Exhibit (10)(u)
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$325,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
LA QUINTA INNS, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
February 7, 1997
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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 . . . . . . . . . . . . . . . . . . . 20
Section 1.3 CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES. . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) REVOLVING CREDIT ADVANCES . . . . . . . . . . . . . . . . . . 21
(b) THE SWING LINE LOANS. . . . . . . . . . . . . . . . . . . . . 21
(c) BID RATE ADVANCES . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT. . . . . . . . . . . . . 22
Section 2.3 INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) ON BASE RATE ADVANCES . . . . . . . . . . . . . . . . . . . . 26
(b) ON LIBOR ADVANCES . . . . . . . . . . . . . . . . . . . . . . 26
(c) ON SWING LINE ADVANCES. . . . . . . . . . . . . . . . . . . . 26
(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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) FACILITY FEE. . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) CLOSING FEE . . . . . . . . . . . . . . . . . . . . . . . . . 28
(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. . . . . . . . . . . . . . . 30
(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 ADVANCES AND THE
INITIAL LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . 44
Section 3.2 CONDITIONS PRECEDENT TO ALL 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
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(l) COMPLIANCE WITH REGULATIONS G, T, U AND X . . . . . . . . . . 50
(m) GOVERNMENTAL REGULATION . . . . . . . . . . . . . . . . . . . 50
(n) ABSENCE OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 51
(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 LEVERAGE 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. . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.18 BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.19 TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . 59
Section 5.20 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 59
Section 5.21 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 6
INFORMATION
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Section 6.1 FINANCIAL STATEMENTS AND OTHER REPORTS BY THE BORROWER. . . . 61
Section 6.2 OFFICER'S CERTIFICATE . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 7
DEFAULT
Section 7.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.2 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 8
CHANGES IN CIRCUMSTANCES
Section 8.1 LIBOR BASIS DETERMINATION INADEQUATE. . . . . . . . . . . . . 66
Section 8.2 ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.3 INCREASED COSTS . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.4 EFFECT ON BASE RATE ADVANCES. . . . . . . . . . . . . . . . . 69
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 . . . . . . . . . . . . . . 71
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY . . . . . . . 71
(g) LIABILITY AMONG LENDERS . . . . . . . . . . . . . . . . . . . 71
(h) RIGHTS AS LENDER. . . . . . . . . . . . . . . . . . . . . . . 72
Section 9.2 LENDER CREDIT DECISION. . . . . . . . . . . . . . . . . . . . 72
Section 9.3 BENEFITS OF ARTICLE . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 10
MISCELLANEOUS
Section 10.1 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 10.2 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 10.3 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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Section 10.4 DETERMINATION BY THE LENDERS CONCLUSIVE AND BINDING . . . . . 74
Section 10.5 SET-OFF . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 10.6 ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.7 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 10.8 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 77
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. . . . . . . . . . . . . . . . . 79
SECTION 10.15 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 10.16 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . 79
SECTION 10.17 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 80
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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: Existing Letters of Credit
Schedule 8: Significant Investments
Schedule 9: Guaranteed Contingent Obligations
Schedule 10: 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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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of February
7, 1997, among LA QUINTA INNS, INC., a Texas corporation ("Borrower"), the
Lenders from time to time party hereto, and NATIONSBANK OF TEXAS, N.A., a
national banking association, as administrative agent for the Lenders.
BACKGROUND
The Borrower, certain of the Lenders and the Administrative Lender are
parties to that (i) Amended and Restated Credit Agreement (Facility A) dated
as of September 12, 1995 and (ii) Amended and Restated Credit Agreement
(Facility B), dated as of September 12, 1995 (said Credit Agreements, as
amended, the "Existing Credit Agreements"). The Borrower has requested that
the Lenders amend and restate the Existing Credit Agreements by making a
credit facility available to the Borrower in the maximum principal amount of
$325,000,000 pursuant to this Agreement. The Lenders have agreed to provide
such credit facility, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree that the Existing Credit Agreements are amended and restated in
their 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 8.5 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 9.1(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.
"APPLICABLE MARGIN" means the following per annum percentages, applicable
in the following situations:
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Base Rate LIBOR
Applicability Basis Basis
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CATEGORY 1 - The Leverage Ratio is not less 0.00 0.7000
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 0.4750
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 0.3375
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 0.2500
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 0.2250
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 until such time as the financial statements are
received, (c) if the Index Debt Rating established by ARA shall fall within a
different category than both Moody's and S&P, the Applicable Margin shall be
determined by reference to Moody's or S&P, whichever shall be 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 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.
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"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.
"BASE RATE ADVANCE" means a Revolving Credit Advance which the Borrower
requests to be made as a Base Rate Advance or which is reborrowed as a Base
Rate Advance, in accordance with the provisions of Section 2.2 hereof.
"BASE RATE BASIS" means, for any day, a per annum interest rate equal to
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day plus (iii) the Applicable Margin, or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Margin. The Base Rate Basis shall
be adjusted automatically as of the opening of business on the effective date
of each change in the Prime Rate to account for such change.
"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 Facility A
Credit Agreement.
"BORROWER" has the meaning specified in the initial paragraph of this
Agreement.
"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.
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"CAPITAL LEASES" mean all capital leases and subleases, as defined in the
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 13, dated November 1976, as amended.
"CAPITAL STOCK" means, with respect to any Person, any capital stock,
partnership or joint venture interests of such Person and shares, interests,
participations or other ownership interests (however designated) of any
Person and any rights (other than debt securities convertible into corporate
stock), warrants or options to purchase any of the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means that portion of any obligation of
the Borrower or any Subsidiary as lessee under a lease which at the time
would be required to be capitalized on a balance sheet prepared in accordance
with GAAP.
"CHANGE OF CONTROL" means (a) any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable), is or becomes the "beneficial owner" (as that term is used
in Rules 13d-3 and 13d-5 under the 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 February 7, 1997, 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").
-5-
"COMMITMENT" means $325,000,000, as reduced pursuant to Section 2.6
hereof.
"CONFIDENTIALITY AGREEMENT" has the meaning specified in Section 10.10
hereof.
"CONSOLIDATED NET INCOME" means, for any period, determined in accordance
with GAAP on a Combined basis, consolidated net income for such period.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means possession,
directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of voting securities, by
contract or otherwise); provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 10% or more (in number of votes)
of the securities having ordinary voting power for the election of directors
of a corporation shall be conclusively presumed to control such corporation.
"CONTROLLED GROUP" shall mean as of the applicable date, as to any
Person, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are 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) of such Person
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
-6-
obligations (without duplication) in respect of Disqualified Capital Stock,
and (k) in the case of such Person, unfunded vested benefits under any Plan.
"DEBTOR RELIEF LAWS" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to
time in effect.
"DEFAULT" means an Event of Default and/or any of the events specified in
Section 7.1, regardless of whether there shall have occurred any passage of
time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"DEFAULT RATE" means a simple per annum interest rate equal to the lesser
of (a) the Highest Lawful Rate, or (b) the sum of the Prime Rate plus three
percent.
"DETERMINING LENDERS" means, on any date of determination, any
combination of the Lenders having at least 51% of the aggregate amount of the
Revolving Credit Advances then outstanding (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); provided, however, that if there are
no Revolving Credit Advances outstanding hereunder, "DETERMINING LENDERS"
shall mean any combination of Lenders whose Specified Percentages hereunder
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 Maturity Date; PROVIDED, that Capital Stock will not be deemed
to be Disqualified Capital Stock if it may only be 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
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under regulations issued under Section 4043 of ERISA), (b) the withdrawal of
any such Person or any member of its Controlled Group from a Plan subject to
Title IV of ERISA during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of
intent to terminate under Section 4041(c) of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, (e) the failure to make required
contributions which could result in the imposition of a lien under Section
412 of the Code or Section 302 of ERISA, or (f) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or the imposition of any liability under Title IV of
ERISA other than PBGC premiums due but not delinquent under Section 4007 of
ERISA.
"EVENT OF DEFAULT" means any of the events specified in Section 7.1,
provided that any requirement for notice or lapse of time has been satisfied.
