MOODY'S' shall have the meaning given thereto in the Credit
Agreement."
"'S&P' shall have the meaning given thereto in the Credit Agreement."
"'SUBSEQUENT PRICING PERIOD' shall have the meaning given thereto in
the Credit Agreement."
-4-
b. The definition of "APPLICABLE MARGIN" set forth in each Reimbursement
Agreement is hereby amended to read as follows:
"'APPLICABLE MARGIN' means the following per annum percentages,
applicable in the following situations:
PRIME RATE LIBOR CD
APPLICABILITY BASIS BASIS BASIS
------------- ---------- ----- -----
(a) INITIAL PRICING PERIOD. 0.00 0.875 1.00
(b) SUBSEQUENT PRICING PERIOD.
CATEGORY 1 - The Leverage Ratio is not 0.00 1.00 1.125
less than 3.75 to 1
CATEGORY 2 - The Leverage Ratio is less 0.00 0.875 1.00
than 3.75 to 1 but not less than 3.25
to 1
CATEGORY 3 - The Leverage Ratio is less 0.00 0.75 0.875
than 3.25 to 1 but not less than 2.75
to 1 or the Index Debt Rating is any
two of the following: BBB- by S&P,
BBB- by ARA or Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less 0.00 0.625 0.75
than 2.75 to 1 but 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 Moody's
CATEGORY 5 - The Leverage Ratio is less 0.00 .50 0.625
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 Moody's
The Applicable Margin payable by the Company on the outstanding draws
under the Letter of Credit which are Tender Drafts shall be adjusted on
each Adjustment Date if determined based on the (i) Leverage Ratio,
according to the performance of the Company 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 Bank
-5-
by the date required pursuant to Section 5.1(A) or 5.1(B), as applicable,
of the Master Covenant Agreement, the Applicable Margin shall be determined
as if the Leverage Ratio is not less than 3.75 to 1, (c) if the Index Debt
Rating established by ARA shall fall within a different category than Moody's
or S&P, the Applicable Margin shall be determined by reference to Moody's
or S&P and (d) if the Index Debt Rating established by Moody's and S&P shall
fall within different categories, the Applicable Margin shall be determined
by reference to the superior (or numerically higher) category, but not to
exceed two rating levels higher than the other rating agency. If the rating
system of Moody's, S&P or ARA shall change prior to the Termination Date, the
Company and the Bank shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system."
c. Section 3 of each Reimbursement Agreement is hereby amended by deleting
said section and substituting the following in lieu thereof:
"Section 3. TERM OF THE LETTER OF CREDIT. The term of the Letter of
Credit shall, subject to earlier termination in accordance with its terms,
end on May 31, 2002; PROVIDED, that the Letter of Credit may, subject to
earlier termination in accordance with its terms, (i) commencing May 31,
2000, be extended at the written request of LQMI for an additional period of
one year beyond the then existing term of the Letter of Credit if the Bank
shall have given a Notice of Extension prior to May 31, 2000 and (ii)
thereafter be extended at the written request of LQMI for successive
additional periods of one year each beyond the then existing term of the
Letter of Credit if the Bank shall have given a Notice of Extension prior to
May 31 of each year thereafter. The Bank may determine to extend the term of
the Letter of Credit in its sole discretion, and no course of dealing or
other circumstances shall require the Bank to extend the Letter of Credit."
