EXHIBIT 10
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$200,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
(Facility A)
AMONG
LA QUINTA INNS, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
September ___, 1995
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. . . . . . . . . . . . . . . 1
Section 1.2 AMENDMENTS AND RENEWALS. . . . . . . . . . 21
Section 1.3 CONSTRUCTION . . . . . . . . . . . . . . . 21
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES . . . . . . . . . . . . . . . 21
(a) REVOLVING CREDIT ADVANCES. . . . . . . . . 21
(b) THE SWING LINE LOANS . . . . . . . . . . . 21
(c) BID RATE ADVANCES . . . . . . . . . . . . 22
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT . . . 22
Section 2.3 INTEREST . . . . . . . . . . . . . . . . . 26
(a) ON PRIME RATE ADVANCES . . . . . . . . . . 26
(b) ON LIBOR ADVANCES . . . . . . . . . . . . 26
(c) ON SWING LINE ADVANCES . . . . . . . . . . 27
(d) ON BID RATE ADVANCES . . . . . . . . . . . 27
(e) INTEREST IF NO NOTICE OF SELECTION OF
INTEREST RATE BASIS . . . . . . . . . . . 27
(f) INTEREST AFTER AN EVENT OF DEFAULT . . . . 27
Section 2.4 FEES . . . . . . . . . . . . . . . . . . . 28
(a) FACILITY FEE . . . . . . . . . . . . . . . 28
(b) CLOSING FEE . . . . . . . . . . . . . . . 29
(c) OTHER FEES. . . . . . . . . . . . . . . . 29
Section 2.5 PREPAYMENT . . . . . . . . . . . . . . . . 29
(a) VOLUNTARY PREPAYMENTS. . . . . . . . . . . 29
(b) MANDATORY PREPAYMENT.. . . . . . . . . . . 29
(c) PREPAYMENTS, GENERALLY . . . . . . . . . . 29
Section 2.6 REDUCTION OF COMMITMENT. . . . . . . . . . 30
(a) VOLUNTARY REDUCTION . . . . . . . . . . . 30
(b) MANDATORY REDUCTION . . . . . . . . . . . 30
(c) GENERAL REQUIREMENTS . . . . . . . . . . . 30
Section 2.7 NON-RECEIPT OF FUNDS BY THE
ADMINISTRATIVE LENDER. . . . . . . . . . . 30
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES . . . . . 31
(a) END OF INTEREST PERIOD . . . . . . . . . . 31
(b) COMMITMENT REDUCTION. . . . . . . . . . . 31
(c) MATURITY DATE . . . . . . . . . . . . . . 31
Section 2.9 REIMBURSEMENT. . . . . . . . . . . . . . . 31
Section 2.10 MANNER OF PAYMENT. . . . . . . . . . . . . 31
Section 2.11 LIBOR LENDING OFFICES. . . . . . . . . . . 32
Section 2.12 SHARING OF PAYMENTS. . . . . . . . . . . . 32
Section 2.13 CALCULATION OF RATES . . . . . . . . . . . 33
Section 2.14 BOOKING LOANS. . . . . . . . . . . . . . . 33
Section 2.15 TAXES. . . . . . . . . . . . . . . . . . . 33
Section 2.16 LETTERS OF CREDIT. . . . . . . . . . . . . 36
(a) THE LETTER OF CREDIT FACILITY. . . . . . . 36
(b) REQUEST FOR ISSUANCE . . . . . . . . . . . 37
(c) DRAWING AND REIMBURSEMENT . . . . . . . . 37
(d) INCREASED COSTS . . . . . . . . . . . . . 38
(e) OBLIGATIONS ABSOLUTE . . . . . . . . . . . 39
(f) COMPENSATION . . . . . . . . . . . . . . . 40
(g) L/C CASH COLLATERAL ACCOUNT. . . . . . . . 42
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO THE INITIAL
REVOLVING CREDIT ADVANCES AND THE
INITIAL LETTERS OF CREDIT . . . . . . . . 44
Section 3.2 CONDITIONS PRECEDENT TO ALL REVOLVING
CREDIT ADVANCES AND LETTERS OF CREDIT. . . 45
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES . . . . . . 46
(a) ORGANIZATION; POWER; QUALIFICATION . . . . 47
(b) AUTHORIZATION. . . . . . . . . . . . . . . 47
(c) COMPLIANCE WITH OTHER LOAN PAPERS AND
CONTEMPLATED TRANSACTIONS. . . . . . . . . 47
(d) LICENSES, ETC. . . . . . . . . . . . . . . 47
(e) COMPLIANCE WITH LAW. . . . . . . . . . . . 48
(f) TITLE TO PROPERTIES. . . . . . . . . . . . 48
(g) LITIGATION . . . . . . . . . . . . . . . . 48
(h) TAXES. . . . . . . . . . . . . . . . . . . 48
(i) FINANCIAL STATEMENTS; MATERIAL LIABILITIES 48
(j) NO ADVERSE CHANGE. . . . . . . . . . . . . 49
(k) ERISA. . . . . . . . . . . . . . . . . . . 49
(l) COMPLIANCE WITH REGULATIONS G, T, U AND X. 50
(m) GOVERNMENTAL REGULATION. . . . . . . . . . 50
(n) ABSENCE OF DEFAULT . . . . . . . . . . . . 50
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(o) INVESTMENT COMPANY ACT . . . . . . . . . . 51
(p) ENVIRONMENTAL MATTERS. . . . . . . . . . . 51
(q) CERTAIN FEES . . . . . . . . . . . . . . . 52
(r) NECESSARY AUTHORIZATIONS . . . . . . . . . 52
(s) PATENTS, ETC.. . . . . . . . . . . . . . . 52
(t) DISCLOSURE . . . . . . . . . . . . . . . . 52
(u) SOLVENCY . . . . . . . . . . . . . . . . . 53
Section 4.2 SURVIVAL OF REPRESENTATIONS AND
WARRANTIES, ETC. . . . . . . . . . . . . . 53
ARTICLE 5
BUSINESS COVENANTS
Section 5.1 MAINTENANCE OF PROPERTY, INSURANCE,
ACCOUNTING PRACTICES, CORPORATE EXISTENCE. 53
Section 5.2 INSPECTION OF PROPERTIES AND BOOKS . . . . 54
Section 5.3 MERGER AND SALE OF ASSETS. . . . . . . . . 54
Section 5.4 NET WORTH. . . . . . . . . . . . . . . . . 55
Section 5.5 CONTINGENT LIABILITIES . . . . . . . . . . 55
Section 5.6 INCURRENCE AND RETENTION OF DEBT . . . . . 55
Section 5.7 INVESTMENTS. . . . . . . . . . . . . . . . 56
Section 5.8 NOTICE OF LITIGATION . . . . . . . . . . . 56
Section 5.9 TOTAL DEBT RATIO . . . . . . . . . . . . . 56
Section 5.10 CASH FLOW RATIO. . . . . . . . . . . . . . 56
Section 5.11 SENIOR DEBT RATIO. . . . . . . . . . . . . 56
Section 5.12 LIENS. . . . . . . . . . . . . . . . . . . 57
Section 5.13 ACCOUNTING CHANGES . . . . . . . . . . . . 57
Section 5.14 AMENDMENT AND MODIFICATION OF
SUBORDINATED DEBT DOCUMENTS. . . . . . . . 57
Section 5.15 LEASE-BACKS. . . . . . . . . . . . . . . . 57
Section 5.16 ENVIRONMENTAL MATTERS. . . . . . . . . . . 57
Section 5.17 ERISA COMPLIANCE . . . . . . . . . . . . . 58
Section 5.18 BUSINESS . . . . . . . . . . . . . . . . . 59
Section 5.19 DEBT . . . . . . . . . . . . . . . . . . . 59
Section 5.20 TRANSACTIONS WITH AFFILIATES . . . . . . . 59
Section 5.21 USE OF PROCEEDS. . . . . . . . . . . . . . 59
Section 5.22 INDEMNITY. . . . . . . . . . . . . . . . . 59
ARTICLE 6
INFORMATION
Section 6.1 FINANCIAL STATEMENTS AND OTHER REPORTS
BY THE BORROWER. . . . . . . . . . . . . . 61
Section 6.2 OFFICER'S CERTIFICATE. . . . . . . . . . . 63
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ARTICLE 7
DEFAULT
Section 7.1 EVENTS OF DEFAULT. . . . . . . . . . . . . 63
Section 7.2 REMEDIES . . . . . . . . . . . . . . . . . 65
ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.1 LIBOR BASIS DETERMINATION INADEQUATE . . . 66
Section 8.2 ILLEGALITY . . . . . . . . . . . . . . . . 66
Section 8.3 INCREASED COSTS. . . . . . . . . . . . . . 67
Section 8.4 EFFECT ON PRIME RATE ADVANCES. . . . . . . 68
Section 8.5 CAPITAL ADEQUACY . . . . . . . . . . . . . 69
ARTICLE 9
AGREEMENT AMONG LENDERS
Section 9.1 AGREEMENT AMONG LENDERS. . . . . . . . . . 69
(a) ADMINISTRATIVE LENDER. . . . . . . . . . . 69
(b) REPLACEMENT OF ADMINISTRATIVE LENDER . . . 70
(c) EXPENSES . . . . . . . . . . . . . . . . . 70
(d) DELEGATION OF DUTIES . . . . . . . . . . . 70
(e) RELIANCE BY ADMINISTRATIVE LENDER. . . . . 70
(f) LIMITATION OF ADMINISTRATIVE LENDER'S
LIABILITY. . . . . . . . . . . . . . . . . 71
(g) LIABILITY AMONG LENDERS. . . . . . . . . . 71
(h) RIGHTS AS LENDER . . . . . . . . . . . . . 71
Section 9.2 LENDER CREDIT DECISION . . . . . . . . . . 71
Section 9.3 BENEFITS OF ARTICLE. . . . . . . . . . . . 72
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES. . . . . . . . . . . . . . . . . . 72
Section 10.2 EXPENSES . . . . . . . . . . . . . . . . . 73
Section 10.3 WAIVERS. . . . . . . . . . . . . . . . . . 73
Section 10.4 DETERMINATION BY THE LENDERS CONCLUSIVE
AND BINDING . . . . . . . . . . . . . . . 74
Section 10.5 SET-OFF. . . . . . . . . . . . . . . . . . 74
Section 10.6 ASSIGNMENT . . . . . . . . . . . . . . . . 74
Section 10.7 COUNTERPARTS . . . . . . . . . . . . . . . 76
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Section 10.8 SEVERABILITY . . . . . . . . . . . . . . . 76
Section 10.9 INTEREST AND CHARGES . . . . . . . . . . . 77
Section 10.10 CONFIDENTIALITY. . . . . . . . . . . . . . 77
Section 10.11 HEADINGS . . . . . . . . . . . . . . . . . 78
Section 10.12 AMENDMENT AND WAIVER . . . . . . . . . . . 78
Section 10.13 EXCEPTION TO COVENANTS . . . . . . . . . . 78
Section 10.14 NO LIABILITY OF ISSUING BANK . . . . . . . 78
Section 10.15 GOVERNING LAW. . . . . . . . . . . . . . . 79
Section 10.16 WAIVER OF JURY TRIAL . . . . . . . . . . . 79
Section 10.17 ENTIRE AGREEMENT . . . . . . . . . . . . . 79
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SCHEDULES AND EXHIBITS
Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Litigation
Schedule 3: Subsidiaries and Unincorporated Ventures
Schedule 4: Existing Investments
Schedule 5: Investment Policy
Schedule 6: Unincorporated Ventures to be Purchased
Schedule 7: Benefit Agreements With Former Employees
Schedule 8: Insolvent Unincorporated Ventures
Schedule 9: Existing Letters of Credit
Schedule 10: Significant Investments
Schedule 11: Guaranteed Contingent Obligations
Schedule 12: Existing Liens
Exhibit A: Revolving Credit Note
Exhibit B: Bid Rate Note
Exhibit C: Swing Line Note
Exhibit D: Subsidiary Guaranty
Exhibit E: Assignment Agreement
Exhibit F: Confidentiality Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
(Facility A)
THIS AMENDED AND RESTATED CREDIT AGREEMENT (Facility A) is
dated as of September ___, 1995, among LA QUINTA INNS, INC., a
Texas corporation ("Borrower"), the Lenders from time to time
party hereto, and NATIONSBANK OF TEXAS, N.A., a national banking
association, as administrative agent for the Lenders.
BACKGROUND
The Borrower, Lenders and the Administrative Lender are
parties to that Credit Agreement dated as of January 25, 1994
(said Credit Agreement, as amended, the "Existing Credit
Agreement"). The Borrower has requested the Lenders amend and
restate the Existing Credit Agreement by making a credit facility
available to the Borrower in the maximum principal amount of
$200,000,000. The Lenders have agreed to do so, subject to the
terms and conditions set forth below.
In consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration
hereby acknowledged, the parties hereto agree that the Existing
Credit Agreement is amended and restated in its entirety as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. For purposes of this Agreement:
"ADDITIONAL COSTS" has the meaning set forth in Section 9.5
hereof.
"ADJUSTMENT DATE" means, for purposes of the Applicable
Margin, the facility 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 6.1(a) or
6.1(b) hereof 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.
"ADMINISTRATIVE LENDER" means NationsBank of Texas, N.A., a
national banking association, as administrative agent for
Lenders, or such successor administrative agent appointed
pursuant to Section 10.1(b) hereof.
"ADVANCE" means a Revolving Credit Advance, a Swing Line
Advance or a Bid Rate Advance and "ADVANCES" means Revolving
Credit Advances, Swing Line Advances and Bid Rate Advances.
"AFFILIATE" means any Person that directly or indirectly
through one or more Subsidiaries Controls, or is Controlled By or
Under Common Control with, the Borrower.
"AGREEMENT" means this Credit Agreement, as amended,
modified, supplemented and restated from time to time.
"AGREEMENT DATE" means the date of this Agreement.
"APPLICABLE ENVIRONMENTAL LAWS" means applicable laws
pertaining to health or the environment, including without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (as amended
from time to time, "CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended by the Used Oil Recycling Act of
1980, the Solid Waste Disposal Act amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended from
time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"APPLICABLE LAW" means (a) in respect of any Person, all
provisions of constitutions, statutes, rules, regulations and
orders of governmental bodies or regulatory agencies applicable
to such Person and its properties, including, without limiting
the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in
question is a party, and (b) in respect of contracts relating to
interest or finance charges that are made or performed in the
State of Texas, "APPLICABLE LAW" shall mean the laws of the
United States of America, including without limitation 12 USC
SECTIONS 85 and 86, as amended from time to time, and any other statute
of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions
of credit, and the laws of the State of Texas, including, without
limitation, Article 5069-1.04, Title 79, Revised Civil Statutes
of Texas, 1925, as amended ("Art. 1.04"), and any other statute
of the State of Texas now or at any time hereafter prescribing
maximum rates of interest on loans and extensions of credit;
provided that the parties hereto agree that the provisions of
Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to Advances, this Agreement, the Notes
or any other Loan Papers.
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"APPLICABLE MARGIN" means the following per annum
percentages, applicable in the following situations:
Prime LIBOR
APPLICABILITY Rate Basis
------------- Basis -----
-----
CATEGORY 1 - The Leverage Ratio is not less 0.00 0.70
than 3.50 to 1 or the Index Debt Rating is
any two of the following: BB by S&P, BB by
ARA or Ba2 by Moody's
CATEGORY 2 - The Leverage Ratio is less 0.00 0.55
than 3.50 to 1 but not less than 3.00 to 1
or the Index Debt Rating is any two of the
following: BB+ by S&P, BB+ by ARA or Ba1
by Moody's
CATEGORY 3 - The Leverage Ratio is less 0.00 0.45
than 3.00 to 1 but not less than 2.50 to 1
or the Index Debt Rating is any two of the
following BBB- by S&P, BBB- by ARA or Baa3
by Moody's
CATEGORY 4 - The Leverage Ratio is less 0.00 0.35
than 2.50 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 0.30
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 Revolving
Credit Advances outstanding hereunder shall be adjusted on each
Adjustment Date if determined based on the (i) Leverage Ratio,
according to the performance of the Borrower for the most recent
fiscal quarter or (ii) the Index Debt Rating, according to the
most recent determination of the Index Debt Rating. For purposes
of the foregoing, (a) if the Index Debt Rating and the Leverage
Ratio are in different categories, the Applicable Margin shall be
determined on whichever of the Index Debt Rating or the Leverage
Ratio falls within the superior (or numerically higher) category,
(b) if the Applicable Margin is determined based on the Leverage
Ratio and the financial statements of the Borrower setting forth
the Leverage Ratio are not received by the Administrative Lender
by the date required pursuant to Section 6.1(a) or 6.1(b), the
Applicable Margin shall be determined as if the Leverage Ratio is
not less than 3.50 to 1, (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 Maturity
Date, the Borrower and the Lenders shall negotiate in
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good faith to amend the references to specific ratings in this
definition to reflect such changed rating system.
"ARA" means Duff & Phelps Credit Ratings Company or Fitch
Investor Services or any other nationally recognized rating
agency approved in writing by the Determining Lenders which shall
have a rating system identical to S&P.
"ART. 1.04" has the meaning specified in the definition of
"Applicable Law."
"ASSIGNEES" means any assignee of a Lender pursuant to an
Assignment Agreement and has the meaning specified in
Section 10.6 hereof.
"ASSIGNMENT AGREEMENT" has the meaning specified in
Section 10.6 hereof.
"AUTHORIZED OFFICER" means any of the following officers of
the Borrower: President, Senior Vice President-Accounting &
Administration, Senior Vice President-Finance, Vice President &
General Counsel or Vice President-Treasurer.
"AUTHORIZED SIGNATORY" means such senior personnel of the
Borrower as may be duly authorized and designated in writing by
the Borrower to execute documents, agreements and instruments on
behalf of the Borrower, and to request Advances or Letters of
Credit hereunder.
"BID RATE ADVANCE" means an Advance the interest rate on
which is determined by agreement between the Borrower and the
Lender making such Advance pursuant to Section 2.1(c) hereof.
"BID RATE NOTE" means each promissory note of the Borrower
evidencing Bid Rate Advances, substantially in the form of
EXHIBIT B hereto, together with any extension, renewal or
amendment thereof or substitution therefor.
"BOND LETTERS OF CREDIT" has the meaning specified in the
Existing Credit Agreement.
"BORROWER" means La Quinta Inns, Inc., a Texas corporation.
"BUSINESS DAY" means a day on which banks are open for the
transaction of business in Dallas, Texas and New York, New York,
and, with respect to any LIBOR Advance, in London, England.
"CAPITAL LEASES" mean all capital leases and subleases, as
defined in the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 13, dated November 1976, as
amended.
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"CAPITAL STOCK" means, with respect to any Person, any
capital stock, partnership or joint venture interests of such
Person and shares, interests, participations or other ownership
interests (however designated) of any Person and any rights
(other than debt securities convertible into corporate stock),
warrants or options to purchase any of the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means that portion of any
obligation of the Borrower or any Subsidiary as lessee under a
lease which at the time would be required to be capitalized on a
balance sheet prepared in accordance with GAAP.
"CHANGE OF CONTROL" means (a) any "person" or "group" (as
such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable), is or becomes the
"beneficial owner" (as that term is used in Rules 13d-3 and 13d-5
under the Exchange Act, whether or not applicable, except that a
person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage
of time, directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of Capital Stock
then outstanding of the Borrower normally entitled to vote in
elections of directors, PROVIDED, that for the purposes of this
clause (a), neither Thomas M. Taylor & Co., Trust for the benefit
of Mr. Taylor's son, Sid R. Bass, Inc., Lee M. Bass, Inc., The
Bass Management Trust, Annie R. Bass Trust for Lee M. Bass,
Ann R. Bass Trust for Sid R. Bass, Peter Sterling Trusts nor
Peter Sterling, each of which is a principal shareholder of the
Borrower as of the Agreement Date, nor any person who on the
Agreement Date is, or at any time thereafter becomes, a member of
any group which includes any of such entities and persons, shall
be deemed to be a "person" or "group" for purposes of this
definition, or (b) during any period of 24 consecutive months
after May 21, 1992, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board or
whose nomination for election by the shareholders of the Borrower
was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such
period or whose election or nomination for election was
previously so approved), cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in
office.
"CODE" means the Internal Revenue Code of 1986, as amended,
together with all regulations thereunder.
"COMBINED" means, with respect to financial statements, the
combined accounts of the Borrower, its Subsidiaries and
Unincorporated Ventures which are included in the Borrower's
Annual Report to Shareholders and in the Borrower's Form 10-K
filed with the Securities and Exchange Commission (the "Combined
Financial Statements").
"COMMITMENT" means $200,000,000, as reduced pursuant to
Section 2.6 hereof.
"CONFIDENTIALITY AGREEMENT" has the meaning specified in
Section 10.10 hereof.
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"CONSOLIDATED NET INCOME" means, for any period, determined
in accordance with GAAP on a Combined basis, consolidated net
income for such period.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means
possession, directly or indirectly, of power to direct or cause
the direction of management or policies (whether through
ownership of voting securities, by contract or otherwise);
provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 10% or more (in number
of votes) of the securities having ordinary voting power for the
election of directors of a corporation shall be conclusively
presumed to control such corporation.
"CONTROLLED GROUP" shall mean as of the applicable date, as
to any Person, all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) which
are under common control with such Person and which, together
with such Person, are treated as a single employer under Section
414(b), (c), (m) or (o) of the Code; provided, however, that the
Subsidiaries and Unincorporated Ventures of the Borrower shall be
deemed to be members of the Borrower's Controlled Group.
"CURRENT MATURITIES" means, with respect to any Person, the
principal portion payable by such Person on Long Term Debt during
the twelve-month period immediately succeeding the date of
determination.
"DEBT" of any Person means, at any date, without
duplication, all obligations, contingent or otherwise, (a) of
such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only
to a portion thereof), (b) of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) representing
the balance deferred and unpaid of the purchase price of any
property or services (other than accounts payable or other
obligations arising in the ordinary course of business), if and
to the extent any of the foregoing described in clauses (a), (b)
and (c) would appear as a liability on the balance sheet of such
Person, (d) of such Person in respect of bankers' acceptances,
letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), (e) of such Person under
Capitalized Lease Obligations, (f) all liabilities secured by a
Lien on any asset of such Person to the extent of the value of
such asset, whether or not such liability is an obligation of
such Person, (g) all liability of others guaranteed by such
Person (but only to the extent of such guarantees), (h) to the
extent not otherwise included, obligations of such Person under
currency risk-hedging agreements and Interest Rate Protection
Agreements, (i) the liquidation preference and any mandatory
redemption payment obligations (without duplication) of such
Person's Subsidiaries in respect of preferred stock issued by any
such Subsidiary, (j) in the case of such Person, the liquidation
preference and any mandatory redemption payment obligations
(without duplication) in respect of Disqualified Capital Stock,
and (k) in the case of such Person, unfunded vested benefits
under any Plan.
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"DEBTOR RELIEF LAWS" means any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization or similar debtor relief Laws
affecting the rights of creditors generally from time to time in
effect.
"DEFAULT" means an Event of Default and/or any of the events
specified in Section 7.1, regardless of whether there shall have
occurred any passage of time or giving of notice that would be
necessary in order to constitute such event an Event of Default.
"DEFAULT RATE" means a simple per annum interest rate equal
to the lesser of (a) the Highest Lawful Rate, or (b) the sum of
the Prime Rate plus three percent.
"DETERMINING LENDERS" means, on any date of determination,
any combination of the Lenders having at least 51% of the
aggregate amount of the Revolving Credit Advances (which for
purpose of the calculation shall include for each Lender an
amount equal to the product of such Lender's Specified Percentage
multiplied by the aggregate principal amount of Swing Line Loans
outstanding) and advances under the Facility B Credit Agreement
then outstanding; provided, however, that if there are no
Revolving Credit Advances outstanding hereunder and no advances
outstanding under the Facility B Credit Agreement, "DETERMINING
LENDERS" shall mean any combination of Lenders whose Specified
Percentages hereunder and under the Facility B Credit Agreement
aggregate at least 51%.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any
Person any series or class of Capital Stock of such Person which
is or may be required to be redeemed, in whole or in part, or may
be put to such Person or any of its Subsidiaries, in whole or in
part, at the option of the Holder thereof, on or prior to the
final maturity of the Senior Subordinated Notes, or is or may be
convertible or exchangeable into or exercisable for such Capital
Stock on or prior to the final maturity of the Notes; PROVIDED,
that Capital Stock will not be deemed to be Disqualified Capital
Stock if it may only be so redeemed or put solely in
consideration of Qualified Capital Stock.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower
organized under the laws of any state within the United States.
"EBITDA" means, for any period, determined in accordance
with GAAP on a Combined basis, the sum of (a) Operating Income,
plus (b) nonrecurring, non-cash charges which decrease Operating
Income, plus (c) depreciation, amortization and non-cash fixed
asset retirements, minus (d) nonrecurring credits which are
included in Operating Income.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulation
promulgated thereunder.
"ERISA EVENT" means, with respect to the Borrower and its
Subsidiaries, (a) a Reportable Event (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC
under regulations issued under Section 4043 of ERISA), (b) the
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withdrawal of any such Person or any member of its Controlled
Group from a Plan subject to Title IV of ERISA during a plan year
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the filing of a notice of intent to
terminate under Section 4041(c) of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, (e) the failure to
make required contributions which could result in the imposition
of a lien under Section 412 of the Code or Section 302 of ERISA,
or (f) any other event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan or the imposition of any liability under
Title IV of ERISA other than PBGC premiums due but not delinquent
under Section 4007 of ERISA.
"EVENT OF DEFAULT" means any of the events specified in
Section 7.1, provided that any requirement for notice or lapse of
time has been satisfied.
"EXISTING CREDIT AGREEMENT" means that certain Amended and
Restated Credit Agreement, dated as of January 25, 1994, among
the Borrower, the lenders party thereto, and NationsBank of
Texas, N.A., as Administrative Lender, as amended, modified,
supplemented or restated from time to time.
"EXISTING INVESTMENTS" means those Investments described on
SCHEDULE 4 hereto.
"EXISTING LETTERS OF CREDIT" means those Letters of Credit
outstanding on the Agreement Date, as described on SCHEDULE 9
hereto.
"FACILITY B CREDIT AGREEMENT" means that certain Amended and
Restated Credit Agreement (Facility B), dated as of the Agreement
Date, among the Borrower, the lenders party thereto, and
NationsBank of Texas, N.A., as administrative lender, as amended,
restated, supplemented or otherwise modified from time to time.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upwards if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate
quoted to the Administrative Lender on such day on such
transactions as determined by Administrative Lender.
"FEE LETTER" has the meaning specified in Section 2.4(c)
hereof.
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"FINANCIAL LETTER OF CREDIT" means any Letter of Credit
issued under the Letter of Credit Facility which is a "financial
guarantee - type standby letter of credit" as defined in
Appendix A to 12 CFR Part 3 issued by the Office of the
Comptroller of the Currency.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles, set
forth in the Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants, or their
successors which are applicable in the circumstances as of the
date in question (except as stated in the last sentence of this
definition). The requisite that such principles be applied on a
consistent basis shall mean that the accounting principles
observed in a current period are comparable in all material
respects to those applied in a preceding period, except as
otherwise required by the adoption of Statements by the Financial
Accounting Standards Board. Notwithstanding the foregoing, each
determination and computation with respect to financial covenants
and ratios in this Agreement shall be made in accordance with
GAAP as in effect on the Agreement Date.
"GUARANTY" OR "GUARANTEED", as applied to an obligation of
another Person, means and includes (a) a guaranty, direct or
indirect, in any manner, of any part or all of such obligation,
and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including,
without limiting the foregoing, any reimbursement obligations
with respect to amounts which may be drawn by beneficiaries of
outstanding letters of credit.
"GUARANTY AGREEMENTS" means the Subsidiary Guaranty and any
other Guaranty executed by a Guarantor.
"GUARANTOR" means each Significant Subsidiary.