"EXISTING CREDIT AGREEMENTS" has the meaning specified in the Background
provision of this Agreement.
"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 7 hereto.
"FACILITY A CREDIT AGREEMENT" means that certain Amended and Restated
Credit Agreement (Facility A), dated as of September 12, 1995, 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.
"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.
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"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
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.
-9-
"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 5.21 hereof.
"INDEMNITEES" has the meaning specified in Section 5.21 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.
"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, for any LIBOR Advance, the period beginning on the
day such Advance is made and ending one, two, three, six months or twelve months
thereafter (as the Borrower shall select).
"INTEREST RATE PROTECTION AGREEMENT" means an interest rate swap, cap,
collar or similar interest rate protection agreement between the Borrower or any
Subsidiary and other Person.
"INVESTMENT" means, in one or a series of related transactions, any direct
or indirect acquisition of all or substantially all assets of any Person, or any
direct or indirect purchase or other acquisition of, or beneficial interest in,
capital stock or other securities of any other Person, or any direct or indirect
loan, advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital
-10-
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 Facility A 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 last day of the fiscal quarter immediately preceding
the date of determination to (ii) EBITDA for the four consecutive fiscal
quarters preceding the date of determination. For purposes of calculation of
EBITDA, there shall be (i) included in EBITDA (without duplication) the EBITDA
of any assets acquired during any such four fiscal quarters and (ii) excluded
from EBITDA the EBITDA of any asset disposed during any such four fiscal
quarters.
"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. The LIBOR Basis
shall, with respect to LIBOR Advances
-11-
subject to reserve or deposit requirements, be subject to premiums for such
reserve or deposit requirements assessed by each Lender to the extent
incurred by such Lender, which are payable directly to each Lender.
"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.
"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 most recent 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 September 12, 1995, 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.
-12-
"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 is 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 February 28, 2002, 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.
"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 as reflected on an income
statement of such Person prepared in accordance with GAAP.
-13-
"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 September 30, 1996, 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" has 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 any of 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.
"OTHER TAXES" has the meaning specified in Section 2.15 hereof.
"PARENT COMPANY" means, with respect to financial statements, the
uncombined, consolidated financial statements of the Borrower and its
Subsidiaries, including equity method investments, as defined by GAAP, in
Unincorporated Ventures and designated "La Quinta Inns, Inc. (Parent Company and
Wholly-Owned Subsidiaries)" on the Borrower's audit report.
"PARTICIPANT" has the meaning specified in Section 10.6(c) hereof.
"PARTICIPATION" has the meaning specified in Section 10.6(c) hereof.
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"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 LIBOR
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
unconditionally guarantee the performance of the Borrower's obligations under
this Agreement and (c) that concurrently deliver to the Lenders (1) an opinion
acceptable to the Lenders with respect to the validity and enforceability of
such guarantee and (2) such other documents, such as corporate resolutions,
certificates of incumbency, by-laws and articles of incorporation, as the
Lenders shall reasonably require, (ii) Investments in any Person other than a
wholly-owned Subsidiary in any one or a series of related transactions with a
fair market value not in excess of $25,000,000 in the aggregate for all
Investments in all such Persons, (iii) Investments for the purpose of satisfying
the Borrower's or any Subsidiary's guarantee obligations with respect to the
Debt of any Person in which the Borrower or any Subsidiary owned any interest
and which obligation was in existence as of the Agreement Date; (iv) Investments
in Subsidiaries and Unincorporated Ventures which do not guarantee the
performance of the Borrower's obligations under this Agreement made in the
ordinary course of business, consistent with past practices for the purpose of
providing for the day to day operating requirements of such Subsidiary or
Unincorporated Venture, PROVIDED, that such Investments shall (a) not be used
for acquisition or conversion of any inns and (b) be evidenced by a note or
other evidence of indebtedness and (c) not at any time exceed $10,000,000 in
aggregate principal amount, (v) Investments permitted by Sections II.B., II.C.
(provided that, notwithstanding Section II.C.3. of the Investment Policy, banks
shall be required to have at least $150,000,000 in capital and surplus), II.E.
and II.H. of the Investment Policy, (vi) loans or advances to employees as
compensation for services in the ordinary course of business not in excess of
$2,000,000 aggregate principal amount, (vii) Investments in the ordinary course
of business, consistent with past practice, in the Borrower's National
Advertising Fund, (viii) Existing Investments, (ix) Investments in Capital Stock
of Subsidiaries and Unincorporated Ventures listed on SCHEDULE 3 hereto for the
purpose of acquiring no less than 100% of the capital stock or partnership
interests, as appropriate, of such Subsidiaries and Unincorporated Ventures,
(x) Investments in notes payable to the Borrower as a result of the sale of inns
in an aggregate principal amount not in excess of $10,000,000, provided that the
Borrower shall obtain and continue to hold a perfected first Lien (subject to
Permitted Liens) in such inns, (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, and (xii) Investments consisting of the purchase,
redemption, or other acquisition or retirement for value of any shares of the
Capital Stock of the Borrower. For purposes of the calculation of the amount of
any Investments permitted hereunder, Investments will be calculated at all times
at
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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;
(vi) Liens created to secure the purchase price of fixed assets acquired by
such Person, which is incurred solely for the purpose of financing the
acquisition of such assets and incurred at the time of acquisition, so long as
(a) each such Lien shall at all times be confined solely to the asset or assets
so acquired (and proceeds thereof), (b) the Liens were placed on such assets at
the time such assets were acquired and (c) the aggregate principal amount of
Debt secured by such Liens does not exceed, together with the principal amount
of Debt secured by Liens permitted pursuant to clause (vii) below, $25,000,000,
and refinancings thereof so long as any such Lien remains solely on the asset or
assets acquired and the amount of Debt related thereto is not increased;
(vii) Liens existing on any property acquired by such Person prior to
the acquisition of such property by such Person, provided (a) such Lien shall at
all times be confined solely to the property so acquired (and proceeds thereof)
and (b) the aggregate principal amount of Debt secured by such Liens does not
exceed, together with the principal amount of Debt secured by
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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 10 hereto, and Liens resulting from the refinancing of the related
Debt, provided that the Debt secured thereby shall not be increased and the
Liens shall not cover additional assets of the Borrower;
(x) any obligations or duties, affecting any property, to any municipality
or public authority with respect to any franchise, grant, license or permit
which do not materially impair the use of any material property for the purposes
for which such property is held by such Person;
(xi) zoning laws or ordinances and municipal regulations which do not
materially impair the use of any material property for the purposes for which
such property is held by such Person;
(xii) Liens, minor irregularities in or deficiencies of title on any
property which do not materially impair the use of any material property for the
purposes for which such property is held by such Person; and
(xiii) Liens otherwise permitted or contemplated by the Loan Papers.
"PERSON" means and includes an individual, corporation, partnership, trust
or unincorporated organization, or a government or any agency or political
subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of ERISA
(including a Multiemployer Plan that is covered by Title IV of ERISA) pursuant
to which any employees of the Borrower, its Subsidiaries, Unincorporated
Ventures or any member of their Controlled Group participate.
"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.
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"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 February 28, 1997.
"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 Revolving Credit Advance which is used to
pay the principal amount (or any portion thereof) of a Revolving Credit 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 Revolving Credit Advances.
"REGULATORY MODIFICATION RETROACTIVE EFFECTIVE DATE" has the meaning
specified in Section 8.5 hereof.
"REGULATORY MODIFICATION SET DATE" has the meaning specified in Section 8.5
hereof.
"RELEASE DATE" means the date on which the Notes have been paid, all other
Obligations due and owing have been paid and performed in full, and the
Commitment has been terminated.
"REPORTABLE EVENT" has the meaning specified in Section 4043(b) of ERISA.
"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 Subordinated Debt.
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"SENIOR NOTES" means, collectively, the Borrower's (a) $100,000,000 senior
unsecured notes due 2005, (b) $100,000,000 senior unsecured notes due 2004 and
(c) $50,000,000 medium term notes due 2001.
"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 have been 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 8 hereto.
"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
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or similar entity in which 100% of the ownership, capital, interest or
profits is at the time, directly or indirectly, owned by such Person, by such
Person and one or more Subsidiaries of such Person or by one or more
Subsidiaries of such Person.