d. Section 4(a) of each Reimbursement Agreement is hereby amended by
deleting said section and substituting the following in lieu thereof:
"(a) LETTER OF CREDIT FEES. Subject to Section 16(g) hereof, the
Company hereby agrees to pay to the Bank (i) a letter of credit fee for the
period from and including April 21, 1995 until the Termination Date, computed
on a daily basis at the following per annum percentages, applicable in the
following situations:
APPLICABILITY PERCENTAGE
------------- ----------
(A) INITIAL PRICING PERIOD 0.875
(B) SUBSEQUENT PRICING PERIOD
CATEGORY 1 - The Leverage Ratio is not less than 3.75 to 1 1.00
CATEGORY 2 - The Leverage Ratio is less than 3.75 to 1 but 0.875
not less than 3.25 to 1
-6-
CATEGORY 3 - The Leverage Ratio is less than 3.25 to 1 but 0.75
not less than 2.75 to 1 or the Index Debt Rating is any two
of the following: BBB- by S&P, BBB- by ARA or Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less than 2.75 to 1 but 0.625
not less than 2.00 to 1 or the Index Debt Rating is any two
of the following: BBB by S&P, BBB by ARA or Baa2 by Moody's
CATEGORY 5 - The Leverage Ratio is less than 2.00 to 1 or 0.50
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 Moody's
calculated as a percentage of the amount from time to time available to be
drawn under the Letter of Credit and (ii) an issuance and fronting fee
equal to 0.10% of the amount from time to time available to be drawn under
the Letter of Credit. Amounts payable under this Section 4(a) shall be
calculated on each calendar quarter and payable quarterly in arrears, based
on a 365 or 365-day year, as appropriate, in immediately available funds,
on the 15th day following the end of each calendar quarter. The fee payable
in respect of the Letter of Credit shall be adjusted on each Adjustment
Date if determined based on the (i) Leverage Ratio, on a quarterly basis
according to the performance of the Company 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 Letter of Credit fee is determined
based on the Leverage Ratio and the financial statements of the Company
setting forth the Leverage Ratio are not received by the Bank by the date
required pursuant to Section 5.1(A) or 5.1(B), as applicable, of the
Master Covenant Agreement, the Letter of Credit fee shall be determined
as if the Leverage Ratio is not less than 3.75 to 1, (c) if the Index Debt
Rating established by ARA shall fall within a different category than
Moody's or S&P, the Letter of Credit fee shall be determined by reference
to Moody's or S&P, and (d) if the Index Debt Rating established by Moody's
and S&P shall fall within different categories, the Letter of Credit fee
shall be determined by reference to the superior (or numerically higher)
category, but not to exceed two rating levels higher than the other rating
agency. If the rating system of Moody's, S&P or ARA shall change prior to
the Termination Date, the Company and Bank shall negotiate in good faith
to amend the references to specific ratings to reflect such changed rating
system."
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, LQMI, LQBR AND LQDP each represents
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and warrants that, as of the date hereof and after giving effect to the
amendments contemplated by the foregoing Section 1:
a. the representations and warranties contained in the LQMI Reimbursement
Agreements, the LQBR Reimbursement Agreement and the LQDP Reimbursement
Agreement are true and correct on and as of the date hereof as though made on
and as of such date;
b. no event has occurred and is continuing which constitutes a Default or
an Event of Default;
c. each LQMI, LQBR and LQDP has full power and authority to execute and
deliver this Amendment, this Amendment and the LQMI Reimbursement Agreements,
as amended hereby, constitute the legal, valid and binding obligations of
LQMI, and this Amendment and the LQBR Reimbursement Agreement, as amended
hereby, constitute the legal, valid and binding obligations of LQBR, each
enforceable in accordance with their respective terms, and this Amendment and
the LQDP Reimbursement Agreement, as amended hereby, constitute the legal,
valid and binding obligations of LQMI and LQDP, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws;
d. the financial statements of LQMI, LQBR and LQDP for the fiscal year
ending December 31, 1994, are true and correct, fairly represent the
financial condition of LQMI, LQBR and LQDP as at such date and have been
prepared in accordance with GAAP applied on a basis consistent with prior
periods; and there has been no material adverse change in the financial
condition of LQMI or LQBR from that represented in such financial statements;
and
e. no authorization, approval, consent, or other action by, notice to, or
filing with, any governmental authority or other Person, is required for the
execution, delivery or performance by LQMI, LQBR or LQDP of this Amendment.
3. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective as of
April 21, 1995, subject to the following:
(i) Lender shall have executed a counterpart of this Amendment;
(ii) Lender shall have received counterparts of this Amendment
executed by LQMI, LQBR and LQDP;
(iii) Lender shall have received, in form and substance satisfactory
to Lender and its counsel, such other documents, certificates
and instruments as Lender shall require; and
-8-
(iv) Lender shall have received a fully-executed copy of the Second
Amendment to Credit Agreement, dated as of April 21, 1995, among
LQMI, the lenders party thereto, and NationsBank of Texas, N.A.,
as Administrative Lender.