"HIGHEST LAWFUL RATE" means at the particular time in
question the maximum rate of interest which, under Applicable
Law, the Lenders are then permitted to charge on the Obligations.
If the maximum rate of interest which, under Applicable Law, the
Lenders are permitted to charge on the Obligations shall change
after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from
time to time as of the effective time of each change in the
Highest Lawful Rate without notice to the Borrower. For purposes
of determining the Highest Lawful Rate under the Applicable Law
of the State of Texas, the applicable rate ceiling shall be
(a) the indicated rate ceiling described in and computed in
accordance with the provisions of Section (a)(1) of Art. 1.04, or
(b) if the parties subsequently contract as allowed by Applicable
Law, the quarterly ceiling or the annualized ceiling computed
pursuant to Section (d) of Art. 1.04; provided, however, that at
any time the indicated rate ceiling, the quarterly ceiling or the
annualized ceiling shall be less than 18% per annum or more than
24% per annum, the
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provisions of Sections (b)(1) and (2) of said Art. 1.04 shall
control for purposes of such determination, as applicable.
"INCREASED ADVANCE COSTS" has the meaning specified in
Section 8.3 hereof.
"INCREASED ADVANCE COSTS RETROACTIVE EFFECTIVE DATE" has the
meaning specified in Section 8.3 hereof.
"INCREASED ADVANCE COSTS SET DATE" has the meaning specified
in Section 8.3 hereof.
"INCREASED LETTER OF CREDIT COSTS" has the meaning specified
in Section 2.16(d) hereof.
"INCREASED LETTER OF CREDIT COSTS RETROACTIVE EFFECTIVE
DATE" has the meaning specified in Section 2.16(d) hereof.
"INCREASED LETTER OF CREDIT COSTS SET DATE" has the meaning
specified in Section 2.16(d) hereof.
"INDEMNIFIED MATTERS" has the meaning specified in
Section 5.23 hereof.
"INDEMNITEES" has the meaning specified in Section 5.23
hereof.
"INDEX DEBT RATING" means the rating applicable to the
Borrower's senior, unsecured, non-credit-enhanced long term
indebtedness for borrowed money ("Index Debt") or the implied
rating established by Moody's, S&P or ARA as if the Borrower had
outstanding Index Debt.
"INSOLVENT UNINCORPORATED VENTURES" means those
Unincorporated Ventures specified on SCHEDULE 8 hereto.
"INTEREST EXPENSE" of any Person means, for any period, the
aggregate interest expense in respect of Debt (including
amortization of original issue discount and non-cash interest
payments or accruals, and dividends on Disqualified Capital
Stock, but excluding amortization of Debt issuance costs) of such
Person and all commissions, discounts, other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing and costs associated with currency and Interest Rate
Protection Agreements, all in accordance with GAAP; PROVIDED,
that interest expense attributable to that portion of the Debt of
another Person that is a direct or indirect, contingent or
primary, recourse obligation of such Person subsequent to the
Agreement Date shall be added thereto.
"INTEREST PERIOD" means (a) for any Prime Rate Advance, the
period beginning on the day the Advance was made and ending on
the Maturity Date, and (b) for any LIBOR
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Advance, the period beginning on the day such Advance is made and ending
one, two, three, six months or twelve months thereafter (as the Borrower
shall select).
"INTEREST RATE PROTECTION AGREEMENT" means an interest rate
swap, cap, collar or similar interest rate protection agreement
between the Borrower or any Subsidiary and any Lender.
"INVESTMENT" means, in one or a series of related
transactions, any direct or indirect acquisition of all or
substantially all assets of any Person, or any direct or indirect
purchase or other acquisition of, or beneficial interest in,
capital stock or other securities of any other Person, or any
direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or
capital contribution or transfer of property, assets or value to,
or investment, in any other Person, including without limitation
the incurrence or sufferance of Debt or the purchase of accounts
receivable of any other Person that are not current assets or do
not arise in the ordinary course of business.
"INVESTMENT POLICY" means that certain Amended and Restated
La Quinta Inns, Inc. Statement of Investment Policy as of October
1989 in effect on the Agreement Date as specified on SCHEDULE 5
hereto.
"ISSUING BANK" means NationsBank of Texas, N.A. in its
capacity as issuer of the Letters of Credit.
"LENDER" means each financial institution shown on the
signature pages hereof so long as such financial institution
maintains a Commitment or is owed any part of the Obligations
(including the Administrative Lender in its individual capacity),
and each Assignee that hereafter becomes party hereto pursuant to
Section 10.6 hereof.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in
Section 2.16(g) hereof.
"L/C RELATED DOCUMENTS" has the meaning specified in
Section 2.16(e) hereof.
"LETTERS OF CREDIT" means letters of credit under the Letter
of Credit Facility and letters of credit issued under the
Existing Credit Agreement and outstanding on the Agreement Date.
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.16(b) hereof.
"LETTER OF CREDIT FACILITY" means the amount of Letters of
Credit the Issuing Bank may issue pursuant to Section 2.16(a)
hereof.
"LEVERAGE RATIO" means, for any date of determination, the
ratio of (i) Total Debt as of the fiscal quarter immediately
preceding the date of determination to (ii) EBITDA,
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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 such four fiscal quarters.
"LIBOR ADVANCE" means a Revolving Credit Advance which the
Borrower requests to be made as a LIBOR Advance or which is
reborrowed as a LIBOR Advance, in accordance with the provisions of
Section 2.2 hereof.
"LIBOR BASIS" means, with respect to each LIBOR Advance for
each Interest Period, a rate per annum equal to the lesser of (a)
the Highest Lawful Rate or (b) the sum of the LIBOR Rate plus the
Applicable Margin.
"LIBOR LENDING OFFICE" means, with respect to a Lender, the
office designated as its LIBOR Lending Office on SCHEDULE 1
attached hereto, and such other office of the Lender or any of its
affiliates hereafter designated by notice to the Borrower and the
Administrative Lender.
"LIBOR RATE" means, for any Interest Period, the interest rate
per annum (rounded upward to the nearest one-sixteenth (1/16th) of
one percent) at which deposits in United States Dollars are offered
to the Administrative Lender by leading banks reasonably selected
by the Administrative Lender in the London interbank market at
approximately 11:00 a.m. (London time), two Business Days before
the first day of such Interest Period, in an amount approximately
equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance
sought by the Borrower.
"LIEN" means, with respect to any property, any mortgage,
lien, pledge, collateral assignment, hypothecation, charge,
security interest, title retention agreement, levy, execution,
seizure, attachment, garnishment or other encumbrance of any kind
in respect of such property, whether or not choate, vested or
perfected.
"LOAN PAPERS" means this Agreement, the Notes, the Guaranty
Agreements, the Fee Letter, and any other document or agreement
executed or delivered from time to time by the Borrower, any
Subsidiary or any other Person in connection herewith or as
security for all or any part of the Obligations.
"LOAN PARTY" means the Borrower and each Guarantor.
"LONG TERM DEBT" means any obligation which is due one year
or more from the date of creation thereof which under GAAP is
shown as a liability, plus (without duplication) amounts equal to
the aggregate net rentals (after making allowances for any
interest, taxes or other expenses included therein) payable more
than one year from the date of creation thereof under Capital
Leases.
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"MAINTENANCE CAPITAL EXPENDITURES" means, for any date of
determination, an amount equal to the product of (a) 5%
multiplied by (b) room revenues (as disclosed in the Borrower's
Form 10-K and 10-Q) of the Borrower, its Subsidiaries and
Unincorporated Ventures, for the four consecutive fiscal quarters
preceding the date of determination.
"MASTER COVENANT AGREEMENT" means the Fifth Amended and
Restated Master Covenant Agreement dated as of the Agreement
Date, by and between the Borrower and NationsBank of Texas, N.A.,
as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"MATERIAL ADVERSE CHANGE OR EFFECT" means any act or
circumstance or event which (a) is material and adverse to the
combined or consolidated financial condition of the Borrower, its
Subsidiaries and Unincorporated Ventures as represented in the
Combined Financial Statements most recently delivered to the
Lenders at the time of any determination thereof or be material
and adverse to the combined or consolidated business operations
or properties of the Borrower, its Subsidiaries and
Unincorporated Ventures or (b) impairs the ability of the
Borrower, any Subsidiary or any other Person to perform in any
material respect their respective obligations under the Loan Papers.
"MATERIAL AMOUNT" means, as of the determination thereof, an
amount equal to the greater of (a) $1,000,000 or (b) the lesser
of (i) $4,000,000 or (ii) 1% of the consolidated revenues of the
Borrower and its Subsidiaries computed on a Combined basis for
the fiscal year preceding the date of determination.
"MATURITY DATE" means August 31, 2000, or the earlier date
of termination in whole of the Commitment pursuant to Section 2.6
or 7.2 hereof.
"MAXIMUM AMOUNT" means the maximum amount of interest which,
under Applicable Law, the Lenders are permitted to charge on the
Obligations.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which such Person or any member of its Controlled
Group is making, or is obligated to make contributions or has
made, or been obligated to make, contributions.
"NECESSARY AUTHORIZATION" means any right, franchise,
license, permit, consent, approval or authorization from, or any
filing or registration with, any governmental or other regulatory
authority necessary or appropriate to enable the Borrower or any
Subsidiary or Unincorporated Venture to maintain and operate its
business and properties.
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"NET CASH PROCEEDS" means the aggregate amount of cash
received by the Borrower in respect of the sale of Capital Stock
of the Borrower, less the sum of all fees, commissions and other
expenses incurred in connection with such sale.
"NET INCOME" means, with respect to any Person for any
period, the net income (loss) of such Person for such period, as
determined in accordance with GAAP.
"NET INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of (i) Interest Expense of such Persons for
such period minus (ii) interest income of such Person for such
period.
"NET WORTH" means an amount equal to the sum of the Capital
Stock and additional paid-in-capital plus retained earnings (or
minus accumulated deficit) of the Borrower and its Subsidiaries,
less (i) treasury stock and (ii) amounts attributable to the
extent included, (1) to any write-up in book value of assets
resulting from a revaluation thereof subsequent to June 30, 1995,
and (2) to Disqualified Capital Stock, all in accordance with
GAAP.
"NON-FINANCIAL LETTER OF CREDIT" means any Letter of Credit
issued under the Letter of Credit Facility which is a
"performance-based standby letter of credit" as defined in
Appendix A to 12 CFR Part 3 issued by the Office of the
Comptroller of the Currency.
"NOTE" means any Revolving Credit Note, Swing Line Note or
Bid Rate Note and "Notes" means the Revolving Credit Notes, the
Swing Line Notes and the Bid Rate Notes.
"NOTICE OF ISSUANCE" means the meaning specified in
Section 2.16(b) hereof.
"OBLIGATIONS" means (a) all obligations of any nature
(whether matured or unmatured, fixed or contingent, including the
Reimbursement Obligations) of the Borrower, any Subsidiary or any
other Person to the Lenders and the Issuing Bank under the Loan
Papers as they may be amended from time to time, and (b) all
obligations of the Borrower, any Subsidiary or any other Person
for losses, damages, expenses or any other liabilities of any
kind that any Lender may suffer by reason of a breach by the
Borrower, any Subsidiary or any other Person of any obligation,
covenant or undertaking with respect to any Loan Paper.
"OBLIGOR" means Borrower or each other Person liable for
performance of any of the Obligations or the property of which
secures any of the Obligations.
"OPERATING INCOME" means, with respect to any Person for any
period, the operating income (loss) of such Person, as determined
in accordance with GAAP.
"OPERATING LEASE" means any operating lease, as defined in
the Financial Accounting Standard Board Statement of Financial
Accounting Standards No. 13, dated November, 1976 or otherwise in
accordance with GAAP.
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"OTHER TAXES" has the meaning specified in Section 2.15
hereof.
"PARENT COMPANY" means, with respect to financial statements
and the calculations of the Leverage Ratio and the definitions
related thereto, the uncombined, consolidated financial
statements of the Borrower and its Subsidiaries, including equity
method investments, as defined by GAAP, in Unincorporated
Ventures and designated "La Quinta Inns, Inc. (Parent Company and
Wholly-Owned Subsidiaries)" on the Borrower's audit report.
"PARTICIPANT" has the meaning specified in Section 10.6(c)
hereof.
"PARTICIPATION" has the meaning specified in Section 10.6(c)
hereof.
"PARTNERS' CAPITAL" means the equity in the net assets of
Unincorporated Ventures of all the partners or venturers (other
than the Borrower or a Subsidiary) of such Unincorporated
Ventures, or minority interest holders, as determined in
accordance with GAAP.
"PAYMENT DATE" means the last day of the Interest Period for
any Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED INVESTMENT" means Investments in (i) wholly-owned
Domestic Subsidiaries (a) that are subject to the provisions of
this Agreement, (b) that concurrently therewith unconditionally
guarantee the performance of the Borrower's obligations under
this Agreement and (c) that concurrently deliver to the Lenders
(1) an opinion acceptable to the Banks with respect to the
validity and enforceability of such guarantee and (2) such other
documents, such as corporate resolutions, certificates of
incumbency, by-laws and articles of incorporation, as the Lenders
shall reasonably require, (ii) Investments in any Person other
than a wholly-owned Subsidiary in any one or a series of related
transactions with a fair market value not in excess of
$25,000,000 in the aggregate for all Investments in all such
Persons, (iii) Investments for the purpose of satisfying the
Borrower's or any Subsidiary's guarantee obligations with respect
to the Debt of any Person in which the Borrower or any Subsidiary
owned any interest and which obligation was in existence as of
the Agreement Date; (iv) Investments in Subsidiaries and
Unincorporated Ventures which do not guarantee the performance of
the Borrower's obligations under this Agreement made in the
ordinary course of business, consistent with past practices for
the purpose of providing for the day to day operating
requirements of such Subsidiary or Unincorporated Venture,
PROVIDED, that such Investments shall (a) not be used for
acquisition or conversion of any inns and (b) be evidenced by a
note or other evidence of indebtedness and (c) not at any time
exceed $10,000,000 in aggregate principal amount, (v) Investments
permitted by Sections II.B., II.C. (provided that,
notwithstanding Section II.C.3. of the Investment Policy, banks
shall be required to have at least $150,000,000 in capital and
surplus), II.E. and II.H. of the
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Investment Policy, (vi) loans or advances to employees as
compensation for services in the ordinary course of business not in
excess of $2,000,000 aggregate principal amount, (vii) Investments
in the ordinary course of business, consistent with past practice,
in the Borrower's National Advertising Fund, (viii) Existing
Investments, (ix) Investments in Capital Stock of Subsidiaries and
Unincorporated Ventures listed on SCHEDULE 3 hereto for the purpose
of acquiring no less than 100% of the capital stock or partnership
interests, as appropriate, of such Subsidiaries and Unincorporated
Ventures, (x) Investments in notes payable to the Borrower as a
result of the sale of inns in an aggregate principal amount not in
excess of $10,000,000, provided that the Borrower shall obtain and
continue to hold a perfected first Lien (subject to Permitted
Liens) in such inns, and (xi) Investments in wholly-owned Foreign
Subsidiaries (a) that are subject to the provisions of this
Agreement and (b) not to exceed in aggregate amount $1,000,000 for
all Investments in all Foreign Subsidiaries. For purposes of the
calculation of the amount of any Investments permitted hereunder,
Investments will be calculated at all times at the amount of the
original Investment with no reduction for write-offs or
write-downs. No Investment which is a Permitted Investment other
than pursuant to clause (ii) of the definition of "PERMITTED
INVESTMENTS" shall reduce the amount of Investments permitted
pursuant to such clause (ii).
"PERMITTED LIENS" means, as applied to any Person:
(i) any Lien in favor of the Administrative Lender or a
trustee on its behalf to secure the Obligations;
(ii) (a) Liens on real estate for real estate taxes not yet
delinquent, (b) Liens created by lease agreements to secure the
payments of rental amounts and other sums not yet due thereunder,
(c) Liens on leasehold interests created by the lessor in favor
of any mortgagee of the leased premises, and (d) Liens for taxes,
assessments, governmental charges, levies or claims that are
being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set
aside on such Person's books, but only so long as no foreclosure,
restraint, sale or similar proceedings have been commenced with
respect thereto;
(iii) Liens of carriers, warehousemen, mechanics,
laborers and materialmen and other similar Liens incurred in the
ordinary course of business for sums not yet due or being
contested in good faith, if such reserve or appropriate
provision, if any, as shall be required by GAAP shall have been
made therefor;
(iv) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
similar legislation;
(v) Easements, rights-of-way, restrictions and other
similar encumbrances on the use of real property which do not
interfere with the ordinary conduct of the business of such
Person;
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(vi) Liens created to secure the purchase price of fixed
assets acquired by such Person, which is incurred solely for the
purpose of financing the acquisition of such assets and incurred
at the time of acquisition, so long as each such Lien shall at
all times be confined solely to the asset or assets so acquired
(and proceeds thereof) and the aggregate principal amount of Debt
secured by such Liens does not exceed, together with the
principal amount of Debt secured by Liens permitted pursuant to
clause (vii) below, $25,000,000, and refinancings thereof so long
as any such Lien remains solely on the asset or assets acquired
and the amount of Debt related thereto is not increased;
(vii) Liens existing on any property acquired by such
Person prior to the acquisition of such property by such Person,
provided (a) such Lien shall at all times be confined solely to
the property so acquired (and proceeds thereof) and (b) the
aggregate principal amount of Debt secured by such Liens does not
exceed, together with the principal amount of Debt secured by
Liens permitted pursuant to clause (vi) above, $25,000,000 and
refinancings thereof so long as any such Lien remains solely on
the asset or assets acquired and the amount of Debt related
thereto is not increased;
(viii) Liens in respect of judgments or awards for which
appeals or proceedings for review are being prosecuted and in
respect of which a stay of execution upon any such appeal or
proceeding for review shall have been secured, provided that
(a) such Person shall have established adequate reserves for such
judgments or awards, (b) such judgments or awards shall be fully
insured and the insurer shall not have denied coverage, or
(c) such judgments or awards shall have been bonded to the
satisfaction of the Lenders;
(ix) Any Liens existing on the Agreement Date which are
described on SCHEDULE 12 hereto, and Liens resulting from the
refinancing of the related Debt, provided that the Debt secured
thereby shall not be increased and the Liens shall not cover
additional assets of the Borrower;
(x) any obligations or duties, affecting any property, to
any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially
impair the use of any material property for the purposes for
which such property is held by such Person;
(xi) zoning laws or ordinances and municipal regulations
which do not materially impair the use of any material property
for the purposes for which such property is held by such Person;
(xii) Liens, minor irregularities in or deficiencies of
title on any property which do not materially impair the use of
any material property for the purposes for which such property is
held by such Person; and
(xiii) Liens otherwise permitted or contemplated by the
Loan Papers.
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"PERSON" means and includes an individual, corporation,
partnership, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section
3(3) of ERISA (including a Multiemployer Plan that is covered by
Title IV of ERISA) pursuant to which any employees of the
Borrower, its Subsidiaries, Unincorporated Ventures or any member
of their Controlled Group participate; PROVIDED, HOWEVER, "Plan"
shall not include those agreements with former employees of any
of such Persons described on SCHEDULE 7 hereto, the obligations
pursuant to which do not exceed $450,000 in aggregate amount.
"PRIME RATE" means, at any time, the prime interest rate
announced or published by the Administrative Lender from time to
time as its reference rate for the determination of interest
rates for loans of varying maturities in United States dollars to
United States residents of varying degrees of creditworthiness
and being quoted at such time by the Administrative Lender as its
"prime rate;" it being understood that such rate may not be the
lowest rate of interest charged by the Administrative Lender.
"PRIME RATE ADVANCE" means a Revolving Credit Advance which
the Borrower requests to be made as a Prime Rate Advance or which
is reborrowed as a Prime Rate Advance, in accordance with the
provisions of Section 2.2 hereof.
"PRIME RATE BASIS" means, for any day, a per annum interest
rate equal to the lesser of (a) the Highest Lawful Rate on such
day, or (b) the sum of (i) the Prime Rate on such day plus
(ii) the Applicable Margin. The Prime Rate Basis shall be
adjusted automatically as of the opening of business on the
effective date of each change in the Prime Rate to account for
such change.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the
Borrower that is not Disqualified Capital Stock.
"QUARTERLY DATE" means the last Business Day of each
February, May, August and November, beginning November 30, 1995.
"REIMBURSEMENT OBLIGATIONS" means, in respect of any Letter
of Credit as at any date of determination, the sum of (a) the
maximum aggregate amount which is then available to be drawn
under such Letter of Credit plus (b) the aggregate amount of all
drawings under such Letter of Credit and not theretofore
reimbursed by the Borrower.
"REFINANCING ADVANCE" means any Advance which is used to pay
the principal amount (or any portion thereof) of an Advance at
the end of its Interest Period and which, after giving effect to
such application, does not result in an increase in the aggregate
amount of outstanding Advances.
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"REGULATORY MODIFICATION RETROACTIVE EFFECTIVE DATE" has the
meaning specified in Section 8.5 hereof.
"REGULATORY MODIFICATION SET DATE" has the meaning specified
in Section 8.5 hereof.
"RELEASE DATE" means the date on which the Notes have been
paid, all other Obligations due and owing have been paid and
performed in full, and the Commitment has been terminated.
"REPORTABLE EVENT" has the meaning specified in Section
4043(b) of ERISA.
"REVOLVING CREDIT ADVANCE" means an Advance made pursuant to
Section 2.1(a) hereof.
"REVOLVING CREDIT NOTE" means any Promissory Note of the
Borrower evidencing Revolving Credit Advances hereunder,
substantially in the form of EXHIBIT A hereto, together with any
extension, renewal or amendment thereof or substitution therefor.
"RIGHTS" means rights, remedies, powers and privileges.
"S&P" means Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc., a New York corporation.
"S.E.C." means the United States Securities and Exchange
Commission.
"SENIOR DEBT" means Total Debt of the Borrower, its
Subsidiaries and Unincorporated Ventures, as appropriate, other
than (i) Subordinated Debt and (ii) the aggregate face amount of
Bond Letters of Credit outstanding.
"SENIOR NOTES" means the Borrower's $100,000,000 senior
unsecured notes due ___________________, __________.
"SENIOR SUBORDINATED NOTES" means the Borrower's
$120,000,000 9-1/4% Senior Subordinated Notes due May 15, 2003
issued pursuant to the Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture
pursuant to which the Senior Subordinated Notes may be issued, as
the same may be amended, supplemented or otherwise modified.
"SIGNIFICANT INVESTMENTS" means those investments of the
Borrower in the joint ventures or partnerships set forth on
SCHEDULE 10 hereto.
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"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the
Borrower (a) the revenues attributable to which for the then most
recently completed four fiscal quarters constituted (or, with
respect to Subsidiaries acquired during such four fiscal
quarters, would have constituted had the revenues of such
Subsidiary been included for such period) 2.5% or more of the
consolidated revenues of the Borrower and its Subsidiaries for
such period, or (b) the assets of which as of the end of such
period constituted 2.5% or more of the consolidated assets of the
Borrower and its Subsidiaries as of the end of such period.
"SOLVENT" means, with respect to any Person, that the fair
value of the assets of such Person (both at fair valuation and at
present fair saleable value) is, on the date of determination,
greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of
such date and that, as of such date, such Person is able to pay
all liabilities of such Person as such liabilities mature and
such Person does not have unreasonably small capital with which
to carry on its business. In computing the amount of contingent
or unliquidated liabilities at any time, such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured
liability discounted to present value at rates believed to be
reasonable by such Person.
"SPECIAL COUNSEL" means the law firm of Donohoe, Jameson &
Carroll, P.C., or such other legal counsel as the Administrative
Lender may select.
"SPECIFIED PERCENTAGE" means, as to any Lender, the
percentage indicated beside its name on the signature pages
hereof, or if applicable, specified in its most recent Assignment
Agreement.
"SUBSIDIARY" with respect to any Persons, means (a) a
corporation at least a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is
at the time, directly or indirectly, owned by such Person, by
such Person and one or more Subsidiaries of such Person or by one
or more Subsidiaries of such Person or (b) a partnership, joint
venture or similar entity in which 100% of the ownership, capital
or interest profits is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of
such Person or by one or more Subsidiaries of such Person.
"SUBSIDIARY GUARANTY" means the Guaranty executed by each
Significant Subsidiary guaranteeing payment and performance of
the Obligations, substantially in the form of EXHIBIT D hereto,
as such agreement may be amended, modified, supplemented or
restated from time to time.
"SUBORDINATED DEBT" means any debt, obligation or liability
(whether primary, contingent or otherwise) of the Borrower, a
Subsidiary or an Unincorporated Venture which by its terms is
subordinate in right of payment to the Obligations, provided that
the Banks approve the terms thereof prior to or at the time of
the issuance thereof.
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"SWING LINE ADVANCE" has the meaning specified in Section 2.1(b) hereof.
"SWING LINE BANK" means NationsBank of Texas, N.A. and any successor
thereto appointed in accordance with Section 9.1(b) hereof.
"SWING LINE FACILITY" has the meaning specified in Section 2.1(b) hereof.
"SWING LINE NOTE" means the Swing Line Note of the Borrower
payable to the order of the Swing Line Bank, substantially in the
form of EXHIBIT C hereto, together with any extension, renewal or
amendment thereof or substitution therefor.
"TAXES" has the meaning specified in Section 2.15 hereof.
"TOTAL DEBT" means, as of any date of determination, the sum (without
duplication) of (a) all Debt of the Borrower and its Subsidiaries, minus (b)
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 on
SCHEDULE 11 hereto and (ii) clauses (h) and (k) of the definition of "DEBT"
herein.
"TRIBUNAL" means any state, commonwealth, federal, foreign territorial,
or other court or governmental department, commission, board, bureau,
agency or instrumentality.
"UCC" means the Uniform Commercial Code of Texas, as amended
from time to time.
"UNINCORPORATED VENTURES" means those Persons designated as
"Unincorporated Ventures" on SCHEDULE 3 hereto.
Section 1.2 AMENDMENTS AND RENEWALS. Each definition of
an agreement in this Article 1 shall include such agreement as amended to
date, and as amended or renewed from time to time in accordance with its
terms, but only with the prior written consent of the Determining Lenders.
Section 1.3 CONSTRUCTION. The terms defined in this Article 1
(except as otherwise expressly provided in this Agreement) for all purposes
shall have the meanings set forth in Section 1.1 hereof, and the singular
shall include the plural, and vice versa, unless otherwise specifically
required by the context. All accounting terms used in this Agreement which
are not otherwise defined herein shall be construed in accordance with GAAP
on a consolidated basis for the Borrower and its Subsidiaries, unless
otherwise expressly stated herein.
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ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES.
(a) REVOLVING CREDIT ADVANCES. Each Lender severally agrees, upon the
terms and subject to the conditions of this Agreement, to make Revolving
Credit Advances to the Borrower from time to time up to and including the
Maturity Date in an aggregate amount not to exceed an amount equal to (i) its
Specified Percentage of the Commitment less (ii) an amount equal to its
Specified Percentage of the aggregate amount of all Reimbursement Obligations
then outstanding (assuming compliance with all conditions to drawing) for the
purposes set forth in Section 5.21 hereof. Notwithstanding the immediately
preceding sentence, at no time shall the sum of (i) the aggregate principal
amount of Revolving Credit Advances outstanding, plus (ii) the aggregate
principal amount of Swing Line Advances outstanding, plus (iii) the aggregate
principal amount of all Reimbursement Obligations, plus (iv) the aggregate
principal amount of Bid Rate Advances exceed the Commitment. Subject to
Section 2.9 hereof, Revolving Credit Advances may be repaid and then
reborrowed. Any Revolving Credit Advance shall, at the option of the
Borrower as provided in Section 2.2 hereof (and, in the case of LIBOR
Advances, subject to availability and to the provisions of Article 8 hereof),
be made as a Prime Rate Advance or a LIBOR Advance; provided that there shall
not be outstanding to any Lender, at any one time, more than six LIBOR
Advances. On the Maturity Date unless sooner paid as provided herein, the
outstanding Revolving Credit Advances shall be repaid in full.