"SUBSIDIARY GUARANTY" means the Guaranty executed by each Significant
Subsidiary guaranteeing payment and performance of the Obligations,
substantially in the form of EXHIBIT 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 Determining Lenders approve the terms
thereof prior to or at the time of the issuance thereof.
"SWING LINE ADVANCE" means an Advance made pursuant to 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)(i) the aggregate face amount of Bond Letters of Credit outstanding and
(ii) all Debt of the Borrower and its Subsidiaries of the type described in
(A) clauses (f) and (g) of the definition of "DEBT" herein which are set
forth on SCHEDULE 9 hereto and (B) clauses (h) and (k) of the definition of
"DEBT" herein.
"TRIBUNAL" means any state, commonwealth, federal, foreign territorial, or
other court or governmental department, commission, board, bureau, agency or
instrumentality.
"UCC" means the Uniform Commercial Code of Texas, as amended from time to
time.
"UNINCORPORATED VENTURES" means those Persons designated as "Unincorporated
Ventures" on SCHEDULE 3 hereto.
Section 1.2 AMENDMENTS AND RENEWALS. Each definition of an agreement in
this Article 1 shall include such agreement as amended to date, and as amended
or renewed from time
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to time in accordance with its terms, but only with the prior written consent
of the Determining Lenders or all Lenders as required pursuant to Section
10.12 hereof.
Section 1.3 CONSTRUCTION. The terms defined in this Article 1 (except
as otherwise expressly provided in this Agreement) for all purposes shall
have the meanings set forth in Section 1.1 hereof, and the singular shall
include the plural, and vice versa, unless otherwise specifically required by
the context. All accounting terms used in this Agreement which are not
otherwise defined herein shall be construed in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, unless otherwise
expressly stated herein.
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES.
(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 5.20 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 Base 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")
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minus (D) the aggregate principal amount of all Bid Rate Advances then
outstanding. 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, 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 and the Borrower may
not request any Bid Rate Advances unless the Index Debt Rating is the same as or
better than any two of the following: BBB- by S&P , BBB- by ARA or Baa3 by
Moody's. Bid Rate Advances may not be prepaid without the prior written consent
of the Lender making such Bid Rate Advance.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) In the case of Base Rate Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender prior to 10:30 a.m., Dallas,
Texas time, on the date of any proposed Base Rate Advance irrevocable written
notice, or irrevocable telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given), of its intention to borrow
or reborrow a Base Rate Advance hereunder. Such notice of borrowing shall
specify the requested funding date, which shall be a Business Day, and the
amount of the proposed aggregate Base Rate Advances to be made by Lenders.
(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.
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(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 date, which shall
be a Business Day, and the amount of the proposed Swing Line Advance.
(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 Base Rate Advance or a LIBOR
Advance, or (ii) is to be repaid and not reborrowed; provided, however,
notwithstanding anything in this Agreement to the contrary, if on any Payment
Date a Default shall exist, such LIBOR Advance may only be reborrowed as a Base
Rate Advance. Upon such Payment Date, such LIBOR Advance shall, subject to the
provisions hereof, be so repaid and, as applicable, reborrowed.
(e) Subject to Sections 2.1 and 2.9 hereof, upon irrevocable written
notice to the Administrative Lender prior to 11:00 a.m., Dallas, Texas, time on
the date of payment of a Base Rate Advance (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 Base Rate
Advance on such date, and (i) reborrow all or a portion of the principal amount
thereof as a Base Rate Advance, (ii) provided no Default or Event of Default has
occurred and is continuing, reborrow all or a portion of the principal amount
thereof as one or more LIBOR Advances, or (iii) not reborrow all or any portion
of such Base Rate Advance. Upon such date of repayment, such Base Rate Advance
shall, subject to the provisions hereof, be so repaid and, as applicable,
reborrowed.
(f) The aggregate amount of Base Rate Advances to be made by the Lenders
on any day shall be in a principal amount which is at least $1,000,000 and which
is an integral multiple of $100,000; provided, however, that such amount may
equal the unused amount of the Commitment. The aggregate amount of LIBOR
Advances having the same Interest Period and to be made by the Lenders on any
day shall be in a principal amount which is at least $3,000,000 and which is an
integral multiple of $500,000.
(g) The Administrative Lender shall promptly notify the Lenders of each
notice (other than with respect to a Swing Line Advance) received from the
Borrower pursuant to this Section and the LIBOR Rate for any proposed LIBOR
Advance. Failure of the Borrower to give any
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notice in accordance with Section 2.2(d) hereof shall result in a repayment
of any such existing LIBOR Advance on the applicable Payment Date by a
Refinancing Advance which is a Base Rate Advance. Each Lender shall, not
later than 1:00 p.m., Dallas, Texas time, on the date of any 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, 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 Base 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
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borrowing, irrevocable written notice of its intention to borrow 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, (iii) the
maturities of such Bid Rate Advances selected by the Borrower,
provided that no such maturities shall extend past the Maturity Date
and (iv) any other terms applicable thereto.
(ii) 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 9:30 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 10:00
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 9:30 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.
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(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.
(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.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of each Base Rate Advance, from the date such Advance is
made until it is due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) or repaid, which shall be payable as set
forth in Section 2.3(a)(ii) hereof, at a simple interest rate per annum
equal to the Base Rate Basis for such Base Rate Advance as in effect from
time to time, provided that interest on such Base Rate Advance shall not
exceed the Maximum Amount. If at any time the Base Rate Basis would exceed
the Highest Lawful Rate, interest payable on such Base Rate Advance shall
be limited to the Highest Lawful Rate, but the Base Rate Basis shall not
thereafter be reduced below the Highest Lawful Rate until the total amount
of interest accrued on such Advance equals the amount of interest that
would have accrued if the Base Rate Basis had been in effect at all times.
(ii) Interest on each Base Rate Advance shall be computed on the basis
of a year of 365 or 366 days, as applicable, for the number of days
actually elapsed, and shall be payable in arrears on each Quarterly Date
and on the Maturity Date.
(b) ON LIBOR ADVANCES.
(i) The Borrower shall pay interest on the unpaid principal amount of
each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) or repaid, at a rate per annum equal to the LIBOR Basis for such
Advance. The Administrative Lender, whose determination shall be
conclusive, shall determine the LIBOR Basis on the second Business Day
prior to the applicable funding date and shall notify the Borrower and the
Lenders of such LIBOR Basis.
(ii) Subject to Section 10.9 hereof, interest on each LIBOR Advance
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on the applicable Payment
Date and on the Maturity Date; provided,
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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 Base 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 Base 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, 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.
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Section 2.4 FEES.
(a) FACILITY FEE. Subject to Section 10.9 hereof, the Borrower agrees to
pay to the Administrative Lender, for the ratable account of the Lenders, a
facility fee on the daily average amount of the Commitment at the following per
annum percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
Category 1 - The Leverage Ratio is not less 0.3000
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 0.2250
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 0.1875
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 than 0.1500
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 than 0.1250
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 accrue from the date of the initial Advance and shall be payable
(i) in arrears on each Quarterly Date and on the Maturity Date, fully earned
when due and, subject to Section 10.9 hereof, nonrefundable when paid and
(ii) computed on the basis of a year of 365 or 366 days, as applicable, for the
actual number of days elapsed. (a) If the Index Debt Rating and the Leverage
Ratio are in different categories, the facility fee shall be determined on
whichever of the Index Debt Rating or the Leverage Ratio falls within the
superior (or numerically higher) category, (b) if the facility fee is determined
based on the Leverage Ratio and the financial statements of the Borrower setting
the Leverage Ratio are not received by the Administrative Lender by the date
required pursuant to Section 6.1(a) or 6.1(b) hereof, the facility fee shall be
determined as if the Leverage Ratio is not less than 3.50 to 1 until such time
as the financial statements are received, (c) if the Index Debt Rating
established by ARA shall fall within a different category than both Moody's and
S&P, the facility fee shall be determined by reference to Moody's or S&P,
whichever shall be the superior (or numerically higher) category, but not to
exceed two rating levels higher than the other rating agency and (e) such fee
shall be adjusted on each Adjustment Date if determined based on the
(i) Leverage Ratio, according to the performance of the Borrower for the most
recent fiscal quarter or (ii) the Index Debt Rating, according to the most
recent
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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 each Lender a closing fee
equal to (i) 0.10% of such Lender's portion of the Commitment if such Lender's
portion of the Commitment is $35,000,000 or greater, (ii) 0.075% of such
Lender's portion of the Commitment if such Lender's portion of the Commitment is
$25,000,000, and (iii) 0.050% of such Lender's portion of the Commitment if such
Lender's portion of the Commitment is $15,000,000. Such fee shall be payable on
the date of the initial Advance, fully earned when due and, subject to
Section 10.9 hereof, nonrefundable when paid.