4. GUARANTOR'S ACKNOWLEDGMENT. By signing below, LQMI agrees that its
obligations under the Guaranty Agreement between LQMI and the Trustee, dated
as of June 1, 1992, with respect to the Industrial Development Board of the
Parish of East Baton Rouge, Louisiana, Inc. Industrial Development Revenue
Refunding Bonds (La Quinta Motor Inns, Inc. Project) Series 1992 are not
released, modified, impaired or affected in any manner by this Amendment.
5. REFERENCE TO THE REIMBURSEMENT AGREEMENTS.
a. Upon the effectiveness of this Amendment, each reference in each
Reimbursement Agreement to "this Agreement", "hereunder", "herein", or words
of like import shall mean and be a reference to such Reimbursement Agreement,
as affected and amended hereby.
b. The Reimbursement Agreements, as amended by the amendments referred to
above, shall remain in full force and effect and are hereby ratified and
confirmed.
6. COSTS, EXPENSES AND TAXES. LQMI, LQBR and LQDP jointly and severally
agree to pay on demand all costs and expenses of Lender in connection with
the preparation, reproduction, execution and delivery of this Amendment and
the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for Lender with respect
thereto and with respect to advising Lender as to its rights and
responsibilties under the Reimbursement Agreements, as hereby amended).
7. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and
the same instrument.
8. GOVERNING LAW; BINDING EFFECT. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and shall be
binding upon LQMI, LQBR, and Lender and their respective successors and
assigns.
9. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
10. FINAL AGREEMENT. THE REIMBURSEMENT AGREEMENTS AS AMENDED, TOGETHER
WITH THE OTHER RELATED DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES REGARDING THE SUBJECT
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MATTER THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
NATIONSBANK OF TEXAS, N.A.
By: /s/ Douglas E. Hutt
___________________________________________
Douglas E. Hutt, Senior Vice President
LA QUINTA INNS, INC.
By: /s/ Dewey W. Chambers
___________________________________________
Dewey W. Chambers, Vice President-Treasurer
L-Q BATON ROUGE JOINT VENTURE
By: La Quinta Inns, Inc., its general partner
By: /s/ Dewey W. Chambers
______________________________________
Dewey W. Chambers
Vice President-Treasurer
LA QUINTA DEVELOPMENT PARTNERS, L.P.
By: La Quinta Inns, Inc., its general partner
By: /s/ Michael A. Depatie
______________________________________
Michael A. Depatie
Senior Vice President-Finance
-11-
EXHIBIT O
GUARANTY
This Guaranty, dated as of July 1, 1994 (this "GUARANTY"), is made by LQ
CIGNA I, a Texas general partnership ("GUARANTOR") to be known as
LQ-INVESTMENTS I.
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, dated as of January 25, 1994 (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 and issue, or participate in the issuance of, Letters of Credit and
Bond Letters of Credit.
3. It is a condition precedent to the obligation of Lenders to make
such Advances and issue, or participate in the issuance of, Letters of
Credit and Bond Letters of Credit that Guarantor guarantee repayment thereof
upon the terms and conditions set forth herein.
4. The Board of Directors of La Quinta Investments, Inc., a Delaware
corporation and a general partner of Guarantor, and the Board of Directors of
La Quinta Inns, Inc., a Texas corporation and the managing general partner of
Guarantor, have each determined that the execution, delivery, and performance
of this Guaranty is necessary and convenient to the conduct, promotion, and
attainment of Guarantor's business.
5. Guarantor desires to induce Lender to make such Advances and issue,
or participate in the issuance of, Letters of Credit and Bond Letters of
Credit, which may reasonably be expected to benefit, directly or indirectly,
Guarantor.
AGREEMENT.