(b) THE SWING LINE LOANS. The Borrower may request Swing Line Bank to
make, and Swing Line Bank may, if in its sole discretion it elects to do so,
make, on the terms and conditions hereinafter set forth, loans ("Swing Line
Loans") to Borrower from time to time on any Business Day during the period
from the date hereof until the Maturity Date in an aggregate amount not to
exceed at any time outstanding the lesser of (i) $10,000,000 and (ii) the sum
of (A) the Commitment, MINUS (B) the aggregate principal amount of Revolving
Credit Advances then outstanding MINUS (C) the aggregate principal amount of
all Reimbursement Obligations then outstanding (assuming compliance with all
conditions to drawing) (the "Swing Line Facility"). Each Swing Line Advance
shall be in an amount not less than $50,000. Within the limits of the Swing
Line Facility, so long as the Swing Line Bank, in its sole discretion, elects
to make Swing Line Advances, Swing Line Advances may be repaid and then
reborrowed.
(c) BID RATE ADVANCES. Each Lender may, in its sole discretion and on
the terms and conditions set forth in this Agreement and such other
agreements that such Lender may enter into with the Borrower, make Bid Rate
Advances to the Borrower from time to time in an aggregate amount not in
excess of the difference between (i) the Commitment minus (ii) the sum of (A)
the aggregate outstanding principal amount of all Revolving Credit Advances,
plus (B) the aggregate outstanding principal amount of all Bid Rate Advances,
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plus (C) the amount of all Reimbursement Obligations plus (D) the aggregate
outstanding principal amount of all Swing Line Advances. Each Bid Rate
Advance shall be for a period of not less than 7 days and not more than 90
days. The Lenders shall have no obligation hereunder to offer any Bid Rate
Advances.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) In the case of Prime Rate Advances other than a Refinancing
Advance, the Borrower, through an Authorized Signatory, shall give the
Administrative Lender prior to 10:00 a.m., Dallas, Texas time, on the date of
any proposed Prime Rate Advance irrevocable written notice, or irrevocable
telephonic notice followed immediately by written notice (provided, however,
that the Borrower's failure to confirm any telephonic notice in writing shall
not invalidate any notice so given), of its intention to borrow or reborrow a
Prime Rate Advance hereunder. Such notice of borrowing shall specify the
requested funding date, which shall be a Business Day, and the amount of the
proposed aggregate Prime Rate Advances to be made by Lenders. Each Prime Rate
Advance shall have an Interest Period beginning on the date such Advance is
made and ending on the Quarterly Date next following the date the Advance is
made; provided that no such Interest Period shall extend past the Maturity
Date.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least three Business Days'
irrevocable written notice for LIBOR Advances, or irrevocable telephonic
notice followed immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given), of its intention to borrow or reborrow a
LIBOR Advance hereunder. Notice shall be given to the Administrative Lender
prior to 11:00 a.m., Dallas, Texas time, in order for such Business Day to
count toward the minimum number of Business Days required. LIBOR Advances
shall in all cases be subject to availability and to Article 8 hereof. For
LIBOR Advances, the notice of borrowing shall specify the requested funding
date, which shall be a Business Day, the amount of the proposed aggregate
LIBOR Advances, to be made by Lenders and the Interest Period selected by the
Borrower, provided that no such Interest Period shall extend past the
Maturity Date.
(c) In the case of Swing Line Advances, the Borrower, through an
Authorized Signatory, shall give the Swing Line Bank and the Administrative
Lender prior to 12:00 noon, Dallas, Texas time, on the date of any proposed
Swing Line Advance irrevocable written notice or irrevocable telephonic
notice followed immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given), of its intention to borrow or reborrow a
Swing Line Advance. Such notice of borrowing shall specify the requested
funding, which shall be a Business Day, and the amount of the proposed Swing
Line Advance.
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(d) Subject to Sections 2.1 and 2.9 hereof, at least three Business
Days prior to each Payment Date for a LIBOR Advance, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender irrevocable
written notice, or irrevocable telephonic notice followed immediately by
written notice (provided, however, that the Borrower's failure to confirm any
telephonic notice in writing shall not invalidate any notice so given),
specifying whether all or a portion of such LIBOR Advance outstanding on the
Payment Date (i) is to be repaid and then reborrowed in whole or in part as a
Prime Rate Advance or a LIBOR Advance, or (ii) is to be repaid and not
reborrowed; provided, however, notwithstanding anything in this Agreement to
the contrary, if on any Payment Date a Default shall exist, such LIBOR
Advance may only be reborrowed as a Prime Rate Advance. Upon such Payment
Date, such LIBOR Advance shall, subject to the provisions hereof, be so
repaid and, as applicable, reborrowed.
(e) Subject to Sections 2.1 and 2.9 hereof, upon irrevocable written
notice prior to 11:00 a.m., Dallas, Texas, time on each Payment Date (or
three Business Days if the Borrower wishes to reborrow a LIBOR Advance,
through an Authorized Signatory, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure
to confirm any telephonic notice in writing shall not invalidate any notice
so given), the Borrower may repay a Prime Rate Advance on its Payment Date,
and (i) reborrow all or a portion of the principal amount thereof as a Prime
Rate Advance, (ii) reborrow all or a portion of the principal amount thereof
as one or more LIBOR Advances, or (iii) not reborrow all or any portion of
such Prime Rate Advance. Upon such Payment Date or date of repayment, such
Prime Rate Advance shall, subject to the provisions hereof, be so repaid and,
as applicable, reborrowed.
(f) The aggregate amount of Prime Rate Advances to be made by the
Lenders on any day shall be in a principal amount which is at least
$1,000,000 and which is an integral multiple of $100,000; provided, however,
that such amount may equal the unused amount of the Commitment. The
aggregate amount of LIBOR Advances having the same Interest Period and to be
made by the Lenders on any day shall be in a principal amount which is at
least $3,000,000 and which is an integral multiple of $500,000.
(g) The Administrative Lender shall promptly notify the Lenders of each
notice (other than with respect to a Swing Line Advance or a Bid Rate
Advance) received from the Borrower pursuant to this Section. Failure of the
Borrower to give any notice in accordance with Sections 2.2(c) and (d) hereof
shall result in a repayment of any such existing Advance on the applicable
Payment Date by a Refinancing Advance which is a Prime Rate Advance. Each
Lender shall, not later than 1:00 p.m., Dallas, Texas time, on the date of
any Revolving Credit Advance that is not a Refinancing Advance, deliver to
the Administrative Lender, at its address set forth herein, such Lender's
Specified Percentage of such Revolving Credit Advance in immediately
available funds in accordance with the Administrative Lender's instructions.
Prior to 2:00 p.m., Dallas, Texas time, on the date of any Revolving Credit
Advance hereunder that is not a Refinancing Advance, the Administrative
Lender shall, subject to satisfaction of the conditions set forth in
Article 3,
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disburse the amounts made available to the Administrative Lender by the
Lenders by (i) transferring such amounts by wire transfer pursuant to the
Borrower's instructions, or (ii) in the absence of such instructions,
crediting such amounts to the account of the Borrower maintained with the
Administrative Lender. All Revolving Credit Advances shall be made by each
Lender according to its Specified Percentage. No Lender shall be relieved of
its obligation to fund its Specified Percentage of any Revolving Credit
Advance notwithstanding the fact that at any time the aggregate outstanding
principal amount of all Bid Rate Advances made by such Lender exceed its
Specified Percentage of the Commitment.
(h) If, in its sole discretion, the Swing Line Bank elects to make the
requested Swing Line Advance, the Swing Line Bank shall, not later than 1:30
p.m., Dallas, Texas time, on the date of any Swing Line Advance, deliver to
the Administrative Lender at its address set forth herein, the amount of such
Swing Line Advance in immediately available funds in accordance with the
Administrative Lender's instructions. Prior to 2:00 p.m., Dallas, Texas
time, on the date of any Swing Line Advance, the Administrative Lender shall,
subject to the conditions set forth in Article 3, disburse the amount made
available to the Administrative Lender by the Swing Line Bank by (i)
transferring such amounts by wire transfer pursuant to the Borrower's
instruction or (ii) in the absence of such instructions, crediting such
amounts to the account of the Borrower maintained with the Administrative
Lender. Forthwith upon demand by the Swing Line Bank and in any event upon
the making of the request or the granting of the consent specified by Section
7.2 to authorize the Administrative Lender to declare the Advances due and
payable pursuant to the provisions of Section 7.2, each Lender, including the
Swing Line Bank, notwithstanding the failure of the Borrower at such time to
satisfy each condition specified in Article 3, shall make by 12:00 noon
(Dallas, Texas time) on the first Business Day following receipt by such
Lender of notice from the Swing Line Bank, a Revolving Credit Advance which
is a Prime Rate Advance in an amount equal to the product of (i) the
Specified Percentage of such Lender times (ii) the aggregate outstanding
principal amount of the Swing Line Advances. The proceeds of such Revolving
Credit Advances shall be applied by the Administrative Lender to repay the
outstanding Swing Line Advance.
(i) BID RATE ADVANCES
(i) In the case of Bid Rate Advances, the Borrower,
through an Authorized Signatory, shall give the
Administrative Lender (which shall promptly notify the
Lenders) prior to 11:00 a.m., Dallas, Texas time, at least
one Business Day prior to the proposed borrowing,
irrevocable written notice of its intention to borrower a
Bid Rate Advance. Such notice of borrowing shall specify
(i) the requested funding date, which shall be a Business
Day, (ii) the aggregate amount of the proposed Bid Rate
Advances, (ii) the Interest Period selected by the Borrower,
provided that no Interest Period shall extend past the
Maturity Date and (iv) any other terms applicable thereto.
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Each Lender shall, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Bid
Rate Advances to the Borrower as part of such proposed
borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by making a written quote to
the Administrative Lender (which shall give prompt notice
thereof to the Borrower) before 9:00 a.m., Dallas, Texas
time, on the date of such proposed borrowing, setting forth
the minimum amount and maximum amount of each Bid Rate
Advance which such Lender would be willing to make as part
of the proposed borrowing (which amounts may exceed such
Lender's Specified Percentage of the Commitment) and the
rate or rates of interest therefor. If NationsBank of
Texas, N.A. elects to offer to make one or more Bid Rate
Advances, it shall deliver its written quote with respect to
the proposed borrowing to the Borrower prior to the
Administrative Lender's receipt of any other Lender's
written quote for such proposed borrowing. The
Administrative Lender shall notify the Borrower of each
written quote provided by each Lender with respect to the
proposed borrowing before 9:30 a.m., Dallas, Texas, on the
date of such proposed borrowing. If any Lender shall elect
not to make such an offer, such Lender shall so notify the
Administrative Lender before 9:00 a.m., Dallas, Texas time,
on the date of such proposed borrowing, and such Lender
shall not make any Bid Rate Advance as part of such
borrowing. If any Lender shall fail to respond to the
Administrative Lender by such time, such Lender shall be
deemed to have elected not to make an offer.
(iii) The Borrower shall, in turn, before 10:30
a.m., Dallas, Texas time, on the date of such proposed
borrowing either
(A) cancel such proposed borrowing by giving the
Administrative Lender notice to that effect, or
(B) accept one or more of the offers made by any
Lender or Lenders pursuant to clause (ii) above, in its
sole discretion, by giving notice to the Administrative
Lender of the amount of each Bid Rate Advance (which
amount shall be equal to or greater than the minimum
amount, and equal to or less than the maximum amount,
for which notification was given to the Borrower by the
Administrative Lender on behalf of such Lender for such
Bid Rate Advance pursuant to clause (ii) above) to be
made by each Lender as part of such borrowing, and
reject any remaining offers made by the Lenders
pursuant to clause (ii) above by giving the
Administrative Lender notice to that effect.
(iv) If the Borrower notifies the Administrative Lender
that such proposed borrowing is cancelled pursuant to
clause (iii)(A) above, the Administrative Lender shall give
prompt notice thereof to the Lenders and such borrowing
shall not be made.
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(v) If the Borrower accepts one or more of the offers
made by any Lender or Lenders pursuant to clause (iii)(B)
above, the Administrative Lender shall in turn promptly
notify each Lender of the date, rate of interest, and amount
of each Bid Rate Advance and the Lender making such Advance.
(vi) Notwithstanding the provisions of Section 2.2(a)
hereof, if the offers made by the Lenders do not equal or
exceed in the aggregate the amount specified by the Borrower
pursuant to clause (i) above, the Administrative Lender
shall be deemed to have received notice pursuant to
Section 2.2(a) hereof of Prime Rate Advances in an amount
equal to that portion of the amount specified by the
Borrower for which offers were not made, unless the Borrower
specifies that such notice not be deemed to have been given.
Section 2.3 INTEREST.
(a) ON PRIME RATE ADVANCES.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of each Prime Rate Advance, from the
date such Advance is made until it is due (whether at
maturity, by reason of acceleration, by scheduled reduction,
or otherwise) or repaid, which shall be payable as set forth
in Section 2.3(a)(ii) hereof, at a simple interest rate per
annum equal to the Prime Rate Basis for such Prime Rate
Advance as in effect from time to time, provided that
interest on such Prime Rate Advance shall not exceed the
Maximum Amount. If at any time the Prime Rate Basis would
exceed the Highest Lawful Rate, interest payable on such
Prime Rate Advance shall be limited to the Highest Lawful
Rate, but the Prime Rate Basis shall not thereafter be
reduced below the Highest Lawful Rate until the total amount
of interest accrued on such Advance equals the amount of
interest that would have accrued if the Prime Rate Basis had
been in effect at all times.
(ii) Interest on each Prime Rate Advance shall be
computed on the basis of a year of 365 or 366 days, as
applicable, for the number of days actually elapsed, and
shall be payable in arrears on each Quarterly Date and on
the Maturity Date.
(b) ON LIBOR ADVANCES.
(i) The Borrower shall pay interest on the unpaid
principal amount of each LIBOR Advance, from the date such
Advance is made until it is due (whether at maturity, by
reason of acceleration, by scheduled reduction, or
otherwise) or repaid, at a rate per annum equal to the LIBOR
Basis for such Advance. The Administrative Lender, whose
determination shall be conclusive, shall determine the LIBOR
Basis on the second Business Day prior to the applicable
funding date and shall notify the Borrower and the Lenders
of such LIBOR Basis.
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(ii) Subject to Section 11.9 hereof, interest on each
LIBOR Advance shall be computed on the basis of a 360-day
year for the actual number of days elapsed, and shall be
payable in arrears on the applicable Payment Date and on the
Maturity Date; provided, however, that if the Interest
Period for such Advance exceeds three months, interest shall
also be due and payable in arrears on each Quarterly Date
during such Interest Period.
(c) ON SWING LINE ADVANCES.
(i) The Borrower shall pay interest on the outstanding
principal amount of such Swing Line Advance, from the date
such Swing Line Advance is made until it is due (whether at
maturity, by reason of acceleration or otherwise) or repaid,
which shall be payable as set forth in Section 2.3(c)(ii)
hereof, equal to the Prime Rate in effect from time to time
minus 1/2%, but not higher than the Highest Lawful Rate.
(ii) Interest on each Swing Line Advance shall be
computed on the basis of a year of 365 or 366 days, as
applicable, for the number of days actually elapsed, and
shall be payable in arrears on each Quarterly Date and on
the Maturity Date.
(d) ON BID RATE ADVANCES. The Borrower shall pay interest on the
outstanding unpaid principal amount of each Bid Rate Advance at a per annum
rate equal to the interest rate agreed to by the Borrower and the Lender
making such Bid Rate Advance pursuant to Section 2.2(i) hereof. Interest on
each Bid Rate Advance shall be computed and shall be payable at such times as
agreed upon between the Borrower and the Lender making such Advance pursuant
to Section 2.2(i) hereof.
(e) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE BASIS. If the
Borrower fails to give the Administrative Lender timely notice of its
selection of a LIBOR Basis or an Interest Period for a LIBOR Advance, or if
for any reason a determination of a LIBOR Basis for any Advance is not timely
concluded due to the fault of the Borrower, the appropriate Prime Rate Basis
shall apply to such Advance.
(f) INTEREST AFTER AN EVENT OF DEFAULT. (i) After an Event of Default
(other than an Event of Default specified in Section 7.1(f) hereof) and
during any continuance thereof, at the option of Determining Lenders, and
(ii) after an Event of Default specified in Section 7.1(f) hereof and during
any continuance thereof, automatically and without any action by the
Administrative Lender or any Lender, the Obligations shall bear interest at a
rate per annum equal to the Default Rate. Such interest shall be payable on
the earlier of demand or the Maturity Date, and shall accrue until the
earlier of (i) waiver or cure (to the satisfaction of the Determining
Lenders) of the applicable Event of Default, (ii) agreement by the Lenders to
rescind the charging of interest at the Default Rate, or (iii) payment in
full of the Obligations. The Lenders shall not be required to accelerate the
maturity of the Advances, to exercise any other rights or remedies under the
Loan Papers,
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or to give notice to the Borrower of the decision to charge interest at the
Default Rate. The Lenders will undertake to notify the Borrower, after the
effective date, of the decision to charge interest at the Default Rate.
Section 2.4 FEES.
FACILITY FEE. Subject to Section 10.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for the ratable account of the Lenders,
a facility fee on the daily average amount of the Commitment at the following
per annum percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
CATEGORY 1 - The Leverage Ratio is not less 0.30
than 3.50 to 1 or the Index Debt Rating is any
two of the following: BB by S&P, BB by ARA or
Ba2 by Moody's
CATEGORY 2 - The Leverage Ratio is less than 0.25
3.50 to 1 but not less than 3.0 to 1 or the
Index Debt Rating is any two of the following:
BB+ by S&P, BB+ by ARA or Ba1 by Moody's
CATEGORY 3 - The Leverage Ratio is less than 0.20
3.00 to 1 but not less than 2.0 to 1 or the
Index Debt Rating is any two of the following:
BBB- or better by S&P, BBB- or better by ARA or
Baa3 or better by Moody's
CATEGORY 4 - The Leverage Ratio is less than 0.15
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
Such fee shall be payable (i) in arrears on each Quarterly Date and on the
Maturity Date, fully earned when due and, subject to Section 10.9 hereof,
nonrefundable when paid and (ii) computed on the basis of a year of 365 or
366 days, as applicable, for the actual number of days elapsed. (a) If the
Index Debt Rating and the Leverage Ratio are in difference categories, the
facility fee shall be determined on whichever of the Index Debt Rating or the
Leverage Ratio falls within the superior (or numerically higher) category,
(b) if the facility fee is determined based on the Leverage Ratio and the
financial statements of the Borrower setting the Leverage Ratio are not
received by the Administrative Lender by the date required pursuant to
Section 6.1(a) or 6.1(b) hereof, the facility fee shall be determined as if
the Leverage Ratio is not less than 3.50 to 1, (c) if the Index Debt Rating
established by ARA shall fall within a different category than Moody's or
S&P, the facility fee shall be determined by reference to Moody's or S&P, (d)
if the Index Debt Rating established by Moody's and S&P shall fall within
different categories, the facility 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 (e) such fee shall be adjusted
on each
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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 Maturity Date, the Borrower and the Lenders shall negotiate in
good faith to amend the references to specific ratings to reflect such
changed rating system.
(b) CLOSING FEE. Subject to Section 10.9 hereof, the Borrower agrees
to pay to the Administrative Lender, for the account of the Lenders a closing
fee equal to 0.10% of each Lender's portion of the Commitment. Such fee
shall be payable on the Agreement Date, fully earned when due and, subject to
Section 10.9 hereof, nonrefundable when paid.
(c) OTHER FEES. Subject to Section 10.9 hereof, the Borrower agrees to
pay to the Administrative Lender, for its account and not the account of the
Lenders, the fees provided for in the letter agreement ("Fee Letter"), dated
as of the Agreement Date, between the Borrower and the Administrative Lender
on the date and in the amounts specified therein.
Section 2.5 PREPAYMENT.
(a) VOLUNTARY PREPAYMENTS. The principal amount of any Prime Rate
Advance may be prepaid in full or in part at any time, without penalty and
without regard to the Payment Date for such Advance, upon notice as required
for a repayment of a Prime Rate Advance as provided in Section 2.2(d) hereof.
LIBOR Advances may be voluntarily prepaid upon notice as required for
repayments of LIBOR Advances as provided in Section 2.2(c) hereof, but only
so long as the Borrower concurrently reimburses the Lenders in accordance
with Section 2.9 hereof. The principal amount of any Swing Line Advance may
be prepaid in full or in part at any time, without penalty and without regard
to the Payment Date for such Advance. Any notice of prepayment shall be
irrevocable.
(b) MANDATORY PREPAYMENT. On or before the date of any reduction of
the Commitment, the Borrower shall prepay outstanding Advances in an amount
necessary to reduce the same to an amount less than or equal to the
Commitment as so reduced. The Borrower shall first prepay all Prime Rate
Advances, second prepay all Swing Line Advances and shall thereafter prepay
LIBOR Advances. To the extent that any prepayment requires that a LIBOR
Advance be repaid on a date other than the last day of its Interest Period,
the Borrower shall reimburse each Lender in accordance with Section 2.9
hereof. To the extent that outstanding Advances and Reimbursement
Obligations exceed the Commitment after any reduction thereof, the Borrower
shall repay any such excess amount and all accrued interest thereon on the
date of such reduction.
(c) PREPAYMENTS, GENERALLY. Any prepayment of an Advance shall be
accompanied by interest accrued on the principal amount being prepaid. Any
voluntary partial prepayment of a Prime Rate Advance shall be in a principal
amount of $100,000 or an integral multiple thereof. Any voluntary partial
prepayment of a Swing Line Advance
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shall be in a principal amount of $50,000 or an integral multiple thereof.
All voluntary prepayments shall be applied in the order directed in writing
by the Borrower to the Administrative Lender. If the Borrower fails to so
direct the Administrative Lender or if the prepayment occurs during the
occurrence and continuance of an Event of Default, such prepayment shall be
applied in the inverse order of maturity.
Section 2.6 REDUCTION OF COMMITMENT.
(a) VOLUNTARY REDUCTION. The Borrower shall have the right, upon not
less than 10 Business Days' notice (provided no notice shall be required for
a termination in whole of the Commitment) by an Authorized Signatory to the
Administrative Lender (if telephonic, to be confirmed by telex or in writing
on or before the date of reduction or termination), which shall promptly
notify the Lenders, to terminate or reduce the Commitment, in whole or in
part. Each partial termination shall be in an aggregate amount which is at
least $1,000,000 and which is an integral multiple of $100,000, and no
voluntary reduction in the Commitment shall cause any LIBOR Advance to be
repaid prior to the last day of its Interest Period.
(b) MANDATORY REDUCTION. On the Maturity Date, the Commitment shall
automatically reduce to zero.
(c) GENERAL REQUIREMENTS. Upon any reduction of the Commitment
pursuant to this Section, the Borrower shall immediately make a repayment of
applicable Advances in accordance with Section 2.5(b) hereof. The Borrower
shall reimburse each Lender for any loss or out-of-pocket expense incurred by
each Lender in connection with any such payment, as set forth in Section 2.9
hereof to the extent applicable. The Borrower shall not have any right to
rescind any termination or reduction. Once reduced, the Commitment may not
be increased or reinstated.
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER.
Unless the Administrative Lender shall have been notified by a Lender prior
to the date of any proposed Revolving Credit Advance (which notice shall be
effective upon receipt) that such Lender does not intend to make the proceeds
of such Revolving Credit Advance available to the Administrative Lender, the
Administrative Lender may assume that such Lender has made such proceeds
available to the Administrative Lender on such date, and the Administrative
Lender may in reliance upon such assumption (but shall not be required to)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Lender by such
Lender, the Administrative Lender shall, without prejudice to the Borrower's
rights against such Lender, be entitled to recover such amount on demand from
such Lender (or, if such Lender fails to pay such amount forthwith upon such
demand, from the Borrower) together with interest thereon in respect of each
day during the period commencing on the date such amount was available to the
Borrower and ending on (but excluding) the date the Administrative Lender
receives such amount from the Lender, at a per annum rate equal to the lesser
of (i) the Highest
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Lawful Rate or (ii)(A) in the case of such Lender, the Federal Funds Rate or
(B) in the case of the Borrower, the interest rate applicable to such
Revolving Credit Advance. No Lender shall be liable for any other Lender's
failure to fund a Revolving Credit Advance hereunder.
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES. The Borrower agrees to
pay the principal amount of the Advances to the Administrative Lender for the
account of the Lenders as follows:
(a) END OF INTEREST PERIOD. The principal amount of each Advance
hereunder shall be due and payable on its Payment Date, which principal
payment (other than in respect of a Bid Rate Advance) may be made by means of
a Refinancing Advance.
(b) COMMITMENT REDUCTION. On the date of reduction of the Commitment
pursuant to Section 2.6 hereof, including the Maturity Date, the aggregate
amount of the Advances outstanding on such date of reduction in excess of the
Commitment as reduced shall be due and payable, which principal payment may
not be made by means of Refinancing Advances.
(c) MATURITY DATE. To the extent not otherwise required to be paid
earlier as provided herein, the principal amount of the Advances, all accrued
interest and fees thereon, and all other Obligations related thereto, shall
be due and payable in full on the Maturity Date.
Section 2.9 REIMBURSEMENT. Whenever any Lender shall sustain or
incur any losses or reasonable out-of-pocket expenses in connection with (a)
failure by the Borrower to borrow any LIBOR Advance after having given notice
of its intention to borrow in accordance with Section 2.2 hereof (whether by
reason of the Borrower's election not to proceed or the non-fulfillment of
any of the conditions set forth in Article 3 hereof), or (b) any prepayment
for any reason of any LIBOR Advance in whole or in part, the Borrower agrees
to pay to any such Lender, upon its demand, an amount sufficient to
compensate such Lender for all such losses and out-of-pocket expenses,
subject to Section 10.9 hereof. Such Lender's good faith determination of
the amount of such losses or out-of-pocket expenses, calculated in its usual
fashion, absent manifest error, shall be binding and conclusive. Such losses
shall include, without limiting the generality of the foregoing, lost profits
and reasonable expenses incurred by such Lender in connection with the
re-employment of funds prepaid, repaid, converted or not borrowed, converted
or paid, as the case may be. Upon request of the Borrower, such Lender shall
provide a certificate setting forth the amount to be paid to it by the
Borrower hereunder and calculations therefor.
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SECTION 2.10 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrower of
the principal of or interest on the Advances, fees, and any other
amount owed under this Agreement or any other Loan Paper shall be
made not later than 12:00 noon (Dallas, Texas time) on the date
specified for payment under this Agreement to the Administrative
Lender at the Administrative Lender's office, in lawful money of
the United States of America constituting immediately available
funds.
(b) If any payment under this Agreement or any other Loan
Paper shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which
is a Business Day, unless such Business Day falls in another
calendar month, in which case payment shall be made on the
preceding Business Day. Any extension of time shall in such case
be included in computing interest and fees, if any, in connection
with such payment.
(c) The Borrower agrees to pay principal, interest, fees
and all other amounts due under the Loan Papers without deduction
for set-off or counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower
are received by the Administrative Lender, the Administrative
Lender shall apply such amounts in the following order of
priority: (i) to the payment of the Administrative Lender's
expenses incurred on behalf of the Lenders then due and payable,
if any; (ii) to the payment of all other fees and amounts then
due and payable under the Loan Papers; (iii) to the payment of
interest then due and payable on the Advances; and (iv) to the
payment of principal then due and payable on the Advances.
(e) Each payment by the Borrower in respect of obligations
relating to the Revolving Credit Advance and the Letters of
Credit (whether for principal, interest, fees or otherwise) shall
be made to the Administrative Lender for the account of the
Lenders pro rata in accordance with their respective Specified
Percentages. Each payment by the Borrower in respect of
obligations relating to Swing Line Advances (whether for
principal, interest, fees or otherwise) shall be made to the
Administrative Lender for the account of the Swing Line Bank.
Each payment by the Borrower in respect of obligations related to
Bid Rate Advances (whether for principal, interest, fees or
otherwise) shall be made to the Administrative Lender for the
account of each Lender holding such Bid Rate Advance.