(c) OTHER FEES. Subject to Section 10.9 hereof, the Borrower agrees to
pay to the Administrative Lender, for its account and not the account of the
Lenders, the fees provided for in the letter agreement ("Fee Letter"), dated as
of the Agreement Date, between the Borrower and the Administrative Lender on the
date and in the amounts specified therein.
Section 2.5 PREPAYMENT.
(a) VOLUNTARY PREPAYMENTS. The principal amount of any Base Rate Advance
may be prepaid in full or in part at any time, without penalty and without
regard to the Payment Date for such Advance, upon notice as required for a
repayment of a Base Rate Advance as provided in Section 2.2(e) hereof. LIBOR
Advances may be voluntarily prepaid upon notice as required for repayments of
LIBOR Advances as provided in Section 2.2(d) 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 Base 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 Base Rate Advance shall be in a principal
amount of $100,000 or an integral multiple thereof.
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Any voluntary partial prepayment of a Swing Line Advance 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 Lawful Rate or (ii)(A) in the case of such Lender, the Federal Funds
Rate
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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 or repay any LIBOR Advance after having
given notice of its intention to borrow or repay in accordance with Section
2.2 hereof (whether by reason of the Borrower's election not to proceed or
the non-fulfillment of any of the conditions set forth in Article 3 hereof),
or (b) any prepayment for any reason of any LIBOR Advance in whole or in
part, the Borrower agrees to pay to any such Lender, upon its demand, an
amount sufficient to compensate such Lender for all such losses and
out-of-pocket expenses, subject to Section 10.9 hereof. Such Lender's good
faith determination of the amount of such losses or out-of-pocket expenses,
calculated in its usual fashion, absent manifest error, shall be binding and
conclusive. Such losses shall include, without limiting the generality of
the foregoing, lost profits and reasonable expenses incurred by such Lender
in connection with the re-employment of funds prepaid, repaid, converted or
not borrowed, converted or paid, as the case may be. Upon request of the
Borrower, such Lender shall provide a certificate setting forth the amount to
be paid to it by the Borrower hereunder and calculations therefor.
Section 2.10 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrower of the principal
of or interest on the Advances, fees, and any other amount owed under this
Agreement or any other Loan Paper shall be made not later than 12:00 noon
(Dallas, Texas time) on the date specified for
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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; (iv) to the payment of principal then due and payable on the
Advances; and (v) to the payment of any outstanding Reimbursement Obligations.
(e) Each payment by the Borrower in respect of obligations relating to the
Revolving Credit Advances 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. Notwithstanding anything in this Section 2.10(e) or any other
provision of this Agreement or any other Loan Paper to the contrary, any payment
by the Borrower in respect of any Advances after acceleration of the Advances
pursuant to Section 7.2 or any monies received by the Administrative Lender as a
result of the exercise of remedies under any Loan Papers after acceleration of
the Advances pursuant to Section 7.2 shall be distributed pro rata to each
Lender based on the percentage that the outstanding Advances and Reimbursement
Obligations owed to such Lender bears to the aggregate Advances and
Reimbursement Obligations owed to all Lenders.
Section 2.11 LIBOR LENDING OFFICES. Each Lender's initial LIBOR Lending
Office is set forth opposite its name in SCHEDULE 1 attached hereto. Each
Lender shall have the right at any time and from time to time to designate a
different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer
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(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 Revolving Credit Advances or its participation
in the Letters of Credit (other than pursuant to Sections 2.15, 2.16(d), 8.3 or
8.5), in excess of its Specified Percentage of all payments made by the Borrower
with respect to Revolving Credit Advances and the Letters of Credit shall
purchase from each other Lender such participation in the Revolving Credit
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 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
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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 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
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only be given if: (i) the Borrower makes any payment from any account
located outside the United States, or (ii) the payment is made by a payor
that is not a United States Person. For purposes of this Section 2.15 the
terms "United States" and "United States Person" shall have the meanings set
forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 10.6 after the
Agreement Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower through the Administrative Lender, with a copy to
the Administrative Lender:
(A) if any lending office is located in the United States of America,
two (2) accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("Form 4224"),
(B) if any lending office is located outside the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service Form 1001 or any successor thereto
("Form 1001").
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or lending offices under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time
or reasonably promptly thereafter but only to the extent the forms
previously delivered by it hereunder are no longer effective, deliver to
the Borrower through the Administrative Lender, with a copy to the
Administrative Lender, in replacement for the forms previously delivered by
it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of
Form 1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such changed or additional lending office under this Agreement
free from withholding of United States Federal income tax;
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(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 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
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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, Financial Letters of Credit and
Non-Financial Letters of Credit (collectively, 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 remainder 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 (or
upon the Agreement Date, with respect to Existing Letters 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
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
- 37 -
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 Base 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 Base 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 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
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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");
(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;
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(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 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 1.000
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 0.700
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 0.525
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
- 40 -
CATEGORY 4 - The Leverage Ratio is less 0.400
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 0.350
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 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 0.5000
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 0.3500
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 0.2625
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 0.2000
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 0.1750
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 letter of credit fee shall
- 41 -
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
until such time as such financial statements are received, (c) if the
Index Debt Rating established by ARA shall fall within a different
category than both Moody's and S&P, the Letter of Credit fee shall be
determined by reference to Moody's or S&P, whichever shall be 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 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
- 42 -
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 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.
- 43 -
(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.
(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 ADVANCES AND THE
INITIAL LETTERS OF CREDIT. The obligation of each Lender to sign this
Agreement and to make any 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;
-44-
(c) duly executed Revolving Credit Notes, payable to the order of the
respective Lenders and in an amount for each Lender equal to its Specified
Percentage of the Commitment;
(d) opinions of counsel to the Borrower and the Subsidiaries addressed
to the Lenders and in form and substance satisfactory to the Lenders, dated
the Agreement Date, and covering the matters set forth in Sections 4.1(a),
(b), (c), (g), (l), (m) and (o) and such other matters incident to the
transactions contemplated hereby as the Administrative Lender or Special
Counsel may reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable fees and expenses rendered through the Agreement Date;
(f) evidence that all corporate or other proceedings of the Borrower and
Subsidiaries taken in connection with the transactions contemplated by this
Agreement and the other Loan Papers shall be reasonably satisfactory in form
and substance to the Lenders and Special Counsel; and the Lenders shall have
received copies of all documents or other evidence which the Administrative
Lender, Special Counsel or any Lender may reasonably request in connection
with such transactions;
(g) the closing fee as required pursuant to Sections 2.4(b);
(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) 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 or the Senior Notes;
(k) payment in full of all accrued and outstanding obligations under the
Existing Credit Agreements (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
Agreements) and the lenders party thereto shall terminate;
(l) the duly executed Swing Line Note, payable to the order of the Swing
Line Bank in the principal amount of $10,000,000;
(m) duly executed Bid Rate Notes, payable to the order of each Lender in
the principal amount of $325,000,000; and
-45-
(n) in form and substance satisfactory to the Lenders and Special
Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation the
status, organization or authority of the Borrower or any Subsidiary or any
other Person executing a Loan Paper, and the enforceability of the Obligation.