Now, therefore, in consideration of the premises and in order to induce
Lenders to make Advances and issue, or participate in the issuance of,
Letters of Credit and Bond Letters of Credit under the Credit Agreement,
Guarantor agrees as follows:
1. GUARANTY.
(a) Guarantor 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 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 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 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 Guarantor pursuant to (i) Applicable Law or (ii) any
agreement providing for an equitable allocation among Guarantor and other
Obligors of obligations arising under guaranties by such parties.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the 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 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 Guarantor 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 Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
-2-
(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 reduction or
termination of the Commitments;
(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 VIRES, (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
or any other Obligor;
(e) any Debtor Relief Law involving Company, Guarantor or any other
Obligor;
(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 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 Guarantor (the right
to such notification being herein specifically waived by 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
Company or any other Person (including without limitation 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;
-3-
(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 or any 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
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 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, 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 other Obligor or
otherwise, all as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, 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 or any other Person or any collateral 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 or 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
-4-
Company, 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 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, Guarantor hereby irrevocably waives any claim or other rights which
it may have or hereafter acquire against Company or any other Obligor that
arise from the existence, payment, performance or enforcement of 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 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 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 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 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. 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 this PARAGRAPH 4(a) is knowingly
made in contemplation of such benefits.
(b) If Guarantor becomes the holder of any indebtedness payable by
Company or any other Obligor, Guarantor hereby subordinates all indebtedness
owing to it from Company and each other Obligor to all indebtedness of
Company 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 attempt to
set-off or reduce any obligations hereunder because of such indebtedness. If
any amount shall nevertheless be paid to Guarantor by Company 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-
5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that all representations and warranties as they apply to Guarantor
only set forth in ARTICLE 4 of the Credit Agreement (each of which is hereby
incorporated by reference) are true and correct.
6. COVENANTS. 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. Guarantor further covenants and agrees (a) punctually
and properly to perform all of 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 any 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 Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by
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 other Obligor or any other Person, (b) join
Company, 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 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 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.
-6-
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 Guarantor against any and all of the obligations of
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 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 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, Guarantor
agrees that Administrative Lender or any Lender, in its discretion, without
notice or demand and without affecting either the liability of Guarantor,
Company 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. Guarantor waives any defense to the
recovery by Administrative Lender or any Lender hereunder against Company,
Guarantor or any collateral of any deficiency after a nonjudicial sale and
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, 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
Guarantor against Company or any other Person or any Collateral or any other
collateral. Guarantor agrees that 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 Term Loan Maturity Date) of
the Obligation and all other amounts payable under this Guaranty, (b) be
binding upon 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. Guarantor acknowledges and agrees that it shall have
the sole responsibility for obtaining from Company and each other Obligor
such information concerning
-7-
Company's and each Obligor's financial condition or business operations as
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, 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. 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 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 Guarantor under this Guaranty shall be,
as between Guarantor and such Lender and Administrative Lender, a
fully-matured, due, and payable obligation of 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 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
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
-8-
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
LQ CIGNA I
(To be known as LQ-INVESTMENTS I)
By: La Quinta Inns, Inc.,
its Managing General Partner
Address for Guarantor:
112 East Pecan
San Antonio, Texas 78205 By:____________________________________
__________________, ________________
(Print Name) (Print Title)
By: La Quinta Investments, Inc.,
a General Partner
By:____________________________________
__________________, ________________
(Print Name) (Print Title)
-9-
EXHIBIT P
GUARANTY
This Guaranty, dated as of July 1, 1994 (this "GUARANTY"), is made by
LQ CIGNA II, a Texas general partnership ("GUARANTOR") to be known as LQ-
INVESTMENTS II.
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, dated as of
January 25, 1994 (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 and issue, or participate in the issuance of, Letters
of Credit and Bond Letters of Credit.
3. It is a condition precedent to the obligation of Lenders to make
such Advances and issue, or participate in the issuance of, Letters of
Credit and Bond Letters of Credit that Guarantor guarantee repayment
thereof upon the terms and conditions set forth herein.
4. The Board of Directors of La Quinta Investments, Inc., a Delaware
corporation and a general partner of Guarantor, and the Board of Directors
of La Quinta Inns, Inc., a Texas corporation and the managing general
partner of Guarantor, have each determined that the execution, delivery,
and performance of this Guaranty is necessary and convenient to the
conduct, promotion, and attainment of Guarantor's business.