SECTION 2.11 LIBOR LENDING OFFICES. Each Lender's initial
LIBOR Lending Office is set forth opposite its name in SCHEDULE 1
attached hereto. Each Lender shall have the right at any time
and from time to time to designate a different office of itself
or of any Affiliate as such Lender's LIBOR Lending Office, and to
transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any
liability on the part of the Borrower for increased costs or
expenses resulting solely from
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such designation or transfer (except any such transfer which is
made by a Lender pursuant to Section 8.2 or 8.3 hereof, or
otherwise for the purpose of complying with Applicable Law).
Increased costs for expenses resulting from a change in law
occurring subsequent to any such designation or transfer shall
be deemed not to result solely from such designation or
transfer.
SECTION 2.12 SHARING OF PAYMENTS. Any Lender obtaining a
payment (whether voluntary or involuntary, due to the exercise of
any right of set-off, or otherwise) on account of its Advances or
its participation in the Letters of Credit (other than pursuant
to Sections 2.15, 2.16(d), 8.3 or 8.5, amounts payable to the
Swing Line Bank in respect of Swing Line Advances, amounts
payable to Lenders in respect of Bid Rate Advances made by such
Lenders and amounts payable to the Issuing Bank in respect of
Letters of Credit) in excess of its Specified Percentage of all
payments made by the Borrower with respect to Advances, the
Letters of Credit shall purchase from each other Lender such
participation in the Advances made by such other Lender or its
participation in the Letters of Credit as shall be necessary to
cause such purchasing Lender to share the excess payment pro rata
according to Specified Percentages with each other Lender;
provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section, to the fullest extent permitted
by law, may exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.13 CALCULATION OF RATES. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included
only for the purpose of determining the rate of interest or other
amounts to be paid hereunder that are based upon such rate, it
being understood that each Lender shall be entitled to fund and
maintain its funding of all or any part of a LIBOR Advance as it
sees fit.
SECTION 2.14 BOOKING LOANS. Any Lender may make, carry or
transfer Advances at, to or for the account of any of its branch
offices or the office of any Affiliate.
SECTION 2.15 TAXES.
(a) Any and all payments by the Borrower hereunder shall be
made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges and withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each
Lender and the Administrative Lender, taxes imposed on, based
upon or measured by its overall net income, net worth or capital,
and franchise taxes, doing business taxes or minimum taxes
imposed on it, (i) by the jurisdiction under the laws of which
such Lender or the Administrative Lender (as the case may be) is
organized and in which it has its applicable lending office or
any political
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subdivision thereof; (ii) by any other jurisdiction, or any
political subdivision thereof, other than those imposed by
reason of (A) an asserted relation of such jurisdiction to the
transactions contemplated by this Agreement, (B) the activities
of the Borrower in such jurisdiction, or (C) the activities in
connection with the transactions contemplated by this Agreement
of a Lender or the Administrative Lender; (iii) by reason of
failure by the Lender or the Administrative Lender to comply
with the requirements of paragraph (e) of this Section 2.15;
and (iv) in the case of any Lender, any Taxes in the nature of
transfer, stamp, recording or documentary taxes resulting from
a transfer (other than as a result of foreclosure) by such
Lender of all or any portion of its interest in this Agreement,
the Notes or any other Loan Papers (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender or the
Administrative Lender, (x) the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.15) such Lender or the
Administrative Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions
been made, (y) the Borrower shall make such deductions and (z)
the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any and all
stamp and documentary taxes and any and all other excise and
property taxes, charges and similar levies (other than (i) Taxes
described in clause (iv) of the first sentence of Section 2.15(a)
and (ii) mortgage taxes payable in Oklahoma) that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or
any other Loan Paper (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Lender for the full amount of Taxes and Other
Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this
Section 2.15) paid by such Lender or the Administrative Lender
(as the case may be) and all liabilities (including penalties,
additions to tax, interest and reasonable expenses) arising
therefrom or with respect thereto whether or not such Taxes or
Other Taxes were correctly or legally asserted, other than
penalties, additions to tax, interest and expenses arising as a
result of gross negligence on the part of such Lender or the
Administrative Lender, PROVIDED, HOWEVER, that the Borrower shall
have no obligation to indemnify such Lender or the Administrative
Lender unless and until such Lender or the Administrative Lender
shall have delivered to the Borrower a certificate setting forth
in reasonable detail the basis of the Borrower's obligation to
indemnify such Lender or the Administrative Lender pursuant to
this Section 2.15. This indemnification shall be made within 30
days from the date such Lender or the Administrative Lender (as
the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Administrative Lender the
original or a certified copy of a receipt evidencing
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payment thereof. If no Taxes are payable in respect of any
payment hereunder, the Borrower will furnish to the
Administrative Lender a certificate from each appropriate
taxing authority, or an opinion of counsel acceptable to the
Administrative Lender, in either case stating that such payment
is exempt from or not subject to Taxes, PROVIDED, HOWEVER, that
such certificate or opinion need only be given if: (i) the
Borrower makes any payment from any account located outside the
United States, or (ii) the payment is made by a payor that is
not a United States Person. For purposes of this Section 2.15
the terms "United States" and "United States Person" shall have
the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby
agrees that:
(i) it shall, no later than the Agreement Date (or, in
the case of a Lender which becomes a party hereto pursuant
to Section 11.6 after the Agreement Date, the date upon
which such Lender becomes a party hereto) deliver to the
Borrower through the Administrative Lender, with a copy to
the Administrative Lender:
(A) if any lending office is located in the United
States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form
4224 or any successor thereto ("Form 4224"),
(B) if any lending office is located outside the
United States of America, two (2) accurate and
complete signed originals of Internal Revenue
Service Form 1001 or any successor thereto ("Form
1001").
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such lending office or
lending offices under this Agreement free from withholding
of United States Federal income tax;
(ii) if at any time such Lender changes its lending
office or lending offices or selects an additional lending
office it shall, at the same time or reasonably promptly
thereafter but only to the extent the forms previously
delivered by it hereunder are no longer effective, deliver
to the Borrower through the Administrative Lender, with a
copy to the Administrative Lender, in replacement for the
forms previously delivered by it hereunder:
(A) if such changed or additional lending office is
located in the United States of America, two (2)
accurate and complete signed originals of Form
4224; or
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(B) otherwise, two (2) accurate and complete signed
originals of Form 1001,
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such changed or
additional lending office under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the
occurrence of any event (including the passing of time but
excluding any event mentioned in clause (ii) above)
requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of
the same be lawful, deliver to the Borrower through the
Administrative Lender with a copy to the Administrative
Lender, two (2) accurate and complete original signed copies
of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Lender;
(iv) it shall, promptly upon the request of the
Borrower to that effect, deliver to the Borrower such other
forms or similar documentation as may be required from time
to time by any applicable law, treaty, rule or regulation in
order to establish such Lender's tax status for withholding
purposes; and
(v) it shall notify the Borrower within 30 days after
any event (including an amendment to, or a change in any
applicable law or regulation or in the written
interpretation thereof by any regulatory authority or any
judicial authority, or by ruling applicable to such Lender
of any governmental authority charged with the
interpretation or administration of any law) shall occur
that results in such Lender no longer being capable of
receiving payments without any deduction or withholding of
United States federal income tax.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.15 shall
survive the payment in full of principal and interest hereunder.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.15 shall use its reasonable best
efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its
lending office, if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable
judgment of such Lender, be materially disadvantageous to such
Lender.
(h) Each Lender (and the Administrative Lender with respect
to payments to the Administrative Lender for its own account)
agrees that (i) it will take all reasonable actions by all usual
means to maintain all exemptions, if any, available to it from
United States withholding taxes (whether available by treaty,
existing administrative waiver, by virtue of
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the location of any Lender's lending office) and (ii) otherwise
cooperate with the Borrower to minimize amounts payable by the
Borrower under this Section 2.15; PROVIDED, HOWEVER, the
Lenders and the Administrative Lender shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any
Taxes or Other Taxes or to disclose any information regarding
its tax affairs or tax computations or reorder its tax or other
affairs or tax or other planning. Subject to the foregoing, to
the extent the Borrower pays sums pursuant to this Section 2.15
and the Lender or the Administrative Lender receives a refund
of any or all of such sums, such refund shall be applied to
reduce any amounts then due and owing under this Agreement or,
to the extent that no amounts are due and owing under this
Agreement at the time such refunds are received, the party
receiving such refund shall promptly pay over all such refunded
sums to the Borrower, provided that no Default or Event of
Default is in existence at such time.
SECTION 2.16 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT FACILITY. The Borrower may
request the Issuing Bank, on the terms and conditions hereinafter
set forth, to issue, and the Issuing Bank shall, if so requested,
issue, letters of credit (the "Letters of Credit") for the
account of the Borrower from time to time on any Business Day
from the date of the initial Advance until the Maturity Date in
an aggregate maximum amount (assuming compliance with all
conditions to drawing) not to exceed at any time outstanding the
lesser of (i) $25,000,000 (the "Letter of Credit Facility") and
(ii) the sum of (A) the Commitment MINUS (B) the aggregate
principal amount of Advances then outstanding. No Letter of
Credit shall have an expiration date (including all rights of
renewal) later than the Maturity Date. Immediately upon the
issuance of each Letter of Credit, the Issuing Bank shall be
deemed to have sold and transferred to each Lender, and each
Lender shall be deemed to have purchased and received from the
Issuing Bank, in each case irrevocably and without any further
action by any party, an undivided interest and participation in
such Letter of Credit, each drawing thereunder and the
obligations of the Borrower under this Agreement in respect
thereof in an amount equal to the product of (x) such Lender's
Specified Percentage times (y) the maximum amount available to be
drawn under such Letter of Credit (assuming compliance with all
conditions to drawing). Within the limits of the Letter of
Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this
Section 2.16(a), repay any Advances resulting from drawings
thereunder pursuant to Section 2.16(c) and request the issuance
of additional Letters of Credit under this Section 2.16(a).
(B) REQUEST FOR ISSUANCE. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 a.m. (Dallas time)
on the third Business Day prior to the date of the proposed
issuance of such Letter of Credit, by the Borrower to the Issuing
Bank, which shall give to the Administrative Lender and each
Lender prompt notice thereof by telex, telecopier or cable. Each
Letter of Credit shall be issued upon notice given in accordance
with the terms of any separate agreement between the Borrower and
the Issuing Bank in form and substance reasonably satisfactory to
the Borrower and the Issuing Bank providing
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for the issuance of Letters of Credit pursuant to this
Agreement and containing terms and conditions not inconsistent
with this Agreement (a "Letter of Credit Agreement"), PROVIDED
that if any such terms and conditions are inconsistent with
this Agreement, this Agreement shall control. Each such notice
of issuance of a Letter of Credit (a "Notice of Issuance")
shall be by telex, telecopier or cable, specifying therein, in
the case of a Letter of Credit, the requested (A) date of such
issuance (which shall be a Business Day), (B) maximum amount of
such Letter of Credit, (C) expiration date of such Letter of
Credit, (D) name and address of the beneficiary of such Letter
of Credit, (E) form of such Letter of Credit and (F) such other
information as shall be required pursuant to the relevant
Letter of Credit Agreement. If the requested terms of such
Letter of Credit are acceptable to the Issuing Bank in its
reasonable discretion, the Issuing Bank will, upon fulfillment
of the applicable conditions set forth in Article 3 hereof,
make such Letter of Credit available to the Borrower at its
office referred to in Section 10.1 or as otherwise agreed with
the Borrower in connection with such issuance.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing
Bank of a draft drawn under any Letter of Credit shall constitute
for all purposes of this Agreement the making by the Issuing Bank
of a Revolving Credit Advance, which shall bear interest at the
applicable Prime Rate Basis, in the amount of such draft (but
without any requirement for compliance with the conditions set
forth in Article 3 hereof). In the event that a drawing under
any Letter of Credit is not reimbursed by the Borrower by 11:00
a.m. (Dallas time) on the first Business Day after such drawing,
the Issuing Bank shall promptly notify Administrative Lender and
each other Lender. Each such Lender shall, on the first Business
Day following such notification, make a Revolving Credit Advance,
which shall bear interest at the applicable Prime Rate Basis, and
shall be used to repay the applicable portion of the Issuing
Bank's Revolving Credit Advance with respect to such Letter of
Credit, in an amount equal to the amount of its participation in
such drawing for application to reimburse the Issuing Bank (but
without any requirement for compliance with the applicable
conditions set forth in Article 3 hereof) and shall make
available to the Administrative Lender for the account of the
Issuing Bank, by deposit at the Administrative Lender's office,
in same day funds, the amount of such Revolving Credit Advance.
In the event that any Lender fails to make available to the
Administrative Lender for the account of the Issuing Bank the
amount of such Revolving Credit Advance, the Issuing Bank shall
be entitled to recover such amount on demand from such Lender
together with interest thereon at a rate per annum equal to the
lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds
Rate.
(d) INCREASED COSTS. If any change in any law or
regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the
administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement
against letters of credit or guarantees issued by, or assets held
by, or deposits in or for the account of, the Issuing Bank or any
Lender or (ii) impose on the Issuing Bank or any Lender any other
condition regarding this Agreement or such Lender or any Letter
of Credit, and the result of any event referred to in the
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preceding clause (i) or (ii) shall be to increase the cost to the
Issuing Bank of issuing or maintaining any Letter of Credit or to
any Lender of purchasing any participation therein or making any
Advance pursuant to Section 2.16(c) ("Increased Letter of Credit
Costs"), then, upon demand by the Issuing Bank or such Lender,
the Borrower shall, subject to Section 10.9 hereof, pay to the
Issuing Bank or such Lender, from time to time as specified by
the Issuing Bank or such Lender, additional amounts that shall be
sufficient to compensate the Issuing Bank or such Lender for such
Increased Letter of Credit Costs. Notwithstanding the foregoing,
any demand for Increased Letter of Credit Costs shall not include
any Letter of Credit Costs with respect to any period more than
180 days prior to the date that the Issuing Bank or any Lender
gives notice to the Borrower of such Increased Letter of Credit
Costs unless the effective date of the condition which results in
the right to receive Increased Letter of Credit Costs is
retroactive (the "Increased Letter of Credit Costs Retroactive
Effective Date"). If any Increased Letter of Credit Costs has an
Increased Costs Letter of Credit Retroactive Effective Date and
the Issuing Bank or any Lender demands compensation within 180
days after the date setting the Increased Letter of Credit Costs
Effective Date (the "Increased Letter of Credit Costs Set Date"),
the Issuing Bank or such Lender, as appropriate, shall have the
right to receive such Increased Letter of Credit Costs from the
Increased Letter of Credit Retroactive Effective Date. If the
Issuing Bank or a Lender does not demand such Increased Letter of
Credit Costs within 180 days after the Increased Letter of Credit
Costs Set Date, the Issuing Bank or such Lender, as appropriate,
may not receive payment of Increased Letter of Credit Costs with
respect to any period more than 180 days prior to such demand. A
certificate as to the amount of such Increased Costs, submitted
to the Borrower by the Issuing Bank or such Lender, shall include
in reasonable detail the basis for the demand for additional
compensation and shall be conclusive and binding for all
purposes, absent manifest error. The obligations of the Borrower
under this Section 2.16(d) shall survive termination of this
Agreement. The Issuing Bank or any Lender claiming any
additional compensation under this Section 2.16(d) shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to reduce or eliminate any such additional
compensation which may thereafter accrue and which efforts would
not, in the sole discretion of the Issuing Bank or such Lender,
be otherwise disadvantageous.
(e) OBLIGATIONS ABSOLUTE. The obligations of the Borrower
under this Agreement with respect to any Letter of Credit, any
Letter of Credit Agreement and any other agreement or instrument
relating to any Letter of Credit or any Advance pursuant to
Section 2.16(c) shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement,
such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any other Loan Paper, any Letter of Credit
Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (collectively, the "L/C Related
Documents");
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(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations
of the Borrower in respect of the Letters of Credit or any
Advance pursuant to Section 2.16(c) or any other amendment
or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank, any Lender
or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the
L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect, except to
the extent that the failure of the Issuing Bank to determine
such insufficiency is a result of the Issuing Bank's gross
negligence or wilful misconduct;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not comply with the terms of the Letter of Credit,
except for any payment made upon the Issuing Bank's gross
negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to departure from any Subsidiary Guaranty or any
other guarantee, for all or any of the Obligations of the
Borrower in respect of the Letters of Credit or any Advance
pursuant to Section 2.16(c); or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor, other than the
Issuing's Bank gross negligence or wilful misconduct.
(f) COMPENSATION.
(i) FINANCIAL LETTERS OF CREDIT. Subject to
Section 10.9 hereof, the Borrower shall pay to the
Administrative Lender for the account of each Lender a fee
(which shall be payable quarterly in arrears on each
Quarterly Date and on the Maturity Date) on the average
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daily amount available for drawing under all outstanding
Financial Letters of Credit at the following per annum
percentages, applicable in the following situations:
APPLICABILITY PERCENTAGE
------------- ----------
CATEGORY 1 - The Leverage Ratio is not less 0.70
than 3.50 to 1 or the Index Debt Rating is
any two of the following: BB by S&P, BB by
ARA or Ba2 by Moody's
CATEGORY 2 - The Leverage Ratio is less 0.55
than 3.50 to 1 but not less than 3.00 to 1
or the Index Debt Rating is any two of the
following: BB+ by S&P, BB+ by ARA or Ba1
by Moody's
CATEGORY 3 - The Leverage Ratio is less 0.45
than 3.00 to 1 but not less than 2.50 to 1
or the Index Debt Rating is any two of the
following: BBB- by S&P, BBB- by ARA or
Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less 0.35
than 2.50 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 0.30
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
(ii) NON-FINANCIAL LETTERS OF CREDIT. Subject to
Section 10.9 hereof, the Borrower shall pay to the
Administrative Lender for the account of each Lender a fee
(which shall be payable quarterly in arrears on each
Quarterly Date and on the Maturity Date) on the average
daily amount available for drawing under all outstanding
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Non-Financial Letters of Credit at the following per annum
percentages, applicable in the following situations:
APPLICABILITY PERCENTAGE
------------- ----------
CATEGORY 1 - The Leverage Ratio is not less 0.35
than 3.50 to 1 or the Index Debt Rating is
any two of the following: BB by S&P, BB by
ARA or Ba2 by Moody's
CATEGORY 2 - The Leverage Ratio is less 0.275
than 3.50 to 1 but not less than 3.00 to 1
or the Index Debt Rating is any two of the
following: BB+ by S&P, BB+ by ARA or Ba1
by Moody's
CATEGORY 3 - The Leverage Ratio is less 0.225
than 3.00 to 1 but not less than 2.50 to 1
or the Index Debt Rating is any two of the
following: BBB- by S&P, BBB- by ARA or
Baa3 by Moody's
CATEGORY 4 - The Leverage Ratio is less 0.175
than 2.50 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 0.150
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
(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 6.1(a) or 6.1(b)
hereof, the Letter of Credit fee shall be determined as if
the Leverage Ratio is not less than 3.50 to 1, (c) if the
Index Debt Rating established by ARA shall fall within a
different category from 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
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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.
(iv) OTHER FEES. In addition to the foregoing fees,
subject to Section 10.9 hereof, the Borrower shall also pay
to the Issuing Bank for its sole account (i) such customary
fees, costs and expenses as may be separately agreed to
between the Borrower and the Issuing Bank and (ii) an
issuance and fronting fee in the amount of 0.075% of the
average daily amount available for drawing under all
outstanding Letters of Credit, which fronting fee shall be
payable quarterly in arrears on each Quarterly Date and on
the Maturity Date.
(g) L/C CASH COLLATERAL ACCOUNT.
(i) Upon the occurrence and continuance of an Event of
Default and demand by the Administrative Lender pursuant to
Section 7.2(c), the Borrower will promptly pay to the
Administrative Lender in immediately available funds (which
payment may not be made by means of an Advance) an amount
equal to 102% of the maximum amount then available to be
drawn under the Letters of Credit then outstanding. Any
amounts so received by the Administrative Lender shall be
deposited by the Administrative Lender in a deposit account
maintained by the Issuing Bank (the "L/C Cash Collateral
Account").
(ii) As security for the payment of all Reimbursement
Obligations and for any other Obligations, the Borrower
hereby grants, conveys, assigns, pledges, sets over and
transfers to the Administrative Lender (for the benefit of
the Issuing Bank and Lenders), and creates in the
Administrative Lender's favor (for the benefit of the
Issuing Bank and Lenders) a Lien in, all money, instruments
and securities at any time held in or acquired in connection
with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be
under the sole dominion and control of the Administrative
Lender and the Borrower shall have no right to withdraw or
to cause the Administrative Lender to withdraw any funds
deposited in the L/C Cash Collateral Account. At any time
and from time to time, upon the Administrative Lender's
request, the Borrower promptly shall execute and deliver any
and all such further instruments and documents, including
UCC financing statements, as may be necessary, appropriate
or desirable in the Administrative Lender's judgment to
obtain the full benefits (including perfection and priority)
of the security interest created or intended to be created
by this paragraph (ii) and of the rights and powers herein
granted. The Borrower shall not create or suffer to exist
any Lien on any amounts or investments held in the L/C Cash
Collateral Account other than (A) the Lien granted under
this paragraph (ii) and (B) Permitted Collateral Liens.
(iii) The Administrative Lender shall (A) apply any
funds in the L/C Cash Collateral Account on account of
Reimbursement Obligations when the same
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become due and payable if and to the extent that the
Borrower shall fail directly to pay such Reimbursement
Obligations and (B) after the Maturity Date and provided no
Letters of Credit are outstanding, apply any proceeds remaining
in the L/C Cash Collateral Account FIRST to pay any unpaid
Obligations then outstanding hereunder and THEN to refund any
remaining amount to the Borrower.
(iv) The Borrower, no more than once in any calendar
month, may direct the Administrative Lender to invest the
funds held in the L/C Cash Collateral Account (so long as
the aggregate amount of such funds exceeds any relevant
minimum investment requirement) in (A) direct obligations of
the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof and
(B) one or more other types of investments permitted by the
Determining Lenders, in each case with such maturities as
the Borrower, with the consent of the Determining Lenders,
may specify, pending application of such funds on account of
Reimbursement Obligations or on account of other
Obligations, as the case may be. In the absence of any such
direction from the Borrower, the Administrative Lender shall
invest the funds held in the L/C Cash Collateral Account (so
long as the aggregate amount of such funds exceeds any
relevant minimum investment requirement) in one or more
types of investments with the consent of the Determining
Lenders with such maturities as the Administrative Lender,
with the consent of the Determining Lenders, may specify,
pending application of such funds on account of
Reimbursement Obligations or on account of other
Obligations, as the case may be. All such investments shall
be made in the Administrative Lender's name for the account
of the Lenders. The Borrower recognizes that any losses or
taxes with respect to such investments shall be borne solely
by the Borrower, and the Borrower agrees to hold the
Administrative Lender and the Lenders harmless from any and
all such losses and taxes. Administrative Lender may
liquidate any investment held in the L/C Cash Collateral
Account in order to apply the proceeds of such investment on
account of the Reimbursement Obligations (or on account of
any other Obligation then due and payable, as the case may
be) without regard to whether such investment has matured
and without liability for any penalty or other fee incurred
(with respect to which the Borrower hereby agrees to
reimburse the Administrative Lender) as a result of such
application.
(v) At such time, if any, which the Commitment has
been terminated and the only unpaid amount of the
Obligations outstanding is Reimbursement Obligations, the
Administrative Lender shall release to the Borrower, no more
than once in any calendar month, the amount by which funds
held in the L/C Cash Collateral Account exceed 110% of the
aggregate outstanding Reimbursement Obligations. At such
time as any Event of Default is cured or waived, the
Administrative Lender shall, upon written instruction from
the Borrower, promptly distribute to the Borrower any funds
held in the L/C Cash Collateral Account.
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(vi) The Borrower shall pay to the Administrative
Lender the fees customarily charged by the Issuing Bank with
respect to the maintenance of accounts similar to the L/C
Cash Collateral Account.
ARTICLE 3
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO THE INITIAL REVOLVING
CREDIT ADVANCES AND THE INITIAL LETTERS OF CREDIT. The
obligation of each Lender to sign this Agreement and to make any
Revolving Credit Advance, and the obligation of the Issuing Bank
to issue Letters of Credit is subject to receipt by the
Administrative Lender of the following, in form and substance
satisfactory to each Lender, with a copy (except for the Notes)
for each Lender, or satisfaction of the following:
(a) a loan certificate of the Borrower certifying as to the
accuracy of its representations and warranties in the Loan
Papers, certifying that no Default has occurred, and including a
certificate of incumbency with respect to each Authorized
Signatory, and including (i) a copy of the articles of
incorporation of the Borrower, certified to be true, complete and
correct by the secretary of state of its state of incorporation,
(ii) a copy of the by-laws of the Borrower, as in effect on the
Agreement Date, (iii) a copy of the resolutions of the Borrower
authorizing it to execute, deliver and perform this Agreement,
the Notes and the other Loan Papers to which it is a party, and
(iv) a copy of a certificate of good standing and a certificate
of existence for its state of incorporation and each state in
which it is qualified to do business;
(b) a certificate of an officer acceptable to the Lenders
of each Significant Subsidiary, certifying as to the incumbency
of the officers signing the Loan Papers to which it is a party,
and including (i) a copy of its articles of incorporation (or
articles of partnership or other appropriate governing
documents), certified as true, complete and correct by the
secretary of state of its state of incorporation or organization,
(ii) a copy of its by-laws (or partnership agreement or other
appropriate governing document), as in effect on the Agreement
Date, (iii) a copy of the resolutions authorizing it to execute,
deliver and perform the Loan Papers to which it is a party, and
(iv) a copy of a certificate of good standing and a certificate
of existence for its state of incorporation;
(c) duly executed Notes, payable to the order of each
Lender and in an amount for each Lender equal to its Specified
Percentage of the Commitment;
(d) opinions of counsel to the Borrower and the
Subsidiaries addressed to the Lenders and in form and substance
satisfactory to the Lenders, dated the Agreement Date, and
covering the matters set forth in Sections 4.1(a), (b), (c), (g),
(l), (m) and (o) and such
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other matters incident to the transactions contemplated hereby
as the Administrative Lender or Special Counsel may reasonably
request;
(e) reimbursement for the Administrative Lender for Special
Counsel's reasonable fees and expenses rendered through the
Agreement Date;
(f) evidence that all corporate or other proceedings of the
Borrower and Subsidiaries taken in connection with the
transactions contemplated by this Agreement and the other Loan
Papers shall be reasonably satisfactory in form and substance to
the Lenders and Special Counsel; and the Lenders shall have
received copies of all documents or other evidence which the
Administrative Lender, Special Counsel or any Lender may
reasonably request in connection with such transactions;
(g) the closing fee as required pursuant to
Sections 2.4(b);
(h) the duly executed and completed Guaranty Agreements,
dated as of the Agreement Date;
(i) any fees required to be paid pursuant to the Fee
Letter;
(j) the duly executed Master Covenant Agreement;
(k) a certificate of an officer acceptable to the Lenders,
in form and substance satisfactory to the Lenders, certifying
that the execution, delivery and performance by the Obligors of
the Loan Papers will not violate or result in a default in
respect of any of the terms of the Senior Subordinated Notes;
(l) payment in full of all accrued and outstanding
obligations under the Existing Credit Agreement (other than in
respect of the Existing Letters of Credit) whereupon all
obligations of the Borrower (excluding those obligations which
expressly survive termination of the Existing Credit Agreement)
and the Lenders (including but not limited to, the participations
of the Lenders in the Bond Letters of Credit) shall terminate;
(m) the duly executed Swing Line Note, payable to the order
of the Swing Line Bank in the principal amount of $10,000,000;
(n) closing and funding of the Senior Notes;
(o) the duly executed Facility B Credit Agreement and all
documents related thereto; and
(p) in form and substance satisfactory to the Lenders and
Special Counsel, such other documents, instruments and
certificates as the Administrative Lender or any Lender may
reasonably require in connection with the transactions
contemplated hereby, including
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without limitation the status, organization or authority of the
Borrower or any Subsidiary or any other Person executing a Loan
Paper, and the enforceability of the Obligation.