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF
CREDIT. The obligation of each Lender to make each 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 Reimbursement Obligations, after giving
effect to such proposed Advance or Letter of Credit, shall not exceed the
maximum principal amount then permitted to be outstanding hereunder;
(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
-46-
whatsoever, except that the conditions precedent set forth in Sections 3.1
and 3.2 with respect to the Swing Line Loan or the Letter of Credit for which
such Revolving Credit Advance is made pursuant to Section 2.2(g) or 2.16(c)
shall have been satisfied in full at the time of the making of such Swing
Line Loan or the issuance of such Letter of Credit; and
(f) The making of such Advance or the issuance of or participation in
such Letter of Credit by any Lender does not violate or contravene any
Applicable Law and is not enjoined, temporarily, preliminarily or permanently.
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. All of the outstanding
Capital Stock of the Borrower and its Subsidiaries and Unincorporated
Ventures has been validly issued and fully paid and is non-assessable. 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).
-47-
(c) COMPLIANCE WITH OTHER LOAN PAPERS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance by the Loan Parties of the Loan
Papers to which they are respectively a party, and the consummation of the
transactions contemplated thereby, do not and will not (i) require any
consent or approval not already obtained, (ii) violate any Applicable Law,
(iii) conflict with, result in a breach of, or constitute a default under the
articles of incorporation, by-laws, articles of partnership, partnership
agreements or similar governing documents of any Loan Party, or under any
Necessary Authorization, indenture, agreement or other instrument, to which
any Loan Party is a party or by which they or their respective properties may
be bound, or (iv) result in or require the creation or imposition of any Lien
upon or with respect to any property now owned or hereafter acquired by any
Loan Party, except Permitted Liens.
(d) LICENSES, ETC. All Necessary Authorizations 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 any of its Subsidiaries or
Unincorporated Ventures, 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. The Borrower maintains insurance coverage
for the litigation set forth on
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SCHEDULE 2 hereto and no insurance carrier has denied coverage or reserved
rights with respect to any such litigation.
(h) TAXES. All federal, state and other tax returns of the Borrower and
its Subsidiaries and Unincorporated Ventures required by law to be filed have
been duly filed and all federal, state and other taxes, assessments and other
governmental charges or levies upon the Borrower, its Subsidiaries or
Unincorporated Ventures or any of their respective properties, income,
profits and assets, which are due and payable, have been paid, unless the
same are being diligently contested in good faith by appropriate proceedings,
with adequate reserves established therefor, and no Lien (other than a
Permitted Lien) has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries and Unincorporated Ventures in
respect of their respective taxes are, in the judgment of the Borrower,
adequate.
(i) FINANCIAL STATEMENTS; MATERIAL LIABILITIES. The Borrower has
furnished or caused to be furnished to the Lenders copies of its December 31,
1995 and September 30, 1996 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 as set forth in the
December 31, 1995 financial statements.
(j) NO ADVERSE CHANGE. Since December 31, 1995, 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
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has been no ERISA Event or any event requiring disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Plan or its related
trust of the Borrower or any member of its Controlled Group since the
effective date of ERISA. The present value of the benefit liabilities, as
defined in Title IV of ERISA, of each Plan subject to Title IV of ERISA
(other than a Multiemployer Plan) of the Borrower and each member of its
Controlled Group does not exceed by more than $10,000,000 the present value
of the assets of each such Plan as of the most recent valuation date using
each such Plan's actuarial assumptions at such date. There are no pending,
or to the best of the Borrower's knowledge threatened, claims, lawsuits or
actions (other than routine claims for benefits in the ordinary course)
asserted or instituted against, and neither the Borrower nor any member of
its Controlled Group has knowledge of any threatened litigation or claims
against, the assets of any Plan or its related trust or against any fiduciary
of a Plan with respect to the operation of such Plan the result of which
could reasonably be expected to have Material Adverse Effect. None of the
Borrower or, to the best of the Borrower's knowledge, any member of its
Controlled Group has engaged in any prohibited transactions, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, in connection
with any Plan the result of which could reasonably be expected to have
Material Adverse Effect. None of the Borrower or any member of its
Controlled Group has withdrawn from any Multiemployer Plan, nor has incurred
or reasonably expects to incur (A) any liability under Title IV of ERISA
(other than premiums due under Section 4007 of ERISA to the PBGC), (B) any
withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under
Section 4201 of ERISA as a result of a complete or partial withdrawal (within
the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or
(C) any liability under Section 4062 of ERISA to the PBGC or to a trustee
appointed under Section 4042 of ERISA. None of the Borrower, any member of
its Controlled Group, or any organization to which the Borrower or any member
of its Controlled Group is a successor or parent corporation within the
meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069 the result of which could reasonably be
expected to have Material Adverse Effect. None of the Borrower or any member
of its Controlled Group maintains or has established any Plan, which is a
material welfare benefit plan within the meaning of Section 3(1) of ERISA and
which provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment, except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and the regulations
thereunder. Each of Borrower and its Controlled Group which maintains a Plan
which is a welfare benefit plan within the meaning of Section 3(1) of ERISA
has complied in all material respects with any applicable notice and
continuation requirements of COBRA and 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
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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.
(m) GOVERNMENTAL REGULATION. The Borrower and its Subsidiaries and
Unincorporated Ventures are not required to obtain any Necessary
Authorization that has not already been obtained from, or effect any material
filing or registration that has not already been effected with, any federal,
state or local regulatory authority in connection with the execution and
delivery of this Agreement or any other Loan Paper, or the performance
thereof (other than any enforcement of remedies by the Administrative Lender
on behalf of the Lenders, in accordance with their respective terms,
including any borrowings hereunder.
(n) ABSENCE OF DEFAULT. The Borrower and its Subsidiaries and
Unincorporated Ventures are in compliance in all respects with all of the
provisions of their articles of incorporation, by-laws, articles of
partnership, partnership agreement or other governing documents, and no event
has occurred or failed to occur, which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes, or which with the passage
of time or giving of notice or both would constitute, (i) an Event of Default
or (ii) a default by the Borrower or any of its Subsidiaries or
Unincorporated Ventures under any material indenture, agreement or other
instrument, or any judgment, decree or order to which the Borrower or any of
its Subsidiaries or Unincorporated Ventures or by which they or any of their
material properties is bound.
(o) INVESTMENT COMPANY ACT. The Borrower is not required to register
under the provisions of the Investment Company Act of 1940, as amended.
Neither the entering into or performance by the Borrower of this Agreement
nor the issuance of the Notes violates any provision of such act or requires
any consent, approval, or authorization of, or registration with, the
Securities and Exchange Commission or any other governmental or public body
of authority pursuant to any provisions of such act.
(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
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Borrower and its Subsidiaries and Unincorporated Ventures have complied in
all respects with all Applicable Environmental Laws except to the extent that
the failure to so comply, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The Borrower and
its Subsidiaries and Unincorporated Ventures are not in violation in any
respects of or subject to any existing, pending or, to the best of the
Borrower's knowledge, threatened investigation or inquiry by any governmental
authority or to any material remedial obligations under any Applicable
Environmental Laws, except to the extent that the results of such
investigation, inquiry or remedial obligation would not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect, and
this representation and warranty would continue to be true and correct
following disclosure to the applicable governmental authorities of all
relevant facts, conditions and circumstances, if any, pertaining to any real
property of the Borrower and its Subsidiaries and Unincorporated Ventures.