5. Guarantor desires to induce Lender to make such Advances and
issue, or participate in the issuance of, Letters of Credit and Bond
Letters of Credit, which may reasonably be expected to benefit, directly or
indirectly, Guarantor.
AGREEMENT.
Now, therefore, in consideration of the premises and in order to
induce Lenders to make Advances and issue, or participate in the issuance
of, Letters of Credit and Bond Letters of Credit under the Credit
Agreement, Guarantor agrees as follows:
1. GUARANTY.
(a) Guarantor 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 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 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 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 Guarantor pursuant to (i) Applicable Law or (ii) any
agreement providing for an equitable allocation among Guarantor and other
Obligors of obligations arising under guaranties by such parties.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the 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 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 Guarantor 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 Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
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(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
reduction or termination of the Commitments;
(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 VIRES, (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
or any other Obligor;
(e) any Debtor Relief Law involving Company, Guarantor or any
other Obligor;
(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 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
Guarantor (the right to such notification being herein specifically
waived by 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 Company or any other Person (including without limitation 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;
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(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 or any 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
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 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, 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 other Obligor or
otherwise, all as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law,
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 or
any other Person or any collateral 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 or
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
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Company, 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 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, Guarantor hereby irrevocably waives any claim or other rights
which it may have or hereafter acquire against Company or any other Obligor
that arise from the existence, payment, performance or enforcement of
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 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 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 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 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. 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 this PARAGRAPH 4(A) is knowingly made in contemplation
of such benefits.
(b) If Guarantor becomes the holder of any indebtedness payable by
Company or any other Obligor, Guarantor hereby subordinates all
indebtedness owing to it from Company and each other Obligor to all
indebtedness of Company 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 attempt to set-off or reduce any obligations
hereunder because of such indebtedness. If any amount shall nevertheless
be paid to Guarantor by Company 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.
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5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that all representations and warranties as they apply to Guarantor
only set forth in ARTICLE 4 of the Credit Agreement (each of which is
hereby incorporated by reference) are true and correct.
6. COVENANTS. 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. Guarantor further covenants and agrees (a)
punctually and properly to perform all of 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 any 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 Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by
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 other Obligor or any other
Person, (b) join Company, 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 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 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.
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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 Guarantor against any and all of the
obligations of 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 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
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, Guarantor
agrees that Administrative Lender or any Lender, in its discretion, without
notice or demand and without affecting either the liability of Guarantor,
Company 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. Guarantor waives any
defense to the recovery by Administrative Lender or any Lender hereunder
against Company, Guarantor or any collateral of any deficiency after a
nonjudicial sale and 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,
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 Guarantor against Company or any other
Person or any Collateral or any other collateral. Guarantor agrees that
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 Term Loan Maturity
Date) of the Obligation and all other amounts payable under this Guaranty,
(b) be binding upon 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. Guarantor acknowledges and agrees that it shall
have the sole responsibility for obtaining from Company and each other
Obligor such information concerning
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Company's and each Obligor's financial condition or business operations as
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, 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. 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 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 Guarantor under this Guaranty shall be,
as between Guarantor and such Lender and Administrative Lender, a fully-
matured, due, and payable obligation of 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 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 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
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HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
LQ CIGNA II
(To be known as LQ-INVESTMENTS II)
By: La Quinta Inns, Inc.,
its Managing General Partner
Address for Guarantor:
112 East Pecan
San Antonio, Texas 78205 By: ___________________________________
________________, ________________
(Print Name) (Print Title)
By: La Quinta Investments, Inc.,
a General Partner
By: ___________________________________
________________, ________________
(Print Name) (Print Title)
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EXHIBIT Q
GUARANTY
This Guaranty, dated as of January 17, 1995 (this "GUARANTY"), is made
by LA QUINTA INNS OF LUBBOCK, INC., a Texas corporation ("GUARANTOR").
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, dated as of January 25, 1994 (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 and issue, or participate in the issuance of, Letters of Credit and
Bond Letters of Credit.