SECTION 3.2 CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT
ADVANCES AND LETTERS OF CREDIT. The obligation of each Lender to
make each Revolving Credit Advance hereunder, and the obligation
of the Issuing Bank to issue each Letter of Credit hereunder is
subject to fulfillment of the following conditions immediately
prior to or contemporaneously with each such Advance or issuance:
(a) With respect to Advances other than Refinancing
Advances and each issuance of a Letter of Credit, all of the
representations and warranties of the Borrower under this
Agreement, which, pursuant to Section 4.2 hereof, are made at and
as of the time of such Advance or issuance, shall be true and
correct at such time in all material respects, both before and
after giving effect to the application of the proceeds of the
Advance or issuance;
(b) The incumbency of the Authorized Signatories shall be
as stated in the certificate of incumbency delivered in the
Borrower's loan certificate pursuant to Section 3.1(a) or as
subsequently modified and reflected in a certificate of
incumbency delivered to the Administrative Lender. The Lenders
may, without waiving this condition, consider it fulfilled and a
representation by the Borrower made to such effect if no written
notice to the contrary, dated on or before the date of such
Advance or issuance, is received by the Administrative Lender
from the Borrower prior to the making of such Advance or
issuance;
(c) There shall not exist a Default hereunder, with respect
to Advances other than Refinancing Advances, or with respect to
the issuance of Letters of Credit, or an Event of Default, with
respect to any Refinancing Advance, and, with respect to each
Advance other than a Refinancing Advance, and with respect to
issuance of each Letter of Credit, the Administrative Lender
shall have received written or telephonic certification thereof
by an Authorized Signatory (which certification, if telephonic,
shall be followed promptly by written certification);
(d) The aggregate Advances and amounts available for draw
under Letters of Credit, after giving effect to such proposed
Advance or Letter of Credit, shall not exceed the maximum
principal amount then permitted to be outstanding hereunder; and
(e) The Administrative Lender shall have received all such
other certificates, reports, statements, opinions of counsel or
other documents as the Administrative Lender or any Lender may
reasonably request; PROVIDED, HOWEVER, that the obligation of
each Lender to make a Revolving Credit Advance pursuant to
Sections 2.2(g) and 2.16(c) shall be absolute and unconditional
and shall not be affected by any circumstances, including,
without limitation, (i) the occurrence of any Default or Event of
Default, (ii) the failure of the Borrower to satisfy any
condition set forth in this Section 3.2, or (iii) any other
circumstance, happening or event whatsoever.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to each Lender as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. As of the Agreement Date, the
respective jurisdiction of incorporation and percentage ownership by the
Borrower or another Subsidiary of the Subsidiaries and Unincorporated
Ventures listed on SCHEDULE 3 are true and correct. Each of the Borrower and
its Subsidiaries and Unincorporated Ventures is a corporation or partnership,
as designated on SCHEDULE 3, duly organized, validly existing and in good
standing under the laws of its state of organization. Each of the Borrower
and its Subsidiaries has the corporate or other power and authority to own
its properties and to carry on its business as now being and hereafter
proposed to be conducted. Each of the Borrower and its Subsidiaries and
Unincorporated Ventures is duly qualified, in good standing and authorized to
do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification or authorization
except where the failure to be so qualified or authorized would not have a
Material Adverse Effect.
(b) AUTHORIZATION. The Borrower has corporate power and has taken all
necessary corporate action to authorize it to borrow hereunder. Each of the
Loan Parties has corporate or other power and has taken all necessary
corporate or other action to execute, deliver and perform the Loan Papers to
which it is party in accordance with the terms thereof, and to consummate the
transactions contemplated thereby. Each Loan Paper has been duly executed
and delivered by the Loan Party executing it. Each of the Loan Papers to
which the Loan Parties are party is a legal, valid and binding respective
obligation of the Loan Party executing it, enforceable in accordance with its
terms, subject to the following qualifications: (i) equitable principles
generally, and (ii) Debtor Relief Laws (insofar as any such law relates to
the bankruptcy, insolvency or similar event of any Loan Party).
(c) COMPLIANCE WITH OTHER LOAN PAPERS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance by the Loan Parties of the Loan
Papers to which they are respectively a party, and the consummation of the
transactions contemplated thereby, do not and will not (i) require any
consent or approval not already obtained, (ii) violate any Applicable Law,
(iii) conflict with, result in a breach of, or constitute a default under the
articles of incorporation, by-laws, articles of partnership, partnership
agreements or similar governing documents of any Loan Party, or under any
Necessary Authorization, indenture, agreement or other instrument, to which
any Loan Party is a party or by which they or their respective properties may
be bound, or (iv) result in or require the creation or imposition of any Lien
upon or with respect to any property now owned or hereafter acquired by any
Loan Party, except Permitted Liens.
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(d) LICENSES, ETC. All Necessary Authorizations which are material
have been duly obtained, and are in full force and effect without any known
conflict with the rights of others and free from any unduly burdensome
restrictions which could reasonably be expected to have a Material Adverse
Effect. The Borrower and its Subsidiaries and Unincorporated Ventures are
and will continue to be in compliance in all material respects with all
provisions thereof. No circumstance exists which might impair the utility of
the Necessary Authorization or the right to renew such Necessary
Authorization the effect of which would have a Material Adverse Effect. No
Necessary Authorization which could reasonably be expected to have a Material
Adverse Effect is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge, suspension, cancellation or
revocation.
(e) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries and
Unincorporated Ventures are in compliance in all respects with all Applicable
Laws, except where the failure to so comply would not have a Material Adverse
Effect.
(f) TITLE TO PROPERTIES. The Borrower and its Subsidiaries and
Unincorporated Ventures have good and indefeasible title to, or a valid
leasehold interest in, all of their material assets. None of their assets are
subject to any Liens, except Permitted Liens. No effective financing
statement or other Lien filing (except relating to Permitted Liens) is on
file in any state or jurisdiction that names the Borrower or any of its
Subsidiaries or Unincorporated Ventures as debtor or covers (or purports to
cover) any assets of the Borrower or any of its Subsidiaries or
Unincorporated Ventures. The Borrower and its Subsidiaries and
Unincorporated Ventures have not signed any such financing statement or
filing, nor any security agreement authorizing any Person to file any such
financing statement or filing.
(g) LITIGATION. Except as reflected on SCHEDULE 2 hereto, there is no
action, suit or proceeding pending against, or, to the best of the Borrower's
knowledge, threatened against the Borrower, or in any other manner relating
directly and adversely to the Borrower or any of its Subsidiaries or
Unincorporated Ventures, or any of their properties, in any court or before
any arbitrator of any kind or before or by any governmental body in which the
amount claimed (in excess of applicable insurance) exceeds a Material Amount.
(h) TAXES. All federal, state and other tax returns of the Borrower
and its Subsidiaries and Unincorporated Ventures required by law to be filed
have been duly filed and all federal, state and other taxes, assessments and
other governmental charges or levies upon the Borrower, its Subsidiaries or
Unincorporated Ventures or any of their respective properties, income,
profits and assets, which are due and payable, have been paid, unless the
same are being diligently contested in good faith by appropriate proceedings,
with adequate reserves established therefor, and no Lien (other than a
Permitted Lien) has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries and Unincorporated Ventures in
respect of their respective taxes are, in the judgment of the Borrower,
adequate.
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(i) FINANCIAL STATEMENTS; MATERIAL LIABILITIES. The Borrower has
furnished or caused to be furnished to the Lenders copies of its December 31,
1994 financial statements, which present fairly in accordance with GAAP the
financial position of the Borrower and its Subsidiaries and Unincorporated
Ventures as at such dates and the results of operations for the periods then
ended. The Borrower and its Subsidiaries and Unincorporated Ventures taken
as a whole have no material liabilities, contingent or otherwise, nor
material losses, except (i) as set forth in the December 31, 1994 financial
statements, (ii) in respect of the Senior Notes and (iii) the "AEW
Transaction" as defined and described in the Borrower's Form S-3 dated August
11, 1995.
(j) NO ADVERSE CHANGE. Since December 31, 1994, no event or
circumstances has occurred or arisen that could have a Material Adverse
Effect.
(k) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan other than those disclosed to the Administrative
Lender in writing. Each such Plan (other than any Multiemployer Plan) is in
compliance in all material respects with the applicable provisions of ERISA,
the Code, and any other applicable Federal or state law, rule or regulation.
With respect to each Plan (other than any Multiemployer Plan) of the Borrower
and each member of its Controlled Group, all reports required under ERISA or
any other Applicable Law to be filed with any governmental authority, the
failure of which to file could reasonably result in liability of the Borrower
or any member of its Controlled Group in excess of a Material Amount, have
been duly filed. All such reports are true and correct in all material
respects as of the date given. No Plan of the Borrower or any member of its
Controlled Group has been terminated under Section 4041(c) of ERISA nor has
any accumulated funding deficiency (as defined in Section 412(a) of the Code)
been incurred (without regard to any waiver granted under Section 412 of the
Code), nor has any funding waiver from the Internal Revenue Service been
received or requested the result of which could reasonably be expected to
have Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has failed to make any contribution or pay any amount due or
owing as required under the terms of any such Plan, or by Section 412 of the
Code or Section 302 of ERISA by the due date under Section 412 of the Code
and Section 302 of ERISA the result of which could reasonably be expected to
have Material Adverse Effect. There has been no ERISA Event or any event
requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Plan or its related trust of the Borrower or any member of its
Controlled Group since the effective date of ERISA. The present value of the
benefit liabilities, as defined in Title IV of ERISA, of each Plan subject to
Title IV of ERISA (other than a Multiemployer Plan) of the Borrower and each
member of its Controlled Group does not exceed by more than $10,000,000 the
present value of the assets of each such Plan as of the most recent valuation
date using each such Plan's actuarial assumptions at such date. There are no
pending, or to the best of the Borrower's knowledge threatened, claims,
lawsuits or actions (other than routine claims for benefits in the ordinary
course) asserted or instituted against, and neither the Borrower nor any
member of its Controlled Group has knowledge of any threatened litigation or
claims against, the assets of any Plan or its related trust or against any
fiduciary
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of a Plan with respect to the operation of such Plan the result of which
could reasonably be expected to have Material Adverse Effect. None of the
Borrower or, to the best of the Borrower's knowledge, any member of its
Controlled Group has engaged in any prohibited transactions, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, in connection
with any Plan the result of which could reasonably be expected to have
Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has withdrawn from any Multiemployer Plan, nor has incurred
or reasonably expects to incur (A) any liability under Title IV of ERISA
(other than premiums due under Section 4007 of ERISA to the PBGC), (B) any
withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under
Section 4201 of ERISA as a result of a complete or partial withdrawal (within
the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or
(C) any liability under Section 4062 of ERISA to the PBGC or to a trustee
appointed under Section 4042 of ERISA. None of the Borrower, any member of
its Controlled Group, or any organization to which the Borrower or any member
of its Controlled Group is a successor or parent corporation within the
meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069 the result of which could reasonably be
expected to have Material Adverse Effect. None of the Borrower or any member
of its Controlled Group maintains or has established any Plan, which is a
material welfare benefit plan within the meaning of Section 3(1) of ERISA and
which provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment, except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and the regulations
thereunder. Each of Borrower and its Controlled Group which maintains a Plan
which is a welfare benefit plan within the meaning of Section 3(1) of ERISA
has complied in all material respects with any applicable notice and
continuation requirements of COBRA and the regulations thereunder, except to
the extent that the failure to so comply could not reasonably be expected to
have a Material Adverse Effect. None of the Borrower or any member of its
Controlled Group maintains, has established, or has ever participated in a
multiemployer welfare benefit arrangement within the meaning of Section
3(40)(A) of ERISA.
(l) COMPLIANCE WITH REGULATIONS G, T, U AND X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, and no part of the proceeds of the Advances or
any Letters of Credit will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying any
margin stock. No assets of the Borrower and its Subsidiaries and
Unincorporated Ventures are margin stock. None of the Borrower and its
Subsidiaries nor any agent acting on their behalf, have taken or will
knowingly take any action which might cause this Agreement or any other Loan
Papers to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934, in each
case as in effect now or as the same may hereafter be in effect.
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(m) GOVERNMENTAL REGULATION. The Borrower and its Subsidiaries and
Unincorporated Ventures are not required to obtain any Necessary
Authorization that has not already been obtained from, or effect any material
filing or registration that has not already been effected with, any federal,
state or local regulatory authority in connection with the execution and
delivery of this Agreement or any other Loan Paper, or the performance
thereof (other than (a) any enforcement of remedies by the Administrative
Lender on behalf of the Lenders and (b) filings of certain Collateral
Documents under the UCC and appropriate real estate records), in accordance
with their respective terms, including any borrowings hereunder.
(n) ABSENCE OF DEFAULT. The Borrower and its Subsidiaries and
Unincorporated Ventures are in compliance in all respects with all of the
provisions of their articles of incorporation, by-laws, articles of
partnership, partnership agreement or other governing documents, and no event
has occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage
of time or giving of notice or both would constitute, (i) an Event of Default
or (ii) a default by the Borrower or any of its Subsidiaries or
Unincorporated Ventures under any material indenture, agreement or other
instrument, or any judgment, decree or order to which the Borrower or any of
its Subsidiaries or Unincorporated Ventures or by which they or any of their
material properties is bound.
(o) INVESTMENT COMPANY ACT. The Borrower is not required to register
under the provisions of the Investment Company Act of 1940, as amended.
Neither the entering into or performance by the Borrower of this Agreement
nor the issuance of the Notes violates any provision of such act or requires
any consent, approval, or authorization of, or registration with, the
Securities and Exchange Commission or any other governmental or public body
of authority pursuant to any provisions of such act.
(p) ENVIRONMENTAL MATTERS. Neither the Borrower nor any Subsidiary or
Unincorporated Venture has any actual knowledge or reason to believe that any
substance deemed hazardous by any Applicable Environmental Law, has been
installed on any real property now owned by the Borrower or any of its
Subsidiaries or Unincorporated Ventures which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
The Borrower and its Subsidiaries and Unincorporated Ventures have complied
in all respects with all Applicable Environmental Laws except to the extent
that the failure to so comply, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The Borrower and
its Subsidiaries and Unincorporated Ventures are not in violation in any
respects of or subject to any existing, pending or, to the best of the
Borrower's knowledge, threatened investigation or inquiry by any governmental
authority or to any material remedial obligations under any Applicable
Environmental Laws, except to the extent that the results of such
investigation, inquiry or remedial obligation would not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect, and
this representation and warranty would continue to be true and correct
following disclosure to the applicable governmental authorities of all
relevant facts,
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conditions and circumstances, if any, pertaining to any real property of the
Borrower and its Subsidiaries and Unincorporated Ventures. The Borrower and
its Subsidiaries and Unincorporated Ventures have obtained all material
permits, licenses or similar authorizations necessary to construct, occupy,
operate or use any buildings, improvements, fixtures, and equipment forming a
part of any real property of the Borrower or any Subsidiary or Unincorporated
Venture by reason of any Applicable Environmental Laws, except where the
failure to obtain such authorization would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries and Unincorporated Ventures undertook, at the
time of acquisition of any real property, reasonable inquiry into the
previous ownership and uses of such real property consistent with good
commercial or customary practice as applied and used in the real estate
industry at the time of each such acquisition. The Borrower and its
Subsidiaries and Unincorporated Ventures have taken all reasonable steps to
determine, and the Borrower and its Subsidiaries and Unincorporated Ventures
have no actual knowledge or reason to believe, after reasonable
investigation, that any hazardous substances or solid wastes have been
disposed of or otherwise released on or to the real property of the Borrower
or any of its Subsidiaries or Unincorporated Ventures, within the meaning of
the Applicable Environmental Laws, except to the extent that the failure to
so depose or release, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
(q) CERTAIN FEES. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Commitments or the Advances or the issuance of
the Letters of Credit hereunder. The Borrower agrees to indemnify and hold
harmless the Administrative Lender and each Lender from and against any
claims, demand, liability, proceedings, costs or expenses asserted with
respect to or arising in connection with any such fees or commissions.
(r) NECESSARY AUTHORIZATIONS. No event has occurred which permits (or
with the passage of time would permit) the revocation or termination of any
Necessary Authorization, or which could result in the imposition of any
restriction thereon, of such a nature that could reasonably be expected to
have a Material Adverse Effect.
(s) PATENTS, ETC. Except for the Borrower's new logo for which a
trademark application is pending as of the Agreement Date, the Borrower and
its Subsidiaries and Unincorporated Ventures have obtained all patents,
trademarks, service-marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the
operation of their business as presently conducted and as proposed to be
conducted. Nothing has come to the attention of the Borrower or any of its
Subsidiaries or Unincorporated Ventures to the effect that (i) any process,
method, part or other material presently contemplated to be employed by the
Borrower or any Subsidiary or Unincorporated Venture may infringe any patent,
trademark, service-mark, trade name, copyright, license or other right owned
by any other Person, or (ii) there is pending or overtly threatened any claim
or litigation against or affecting the Borrower or any Subsidiary
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or Unincorporated Venture contesting its right to sell or use any such
process, method, part or other material, provided with respect to clauses (i)
and (ii) that such events are limited to those which could reasonably be
expected to have a Material Adverse Effect.
(t) DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement which has been furnished to any Lender by or on
behalf of the Borrower or any Subsidiary or Unincorporated Venture in
connection herewith contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statement
contained herein and therein not misleading at the time it was furnished.
There is no fact known to the Borrower and not known to the public generally
that could reasonably be expected to materially adversely affect the assets
or business of the Borrower and its Subsidiaries and Unincorporated Ventures,
or in the future could reasonably be expected (so far as the Borrower can now
foresee) to have a Material Adverse Effect, which has not been set forth in
this Agreement or in the documents, certificates and statements furnished to
the Lenders by or on behalf of the Borrower prior to the date hereof in
connection with the transaction contemplated hereby.
(u) SOLVENCY. The Borrower is, and Borrower and its Subsidiaries and
Unincorporated Ventures on a consolidated basis are, Solvent.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Papers shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance and issuance of each Letter of Credit, and
each shall be true and correct when made, except to the extent (a) previously
fulfilled in accordance with the terms hereof, (b) applicable to a specific
date or otherwise subsequently inapplicable or modified to give effect to the
transactions expressly permitted hereby, or (c) previously waived in writing
by the Determining Lenders with respect to any particular factual
circumstance. All such representations and warranties shall survive, and not
be waived by, the execution hereof by any Lender, any investigation or
inquiry by any Lender, or by the making of any Advance or the issuance of any
Letter of Credit under this Agreement.
ARTICLE 5
BUSINESS COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Commitment is outstanding (whether or not the conditions to borrowing have
been or can be fulfilled):
Section 5.1 MAINTENANCE OF PROPERTY, INSURANCE, ACCOUNTING PRACTICES,
CORPORATE EXISTENCE. The Borrower covenants and agrees to, and will cause
each Subsidiary and Unincorporated Venture to:
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(a) Maintain its material property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto, consistent with sound business practice and as is customary in the
case of corporations or other entities of established reputation engaged in
the same or a similar business and similarly situated;
(b) Maintain, with financially sound and reputable insurers, or through
its own program of self-insurance, insurance with respect to its material
properties and business against such casualties and contingencies, of such
types, and in such amounts as is customary in the case of corporations or
other entities of established reputation engaged in the same or a similar
business and similarly situated;
(c) Keep books of record and accounts in which entries will be made of
all of its business transactions, and will reflect in it financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP;
(d) Do or cause to be done all things necessary to preserve and keep in
full force and effect its material rights;
(e) Do or cause to be done all things necessary to preserve and keep in
full force and effect its existence (except as may be specifically permitted
by this Agreement); and
(f) Cause to be paid and discharged (i) all lawful tax assessments and
governmental charges imposed from the income or profits of the Borrower, its
Subsidiaries and Unincorporated Ventures or upon any property belonging to
the Borrower, any Subsidiary or any Unincorporated Venture and (ii) all
lawful claims, whether for labor, materials, supplies, services or anything
else, which have become due and payable and which by law have or may become a
Lien upon the property of the Borrower or any of its Subsidiaries or
Unincorporated Ventures; PROVIDED, HOWEVER, that the Borrower, its
Subsidiaries and Unincorporated Ventures shall not be required to cause to be
paid or discharged any such tax assessment, charge or claim so long as the
amount, applicability or validity thereof shall be contested in good faith by
appropriate proceedings, and adequate book reserves shall have been
established to the extent required by GAAP with respect thereto.
Section 5.2 INSPECTION OF PROPERTIES AND BOOKS. The Borrower
covenants and agrees that it will permit, and will cause each Subsidiary and
Unincorporated Venture to permit, any Bank, upon (i) reasonable request, if
such request is prior to the occurrence of a Default or an Event of Default
or (ii) request, if such request is after the occurrence of a Default or an
Event of Default, to any Authorized Officer, to visit and inspect any of the
properties of, to examine the books of account and records of the Borrower,
any Subsidiary or Unincorporated Venture and to take extracts therefrom and
to discuss the affairs, finances or accounts of the Borrower, any Subsidiary
or Unincorporated Venture, and to be advised as to the same by the officers
of the Borrower, at all such times during normal
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business hours, in such detail and through such agents and representatives as
such Bank may reasonably desire.
Section 5.3 MERGER AND SALE OF ASSETS.
(a) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, directly or indirectly
sell, transfer or otherwise dispose of any of its assets (whether now owned
or hereafter acquired, and including any interest in a joint venture or
partnership) unless immediately prior to, and after giving effect to, such
sale, transfer or other disposition, the Borrower, its Subsidiaries and
Unincorporated Ventures are and will be in compliance with all covenants
hereunder and there shall otherwise be no Default or Event of Default
hereunder; and
(b) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, merge into or consolidate
with any other Person; provided, however, if after giving effect to any such
merger or consolidation, (i) the business of the Borrower or any Subsidiary
or Unincorporated Venture, as appropriate, will not be materially changed and
(ii) the Borrower or any Subsidiary or Unincorporated Venture, as
appropriate, will not be in default in respect of any of the covenants
contained in any material agreement, including, without limitation, this
Agreement, to which the Borrower or any Subsidiary or Unincorporated Venture
is a party or by which its property may be bound,
(1) any corporation, partnership or joint venture may
merge or consolidate with the Borrower, provided that the
Borrower shall be the continuing and surviving corporation,
(2) any Subsidiary may merge with or consolidate with
any corporation, partnership or joint venture, provided
that, unless such merger or consolidation shall be with the
Borrower, such Subsidiary shall be the continuing and
surviving corporation, and
(3) any Unincorporated Venture may merge with or
consolidate with any corporation, partnership or joint
venture, provided that, unless such merger or consolidation
shall be with the Borrower or a Subsidiary, such
Unincorporated Venture shall be the continuing and surviving
person.
Section 5.4 NET WORTH. The Borrower covenants and agrees that it
will not allow its Net Worth at any time to be less than the sum of (i)
$285,000,000 plus (ii) 50% of Consolidated Net Income (excluding Consolidated
Net Income for any fiscal quarter in which Consolidated Net Income was a
negative number) earned on or after the Agreement Date, plus (iii) 75% of the
Net Cash Proceeds of any equity issues of the Borrower's Capital Stock after
the Agreement Date.
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Section 5.5 CONTINGENT LIABILITIES. The Borrower covenants and
agrees that it will not, and will cause each Subsidiary and Unincorporated
Venture to not, guarantee, endorse, contingently agree to purchase, or
otherwise become liable, directly or indirectly, upon the obligation of or in
connection with the earnings, the assets, the stock, or the dividends of any
other Person (other than the Borrower or any Subsidiary), including
obligations of the Borrower, each Subsidiary and Unincorporated Venture
arising solely by virtue of any of them being a general partner or venturer
of any Unincorporated Venture, except (i) the obligations in respect of the
written agreements described in Section 5.4(a)(iv) hereof, (ii) the
guarantees and other contingent obligations set forth on SCHEDULE 11 hereto,
(iii) endorsements in the ordinary course of business of negotiable
instruments for deposit or collection, (iv) guarantees of loans to any
employee; PROVIDED, THAT any such guaranty of an employee loan shall not
exceed the amount of $100,000 per employee, and the amount of such guaranties
of employee loans, together with the amount of Investments permitted pursuant
to clause (vi) of the definition of "Permitted Investments," shall not
exceed, in the aggregate, more than $2,000,000, and (v) guarantees and
contingent obligations incurred after the Agreement Date not to exceed
$20,000,000 in aggregate principal amount.
Section 5.6 INCURRENCE AND RETENTION OF DEBT. The Borrower covenants
and agrees that it will not, and will cause each Subsidiary and
Unincorporated Venture to not, incur, create, assume, or suffer to exist any
Debt (other than Debt existing on the Agreement Date) unless, immediately
prior to, and after the incurrence of, such Debt, the Borrower, its
Subsidiaries and Unincorporated Ventures are and will be in compliance with
all covenants hereunder and there shall otherwise be no Default or Event of
Default hereunder.
Section 5.7 INVESTMENTS. The Borrower will not, and will cause each
Subsidiary and Unincorporated Venture to not, make or permit to remain any
Investment other than a Permitted Investment.
Section 5.8 NOTICE OF LITIGATION. The Borrower covenants and agrees
that it will, and will cause each Subsidiary and Unincorporated Venture to,
promptly give notice in writing to the Lenders (i) of any litigation to which
the Borrower, any Subsidiary or Unincorporated Venture becomes a party, if
(A) the amount in controversy exceeds $500,000 and (B) the Borrower's
insurance carrier does not acknowledge coverage with respect to such
litigation, and (ii) of all proceedings before any governmental or regulatory
agencies (A) affecting or potentially affecting the business or property of
the Borrower, any Subsidiary or Unincorporated Venture in an amount in excess
of $500,000 or (B) materially affecting the ability of the Borrower, any
Subsidiary or Unincorporated Venture to perform their respective covenants
and obligations hereunder or under any other obligations owed any Lender.
Section 5.9 TOTAL DEBT RATIO. The Borrower covenants and agrees that
it will not allow the ratio of (i) Total Debt to (ii) EBITDA, in each case
for the four consecutive fiscal quarters immediately preceding the date of
determination, to be greater than 4.00 to 1 at the end of any fiscal quarter.
For purposes of this Section 5.10, with respect to assets not
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owned at all times during the four consecutive quarters immediately preceding
the date of determination of EBITDA, there shall be (i) included in EBITDA
(without duplication) the EBITDA of any assets acquired during any such four
consecutive fiscal quarters immediately preceding the date of determination
and (ii) excluded from EBITDA the EBITDA of any asset disposed of during any
such four consecutive fiscal quarters immediately preceding the date of
determination.
Section 5.10 CASH FLOW RATIO. The Borrower covenants and agrees that
it will not allow the ratio of (i)(a) EBITDA, plus (b) lease expense pursuant
to Operating Leases, minus (c) Maintenance Capital Expenditures to (ii) (a)
Net Interest, plus (b) lease expense pursuant to Operating Leases, plus (c)
Current Maturities, in each case other than Current Maturities (which, with
respect to Current Maturities, shall be for the four consecutive fiscal
quarters immediately succeeding the date of determination) for the four
consecutive fiscal quarters immediately preceding the date of determination,
to be less than 1.50 to 1 at the end of any fiscal quarter.
Section 5.11 SENIOR DEBT RATIO. The Borrower covenants and agrees
that it will not allow the ratio of (i) Senior Debt to (ii) EBITDA, in each
case for the four consecutive fiscal quarters immediately preceding the date
of determination, to be greater than 3.0 to 1 at the end of any fiscal
quarter. For purposes of this Section 5.12, with respect to assets not owned
at all times during the four consecutive quarters immediately preceding the
date of determination of EBITDA, there shall be (i) included in EBITDA
(without duplication) the EBITDA of any assets acquired during any such four
consecutive fiscal quarters immediately preceding the date of determination
and (ii) excluded from EBITDA the EBITDA of any asset disposed of during any
such four consecutive fiscal quarters immediately preceding the date of
determination.