The Borrower and its Subsidiaries and Unincorporated Ventures have obtained
all material permits, licenses or similar authorizations necessary to
construct, occupy, operate or use any buildings, improvements, fixtures, and
equipment forming a part of any real property of the Borrower or any
Subsidiary or Unincorporated Venture by reason of any Applicable
Environmental Laws, except where the failure to obtain such authorization
would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries and
Unincorporated Ventures undertook, at the time of acquisition of any real
property, reasonable inquiry into the previous ownership and uses of such
real property consistent with good commercial or customary practice as
applied and used in the real estate industry at the time of each such
acquisition. The Borrower and its Subsidiaries and Unincorporated Ventures
have taken all reasonable steps to determine, and the Borrower and its
Subsidiaries and Unincorporated Ventures have no actual knowledge or reason
to believe, after reasonable investigation, that any hazardous substances or
solid wastes have been disposed of or otherwise released on or to the real
property of the Borrower or any of its Subsidiaries or Unincorporated
Ventures, within the meaning of the Applicable Environmental Laws, except to
the extent that the failure to so dispose 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. 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
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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 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 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):
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Section 5.1 MAINTENANCE OF PROPERTY, INSURANCE, ACCOUNTING PRACTICES,
CORPORATE EXISTENCE. The Borrower covenants and agrees to, and will cause each
Subsidiary and Unincorporated Venture to:
(a) Maintain its material property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto, consistent with sound business practice and as is customary in the case
of corporations or other entities of established reputation engaged in the same
or a similar business and similarly situated;
(b) Maintain, with financially sound and reputable insurers, or through
its own program of self-insurance, insurance with respect to its material
properties and business against such casualties and contingencies, of such
types, and in such amounts as is customary in the case of corporations or other
entities of established reputation engaged in the same or a similar business and
similarly situated;
(c) Keep books of record and accounts in which entries will be made of all
of its business transactions, and will reflect in its 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 Lender, upon (i) reasonable request, if
such request is prior to the occurrence of a Default or an Event of Default or
(ii) request, if such request is after the occurrence of a Default or an Event
of Default, to any Authorized Officer, to visit and inspect any of the
properties of, to examine the books of account and records of the Borrower, any
Subsidiary or Unincorporated Venture and to
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take extracts therefrom and to discuss the affairs, finances or accounts of
the Borrower, any Subsidiary or Unincorporated Venture, and to be advised as
to the same by the officers of the Borrower, at all such times during normal
business hours, in such detail and through such agents and representatives as
such Bank may reasonably desire.
Section 5.3 MERGER AND SALE OF ASSETS.
(a) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, directly or indirectly sell,
transfer or otherwise dispose of any of its assets (whether now owned or
hereafter acquired, and including any interest in a joint venture or
partnership) unless immediately prior to, and after giving effect to, such sale,
transfer or other disposition, the Borrower, its Subsidiaries and Unincorporated
Ventures are and will be in compliance with all covenants hereunder and there
shall otherwise be no Default or Event of Default hereunder; and
(b) The Borrower covenants and agrees that it will not, and will cause
each Subsidiary and Unincorporated Venture to not, merge into or consolidate
with any other Person; provided, however, if after giving effect to any such
merger or consolidation, (i) the business of the Borrower or any Subsidiary or
Unincorporated Venture, as appropriate, will not be materially changed and
(ii) the Borrower or any Subsidiary or Unincorporated Venture, as appropriate,
will not be in default in respect of any of the covenants contained in any
material agreement, including, without limitation, this Agreement, to which the
Borrower or any Subsidiary or Unincorporated Venture is a party or by which its
property may be bound,
(1) any corporation, partnership or joint venture may merge or
consolidate with the Borrower, provided that the Borrower shall be the
continuing and surviving corporation,
(2) any Subsidiary may merge with or consolidate with any
corporation, partnership or joint venture, provided that, unless such
merger or consolidation shall be with the Borrower, such Subsidiary shall
be the continuing and surviving corporation, and
(3) any Unincorporated Venture may merge with or consolidate with any
corporation, partnership or joint venture, provided that, unless such
merger or consolidation shall be with the Borrower or a Subsidiary, such
Unincorporated Venture shall be the continuing and surviving person.
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) $315,000,000
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 December 31, 1996, plus (iii) 75% of the Net Cash Proceeds of
any equity issues of the Borrower's Capital Stock on or after December 31, 1996.
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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 in existence on the
Agreement Date in respect of any Significant Investments, (ii) the guarantees
and other contingent obligations set forth on SCHEDULE 9 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 LEVERAGE RATIO. The Borrower covenants and agrees that it
will not allow the Leverage Ratio to be greater than (a) 4.00 to 1 at the end of
any fiscal quarter occurring during the period from the Agreement Date through
and including March 31, 1998 and (b) 3.75 to 1 at the end of any fiscal quarter
thereafter.
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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 Expense, 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 as of the last day of the fiscal
quarter immediately preceding the date of determination to (ii) EBITDA for the
four consecutive fiscal quarters immediately preceding the date of
determination, to be greater than (a) 3.25 to 1 at the end of any fiscal quarter
occurring during the period from the Agreement Date through and including
March 31, 1998 and (b) 3.00 to 1 at the end of any fiscal quarter thereafter.
For purposes of this Section 5.11, with respect to assets not owned at all times
during the four consecutive quarters immediately preceding the date of
determination of EBITDA, there shall be (i) included in EBITDA (without
duplication) the EBITDA of any assets acquired during any such four consecutive
fiscal quarters immediately preceding the date of determination and
(ii) excluded from EBITDA the EBITDA of any asset disposed of during any such
four consecutive fiscal quarters immediately preceding the date of
determination.
Section 5.12 LIENS. The Borrower covenants and agrees that it will not
create, assume or suffer to exist, or permit any Subsidiary or Unincorporated
Venture to create, assume or suffer to exist, any Lien on any asset now owned or
hereafter acquired by it except Permitted Liens. Other than with respect to
Senior Notes, the Borrower shall not, and shall not permit any Subsidiary or
Unincorporated Venture to, agree with any Person that it shall not create,
assume, incur, permit or suffer to exist or to be created, assumed, incurred or
permitted to exist, directly or indirectly, any Lien on any of its assets.
Section 5.13 ACCOUNTING CHANGES. The Borrower covenants and agrees that
it will not, and will not permit an of its Subsidiaries or Unincorporated
Ventures to, make any change in its accounting treatment or financial reporting
practices, except as permitted or required by GAAP in effect from time to time.
The Borrower will not change its fiscal year or the calculation of its fiscal
quarter ends.
Section 5.14 AMENDMENT AND MODIFICATION OF SUBORDINATED DEBT DOCUMENTS.
The Borrower covenants and agrees that it will not, and it will not permit any
Subsidiary or Unincorporated Venture to, directly or indirectly, amend, modify,
supplement, waive compliance with, or assent to noncompliance with, any term,
provision or condition of any of the documents governing or evidencing the
Subordinated Debt, which (i) the Determining 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
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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 Applicable Environmental Law 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 Determining Lenders (or such shorter period of time
as may be required under any applicable law, regulation, order or agreement),
commence and thereafter diligently prosecute to completion, all such Remedial
Work.
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(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 Applicable 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, 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 other Persons, any business other than the businesses now
carried on and other businesses directly related thereto.
Section 5.19 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
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Unincorporated Venture could obtain or could become entitled to in an
arm's-length transaction with a Person which was not an Affiliate.
Section 5.20 USE OF PROCEEDS. The Borrower shall use the proceeds of the
Commitment to refinance the debt outstanding under the Existing Credit
Agreements and for working capital and general corporate purposes, including
repayment of Debt.
Section 5.21 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES, AND
EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING
(COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
COSTS, EXPENSES AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, THE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES
IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING,
WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT
OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR
OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS
OF THE BORROWER OR ANY OTHER OBLIGOR OR THEIR RESPECTIVE PREDECESSORS IN
INTEREST, OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF
THE BORROWER OR ANY OTHER OBLIGOR), IN ANY MANNER RELATING TO OR ARISING OUT OF
THIS AGREEMENT, ANY OTHER 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
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LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, AND (ii) MATTERS RAISED BY ONE LENDER AGAINST ANOTHER
LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR ITS MANAGEMENT
(COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT THAT ANY INDEMNIFIED
MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL USE THE SAME
LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION DETERMINES
THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH REPRESENTATION.