3. It is a condition precedent to the obligation of Lenders to make
such Advances and issue, or participate in the issuance of, Letters of Credit
and Bond Letters of Credit that Guarantor guarantee repayment thereof upon
the terms and conditions set forth herein.
4. The Board of Directors of Guarantor has determined that the
execution, delivery, and performance of this Guaranty is necessary and
convenient to the conduct, promotion, and attainment of Guarantor's business.
5. Guarantor desires to induce Lender to make such Advances and issue,
or participate in the issuance of, Letters of Credit and Bond Letters of
Credit, which may reasonably be expected to benefit, directly or indirectly,
Guarantor.
AGREEMENT.
Now, therefore, in consideration of the premises and in order to induce
Lenders to make Advances and issue, or participate in the issuance of,
Letters of Credit and Bond Letters of Credit under the Credit Agreement,
Guarantor agrees as follows:
1. GUARANTY.
(a) Guarantor 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 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 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 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 Guarantor pursuant to (i)
Applicable Law or (ii) any agreement providing for an equitable allocation
among Guarantor and other Obligors of obligations arising under guaranties
by such parties.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the 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 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 Guarantor 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 Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
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(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 reduction or
termination of the Commitments;
(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 VIRES, (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
or any other Obligator;
(e) any Debtor Relief Law involving Company, Guarantor or any
other Obligor;
(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 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 Guarantor
(the right to such notification being herein specifically waived by
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
Company or any other Person (including without limitation 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;
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(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 or any 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
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 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, 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 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 other Obligor or otherwise, all
as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, 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 or any other Person or any collateral 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 or 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
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Company, 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 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, Guarantor hereby irrevocably waives any claim or other rights
which it may have or hereafter acquire against Company or any other Obligor
that arise from the existence, payment, performance or enforcement of
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 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 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 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 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. 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 this PARAGRAPH 4(a) is knowingly made in contemplation of such
benefits.
(b) If Guarantor becomes the holder of any indebtedness payable by
Company or any other Obligor, Guarantor hereby subordinates all indebtedness
owing to it from Company and each other Obligor to all indebtedness of
Company 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 attempt to
set-off or reduce any obligations hereunder because of such indebtedness. If
any amount shall nevertheless be paid to Guarantor by Company 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.
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5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that all representations and warranties as they apply to Guarantor
only set forth in ARTICLE 4 of the Credit Agreement (each of which is hereby
incorporated by reference) are true and correct.
6. COVENANTS, 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. Guarantor further covenants and agrees (a) punctually and
properly to perform all of 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
any 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 Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by
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 other Obligor or any other Person, (b) join
Company, 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 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 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.
-6-
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 Guarantor against any and all of the obligations of
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 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 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, Guarantor
agrees that Administrative Lender or any Lender, in its discretion, without
notice or demand and without affecting either the liability of Guarantor,
Company 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. Guarantor waives any defense to the
recovery by Administrative Lender or any Lender hereunder against Company,
Guarantor or any collateral of any deficiency after a nonjudicial sale and
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, 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
Guarantor against Company or any other Person or any Collateral or any other
collateral. Guarantor agrees that 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 Term Loan Maturity Date) of
the Obligation and all other amounts payable under this Guaranty, (b) be
binding upon 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. Guarantor acknowledges and agrees that it shall have
the sole responsibility for obtaining from Company and each other Obligor
such information concerning
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Company's and each Obligor's financial condition or business operations as
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, 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. 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 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 Guarantor under this Guaranty shall be,
as between Guarantor and such Lender and Administrative Lender, a fully-
matured, due, and payable obligation of 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 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
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
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HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, 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 INNS OF LUBBOCK, INC.
Address for Guarantor:
112 East Pecan
San Antonio, Texas 78205 By:
___________________________________
John F. Schmutz, Vice President
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EXHIBIT R
GUARANTY
This Guaranty, dated as of April 21, 1995 (this "GUARANTY"), is made by
LA QUINTA INNS OF PUERTO RICO, INC., a Delaware corporation ("GUARANTOR").