Section 5.12 LIENS. The Borrower covenants and agrees that it will
not create, assume or suffer to exist, or permit any Subsidiary or
Unincorporated Venture to create, assume or suffer to exist, any Lien on any
asset now owned or hereafter acquired by it except Permitted Liens. Other
than with respect to Senior Notes, the Borrower shall not, and shall not
permit any Subsidiary or Unincorporated Venture to, agree with any Person
that it shall not create, assume, incur, permit or suffer to exist or to be
created, assumed, incurred or permitted to exist, directly or indirectly, any
Lien on any of its assets.
Section 5.13 ACCOUNTING CHANGES. The Borrower covenants and agrees
that it will not, and will not permit an of its Subsidiaries or
Unincorporated Ventures to, make any change in its accounting treatment or
financial reporting practices, except as permitted or required by GAAP in
effect from time to time. The Borrower will not change its fiscal year or the
calculation of its fiscal quarter ends.
Section 5.14 AMENDMENT AND MODIFICATION OF SUBORDINATED DEBT
DOCUMENTS. The Borrower covenants and agrees that it will not, and it will
not permit any Subsidiary or Unincorporated Venture to, directly or
indirectly, amend, modify, supplement, waive
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compliance with, or assent to noncompliance with, any term, provision or
condition of any of the documents governing or evidencing the Subordinated
Debt, which (i) the Lenders deem material (including, without limitation,
relating to events of default, acceleration rights, interest rates, tenor,
maturity date, subordination, covenants, prohibition against amending any
documents related to this Agreement and definitions with respect thereto
(including, without limitation, the definition of "Senior Debt")) or (ii)
places any further restrictions on the Borrower, its Subsidiaries or
Unincorporated Ventures or increases the obligations of the Borrower, its
Subsidiaries or Unincorporated Ventures thereunder or confers on the holders
thereof any additional rights.
Section 5.15 LEASE-BACKS. The Borrower covenants and agrees that it
will not, and will not permit any Subsidiary or Unincorporated Venture to,
enter into any arrangements, directly or indirectly, with any Person, whereby
the Borrower, any Subsidiary or Unincorporated Venture shall sell or transfer
any property, whether now owned or hereafter acquired, used or useful in its
business, and thereafter rent or lease the property so sold or transferred in
an aggregate amount (determined at the greater of fair market value or net
book value) in excess of $20,000,000 during the term of this Agreement.
Section 5.16 ENVIRONMENTAL MATTERS.
(a) The Borrower covenants and agrees that it will not, and will not
permit any of its Subsidiaries or Unincorporated Ventures to, use, generate,
manufacture, produce, store, release, discharge or dispose of on, under or
about any real property owned or leased by the Borrower or any of its
Subsidiaries or Unincorporated Ventures (such owned or leased real property,
the "Property"), or transport to or from the Property, any Hazardous
Substance (as defined below), or (to the extent within the Borrower's or such
Subsidiary's or Unincorporated Venture's control) permit any other Person to
do so, where such could reasonably be expected to have a Material Adverse
Effect.
(b) The Borrower shall keep and maintain and shall cause each
Subsidiary and Unincorporated Venture to keep and maintain, the Property in
compliance with any Environmental Law (as defined below) where the failure to
do so could reasonably be expected to have a Material Adverse Effect.
(c) In the event that any investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature
(the "Remedial Work") with respect to the Property is required to be
performed by the Borrower or any of its Subsidiaries or Unincorporated
Ventures under any applicable local, state or federal law or regulation, any
judicial order, or by any governmental entity because of, or in connection
with, the current or future presence, suspected presence, release or
suspected release of a Hazardous Substance in or into the air, soil,
groundwater or surface water at, on, under or within the Property (or any
portion thereof), the Borrower or such Subsidiary or Unincorporated Venture
shall within thirty (30) days after written demand for performance thereof by
the Lenders (or such shorter period of time as may be required under any
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applicable law, regulation, order or agreement), commence and thereafter
diligently prosecute to completion, all such Remedial Work.
(d) The Borrower will defend, indemnify and hold harmless the Lenders,
and their respective employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Law
applicable to the operations of the Borrowers or any Subsidiary or
Unincorporated Venture or the Property, or any orders, requirements or
demands of Tribunal related thereto, including, without limitation,
attorneys' and consultants' fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.
(e) As used herein, (i) "Environmental Law" means any federal, state or
local law, statute, ordinance, or regulation now or hereafter in effect
pertaining to health, industrial hygiene, or the environmental conditions on,
under or about the Property, and (ii) the term "Hazardous Substance" means
those substances included within the definitions of "hazardous substances",
"hazardous materials", "toxic substances", or "solid waste" under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. Sections 9601 ET SEQ., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ. and the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 ET SEQ., and in the
regulations promulgated pursuant to said laws, and such other substances,
materials and wastes which are or become regulated under applicable local,
state or federal law, or which are classified as hazardous or toxic under
federal, state, or local laws or regulations.
Section 5.17 ERISA COMPLIANCE. The Borrower covenants and agrees that
it shall, and shall cause each Subsidiary and Unincorporated Venture to (i)
at all times, make prompt payment of all contributions required under all
Plans and required to meet the minimum funding standard set forth in ERISA
with respect to its Plans, (ii) after the discovery by an Authorized Officer,
notify the Lenders immediately of any fact, including, but not limited to,
any Reportable Event arising in connection with any of its Plans, which might
constitute grounds for termination thereof by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer
such Plan, together with a statement, if requested by any Lender, as to the
reason therefor and the action, if any, proposed to be taken with respect
thereto, and (iii) not permit any Plan to be subject to any involuntary
termination proceedings.
Section 5.18 BUSINESS. The Borrower covenants and agrees that it will
not, and will not permit any Subsidiary or Unincorporated Venture to, engage
in, directly or through
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other Persons, any business other than the businesses now carried on and
other businesses directly related thereto.
Section 5.19 DEBT. The Borrower covenants and agrees that it will
not, and will cause each Subsidiary and Unincorporated Venture to not, (i)
default, beyond any notice, grace or cure period, in any payment equal to or
exceeding the aggregate amount of $1,000,000 of principal of or interest on
any Debt with respect to which recourse may be made against the Borrower or
any Subsidiary or Unincorporated Venture beyond any period of grace provided
with respect thereto, or (ii) default, beyond any notice, grace or cure
period, in the performance of any other agreement, term, covenant or
condition contained in any agreement or instrument under or by which any such
Debt, the unpaid principal amount of which then equals or exceeds $1,000,000
is created, evidenced or secured if the effect of such default is to cause
such Debt to become due before its stated maturity.
Section 5.20 TRANSACTIONS WITH AFFILIATES. The Borrower covenants and
agrees that it will not, and will not permit any Subsidiary or Unincorporated
Venture to, directly or indirectly, enter into any transaction (including,
but not limited to, the sale or exchange of property or the rendering of
service) with any of its Affiliates, other than in the ordinary course of
business and upon fair and reasonable terms no less favorable than the
Borrower or any Subsidiary or Unincorporated Venture could obtain or could
become entitled to in an arm's-length transaction with a Person which was not
an Affiliate.
Section 5.21 USE OF PROCEEDS. The Borrower shall use the proceeds of
the Commitment to refinance the debt outstanding under the Existing Credit
Agreement and for working capital and general corporate purposes.
Section 5.22 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES,
AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS
(INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE
SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH
HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE FEES AND
DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH
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INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND WHETHER BASED ON
ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON LAW OR AT
EQUITABLE CAUSE, OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR CONNECTED
WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ITS
PREDECESSORS IN INTEREST, OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL
CONDITION OF PROPERTY OF THE BORROWER), IN ANY MANNER RELATING TO OR ARISING
OUT OF THIS AGREEMENT, THE LOAN PAPERS, OR ANY ACT, EVENT OR TRANSACTION OR
ALLEGED ACT, EVENT OR TRANSACTION RELATING OR ATTENDANT THERETO, THE MAKING
OF ANY PARTICIPATIONS IN THE ADVANCES OR THE LETTERS OF CREDIT AND THE
MANAGEMENT OF THE ADVANCES OR THE LETTERS OF CREDIT, INCLUDING IN CONNECTION
WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF
ADMINISTRATIVE LENDER OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED
EXCLUSIVELY BY A PARTICIPANT AGAINST THE ADMINISTRATIVE LENDER OR ANY LENDER
AND NOT THE BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE
ADVANCES OR THE LETTERS OF CREDIT HEREUNDER, OR IN CONNECTION WITH ANY
INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (i) ANY
CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A
COURT OF COMPETENT JURISDICTION, AND (ii) MATTERS RAISED BY ONE LENDER
AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR
ITS MANAGEMENT (COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT THAT ANY
INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL
USE THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION
DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH
REPRESENTATION.
(b) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL EXPENSES
(INCLUDING THE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN
CONNECTION WITH ANY INDEMNIFIED MATTER. IF FOR ANY REASON THE FOREGOING
INDEMNIFICATION IS UNAVAILABLE TO ANY INDEMNITEE OR INSUFFICIENT TO HOLD ANY
INDEMNITEE HARMLESS WITH RESPECT TO INDEMNIFIED MATTERS, THEN THE BORROWER
SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A RESULT
OF SUCH LOSS, CLAIM, DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE
TO REFLECT NOT ONLY THE RELATIVE BENEFITS RECEIVED BY THE BORROWER AND THE
BORROWER'S STOCKHOLDERS ON THE ONE HAND AND SUCH INDEMNITEE ON THE OTHER HAND
BUT ALSO THE RELATIVE
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FAULT OF THE BORROWER AND SUCH INDEMNITEE, AS WELL AS ANY OTHER RELEVANT
EQUITABLE CONSIDERATIONS. THE REIMBURSEMENT, INDEMNITY AND CONTRIBUTION
OBLIGATIONS UNDER THIS SECTION SHALL BE IN ADDITION TO ANY LIABILITY WHICH
THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND
CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE
BORROWER, THE ADMINISTRATIVE LENDER, THE LENDERS AND ALL OTHER INDEMNITEES.
THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF
THE OBLIGATIONS.
ARTICLE 6
INFORMATION
Section 6.1 FINANCIAL STATEMENTS AND OTHER REPORTS BY THE BORROWER.
The Borrower will deliver to each Lender:
(a) As soon as practicable after the end of each of the first three
quarterly fiscal periods in each fiscal year of the Borrower, and in any
event within 45 days thereafter, duplicate copies of
(1) Combined balance sheets, statements of earnings,
shareholders' equity and cash flows for the portion of the
fiscal year ending with such quarter; all in reasonable
detail and accompanied by an Officer's Certificate
certifying that the aforementioned financial statements
present fairly the financial position of the Borrower
(Combined Basis) at the end of such quarter and the results
of operations and the changes in financial position for the
portion of the fiscal year ending with such quarter,
determined in accordance with GAAP; and
(2) An Officer's Certificate (with calculations and a
new SCHEDULE 11 attached thereto) certifying (i) as to any
increases or reductions in interest in the Significant
Investments, and (ii) compliance with Sections 5.3, 5.4(a),
5.5, 5.6, 5.8, 5.10, 5.11 and 5.12.
(b) As soon as practicable after the end of each fiscal year of the
Borrower and in any event within 120 days thereafter, duplicate copies of:
(1) Combined balance sheets, statements of earnings,
shareholders' equity and cash flows of the Borrower for such
year; all in reasonable detail, prepared on a basis
consistent with the financial statements delivered to all
Lenders in prior periods and accompanied by an unqualified
opinion and report of KPMG Peat
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Marwick, or other independent certified accountants of recognized
standing selected by the Borrower and reasonably consented to by
Lenders, which report shall state that no default under this
Agreement and no condition or event which after notice or
lapse of time or both would constitute a default under this
Agreement has come to the knowledge of such accountants or,
if such is not the case, the details of such default or such
condition or event; and
(2) An Officer's Certificate (with calculations and a
new SCHEDULE 11 attached thereto) certifying (i) as to any
increases or reductions in interest in the Significant
Investments, and (ii) compliance with Sections 5.4, 5.5,
5.9, 5.10 and 5.11.
(c) As soon as practicable after the Borrower or any Subsidiary files
with the S.E.C. any of the following documents and in any event within 10
days thereafter, a copy of:
(1) Any final Registration Statement filed for the
registration of any securities under the Securities Act of
1933, as amended (except a Registration Statement on Form S-
8 for the registration of stock to be issued in connection
with any Stock Plan);
(2) Each Annual and Periodic Report filed under
Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended;
(3) Each definitive Proxy Statement filed pursuant to
the Securities Exchange Act of 1934, as amended; and
together with any other document filed with the S.E.C. or
the New York Stock Exchange, Inc., as may be requested by
any Lender.
(d) Upon request by any Lender, copies of the following:
(1) Each annual report/return, as well as all
schedules and attachments required to be filed with the
Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the regulations promulgated
thereunder, in connection with each of its Plans for each
Plan year; and
(2) Such additional information concerning any of its
Plans as may be reasonably requested.
(e) On the date of receipt by the Borrower of any change in
the Index Debt Rating, a copy of such change.
(f) With reasonable promptness, such other data and
information as from time to time may be reasonably requested by
any Lender.
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(g) Notwithstanding anything in this Section 6.1 to the contrary, (i)
if the terms of any Subordinated Debt of the Borrower requires delivery of
Parent Company financial statements and (ii) any Lender shall request
delivery of Parent Company financial statements, the Borrower shall also
deliver to such Lender the financial statements required to be delivered
pursuant to (1) Section 6.1(a) on a Parent Company basis within 60 days after
the end of the first three quarterly fiscal periods of the Borrower and (2)
Section 6.1(b) on a Parent Company basis within 120 days after the end of
each fiscal year of the Borrower.
Section 6.2 OFFICER'S CERTIFICATE. Each set of financial statements
delivered pursuant to Sections 6.1(a) and (b) shall be accompanied by an
Officer's Certificate stating whether there exists on the date of such
certificate any condition or event which then constitutes, or which after
notice or lapse of time or both, would constitute, a breach of any covenant
herein, and if any such condition or event then exists, specifying the nature
and period of existence thereof and the action the Borrower is taking or
proposes to take with respect thereto.
ARTICLE 7
DEFAULT
Section 7.1 EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default, whatever the reason for such event, and
whether voluntary, involuntary, or effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) The Borrower fails to make any payment of principal on any Note or
any Reimbursement Obligation on the date such payment is due;
(b) The Borrower fails to make any payment of interest on any Note,
Reimbursement Obligation or any other costs, fees, expenses or other amounts
payable hereunder or under the other Loan Papers within one Business Day
after the date such payment is due;
(c) The Borrower or any Subsidiary or Unincorporated Venture fails to
perform or observe any other covenant in this Agreement or any other Loan
Paper (other than the Master Covenant Agreement) to be performed or observed
by it and such failure continues for a period of 30 days after any Lender has
given written notice specifying such failure to the Borrower;
(d) Any material warranty or representation by or on behalf of the
Borrower or any Subsidiary or Unincorporated Venture contained in this
Agreement or any other Loan Paper is false or misleading in any material
respect;
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(e) The Borrower or any Subsidiary or Unincorporated Venture fails to
make any payment due on any other Debt in an aggregate amount of at least
$1,000,000 beyond any applicable grace period, including any extension
thereof, or the Company, or any Subsidiary fails to perform or observe any
other provision contained in any such Debt or any agreement securing or
relating to such Debt if and only if the effect of such failure to make such
payment or to perform or observe such other provision is to cause or permit
the holder of such Debt or any Person acting on such holder's behalf to cause
such Debt to become due prior to its stated maturity;
(f) The Borrower or any Significant Subsidiary or Unincorporated
Venture (other than Insolvent Unincorporated Ventures) (i) shall become
insolvent, (ii) shall fail to pay its debts generally as they become due,
(iii) shall make a general assignment for the benefit of creditors, (iv)
shall voluntarily seek, consent to, or acquiesce in the benefit of any Debtor
Relief Law, (v) shall become a party to or is made the subject of any
proceeding provided for by any Debtor Relief Law, other than as a creditor or
claimant (unless, in the event such proceeding is involuntary, the petition
instituting same is dismissed within 60 days after its filing), or (vi) take
any corporate or other action for the purpose of effecting any of the
foregoing;
(g) The Borrower or any Subsidiary or Unincorporated Venture fails to
have discharged, within a period of 45 days after the expiration of all
rights of appeal, any judgment, warrant of attachment, sequestration, or
similar proceeding against any of its respective assets with a value,
individually or collectively, in excess of a Material Amount;
(h) The Borrower or any Subsidiary or Unincorporated Venture shall fail
to perform or observe, beyond any grace period provided with respect thereto
and provided that the Borrower has been given a notice of default with
respect to, any covenant contained in that certain Master Covenant Agreement;
(i) Any material provision of any Loan Paper after delivery thereof
hereunder shall for any reason cease to be valid and binding on the Person
(other than any Lender) executing such Loan Paper, or the Borrower or such
Person shall so state in writing;
(j) A final judgment or judgments for the payment of money shall be
entered by a court or courts against the Borrower or any Subsidiary or
Unincorporated Venture and such judgment or judgments remain unstayed or
undischarged for a period of 30 days from the date of entry thereof and the
aggregate amount of all such judgments exceeds a Material Amount (net of
actual insurance coverage if the Lenders receive evidence satisfactory to
them that coverage exists);
(k) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person shall engage in transactions which
in the aggregate would reasonably result in a direct or indirect liability to
the Borrower or any member of its Controlled Group in excess
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of $100,000 under Section 409 or 502 of ERISA or Section 4975 of the Code;
(ii) the Borrower or any member of its Controlled Group shall incur any
accumulated funding deficiency, as defined in Section 412 of the Code, in the
aggregate in excess of $100,000, or request a funding waiver from the
Internal Revenue Service for contributions in the aggregate in excess of
$100,000; (iii) the Borrower or any member of its Controlled Group shall
incur any withdrawal liability in the aggregate in excess of $100,000 as a
result of a complete or partial withdrawal within the meaning of Section 4203
or 4205 of ERISA, or any other liability with respect to a Plan in excess of
$100,000, unless the amount of such liability has been funded within the Plan
or pursuant to one or more insurance contracts; (iv) the Borrower or any
member of its Controlled Group shall fail to make a required contribution by
the due date under Section 412 of the Code or Section 302 of ERISA which
would result in the imposition of a lien under Section 412 of the Code or
Section 302 of ERISA; (v) the Borrower, any member of its Controlled Group or
any Plan sponsor shall notify the PBGC of an intent to terminate, or the PBGC
shall institute proceedings to terminate, or the PBGC shall institute
proceedings to terminate, any Plan subject to Title IV of ERISA; (vi) a
Reportable Event shall occur with respect to a Plan subject to Title IV of
ERISA, and within 15 days after the reporting of such Reportable Event to the
Administrative Lender, the Administrative Lender shall have notified the
Borrower in writing that the Determining Lenders have made a determination
that, on the basis of such Reportable Event, there are reasonable grounds for
the termination of such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such Plan
and as a result thereof an Event of Default shall have occurred hereunder;
(vii) a trustee shall be appointed by a court of competent jurisdiction to
administer any Plan or the assets thereof; (viii) the benefits of any Plan
shall be increased, or the Borrower or any member of its Controlled Group
shall begin to maintain, or begin to contribute to, any Plan, without the
prior written consent of the Determining Lenders; or (ix) any ERISA Event
with respect to a Plan subject to Title IV of ERISA shall have occurred, and
30 days thereafter (A) such ERISA Event, other than such event described in
clause (f) of the definition of ERISA Event herein, (if correctable) shall
not have been corrected and (B) the then present value of such Plan's benefit
liabilities, as defined in Title IV of ERISA, shall exceed the then current
value of assets accumulated in such Plan; provided, however, that the events
listed in subsections (v) through (ix) shall constitute Events of Default
only if, as of the date thereof or any subsequent date, the amount of
liability that the Borrower or any member of its Controlled Group reasonably
is likely to incur in the aggregate under Section 4062, 4063, 4064, 4219 or
4023 of ERISA or any other provision of law with respect to all such Plans,
computed by the actuary of the Plan taking into account any applicable rules
and regulations of the PBGC at such time, and based on the actuarial
assumptions used by the Plan, resulting from or otherwise associated with
such event exceeds $100,000; or
(l) A Change of Control shall have occurred.
Section 7.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
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(a) With the exception of an Event of Default specified in Section
7.1(f) hereof, the Administrative Lender shall, upon the direction of the
Determining Lenders, terminate the Commitment and/or declare the principal of
and interest on the Advances and all Obligations and other amounts owed under
the Loan Papers to be forthwith due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived,
anything in the Loan Papers to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Section
7.1(f) hereof, such principal, interest and other amounts shall thereupon and
concurrently therewith become due and payable and the Commitment shall
automatically forthwith terminate, all without any action by the
Administrative Lender, any Lender or any holders of the Notes and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in the Loan Papers to the contrary notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Lender may demand upon the Borrower to, and forthwith upon
such demand, the Borrower shall, pay to the Administrative Lender in same day
funds at the office of the Administrative Lender in such demand for deposit
in the L/C Cash Collateral Account, an amount equal to 102% of the maximum
amount available to be drawn under the Letters of Credit then outstanding.
(d) The Administrative Lender, and the Lenders may exercise all of the
post-default rights granted to them under the Loan Papers or under Applicable
Law.
(e) The rights and remedies of the Administrative Lender and the
Lenders hereunder shall be cumulative, and not exclusive.
ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.1 LIBOR BASIS DETERMINATION INADEQUATE. If with respect to
any proposed LIBOR Advance for any Interest Period, any Lender determines
that (i) deposits in dollars (in the applicable amount) are not being offered
to that Lender in the relevant market for such Interest Period or (ii) the
LIBOR Basis for such proposed LIBOR Advance does not adequately cover the
cost to such Lender of making and maintaining such proposed LIBOR Advance for
such Interest Period, such Lender shall forthwith give notice thereof to the
Borrower, whereupon until such Lender notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligation
of such Lender to make LIBOR Advances shall be suspended.
Section 8.2 ILLEGALITY. If any applicable law, rule or regulation,
or any change therein or adoption thereof, or interpretation or
administration thereof by any governmental
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authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or its LIBOR Lending
Office) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency, shall make it
unlawful or impossible for such Lender (or its LIBOR Lending Office) to make,
maintain or fund its LIBOR Advances, such Lender shall so notify the Borrower
and the Administrative Lender. Before giving any notice to the Borrower
pursuant to this Section, the notifying Lender shall designate a different
LIBOR Lending Office or other lending office if such designation will avoid
the need for giving such notice and will not, in the sole judgment of the
Lender, be materially disadvantageous to the Lender. Upon receipt of such
notice, notwithstanding anything contained in Article 2 hereof, the Borrower
shall repay in full the then outstanding principal amount of each LIBOR
Advance owing to the notifying Lender, together with accrued interest
thereon, on either (a) the last day of the Interest Period applicable to such
Advance, if the Lender may lawfully continue to maintain and fund such
Advance to such day, or (b) immediately, if the Lender may not lawfully
continue to fund and maintain such Advance to such day. Concurrently with
repaying each affected LIBOR Advance owing to such Lender, notwithstanding
anything contained in Article 2 hereof, the Borrower shall borrow a Prime
Rate Advance from such Lender, and such Lender shall make such Prime Rate
Advance, in an amount such that the outstanding principal amount of the
Advances owing to such Lender shall equal the outstanding principal amount of
the Advances owing immediately prior to such repayment.
Section 8.3 INCREASED COSTS.
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof
or compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending
Office) to any Tax (net of any tax benefit engendered
thereby) with respect to its LIBOR Advances or its
obligation to make such Advances, or shall change the basis
of taxation of payments to a Lender (or to its LIBOR Lending
Office) of the principal of or interest on its LIBOR
Advances or in respect of any other amounts due under this
Agreement, as the case may be, or its obligation to make
such Advances (except for changes in the rate of tax on the
overall net income, net worth or capital of the Lender and
franchise taxes, doing business taxes or minimum taxes
imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits
with or for the
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account of, or credit extended by, a Lender's LIBOR Lending
Office or shall impose on the Lender (or its LIBOR Lending Office)
or on the United States market for certificates of deposit or
the London interbank market any other condition affecting its
LIBOR Advances or its obligation to make such Advances;
and the result of any of the foregoing is to increase the cost to a Lender
(or its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or
to reduce the amount of any sum received or receivable by a Lender (or its
LIBOR Lending Office) with respect thereto, by an amount deemed by a Lender
to be material ("Increased Advance Costs"), then, within 15 days after demand
by a Lender, the Borrower agrees to pay to such Lender such additional amount
as will compensate such Lender for such increased costs or reduced amounts,
subject to Section 10.9 hereof. The affected Lender will as soon as
practicable notify the Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section and will designate a different LIBOR
Lending Office or other lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
sole judgment of the affected Lender made in good faith, be materially
disadvantageous to such Lender. Notwithstanding the foregoing, any Lender's
demand for Increased Advance Costs shall not include any Increased Advance
Costs with respect to any period more than 180 days prior to the date that
such Lender gives notice to the Borrower of such Increased Advance Costs
unless the effective date of the condition which results in the right to
receive Increased Advance Costs is retroactive (the "Increased Advance Costs
Retroactive Effective Date"). If any Increased Advance Costs has an
Increased Advance Costs Retroactive Effective Date and any Lender demands
compensation within 180 days after the date setting the Increased Advance
Costs Retroactive Effective Date (the "Increased Advance Costs Set Date"),
such Lender shall have the right to receive such Increased Advance Costs from
the Increased Advance Costs Retroactive Effective Date. If a Lender does
not demand such Increased Advance Costs within 180 days after the Increased
Advance Costs Set Date, such Lender may not receive payment of Increased
Advance Costs with respect to any period more than 180 days prior to such
demand.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder
and calculations therefor shall be conclusive in the absence of manifest
error. In determining such amount, a Lender may use any reasonable averaging
and attribution methods. If a Lender demands compensation under this Section,
the Borrower may at any time, upon at least five Business Days' prior notice
to the Lender, after reimbursement to the Lender by the Borrower in
accordance with this Section of all costs incurred, prepay in full the then
outstanding LIBOR Advances of the Lender, together with accrued interest
thereon to the date of prepayment, along with any reimbursement required
under Section 2.9 hereof. Concurrently with prepaying such LIBOR Advances,
the Borrower shall borrow a Prime Rate Advance from the Lender, and the
Lender shall make such Prime Rate Advance, in an amount such that the
outstanding principal amount of the Advances owing to such Lender shall equal
the outstanding principal amount of the Advances owing immediately prior to
such prepayment.
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Section 8.4 EFFECT ON PRIME RATE ADVANCES. If notice has been given
pursuant to Section 8.1, 8.2 or 8.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as LIBOR Advances shall
be made instead as Prime Rate Advances.
Section 8.5 CAPITAL ADEQUACY. If either (a) the introduction of or
any change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital
required or expected to be maintained by a Lender or any corporation
controlling such Lender, and such Lender determines that the amount of such
capital is increased by or based upon the existence of such Lender's
Commitment or Advances hereunder and other commitments or advances of such
Lender of this type, then, upon demand by such Lender, subject to Section
10.9, the Borrower shall immediately pay to such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender with respect to such circumstances (collectively, "Additional Costs"),
to the extent that such Lender reasonably determines in good faith such
increase in capital to be allocable to the existence of such Lender's
Commitment hereunder. Notwithstanding the foregoing, any Lender's demand for
Additional Costs shall not include any Additional Costs with respect to any
period more than 180 days prior to the date that such Lender gives notice to
the Borrower of such Additional Costs unless the effective date of the
Regulatory Modification which results in the right to receive Additional
Costs is retroactive (the "Regulatory Modification Retroactive Effective
Date"). If any Regulatory Modification has a Regulatory Modification
Retroactive Effective Date and any Lender demands compensation within 180
days after the date setting the Regulatory Modification Retroactive Effective
Date (the "Regulatory Modification Set Date"), such Lender shall have the
right to receive such Additional Costs from the Regulatory Modification
Retroactive Effective Date. If a Lender does not demand such Additional
Costs within 180 days after the Regulatory Modification Set Date, such Lender
may not receive payment of Additional Costs with respect to any period more
than 180 days prior to such demand. A certificate as to such amounts
submitted to the Borrower by a Lender hereunder, shall, in the absence of
manifest error, be conclusive and binding for all purposes.