(b) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST, REIMBURSE
EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL EXPENSES (INCLUDING
THE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN CONNECTION WITH ANY
INDEMNIFIED MATTER. IF FOR ANY REASON THE FOREGOING INDEMNIFICATION IS
UNAVAILABLE TO ANY INDEMNITEE OR INSUFFICIENT TO HOLD ANY INDEMNITEE HARMLESS
WITH RESPECT TO INDEMNIFIED MATTERS, THEN THE BORROWER SHALL CONTRIBUTE TO THE
AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A RESULT OF SUCH LOSS, CLAIM,
DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY THE
RELATIVE BENEFITS RECEIVED BY THE BORROWER AND THE BORROWER'S STOCKHOLDERS ON
THE ONE HAND AND SUCH INDEMNITEE ON THE OTHER HAND BUT ALSO THE RELATIVE FAULT
OF THE BORROWER AND SUCH INDEMNITEE, AS WELL AS ANY OTHER RELEVANT EQUITABLE
CONSIDERATIONS. THE REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER
THIS SECTION SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY
OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH
INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF ANY
SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE
ADMINISTRATIVE LENDER, THE LENDERS AND ALL OTHER INDEMNITEES. THIS 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:
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(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 9
attached thereto) certifying (i) as to any increases or reductions in
interest in the Significant Investments, and (ii) compliance with
Sections 5.4, 5.5, 5.9, 5.10 and 5.11.
(b) As soon as practicable after the end of each fiscal year of the
Borrower and in any event within 120 days thereafter, duplicate copies of:
(1) Combined balance sheets, statements of earnings, shareholders'
equity and cash flows of the Borrower for such year; all in reasonable
detail, prepared on a basis consistent with the financial statements
delivered to all Lenders in prior periods and accompanied by an unqualified
opinion and report of KPMG Peat Marwick, or other independent certified
accountants of recognized standing selected by the Borrower and reasonably
consented to by the Determining 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 9
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;
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(3) Each definitive Proxy Statement filed pursuant to the Securities
Exchange Act of 1934, as amended; and
together with any other document filed with the S.E.C. or the New York
Stock Exchange, Inc., as may be requested by any Lender.
(d) Upon request by any Lender, copies of the following:
(1) Each annual report/return, as well as all schedules and
attachments required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the regulations promulgated
thereunder, in connection with each of its Plans for each Plan year; and
(2) Such additional information concerning any of its Plans as may be
reasonably requested.
(e) On the date of receipt by the Borrower of any change in the Index
Debt Rating, a copy of such change.
(f) Promptly upon the occurrence of a Default or Event of Default, a
written notice specifying the nature and period of existence thereof and what
action is being taken or is proposed to be taken with respect thereto.
(g) Promptly upon becoming aware thereof, notice of the commencement or
filing (or of a threat to commence or file) of any action, suit or proceeding
before any court or any federal, state, municipal or other governmental
agency or authority involving claims for damages, fines or penalties in
excess of $500,000 (after deducting any amount with respect to which the
Borrower, any Subsidiary or Unincorporated Venture is insured) against or in
any other way relating to the Borrower, any Subsidiary or any Unincorporated
Venture or any of their respective properties or businesses.
(h) Promptly upon becoming aware of any event, circumstance or condition
which could reasonably be expected to result in a Material Adverse Change or
Effect, a written notice specifying the details thereof and what action is
being taken or is proposed to be taken with respect thereto.
(i) With reasonable promptness, such other data and information as from
time to time may be reasonably requested by any Lender.
(j) 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
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(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 (i) any covenant contained in Sections 5.3, 5.4, 5.5, 5.6,
5.7, 5.9, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.19 or 5.20 of this Agreement
or (ii) any other covenant in this Agreement or any other Loan Paper (other
than the Master Covenant Agreement) to be performed or observed by it and
such failure with respect to such other covenants continues for a period of
30 days after any Lender has given written notice specifying such failure to
the Borrower;
(d) Any material warranty or representation by or on behalf of the
Borrower or any Subsidiary or Unincorporated Venture contained in this
Agreement or any other Loan Paper is false or misleading in any material
respect;
(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 any
other event or condition shall exist in respect of such Debt or any agreement
securing or relating to such Debt if and only if the
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effect of such failure to make such payment or such event or condition 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, repurchased or redeemed prior to its
stated maturity;
(f) The Borrower or any Significant Subsidiary or Unincorporated Venture
(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) 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;
(i) 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);
(j) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other party-in-
interest or disqualified person shall engage in transactions which in the
aggregate would reasonably result in a direct or indirect liability to the
Borrower or any member of its Controlled Group in excess of $100,000 under
Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or
any member of 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
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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
(k) A Change of Control shall have occurred.
Section 7.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in Section
7.1(f) hereof, the Administrative Lender shall, upon the direction of the
Determining Lenders, terminate the 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,
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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 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
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may lawfully continue to maintain and fund such Advance to such day, or (b)
immediately, if the Lender may not lawfully continue to fund and maintain
such Advance to such day. Concurrently with repaying each affected LIBOR
Advance owing to such Lender, notwithstanding anything contained in Article 2
hereof, the Borrower shall borrow a Base Rate Advance from such Lender, and
such Lender shall make such Base Rate Advance, in an amount such that the
outstanding principal amount of the Advances owing to such Lender shall equal
the outstanding principal amount of the Advances owing immediately prior to
such repayment.
Section 8.3 INCREASED COSTS.
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof
or compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any Tax
(net of any tax benefit engendered thereby) with respect to its LIBOR
Advances or its obligation to make such Advances, or shall change the basis
of taxation of payments to a Lender (or to its LIBOR Lending Office) of the
principal of or interest on its LIBOR Advances or in respect of any other
amounts due under this Agreement, as the case may be, or its obligation to
make such Advances (except for changes in the rate of tax on the overall
net income, net worth or capital of the Lender and franchise taxes, doing
business taxes or minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, a Lender's
LIBOR Lending Office or shall impose on the Lender (or its LIBOR Lending
Office) or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its LIBOR Advances or
its obligation to make such Advances (but excluding any reserves or
deposits that are included in the calculation of LIBOR Basis);
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
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office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole judgment of the affected Lender
made in good faith, be materially disadvantageous to such Lender.
Notwithstanding the foregoing, any Lender's demand for Increased Advance
Costs shall not include any Increased Advance Costs with respect to any
period more than 180 days prior to the date that such Lender gives notice to
the Borrower of such Increased Advance Costs unless the effective date of the
condition which results in the right to receive Increased Advance Costs is
retroactive (the "Increased Advance Costs Retroactive Effective Date"). If
any Increased Advance Costs has an Increased Advance Costs Retroactive
Effective Date and any Lender demands compensation within 180 days after the
date setting the Increased Advance Costs Retroactive Effective Date (the
"Increased Advance Costs Set Date"), such Lender shall have the right to
receive such Increased Advance Costs from the Increased Advance Costs
Retroactive Effective Date. If a Lender does not demand such Increased
Advance Costs within 180 days after the Increased Advance Costs Set Date,
such Lender may not receive payment of Increased Advance Costs with respect
to any period more than 180 days prior to such demand.
(b) A certificate of any Lender claiming compensation under this Section
and setting forth the additional amounts to be paid to it hereunder and
calculations therefor shall be conclusive in the absence of manifest error.
In determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this Section,
the Borrower may at any time, upon at least five Business Days' prior notice
to the Lender, after reimbursement to the Lender by the Borrower in
accordance with this Section of all costs incurred, prepay in full the then
outstanding LIBOR Advances of the Lender, together with accrued interest
thereon to the date of prepayment, along with any reimbursement required
under Section 2.9 hereof. Concurrently with prepaying such LIBOR Advances,
the Borrower shall borrow a Base Rate Advance from the Lender, and the Lender
shall make such Base Rate Advance, in an amount such that the outstanding
principal amount of the Advances owing to such Lender shall equal the
outstanding principal amount of the Advances owing immediately prior to such
prepayment.
Section 8.4 EFFECT ON BASE RATE ADVANCES. If notice has been given
pursuant to Section 8.1, 8.2 or 8.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as LIBOR Advances shall
be made instead as Base Rate Advances.
Section 8.5 CAPITAL ADEQUACY. If either (a) the introduction of or
any change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital
required or expected to be maintained by a Lender or any corporation
controlling such Lender, and such Lender determines that the amount of such
capital is increased by or based upon the existence of
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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:
(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,
notices, demands, approvals and consents received from the Lenders. The
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. The Administrative Lender shall have no
duties or responsibilities except those expressly set forth in this
Agreement. The duties of the Administrative Lender are mechanical and
administrative in nature and the Administrative
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Lender shall have no fiduciary relationship in respect of any Lender by
reason of this Agreement or any other Loan Paper.