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, dated as of January
25, 1994 (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 and issue, or participate in the issuance of, Letters of Credit
and Bond Letters of Credit.
3. It is a condition precedent to the obligation of Lenders to
make such Advances and issue, or participate in the issuance of, Letters of
Credit and Bond Letters of Credit that Guarantor guarantee repayment thereof
upon the terms and conditions set forth herein.
4. The Board of Directors of Guarantor has determined that the
execution, delivery, and performance of this Guaranty is necessary and
convenient to the conduct, promotion, and attainment of Guarantor's business.
5. Guarantor desires to induce Lender to make such Advances and
issue, or participate in the issuance of, Letters of Credit and Bond Letters
of Credit, which may reasonably be expected to benefit, directly or
indirectly, Guarantor.
AGREEMENT.
Now, therefore, in consideration of the premises and in order to induce
Lenders to make Advances and issue, or participate in the issuance of,
Letters of Credit and Bond Letters of Credit under the Credit Agreement,
Guarantor agrees as follows:
1. GUARANTY.
(a) Guarantor 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 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 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 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 Guarantor pursuant to (i)
Applicable Law or (ii) any agreement providing for an equitable
allocation among Guarantor and other Obligors of obligations arising
under guaranties by such parties.
2. GUARANTY ABSOLUTE. Guarantor guarantees that the 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 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 Guarantor 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 Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
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(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 reduction or
termination of the Commitments;
(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 VIRES, (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 or
any other Obligor;
(e) any Debtor Relief Law involving Company, Guarantor or any other
Obligor;
(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 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 Guarantor (the right
to such notification being herein specifically waived by 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 Administrativ Lender to make any
demand upon or to bring any legal, equitable, or other action against
Company or any other Person (including without limitation 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;
-3-
(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 or any 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
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 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, 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 other Obligor or
otherwise, all as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, 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 or any other Person or any collateral 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 or 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
-4-
Company, 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 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, Guarantor hereby irrevocably waives any claim or other rights
which it may have or hereafter acquire against Company or any other Obligor
that arise from the existence, payment, performance or enforcement of
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 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 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 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 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. 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 this PARAGRAPH 4(a) is knowingly made in contemplation of such
benefits.
(b) If Guarantor becomes the holder of any indebtedness payable by
Company or any other Obligor, Guarantor hereby subordinates all indebtedness
owing to it from Company and each other Obligor to all indebtedness of
Company 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 attempt to
set-off or reduce any obligations hereunder because of such indebtedness. If
any amount shall nevertheless be paid to Guarantor by Company 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.
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5. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that all representations and warranties as they apply to Guarantor
only set forth in ARTICLE 4 of the Credit Agreement (each of which is hereby
incorporated by reference) are true and correct.
6. COVENANTS. 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. Guarantor further covenants and agrees (a) punctually and
properly to perform all of 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
any 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 Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by
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 other Obligor or any other Person, (b) join
Company, 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 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 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.
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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 Guarantor against any and all of the obligations of
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 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 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, Guarantor
agrees that Administrative Lender or any Lender, in its discretion, without
notice or demand and without affecting either the liability of Guarantor,
Company 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. Guarantor waives any defense to the
recovery by Administrative Lender or any Lender hereunder against Company,
Guarantor or any collateral of any deficiency after a nonjudicial sale and
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, 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
Guarantor against Company or any other Person or any Collateral or any other
collateral. Guarantor agrees that 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 Term Loan Maturity Date) of
the Obligation and all other amounts payable under this Guaranty, (b) be
binding upon 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. Guarantor acknowledges and agrees that it shall have
the sole responsibility for obtaining from Company and each other Obligor
such information concerning
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Company's and each Obligor's financial condition or business operations as
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, 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. 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 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 Guarantor under this Guaranty shall be,
as between Guarantor and such Lender and Administrative Lender, a fully-
matured, due, and payable obligation of 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 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
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
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HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, 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 INNS OF PUERTO RICO, INC.
Address for Guarantor:
112 East Pecan
San Antonio, Texas 78205 By:
___________________________________
John F. Schmutz, Vice President
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