ARTICLE 9
AGREEMENT AMONG LENDERS
Section 9.1 AGREEMENT AMONG LENDERS. The Lenders agree among
themselves that:
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(a) ADMINISTRATIVE LENDER. Each Lender hereby appoints the
Administrative Lender as its nominee in its name and on its behalf, to
receive all documents and items to be furnished hereunder; to act as nominee
for and on behalf of all Lenders under the Loan Papers; to, except as
otherwise expressly set forth herein, take such action as may be requested by
the Determining Lenders, provided that, unless and until the Administrative
Lender shall have received such requests, the Administrative Lender may take
such administrative action, or refrain from taking such administrative
action, as it may deem advisable and in the best interests of the Lenders; to
arrange the means whereby the proceeds of the Advances of the Lenders are to
be made available to the Borrower; to distribute promptly to each Lender
information, requests and documents received from the Borrower, and each
payment (in like funds received) with respect to any of such Lender's
Advances, fee or other amount; and to deliver to the Borrower requests,
demands, approvals and consents received from the Lenders. Administrative
Lender agrees to promptly distribute to each Lender, at such Lender's address
set forth below information, requests, documents and payments received from
the Borrower.
(b) REPLACEMENT OF ADMINISTRATIVE LENDER. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the Administrative Lender or any successor
Administrative Lender ever resign as Administrative Lender, or should the
Administrative Lender or any successor Administrative Lender ever be removed
with cause by the Determining Lenders, then the Lender appointed by the other
Lenders shall forthwith become the Administrative Lender, and the Borrower
and the Lenders shall execute such documents as any Lender may reasonably
request to reflect such change. If the Administrative Lender also then
serves in the capacity of the Swing Line Bank or the Issuing Bank, such
resignation or removal shall constitute resignation or removal of the Swing
Line Bank and the Issuing Bank. Any resignation or removal of the
Administrative Lender or any successor Administrative Lender shall become
effective upon the appointment by the Lenders of a successor Administrative
Lender; provided, however, that if the Lenders fail for any reason to appoint
a successor within 60 days after such removal or resignation, the
Administrative Lender or any successor Administrative Lender (as the case may
be) shall thereafter have no obligation to act as Administrative Lender
hereunder.
(c) EXPENSES. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any expenses paid by the Administrative Lender
directly and solely in connection with any of the Loan Papers if
Administrative Lender does not receive reimbursement therefor from other
sources within 60 days after the date incurred, unless payment of such fees
is being diligently disputed by such Lender or the Borrower in good faith.
Any amount so paid by the Lenders to the Administrative Lender shall be
returned by the Administrative Lender pro rata to each paying Lender to the
extent later paid by the Borrower or any other Person on the Borrower's
behalf to the Administrative Lender.
(d) DELEGATION OF DUTIES. The Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees, attorneys
or agents, and shall
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be entitled to (and shall be protected in relying upon) advice of counsel
concerning all matters pertaining to its duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex
or teletype message, statement, order, or other document or conversation
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected the Administrative Lender. The
Administrative Lender may, in its reasonable judgment, deem and treat the
payee of any Note as the owner thereof for all purposes hereof.
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither the
Administrative Lender nor any of its officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be
taken by it or them hereunder in good faith and believed by it or them to be
within the discretion or power conferred to it or them by the Loan Papers or
be responsible for the consequences of any error of judgment, except for its
or their own gross negligence or wilful misconduct. Except as aforesaid, the
Administrative Lender shall be under no duty to enforce any rights with
respect to any of the Advances, or any security therefor. The Administrative
Lender shall not be compelled to do any act hereunder or to take any action
towards the execution or enforcement of the powers hereby created or to
prosecute or defend any suit in respect hereof, unless indemnified to its
satisfaction against loss, cost, liability and expense. The Administrative
Lender shall not be responsible in any manner to any Lender for the
effectiveness, enforceability, genuineness, validity or due execution of any
of the Loan Papers, or for any representation, warranty, document,
certificate, report or statement made herein or furnished in connection with
any Loan Papers, or be under any obligation to any Lender to ascertain or to
inquire as to the performance or observation of any of the terms, covenants
or conditions of any Loan Papers on the part of the Borrower. To the extent
not reimbursed by the Borrower, each Lender hereby jointly and severally
indemnifies and holds harmless the Administrative Lender, pro rata according
to its Specified Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and/or disbursements of any kind or nature whatsoever which may be
imposed on, asserted against, or incurred by the Administrative Lender in any
way with respect to any Loan Papers or any action taken or omitted by the
Administrative Lender under the Loan Papers (including any negligent action
of the Administrative Lender), except to the extent the same result from
gross negligence or wilful misconduct by the Administrative Lender.
(g) LIABILITY AMONG LENDERS. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Papers) to any other Lender, except for acts or
omissions in bad faith.
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(h) RIGHTS AS LENDER. With respect to its commitment hereunder, the
Advances made by it and Note issued to it, the Administrative Lender shall
have the same rights as a Lender and may exercise the same as though it were
not the Administrative Lender, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Lender in
its individual capacity. The Administrative Lender or any Lender may accept
deposits from, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower and any of its Affiliates, and any
Person who may do business with or own securities of the Borrower or any of
its Affiliates, all as if the Administrative Lender were not the
Administrative Lender hereunder and without any duty to account therefor to
the Lenders.
Section 9.2 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements delivered to such Lender
by the Borrower, and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Lender or any other Lender and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Papers.
Section 9.3 BENEFITS OF ARTICLE. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders;
consequently, no Person shall be entitled to rely upon, or to raise as a
defense, in any manner whatsoever, the failure of the Administrative Lender
or any Lender to comply with such provisions.
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES.
(a) All notices and other communications under this Agreement shall be
in writing and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after
deposit in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, or one day after being delivered to the telegraph
office or sent out by telex addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:
(i) If to the Borrower, at:
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La Quinta Inns, Inc.
112 E. Pecan Street, Suite 1200
San Antonio, Texas 78205
Attn: Dewey Chambers, Treasurer
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Douglas E. Hutt, Senior Vice President
(iii) If to a Lender, at its address shown below its name on
the signature pages hereof, or if applicable, set forth
in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other
parties.
Section 10.2 EXPENSES. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Papers, the transactions contemplated
hereunder and thereunder, and the making of Advances hereunder, including
without limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and attorneys' fees of the
Administrative Lender in connection with the administration of the
transactions contemplated in this Agreement and the other Loan Papers and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Lenders relating to this Agreement or the other Loan Papers;
and
(c) all costs, out-of-pocket expenses and attorneys' fees of the
Administrative Lender and each Lender incurred for enforcement, collection,
restructuring, refinancing and "work-out", or otherwise incurred in obtaining
performance under the Loan Papers, and all costs and out-of-pocket expenses
of collection if default is made in the payment of the Notes, which in each
case shall include without limitation fees and expenses of consultants,
counsel for the Administrative Lender and any Lender, and administrative fees
for the Administrative Lender.
Section 10.3 WAIVERS. The rights and remedies of the Lenders under
this Agreement and the other Loan Papers shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Administrative Lender or any Lender in exercising any
right shall operate as a waiver of such right. The Lenders expressly
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reserve the right to require strict compliance with the terms of this
Agreement in connection with any funding of a request for an Advance or the
issuance of any Letter of Credit. In the event that any Lender decides to
fund an Advance or the Issuing Bank decides to issue a Letter of Credit at a
time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by such Lender shall not be deemed to constitute an
undertaking by the Lender to fund any further requests for Advances or the
Issuing Bank to honor any further requests for Letters of Credit or preclude
the Lenders from exercising any rights available under the Loan Papers or at
law or equity. Any waiver or indulgence granted by the Lenders shall not
constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by
the Lenders at variance with the terms of the Agreement such as to require
further notice by the Lenders of the Lenders' intent to require strict
adherence to the terms of the Agreement in the future. Any such actions
shall not in any way affect the ability of the Administrative Lender or the
Lenders, in their discretion, to exercise any rights available to them under
this Agreement or under any other agreement, whether or not the
Administrative Lender or any of the Lenders are a party thereto, relating to
the Borrower.
Section 10.4 DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING. Any
material determination required or expressly permitted to be made by the
Administrative Lender or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be conclusive and binding on all parties.
Section 10.5 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, each Lender and any subsequent
holder of any Note, and any assignee or participant in any Note is hereby
authorized by the Borrower at any time or from time to time, without notice
to the Borrower or any other Person, any such notice being hereby expressly
waived, to set-off, appropriate and apply any deposits (general or special
(except trust and escrow accounts), time or demand, including without
limitation Debt evidenced by certificates of deposit, in each case whether
matured or unmatured) and any other Debt at any time held or owing by such
Lender or holder to or for the credit or the account of the Borrower, against
and on account of the Obligations and other liabilities of the Borrower to
such Lender or holder, irrespective of whether or not (a) the Lender or
holder shall have made any demand hereunder, or (b) the Lender or holder
shall have declared the principal of and interest on the Advances and other
amounts due hereunder to be due and payable as permitted by Section 7.2 and
although such obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by any Lender or by any assignee,
participant or subsequent holder of any Note shall be subject to pro rata
treatment of all Obligations and other liabilities hereunder.
Section 10.6 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Papers without the prior
written consent of the Lenders.
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(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
(c) With the prior written consent of the Borrower (which consent may
be withheld for any reason or for no reason), a Lender may at any time sell
participations in all or any part of its Advances, its portion of the
Commitment, and all other interests of such Lender under this Agreement and
the other Loan Papers, including but not limited to the Letters of Credit and
the Reimbursement Obligations (collectively, "Participations") to any banks
or other financial institutions ("Participants") provided that such
Participation shall not confer on any Person (other than the parties hereto)
any right to vote on, approve or sign amendments or waivers, or any other
independent benefit or any legal or equitable right, remedy or other claim
under this Agreement or any other Loan Papers, other than the right to vote
on, approve, or sign amendments or waivers or consents with respect to items
that would result in (i) any increase in the commitment of any Participant;
or (ii)(A) the extension of the date of maturity of, or (B) the extension of
the due date for any payment of principal, interest or fees respecting, or
(C) the reduction of the amount of any installment of principal or interest
on or the change or reduction of any mandatory reduction required hereunder,
or (D) a reduction of the rate of interest on, the Advances, the Letters of
Credit or the Reimbursement Obligations, or change in Applicable Margin; or
(iii) the release of security for the Obligations having a value in excess of
a Material Amount, including without limitation any guarantee; or (iv) the
reduction of any fees payable hereunder. Notwithstanding the foregoing, the
Borrower agrees that the Participants shall be entitled to the benefits of
Article 8 and Section 10.5 hereof as though they were Lenders and the Lenders
may provide copies of all financial information received from the Borrower to
such Participants. To the fullest extent it may effectively do so under
Applicable Law, the Borrower agrees that any Participant may exercise any and
all rights of banker's lien, set-off and counterclaim with respect to this
Participation as fully as if such Participant were the holder of the Advances
in the amount of its Participation. Notwithstanding anything in this Section
9.6(c) to the contrary, a Lender may sell Participations to its affiliates
without the prior written consent of the Borrower.
(d) Each Lender may assign to one or more financial institutions or
funds organized under the laws of the United States, or any state thereof, or
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "Assignee")
its rights and obligations under this Agreement and the other Loan Papers;
PROVIDED, HOWEVER, that (i) except as otherwise provided herein, each such
assignment shall be subject to the prior written consent of the
Administrative Lender and the Borrower (which consent shall not be
unreasonably withheld), (ii) each such assignment shall be of a constant, and
not a varying, percentage of the Lender's rights and obligations under this
Agreement, (iii) the amount of the Commitment and Advances being assigned
pursuant to each such assignment (determined as of the date of the assignment
with respect to such assignment) shall in no event be less than $10,000,000,
(iv) the applicable Lender,
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Administrative Lender and applicable Assignee shall execute and deliver to
the Administrative Lender an Assignment and Acceptance Agreement (an
"Assignment Agreement") in substantially the form of EXHIBIT E hereto,
together with the Notes subject to such assignment, (v) the Assignee or the
Lender executing the Assignment as the case may be, shall deliver to the
Administrative Lender a processing fee of $3,500, and (vi) the Administrative
Lender shall give the Borrower notice of any proposed assignment no later
than 5 days prior to any assignment by any Lender. Upon such execution,
delivery and acceptance from and after the effective date specified in each
Assignment, which effective date shall be at least three Business Days after
the execution thereof, (A) the Assignee thereunder shall be party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment, have the rights and obligations of a Lender
hereunder and (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment,
relinquish such rights and be released from such obligations under this
Agreement. Notwithstanding anything in this clause (d) to the contrary,
Texas Commerce Bank National Association may assign its rights and
obligations under this Agreement to Chemical Bank without the prior written
consent of the Administrative Lender and the Borrower, but otherwise subject
to the restrictions set forth herein.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A of
F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank;
provided, however, that no such assignment under this clause (e) shall
release the assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender
and an Assignee, and any Note subject to such assignment, the Borrower shall,
within three Business Days after its receipt of such Assignment Agreement, at
its own expense, execute and deliver to the Administrative Lender in exchange
for the surrendered Note a new Note to the order of such Assignee in an
amount equal to the portion of the Advances and Commitment assigned to it
pursuant to such Assignment Agreement and a new Note to the order of the
assigning Lender in an amount equal to the portion of the Advances and
Commitment retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note, shall be dated the effective date of such Assignment Agreement and
shall otherwise be in substantially the form of EXHIBIT A hereto.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 10.6,
disclose to the assignee or Participant or proposed assignee or participant,
any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower.
(h) Except as specifically set forth in this Section 10.6, nothing in
this Agreement or any other Loan Papers, expressed or implied, is intended to
or shall confer on any Person
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other than the respective parties hereto and thereto and their successors and
assignees permitted hereunder and thereunder any benefit or any legal or
equitable right, remedy or other claim under this Agreement or any other Loan
Papers.
(i) Notwithstanding anything in this Section 10.6 to the contrary, no
Assignee or Participant shall be entitled to receive any greater payment
under Section 2.15 or Section 8.3 than such assigning or participating Lender
would have been entitled to receive with respect to the interest assigned or
participated to such Assignee or Participant.
Section 10.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 10.8 SEVERABILITY. Any provision of this Agreement which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 10.9 INTEREST AND CHARGES. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of
any applicable jurisdiction relating to usury. Regardless of any provision
in any Loan Papers, no Lender shall ever be entitled to receive, collect or
apply, as interest on the Obligations, any amount in excess of the Maximum
Amount. If any Lender or participant ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest
shall be deemed a partial repayment of principal and treated hereunder as
such; and if principal is paid in full, any remaining excess shall be paid to
the Borrower. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, the Borrower and
the Lenders shall, to the maximum extent permitted under Applicable Law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (b) exclude voluntary prepayments and the effect thereof,
and (c) amortize, prorate, allocate and spread in equal parts, the total
amount of interest throughout the entire contemplated term of the Obligations
so that the interest rate is uniform throughout the entire term of the
Obligations; provided, however, that if the Obligations are paid and
performed in full prior to the end of the full contemplated term thereof, and
if the interest received for the actual period of existence thereof exceeds
the Maximum Amount, the Lenders shall refund to the Borrower the amount of
such excess or credit the amount of such excess against the total principal
amount of the Obligations owing, and, in such event, the Lenders shall not be
subject to any penalties provided by any laws for contracting for, charging
or receiving interest in excess of the Maximum Amount. This Section shall
control every other provision of all agreements pertaining to the
transactions contemplated by or contained in the Loan Papers.
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SECTION 10.10 CONFIDENTIALITY. Each Lender and the
Administrative Lender agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance
with customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement which is identified by the
Borrower as being confidential at the time the same is delivered
to the Lenders or the Administrative Lender, provided that
nothing herein shall limit the disclosure of any such information
(a) to the extent required by statute, rule, regulation or
judicial process, (b) to counsel for any Lender or the
Administrative Lender, (c) to bank examiners, auditors or
accountants of any Lender, (d) to the Administrative Lender or
any other Lender, (e) in connection with any litigation to which
any one or more of Lenders is a party, provided, further, that,
unless specifically prohibited by Applicable Law or court order,
each Lender shall, prior to disclosure thereof, notify the
Borrower of any request for disclosure of any such non-public
information (i) by any governmental agency or representative
thereof (other than any such request in connection with an
examination of such Lender's financial condition by such
governmental agency) or (ii) pursuant to legal process, or (f) to
any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers
to the respective Lender an agreement (a "Confidentiality
Agreement") in substantially the form of EXHIBIT F hereto; and
provided finally that in no event shall any Lender or the
Administrative Lender by obligated or required to return any
materials furnished by the Borrower.
SECTION 10.11 HEADINGS. Headings used in this Agreement
are for convenience only and shall not be used in connection with
the interpretation of any provision hereof.
SECTION 10.12 AMENDMENT AND WAIVER. The provisions of this
Agreement may not be amended, modified or waived except by the
written agreement of the Borrower and the Determining Lenders;
provided, however, that no such amendment, modification or waiver
shall be made (a) without the consent of all Lenders, if it would
(i) increase the Specified Percentage or commitment of any
Lender, or (ii) extend the date of maturity of, extend the due
date for any payment of principal or interest on, reduce the
amount of any installment of principal or interest on, or reduce
the rate of interest on, any Advance, the Reimbursement
Obligations or other amount owing under any Loan Papers, or
(iii) release any security for or guaranty of the Obligations
(except pursuant to this Agreement), or (iv) reduce the fees
payable hereunder, or (v) revise this Section 10.12, or
(vi) waive the date for payment of any of the Obligations, or
(vii) amend the definition of Determining Lenders; or (b) without
the consent of the Administrative Lender, if it would alter the
rights, duties or obligations of the Administrative Lender.
Neither this Agreement nor any term hereof may be amended orally,
nor may any provision hereof be waived orally but only by an
instrument in writing signed by the Administrative Lender and, in
the case of an amendment, by the Borrower.
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SECTION 10.13 EXCEPTION TO COVENANTS. Neither the Borrower
nor any Subsidiary shall be deemed to be permitted to take any
action or fail to take any action which is permitted as an
exception to any of the covenants contained herein or which is
within the permissible limits of any of the covenants contained
herein if such action or omission would result in the breach of
any other covenant contained herein.
SECTION 10.14 NO LIABILITY OF ISSUING BANK. The Borrower
assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Issuing Bank nor any Lender
nor any of their respective officers or directors shall be liable
or responsible for: (a) the use that may be made of any Letter
of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even
if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the
Letter of Credit, except for any payment made upon the Issuing
Bank's gross negligence or willful misconduct; or (d) any other
circumstances whatsoever in making or failing to make payment
under any Letter of Credit, EXCEPT that the Borrower shall have a
claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower
proves were caused by (i) the Issuing Bank's willful misconduct
or gross negligence in determining whether documents presented
under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of
a draft and certificates strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any
notice or information to the contrary.
SECTION 10.15 GOVERNING LAW. THIS AGREEMENT AND THE OTHER
LOAN PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT
TO ARTICLE 5069-15.10(b), TITLE 79, REVISED CIVIL STATUTES OF
TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE PROVISIONS OF
CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS
AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS AGREEMENT AND THE
OTHER LOAN PAPERS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE
BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS
LOCATED IN DALLAS, TEXAS SHALL HAVE JURISDICTION OVER PROCEEDINGS
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN PAPERS.
SECTION 10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY
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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
AGREEMENT OR ANY OF THE OTHER LOAN PAPERS OR THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING
ANY ADVANCES HEREUNDER.
SECTION 10.17 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT,
TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
=================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
=================================================================
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IN WITNESS WHEREOF, this Credit Agreement is executed as of
the date first set forth above.
BORROWER: LA QUINTA INNS, INC.
By: _________________________
Name:____________________
Title:___________________
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By: _________________________
Douglas E. Hutt
Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.,
as a Lender
Specified Percentage:
_____%
By: _________________________
Douglas E. Hutt
Senior Vice President
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Douglas E. Hutt
Senior Vice President
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CITICORP USA, INC.
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
_____________________________
_____________________________
_____________________________
Attn:________________________
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THE FROST NATIONAL BANK
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
100 West Houston Street
San Antonio, Texas 78205
Attn: Suzanne Houser
-86-
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
1020 N.E. Loop 410
San Antonio, Texas 78209
Attn: Mark Harris
-87-
THE BANK OF SCOTLAND
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
565 Fifth Avenue
New York, New York 10017
Attn: Cathy Oniffrey
copy to:
Citicorp Center
1200 Smith Street, Suite 1750
Houston, Texas 77002
Attn: Janna Blanter
-88-
BANK OF AMERICA ILLINOIS
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
333 Clay Street, Suite 4550
Houston, Texas 77002
Attn: W. Thomas Barnett
-89-
BANK ONE, TEXAS, N.A.
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
1717 Main Street, 3rd Floor
Dallas, Texas 75201
Attn: Alan Miller
-90-
FIRST INTERSTATE BANK OF TEXAS,
N.A.
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
700 N. St. Mary's Street, Suite 300
San Antonio, Texas 78205
Attn: Charles T. Bridgeman
-91-
U.S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
Specified Percentage:
_____%
By: _________________________
Name:____________________
Title:___________________
555 Southwest Oak Street, Suite 400
Portland, Oregon 97204
Attn: Blake R. Howells
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SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
CITICORP USA, INC.
____________________
____________________
____________________
THE FROST NATIONAL BANK
100 West Houston Street
San Antonio, Texas 78205
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
1020 N.E. Loop 410
San Antonio, Texas 78209
THE BANK OF SCOTLAND
565 Fifth Avenue
New York, New York 10017
BANK OF AMERICA ILLINOIS
333 Clay Street, Suite 4550
Houston, Texas 77002
BANK ONE, TEXAS, N.A.
1717 Main Street, 3rd Floor
Dallas, Texas 75201
FIRST INTERSTATE BANK OF TEXAS, N.A.
700 N. St. Mary's Street, Suite 300
San Antonio 78205
U.S. BANK OF WASHINGTON NATIONAL ASSOCIATION
555 Southwest Oak Street, Suite 400
Portland, Oregon 97204
-93-
EXHIBIT A
REVOLVING CREDIT NOTE
Dallas, Texas $_____________ September ___, 1995
LA QUINTA INNS, INC., a Texas corporation (the "Borrower"), for value
received, promises to pay to the order of ______________________ ("Lender"),
at the principal office of _________________________________, in lawful money
of the United States of America, the principal sum
of _________________________________DOLLARS ($_____________), or such lesser
sum as shall be due and payable from time to time hereunder, as hereinafter
provided. All terms used but not defined herein shall have the meanings set
forth in the Credit Agreement described below.
Principal of and interest on the unpaid principal balance of Revolving
Credit Advances under this Revolving Credit Note from time to time
outstanding shall be due and payable as set forth in the Credit Agreement.
This Revolving Credit Note is issued pursuant to and evidences Revolving
Credit Advances under an Amended and Restated Credit Agreement (Facility A),
dated as of September ___, 1995, among the Borrower, NationsBank of Texas,
N.A., as Administrative Lender, and the lenders parties thereto (as amended,
restated, supplemented, renewed, extended or otherwise modified from time to
time, "Credit Agreement"), to which reference is made for a statement of the
rights and obligations of the Lender and the duties and obligations of the
Borrower in relation thereto; but neither this reference to the Credit
Agreement nor any provision thereof shall affect or impair the absolute and
unconditional obligation of the Borrower to pay the principal sum of and
interest on this Revolving Credit Note when due.
The Borrower and all endorsers, sureties and guarantors of this
Revolving Credit Note hereby severally waive demand, presentment for payment,
protest, notice of protest, notice of acceleration, notice of intention to
accelerate the maturity of this Revolving Credit Note, and all other notices
of any kind, diligence in collecting, the bringing of any suit against any
party and any notice of or defense on account of any extensions, renewals,
partial payments or changes in any manner of or in this Revolving Credit Note
or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
THIS REVOLVING CREDIT NOTE, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
LA QUINTA INNS, INC.
By:___________________________
Title:_____________________
EXHIBIT B
BID RATE NOTE
U.S.________________ Dated: September ___, 1995
FOR VALUE RECEIVED, the undersigned, LA QUINTA INNS, INC., a Texas
corporation, (the "Borrower"), HEREBY PROMISES TO PAY to the order of
____________________ (the "Lender") the lesser of _____________ MILLION AND
NO/100 Dollars ($__________) and the unpaid principal amount of the Bid Rate
Advances (as defined in the Credit Agreement referred to below) made by the
Lender to the Borrower pursuant to the Credit Agreement, payable at such
times, and in such amounts, as are agreed to by the Lender and the Borrower
pursuant to Section 2.2(c) of the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
the Bid Rate Advances from the date made until such principal amount is paid
in full, at such interest rates, and payable at such times, as are agreed to
by the Lender and the Borrower pursuant to Section 2.2(c) of the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to NationsBank of Texas, N.A. as Administrative Lender for
the Lender, at 901 Main Street, Dallas, Texas 75202 in immediately available
funds.
This Bid Rate Note is one of the Bid Rate Notes referred to in, and is
entitled to the benefits of, the Amended and Restated Credit Agreement
(Facility A), dated as of September ___, 1995, among the Borrower, the Lender
and certain other banks parties thereto, and NationsBank of Texas, N.A., as
Administrative Lender for the Lender and such other banks (as from time to
time amended, modified or supplemented, the "Credit Agreement"). The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified.
The Borrower and all endorsers, sureties and guarantors of this Bid Rate
Note hereby severally waive demand, presentment for payment, protest, notice
of protest, notice of acceleration, notice of intention to accelerate the
maturity of this Bid Rate Note, and all other notices of any kind, diligence
in collecting, the bringing of any suit against any party and any notice of
or defense on account of any extensions, renewals, partial payments or
changes in any manner of or in this Bid Rate Note or in any of its terms,
provisions and covenants, or any releases or substitutions of any security,
or any delay, indulgence or other act of any trustee or any holder hereof,
whether before or after maturity.
THIS BID RATE NOTE, TOGETHER WITH THE OTHER LOAN PAPERS,
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
LA QUINTA INNS, INC.
By:___________________________
Title:_____________________
EXHIBIT C
SWING LINE NOTE
U.S. $10,000,000.00 Dated: September ___, 1995
FOR VALUE RECEIVED, the undersigned, LA QUINTA INNS, INC., a Texas
corporation (the "Company"), HEREBY PROMISES TO PAY to the order of
NATIONSBANK OF TEXAS, N.A. (the "Swing Line Bank") for the account of its
Lending Office (as defined in the Credit Agreement referred to below) the
lesser of TEN MILLION AND NO/100 Dollars ($10,000,000) and the unpaid
principal amount of the Swing Line Advances (as defined in the Credit
Agreement referred to below) made by the Swing Line Bank to the Company
pursuant to the Credit Agreement, payable at such times, and in such amounts,
as are specified in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of
the Swing Line Advances from the date made until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to NationsBank of Texas, N.A. as Administrative Lender for
the Swing Line Bank, at NationsBank Plaza, 901 Main Street, Dallas, Texas
75202 in immediately available funds.
This Swing Line Note is the Swing Line Note referred to in, and is
entitled to the benefits of, the Amended and Restated Credit Agreement
(Facility A), dated as of September ___, 1995, among La Quinta Inns, Inc.,
the Swing Line Bank and certain other banks parties thereto, and NationsBank
of Texas, N.A., as Administrative Lender for the Swing Line Bank and such
other banks (as from time to time amended, modified or supplemented, the
"Credit Agreement"). The Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
The Borrower and all endorsers, sureties and guarantors of this Swing
Line Note hereby severally waive demand, presentment for payment, protest,
notice of protest, notice of acceleration, notice of intention to accelerate
the maturity of this Swing Line Note, and all other notices of any kind,
diligence in collecting, the bringing of any suit against any party and any
notice of or defense on account of any extensions, renewals, partial payments
or changes in any manner of or in this Swing Line Note or in any of its
terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.
THIS SWING LINE NOTE, TOGETHER WITH THE OTHER LOAN PAPERS, REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
LA QUINTA INNS, INC.
By:___________________________
Title:_____________________
EXHIBIT D
GUARANTY
This Guaranty, dated as of September ___, 1995 (this
"GUARANTY"), is made by the entities listed on the signature
pages hereof (all such entities being collectively called the
"GUARANTORS").
BACKGROUND.
1. La Quinta Inns, Inc., a Texas corporation ("COMPANY"), NationsBank
of Texas, N.A., as Administrative Lender ("ADMINISTRATIVE LENDER") on behalf
of NationsBank of Texas, N.A. and each other lender, and each other lender
(singly, a "Lender" and collectively, the "LENDERS") have entered into the
Amended and Restated Credit Agreement, dated as of September ___, 1995 (as
hereafter amended or otherwise modified from time to time, the "CREDIT
AGREEMENT"). The capitalized terms not otherwise defined herein have the
meanings specified in the Credit Agreement.
2. Pursuant to the Credit Agreement, Company may, subject to the terms
of the Credit Agreement and the other Loan Papers, request that Lenders make
Advances 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 Guarantors guarantee repayment thereof
upon the terms and conditions set forth herein.
4. In the case of each Guarantor which is a corporation, the Board of
Directors of each such Guarantor, and in the case of each Guarantor which is
a partnership or joint venture, the Board of Directors of each corporation
which is a partner or a joint venturer of such Guarantor, have determined
that the execution, delivery, and performance of this Guaranty is necessary
and convenient to the conduct, promotion, and attainment of such Guarantor's
business and that such Guaranty may reasonably be expected to benefit,
directly or indirectly, such Guarantor.
5. Guarantors desire to induce Lender to make such Advances and issue,
or participate in the issuance of, Letters of Credit.
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 under the Credit Agreement, Guarantors agree as follows:
1. GUARANTY.
(a) Each Guarantor, jointly or severally, hereby
unconditionally and irrevocably guarantees the punctual
payment of, and promises to pay, when due, whether at stated
maturity, by mandatory prepayment, by acceleration or
otherwise, all obligations, indebtedness and liabilities,
and all rearrangements, renewals and extensions of all or
any part thereof, of Company or any other Obligor now or
hereafter arising from, by virtue of or pursuant to the
Credit Agreement, the Notes, any other Loan Paper, and any
and all renewals and extensions thereof, or any part
thereof, or future amendments thereto, whether for
principal, interest (including, without limitation,
interest, fees and other charges that would accrue or become
owing both prior to and subsequent to and but for the
commencement of any proceeding against or with respect to
Company or any other Obligor under any chapter of the
Bankruptcy Code of 1978, 11 U.S.C. Section 101 ET SEQ. whether or
not a claim is allowed for the same in any such proceeding),
premium, fees, commissions, expenses or otherwise (such
obligations being the "OBLIGATION"), and agrees to pay any
and all reasonable expenses (including reasonable counsel
fees and expenses) incurred in enforcement or collection of
all or any part thereof, whether such obligations,
indebtedness and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several, and any
rights under this Guaranty.
(b) Anything contained in this Guaranty to the
contrary notwithstanding, the obligations of each Guarantor
hereunder shall be limited to a maximum aggregate amount
equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of
comparable state law (collectively, the "FRAUDULENT TRANSFER
LAWS"), in each case after giving effect to all other
liabilities of Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor in
respect of intercompany indebtedness to Company, other
Affiliates of Company or other Obligors to the extent that
such indebtedness would be discharged in an amount equal to
the amount paid by such Guarantor hereunder) and after
giving effect as assets, subject to PARAGRAPH 4(a) hereof,
to the value (as determined under the applicable provisions
of Fraudulent Transfer Laws) of any rights to subrogation or
contribution of such Guarantor pursuant to (i) Applicable
Law or (ii) any agreement providing for an equitable
allocation among such Guarantor and other Obligors of
obligations arising under guaranties by such parties.
2. GUARANTY ABSOLUTE. Each Guarantor guarantees that 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 any Guarantor to make any payment under this Guaranty in violation of
any
Applicable Law, regulation or order now or hereafter in effect. The
obligations and liabilities of each Guarantor hereunder are independent of
the obligations of Company under the Credit Agreement and of the obligations
of each other Obligor under each other Loan Paper and any Applicable Law.
The liability of each Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) the taking or accepting of any other security or
guaranty for any or all of the Obligation;
(b) any increase, reduction or payment in full at any
time or from time to time of any part of the Obligation,
including any increase, reduction or termination of the
Commitment;
(c) any lack of validity or enforceability of the
Credit Agreement, the Notes, or any other Loan Paper or
other agreement or instrument relating thereto, including
but not limited by the unenforceability of all or any part
of the Obligation by reason of the fact that (i) the
Obligation, and/or the interest paid or payable with respect
thereto, exceeds the amount permitted by Applicable Law,
(ii) the act of creating the Obligation, or any part
thereof, is ULTRA 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, any Obligor or any other Person;
(e) any Debtor Relief Law involving Company, any
Guarantor, any Obligor or any other Person;
(f) any renewal, compromise, extension, acceleration
or other change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligation; any
adjustment, indulgence, forbearance, or compromise that may
be granted or given by any Lender or Administrative Lender
to Company, any Guarantor or any other Obligor; or any other
modification, amendment, or waiver of or any consent to
departure from the Credit Agreement, the Notes, or any other
Loan Paper or other agreement or instrument relating thereto
without notification of any Guarantor (the right to such
notification being herein specifically waived by each
Guarantor);
(g) any exchange, release, sale, subordination, or
non-perfection of any collateral or Lien thereon or any lack
of validity or enforceability or change in priority,
destruction, reduction, or loss or impairment of value of
any collateral or Lien thereon;
(h) any release or amendment or waiver of or consent
to departure from any other guaranty for all or any of the
Obligation;
(i) the failure by any Lender or Administrative Lender
to make any demand upon or to bring any legal, equitable, or
other action against Company or any other Person (including
without limitation any Guarantor or any other Obligor), or
the failure or delay by any Lender or Administrative Lender
to, or the manner in which any Lender or Administrative
Lender shall, proceed to exhaust rights against any direct
or indirect security for the Obligation;
(j) the existence of any claim, defense, set-off, or
other rights which Company or Guarantor may have at any time
against Company, any Lender, Administrative Lender, any
Guarantor or any other Obligor, or any other Person, whether
in connection with this Guaranty, the Loan Papers, the
transactions contemplated thereby, or any other transaction;
(k) any failure of any Lender or Administrative Lender
to notify any Guarantor of any renewal, extension, or
assignment of the Obligation or any part thereof, or the
release of any security, or of any other action taken or
refrained from being taken by any Lender or Administrative
Lender, it being understood that Lenders and Administrative
Lender shall not be required to give any Guarantor any
notice of any kind under any circumstances whatsoever with
respect to or in connection with the Obligation;
(l) any payment by Company to any Lender or
Administrative Lender is held to constitute a preference
under any Debtor Relief Law or if for any other reason any
Lender or Administrative Lender is required to refund such
payment or pay the amount thereof to another Person; or
(m) any other circumstance which might otherwise
constitute a defense available to, or a discharge of,
Company, any Guarantor or any other Obligor, including
without limitation any defense by reason of any disability
or other defense of Company, or the cessation from any cause
whatsoever of the liability of Company, or any claim that
Guarantor's obligations hereunder exceed or are more
burdensome than those of Company or any other Obligor.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Obligation is rescinded or
must otherwise be returned by any Lender or any other Person upon the
insolvency, bankruptcy or reorganization of Company, any Guarantor, any other
Obligor or otherwise, all as though such payment had not been made.
3. WAIVER. To the extent not prohibited by Applicable Law, each
Guarantor hereby waives: (a) promptness, protest, diligence, presentments,
acceptance, performance, demands for performance, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guaranty and notices of the existence, creation or incurrence of new or
additional indebtedness, and any of the events described in SECTION 2
and of any other occurrence or matter with respect to any of the Obligation,
this Guaranty or any of the other Loan Papers; (b) any requirement that
Administrative Lender or any Lender protect, secure, perfect, or insure any
Lien or security interest or any property subject thereto or exhaust any
right or take any action against Company, any Guarantor, any other Obligor or
any other Person or any collateral or pursue any other remedy in
Administrative Lender's or any Lender's power whatsoever; (c) any right to
assert against Administrative Lender or any Lender as a counterclaim, set-off
or cross-claim, any counterclaim, set-off or claim which it may now or
hereafter have against Administrative Lender, any Lender, Company, any
Guarantor or any other Obligor; (d) any right to seek or enforce any remedy
or right that Administrative Lender or any Lender now has or may hereafter
have against Company, any Guarantor, any other Obligor or any other Person
(to the extent permitted by Applicable Law); (e) any right to participate in
any collateral or any right benefiting Administrative Lender or Lenders in
respect of the Obligation; and (f) any right by which it might be entitled to
require suit on an accrued right of action in respect of any of the
Obligation or require suit against Company, any Guarantor, any other Obligor
or any other Person, whether arising pursuant to Section 34.02 of the Texas
Business and Commerce Code, as amended, Section 17.001 of the Texas Civil
Practice and Remedies Code, as amended, Rule 31 of the Texas Rules of Civil
Procedure, as amended, or otherwise.
4. SUBROGATION AND SUBORDINATION.
(a) Notwithstanding any reference to subrogation contained herein to
the contrary, each Guarantor hereby irrevocably waives any claim or other
rights which it may have or hereafter acquire against Company or any other
Obligor that arise from the existence, payment, performance or enforcement of
such Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or
remedy of any Lender or Administrative Lender against Company, any Guarantor
or any other Obligor or any collateral which any Lender or Administrative
Lender now has or hereafter acquires, whether or not such claim, remedy or
right arises in equity, or under contract, statutes or common law, including
without limitation, the right to take or receive from Company, any Guarantor
or any other Obligor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Guarantor in violation
of the preceding sentence and the Obligation shall not have been paid in
full, such amount shall be deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, Lenders, and shall
forthwith be paid to Administrative Lender to be credited and applied upon
the Obligation, whether matured or unmatured, in accordance with the terms of
the Credit Agreement. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
the Credit Agreement and that the waiver set forth in this PARAGRAPH 4(a) is
knowingly made in contemplation of such benefits.
(b) If any Guarantor becomes the holder of any indebtedness payable by
Company, any Guarantor or any other Obligor, such Guarantor hereby
subordinates all indebtedness owing to it from Company, any Guarantor and
each other Obligor to all indebtedness of Company, any Guarantor and each
other Obligor to Lenders and Administrative Lender, and agrees that upon the
occurrence and continuance of a Default or an Event of Default, it shall not
accept any payment on the same until final payment in full of the obligations
of Company under the Credit Agreement, the Notes and all other Loan Papers,
and shall in no circumstance whatsoever attempt to set-off or reduce any
obligations hereunder because of such indebtedness. If any amount shall
nevertheless be paid to such Guarantor by Company, any Guarantor or any other
Obligor prior to payment in full of the Obligation, such amount shall be held
in trust for the benefit of Lenders and Administrative Lender and shall
forthwith be paid to Administrative Lender to be credited and applied to the
Obligation, whether matured or unmatured.
5. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents
and warrants that all representations and warranties as they apply to such
Guarantor only set forth in ARTICLE 4 of the Credit Agreement (each of which
is hereby incorporated by reference) are true and correct.
6. COVENANTS. Each Guarantor hereby expressly assumes, confirms, and
agrees to perform, observe, and be bound by all conditions and covenants set
forth in the Credit Agreement, to the extent applicable to it, as if it were
a signatory thereto. Each Guarantor further covenants and agrees (a)
punctually and properly to perform all of such Guarantor's covenants and
duties under all other Loan Papers; (b) from time to time promptly to furnish
Administrative Lender with any information or writings which Administrative
Lender may request concerning this Guaranty; and (c) promptly to notify
Administrative Lender of 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 any Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by such
Guarantor, Administrative Lender, and, either all Lenders or Determining
Lenders, as appropriate, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
8. ADDRESSES FOR NOTICES. Unless otherwise provided herein, all
notices, requests, consents and demands shall be in writing and shall be
delivered by hand or overnight courier service, mailed or sent by telecopy to
the respective addresses specified herein, or, as to any party, to such other
addresses as may be designated by it in written notice to all other parties.
All notices, requests, consents and demands hereunder shall be deemed to have
been given on the date of receipt if delivered by hand or overnight courier
service or sent by telecopy, or if mailed, effective on the earlier of actual
receipt or three days after being mailed by certified mail, return receipt
requested, postage prepaid, addressed as aforesaid.
9. NO WAIVER; REMEDIES. No failure on the part of Administrative
Lender or any Lender to exercise, and no delay in exercising, any right
hereunder or under any of the Loan Papers shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder or under any
of the Loan Papers preclude any other or further exercise thereof or the
exercise of any other right. Neither Administrative Lender nor any Lender
shall be required to (a) prosecute collection or seek to enforce or resort to
any remedies against Company, any Guarantor, any other Obligor or any other
Person, (b) join Company, any Guarantor, any other Obligor or any other
Person in any action in which Administrative Lender or any Lender prosecutes
collection or seeks to enforce or resort to any remedies against Company, any
Guarantor, any other Obligor or any other Person liable on any of the
Obligation, or (c) seek to enforce or resort to any remedies with respect to
any Liens granted to (or benefiting, directly or indirectly) Administrative
Lender or any Lender by Company, any Guarantor, any other Obligor or any
other Person. Neither Administrative Lender nor any Lender shall have any
obligation to protect, secure or insure any of the Liens or the properties or
interests in properties subject thereto. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Applicable Law.
10. RIGHT OF SET-OFF. Upon the occurrence and during the continuance
of any Event of Default, each Lender and Administrative Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted
by Law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or Administrative Lender to or for the credit
or the account of any Guarantor against any and all of the obligations of
such Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not such Lender or Administrative Lender shall have made any
demand under this Guaranty. Each Lender and Administrative Lender agrees
promptly to notify such Guarantor after any such set-off and application,
provided that the failure to give such notice shall not affect the validity
of such set-off and application or provide a defense to such Guarantor's
obligations under this Guaranty. The rights of each Lender and
Administrative Lender under this SECTION 10 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which
such Lender and Administrative Lender may have.
11. LIENS. To the extent not prohibited by Applicable Law, each
Guarantor agrees that Administrative Lender or any Lender, in its discretion,
without notice or demand and without affecting either the liability of such
Guarantor, Company, any other Guarantor or any other Obligor, or any security
interest or other Lien, may foreclose any deed of trust or mortgage or
similar Lien covering interests in real or personal property, and the
interests in real or personal property secured thereby, by nonjudicial sale.
Each Guarantor waives any defense to the recovery by Administrative Lender or
any Lender hereunder against Company, such Guarantor or any collateral of any
deficiency after a nonjudicial sale and each Guarantor expressly waives any
defense or benefits that may be derived from Chapter 34 of the Texas Business
and Commerce Code, Section 51.003 of the Texas Property Code, or any similar
statute in effect in any other jurisdiction. Without limiting the foregoing,
each Guarantor waives, to the extent not prohibited by Applicable Law, any
defense arising out of any such nonjudicial sale even though such sale
operates to impair or extinguish any right of reimbursement or subrogation or
any other right or remedy of such Guarantor against Company, any other
Guarantor or any other Person or any Collateral or any other collateral.
Each Guarantor agrees that such Guarantor is liable, subject to the
limitations of SECTION 1 hereof, for any part of the Obligation remaining
unpaid after any foreclosure.
12. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is an
irrevocable continuing guaranty of payment and shall (a) remain in full force
and effect until final payment in full (after the Maturity Date) of the
Obligation and all other amounts payable under this Guaranty, (b) be binding
upon each Guarantor, its successors and assigns, and (c) inure to the benefit
of and be enforceable by Lender and Administrative Lender and their
successors, transferees and assigns. Without limiting the generality of the
foregoing CLAUSE (c), to the extent permitted by the Credit Agreement, each
Lender may assign or otherwise transfer its rights under the Credit
Agreement, the Notes or any of the Loan Papers or any interest therein to any
other Person, and such other Person shall thereupon become vested with all
the rights or any interest therein, as appropriate, in respect thereof
granted to such Lender herein or otherwise.
13. INFORMATION. Each Guarantor acknowledges and agrees that it shall
have the sole responsibility for obtaining from Company and each other
Obligor such information concerning Company's and each Obligor's financial
condition or business operations as such Guarantor may require, and that
neither Administrative Lender nor any Lender has any duty at any time to
disclose to Guarantor any information relating to the business operations or
financial conditions of Company or any Obligor.
14. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. WITHOUT EXCLUDING ANY OTHER
JURISDICTION, EACH GUARANTOR AGREES THAT THE STATE AND FEDERAL COURTS OF
TEXAS LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION HEREWITH. THIS GUARANTY IS PERFORMABLE IN DALLAS COUNTY, TEXAS.
15. WAIVER OF JURY TRIAL. EACH GUARANTOR, ADMINISTRATIVE LENDER, AND
LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY
OF THE LOAN PAPERS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION
IS A MATERIAL INDUCEMENT TO LENDER ENTERING INTO THE CREDIT AGREEMENT.
16. RATABLE BENEFIT. This Guaranty is for the ratable benefit of
Lenders and Administrative Lender, each of which shall share any proceeds of
this Guaranty pursuant to the terms of the Credit Agreement.
17. GUARANTOR INSOLVENCY. Should any Guarantor become insolvent, fail
to pay its debts generally as they become due, voluntarily seek, consent to,
or acquiesce in the benefits of any Debtor Relief Law or become a party to or
be made the subject of any proceeding provided for by any Debtor Relief Law
(other than as a creditor or claimant) that could suspend or otherwise
adversely affect the rights of any Lender or Administrative Lender granted
hereunder, then, the obligations of such Guarantor under this Guaranty shall
be, as between such Guarantor and such Lender and Administrative Lender, a
fully-matured, due, and payable obligation of such Guarantor to such Lender
and Administrative Lender (without regard to whether Company or any other
Obligor is then in default under the Credit Agreement or any other Loan Paper
or whether any part of the Obligation is then due and owing by Company or any
other Obligor to such Lender or Administrative Lender), payable in full by
such Guarantor to such Lender or Administrative Lender upon demand, which
shall be the estimated amount owing in respect of the contingent claim
created hereunder.
18. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES.
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
LA QUINTA REALTY CORP.
By:___________________________
Name:______________________
Title:_____________________
LA QUINTA PLAZA, INC.
By:___________________________
Name:______________________
Title:_____________________
Address for all Guarantors:
112 East Pecan Street LA QUINTA FINANCIAL CORPORATION
San Antonio, Texas 78205
By:___________________________
Name:______________________
Title:_____________________
LA QUINTA INVESTMENTS, INC.
By:___________________________
Name:______________________
Title:_____________________
LQI ACQUISITION CORPORATION
By:___________________________
Name:______________________
Title:_____________________
LA QUINTA MOTOR INNS LIMITED
PARTNERSHIP
By: La Quinta Realty Corp.,
its General Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-BATON ROUGE JOINT VENTURE
By: La Quinta Inns, Inc., its
Managing General Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-DENVER PEORIA ST., LTD.
By: [_______________________]
By:___________________________
Name:______________________
Title:_____________________
LQM OPERATING PARTNERS, L.P.
By: La Quinta Realty Corp., its
General Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-BIG APPLE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:___________________________
Name:______________________
Title:_____________________
By: La Quinta Investments, Inc., its
Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-LNL LIMITED PARTNERSHIP
By: La Quinta Inns, Inc., its Managing
General Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-EAST IRVINE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:___________________________
Name:______________________
Title:_____________________
By: La Quinta Investments, Inc., its
Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-INVESTMENTS I
By: La Quinta Inns, Inc., its Managing
General Partner
By:___________________________
Name:______________________
Title:_____________________
By: La Quinta Investments, Inc., a
General Partner
By:___________________________
Name:______________________
Title:_____________________
LQ-INVESTMENTS II
By: La Quinta Inns, Inc., its Managing
General Partner
By:___________________________
Name:______________________
Title:_____________________
By: La Quinta Investments, Inc., a
General Partner
By:___________________________
Name:______________________
Title:_____________________
LA QUINTA INNS OF LUBBOCK, INC.
By:___________________________
Name:______________________
Title:_____________________
LA QUINTA INNS OF PUERTO RICO, INC.
By:___________________________
Name:______________________
Title:_____________________
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Dated _______________, 199__
Reference is made to the Amended and Restated Credit Agreement (Facility
A), dated as of September ___, 1995 (the "Credit Agreement") among La Quinta
Inns, Inc., a Texas corporation ("Borrower"), NationsBank of Texas, N.A. as
Administrative Lender ("Administrative Lender"), and the lenders parties
thereto. Terms defined in the Credit Agreement are used herein with the same
meaning.
______________________ ("Assignor") and ______________________("Assignee")
agree as follows:
19. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, a _____% interest in and to all of
Assignor's rights and obligations under the Credit Agreement as of the
Effective Date (as defined below), with respect to such percentage interest
in Assignor's Commitment as in effect on the Effective Date, the principal
amount of Revolving Credit Advances owing to Assignor on the Effective Date,
and the Revolving Credit Note held by Assignor, and Assignor's participation
in any Letters of Credit and Reimbursement Obligations outstanding on the
Effective Date, subject to the terms and conditions of this Assignment and
Acceptance.
20. Assignor (a) represents and warrants that (i) as of the date
hereof its Commitment (without giving effect to assignments thereof which
have not yet become effective) is $________ and, as of the date hereof, the
outstanding principal amount of the Revolving Credit Advances owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $______, (ii) it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any adverse claim; (b) makes no representation or warranty and
assumes no responsibility with respect to (i) any statements, warranties, or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto or (ii) the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant
thereto; and (c) attaches the Revolving Credit Note referred to in Paragraph
1 above to exchange such Revolving Credit Note for new Revolving Credit Notes
as follows: a Revolving Credit Note dated ___________, 199___, in the
principal amount of $__________________ payable to the order of Assignee, and
a Revolving Credit Note dated _______________, 199___, in the principal
amount of $__________________ payable to the order of Assignor.
21. Assignee (a) confirms that it has received a copy of the Credit
Agreement and the other Loan Papers, together with copies of the financial
statements referred to in Sections 6.1(a) and 6.1(b) of the Credit Agreement
and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (b) agrees that it
will, independently and without reliance upon the Administrative Lender,
Assignor, or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement and the
other Loan Papers; (c) appoints and authorizes the Administrative Lender to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement, the other Loan Papers, and this Assignment and Acceptance
as are delegated to the Administrative Lender by the terms thereof and
hereof, together with such powers as are reasonably incidental thereto and
hereto; (d) agrees that it will perform in accordance with its terms all of
the obligations which by the terms of the Credit Agreement, the other Loan
Papers, and this Assignment and Acceptance are required to be performed by it
as a Lender; [and](e) specifies the addresses set forth in Schedule I
attached hereto as its address for the receipt of notices and as its initial
LIBOR Lender Office, respectively[; and (f) attaches the forms prescribed by
the IRS certifying as to Assignee's status for purposes of determining
exception from United States withholding taxes with respect to all payments
to be made to Assignee under the Credit Agreement, the other Loan Papers,
and this Assignment and Acceptance or such other documents as are necessary
to indicate that all such payments are subject to such taxes at a rate
reduced by an applicable tax treaty].
22. The effective date for this Assignment and Acceptance shall be
___________________, 199___ (the "Effective Date").
23. Upon such acceptance as of the Effective Date and upon the
remittance of a $3,500 processing fee to the Administrative Lender, (a)
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (b) Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
24. Upon such acceptance from and after the Effective Date, whenever
the Administrative Lender shall receive a payment, or whenever the
Administrative Lender shall make an application of funds, in respect of any
aggregate outstanding principal amount of the Revolving Credit Advances or in
respect of any aggregate amount of interest accrued on the Revolving Credit
Advances, or in respect of the commitment fee (other than a payment or an
application of funds in respect of any amount due and owing to any Lender or
the Administrative Lender under Sections 2.9, 5.23, 8.3, 8.5, or 10.2 of the
Credit Agreement), the Administrative Lender shall pay over to each of the
Lenders an amount equal to (i) such Lender's Pro Rata Share (as defined
below) of such aggregate amount of principal, (ii) such Lender's Pro Rata
Share of such aggregate amount of interest, and (iii) such Lender's Pro Rata
Share of such aggregate amount of the commitment fee.
The "Pro Rata Share" of any aggregate amount means, with respect to such
Lender, the amount equal to the product obtained by multiplying (i) such
aggregate amount and
(ii) a fraction, the numerator of which is such Lender's Total Commitment, or
after the Advances have been made, the principal amount of the Advances owing
to such Lender and the denominator of which is the sum of the Commitments of
all of the Lenders, or after the Advances have been made, the aggregate
principal amount of the Advances owing to all of the Lenders.
25. In the event that, after the Administrative Lender has paid to any
Lender its Pro Rata Share of any such payment received by the Administrative
Lender or any such application made by the Administrative Lender, such
payment or application is rescinded or must otherwise be returned or must be
paid over by the Administrative Lender for any reason, such Lender shall,
upon notice by the Administrative Lender, forthwith pay back to the
Administrative Lender such Lender's Pro Rata Share of the amount so rescinded
or so returned or paid over.
26. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of Texas and the United States of
America. Without excluding any other jurisdiction, Assignee agrees that the
courts of Texas will have jurisdiction over proceedings in connection
herewith.
27. Assignee's Specified Percentage shall be ____%.
28. This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[NAME OF ASSIGNOR]
By:___________________________
_______________,_________________
(Print Name) (Print Title)
[NAME OF ASSIGNEE]
By:___________________________
_______________,_________________
(Print Name) (Print Title)
Accepted this ___ day of ____________, 199___
NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:___________________________
_______________,_________________
(Print Name) (Print Title)
LA QUINTA INNS, INC.
By:___________________________
_______________,_________________
(Print Name) (Print Title)
Schedule I
ASSIGNEE'S ADDRESS
1. ADDRESS FOR THE ADVANCES AND RECEIPT OF NOTICES
2. INITIAL LIBOR LENDING OFFICE
EXHIBIT F
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and Address
of Prospective Participant
or Assignee]
Re: Amended and Restated Credit Agreement (Facility A),
dated as of September ___, 1995, among La Quinta Inns,
Inc. (the "Borrower"), the Lenders a party thereto, and
NationsBank of Texas, N.A., as Administrative Lender.
Dear ______________:
As a Lender party to the above-referenced Credit Agreement (the "CREDIT
AGREEMENT"; capitalized terms used herein shall have the same meaning given
to them in the Credit Agreement), we have agreed with the Borrower pursuant
to Section 10.10 of the Credit Agreement to use reasonable precautions to
keep confidential, except as otherwise provided therein, all non-public
information identified by the Borrower as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 10.10, we are permitted to provide you, as a
prospective [PARTICIPANT] [ASSIGNEE], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form.
Such information will not be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [PARTICIPATION] [ASSIGNMENT] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe
and sound banking practices, to keep such information confidential, provided
that nothing herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
your counsel or to counsel for any of the Lenders or the Administrative
Lender, (iii) to bank examiners, auditors or accountants of any of the
Lenders, (iv) to the Administrative Lender, or any other Lender, (v) in
connection with any litigation to which you or any one or more of the Lenders
are a party;
__________, 199__
Page 27
provided, further, that, unless specifically prohibited by Applicable Law or
court order, you agree, prior to disclosure thereof, to notify the Borrower
of any request for disclosure of any such non-public information (x) by any
governmental agency or representative thereof (other than any such request in
connection with an examination of your financial condition by such
governmental agency) or (y) pursuant to legal process; and provided, finally,
that in no event shall you be obligated to return any materials furnished to
you pursuant to this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by signing at
the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
______________________________
By:___________________________
Title:________________________
THE FOREGOING IS AGREED TO AS
OF THE DATE OF THIS LETTER.
___________________________
By:___________________________
Title:________________________