(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
Determining 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 Determining Lenders of a successor
Administrative Lender; provided, however, that if the Lenders fail for any
reason to appoint a successor within 60 days after such removal or
resignation, the Administrative Lender or any successor Administrative Lender
(as the case may be) shall thereafter have no obligation to act as
Administrative Lender hereunder.
(c) EXPENSES. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any expenses paid by the Administrative Lender
directly and solely in connection with any of the Loan Papers if
Administrative Lender does not receive reimbursement therefor from other
sources within 60 days after the date incurred, unless payment of such fees
is being diligently disputed by such Lender or the Borrower in good faith.
Any amount so paid by the Lenders to the Administrative Lender shall be
returned by the Administrative Lender pro rata to each paying Lender to the
extent later paid by the Borrower or any other Person on the Borrower's
behalf to the Administrative Lender.
(d) DELEGATION OF DUTIES. The Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees, attorneys
or agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex
or teletype message, statement, order, or other document or conversation
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected the Administrative Lender. The
Administrative Lender may, in its reasonable judgment, deem and treat the
payee of any Note as the owner thereof for all purposes hereof.
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(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. After the
occurrence of a Default or an Event of Default, 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 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 or which are the result of gross negligence or wilful
misconduct.
(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
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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:
La Quinta Inns, Inc.
112 E. Pecan Street, Suite 1200
San Antonio, Texas 78205
Attn: William C. Hammett, Jr.
Senior Vice President-Chief Financial Officer
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Jeffrey H. Susman
Senior Vice President
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(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 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
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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 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 Administrative Lender or holder shall have declared the principal of and
interest on the Advances and other amounts due hereunder to be due and payable
as permitted by Section 7.2 and although such obligations and liabilities, or
any of them, shall be contingent or unmatured. Any sums obtained by any Lender
or by any assignee, participant or subsequent holder of any Note shall be
subject to pro rata treatment of all Obligations and other liabilities
hereunder.
Section 10.6 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Papers without the prior written
consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this Agreement,
its Notes or its Advances, except as hereinafter set forth.
(c) With the prior written consent of the Borrower (which consent may be
withheld for any reason or for no reason), a Lender may at any time sell
participations in all or any part of its Advances, its portion of the
Commitment, and all other interests of such Lender under this Agreement and the
other Loan Papers, 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
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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, 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, and (v)
the Assignee or the Lender executing the Assignment Agreement as the case may
be, shall deliver to the Administrative Lender a processing fee of $3,500.
Upon such execution, delivery and acceptance from and after the effective
date specified in each Assignment Agreement, 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
Agreement, 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 Agreement, relinquish
such rights and be released from such obligations under this Agreement.
Notwithstanding anything in this clause (d) to the contrary, any Lender may
assign its rights and obligations under this Agreement to an affiliate of
such Lender without the prior written consent of the Administrative Lender
and the Borrower, but otherwise subject to the restrictions set forth herein.
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(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 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.
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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.
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
- 78 -
shall any Lender or the Administrative Lender be 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.
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
- 79 -
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 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
- ------------------------------------------------------------------------------
- 80 -
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
BORROWER: LA QUINTA INNS, INC.
By: /s/ William C. Hammett, Jr.
-----------------------------------------
William C. Hammett, Jr.
Senior Vice President-Chief Financial
Office
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as Administrative
Lender
By: /s/ Jeffrey H. Susman
-----------------------------------------
Jeffrey H. Susman
Senior Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender
Specified Percentage:
12.3076923077%
By: /s/ Jeffrey H. Susman
-----------------------------------------
Jeffrey H. Susman
Senior Vice President
901 Main Street, 67th Floor
Dallas, Texas 75202
Attn: Jeffrey H. Susman
Senior Vice President
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BANK OF AMERICA ILLINOIS
Specified Percentage:
10.7692307692%
By: /s/ W. Thomas Barnett
-----------------------------------------
Name: W. Thomas Barnett
------------------------------------
Title: Vice President
-----------------------------------
333 Clay Street, Suite 4550
Houston, Texas 77002
Attn: W. Thomas Barnett
Vice President
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THE BANK OF NOVA SCOTIA
Specified Percentage:
7.6923076923%
By: /s/ M.D. Smith
-----------------------------------------
Name: M.D. Smith
------------------------------------
Title: Agent
-----------------------------------
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30308
Attn: F.C.H. Ashby
Senior Assistant Agent
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THE FROST NATIONAL BANK
Specified Percentage:
7.6923076923%
By: /s/ Suzanne Peterson
-----------------------------------------
Name: Suzanne Peterson
------------------------------------
Title: Vice President
-----------------------------------
100 West Houston Street
San Antonio, Texas 78205
Attn: Suzanne Peterson
- 84 -
GUARANTY FEDERAL BANK, F.S.B.
Specified Percentage:
7.6923076923%
By: /s/ Jim R. Hamilton
-----------------------------------------
Name: Jim R. Hamilton
------------------------------------
Title: Vice President
-----------------------------------
1100 N.E. Loop 410
San Antonio, Texas 78209
Attn: Jim R. Hamilton
Vice President
- 85 -
SOCIETE GENERALE, SOUTHWEST AGENCY
Specified Percentage:
7.6923076923%
By: /s/ Richard A. Gould
-----------------------------------------
Name: Richard A. Gould
------------------------------------
Title: Vice President
-----------------------------------
1111 Bagby, Suite 2020
Houston, Texas 77002
Attn: Richard A. Gould
Vice President
- 86 -
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Specified Percentage:
7.6923076923%
By: /s/ Mark V. Harris
-----------------------------------------
Name: Mark V. Harris
------------------------------------
Title: Senior Vice President
-----------------------------------
1020 N.E. Loop 410
San Antonio, Texas 78209
Attn: Mark V. Harris
Senior Vice President
- 87 -
UNITED STATES NATIONAL BANK OF OREGON
Specified Percentage:
7.6923076923%
By: /s/ Thomas Marks
-----------------------------------------
Name: Thomas Marks
------------------------------------
Title: Assistant Vice President
-----------------------------------
555 Southwest Oak Street, Suite 400
Portland, Oregon 97204
Attn: Tom Marks
Assistant Vice President
- 88 -
WELLS FARGO BANK, N.A.
Specified Percentage:
7.6923076923%
By: /s/ Dana D. Cagle
-----------------------------------
Name: Dana D. Cagle
----------------------------
Title: Vice President
----------------------------
420 Montgomery Street
San Francisco, California 94104
Attn: Veronica Christian
with a copy to:
1445 Ross Avenue, Suite 400
Dallas, Texas 75202
Attn: Dana D. Cagle
Vice President
-89-
THE FUJI BANK, LIMITED, HOUSTON AGENCY
Specified Percentage:
4.6153846154%
By: /s/ Philip C. Lauinger
---------------------------------------
Name: Philip C. Lauinger
--------------------------------
Title: Vice President and Joint Manager
--------------------------------
1221 McKinney Street, Suite 4100
Houston, Texas 77010
Attn: Greg Parten
Vice President
-90-
THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW
YORK BRANCH
Specified Percentage:
4.6153846154%
By: /s/ Kensaku Iwata
-----------------------------------
Name: Kensaku Iwata
----------------------------
Title: Senior Vice President and
Deputy General Manager,
Houston Office
----------------------------
Three Allen Center, Suite 4850
333 Clay Street
Houston, Texas 77002
Attn: Daniel A. Davis
Vice President
-91-
THE SANWA BANK, LIMITED, DALLAS AGENCY
Specified Percentage:
4.6153846154%
By: /s/ R. Blake Wright
-----------------------------------
Name: R. Blake Wright
----------------------------
Title: Vice President
----------------------------
2200 Ross Avenue, Suite 4100W
Dallas, Texas 75201
Attn: Blake Wright
Vice President
-92-
THE SUMITOMO BANK, LIMITED
Specified Percentage:
4.6153846154%
By: /s/ Harumitsu Seki
-----------------------------------
Name: Harumitsu Seki
----------------------------
Title: General Manager
----------------------------
700 Louisiana Street, Suite 1750
Houston, Texas 77002
Attn: Will Rogers
-93-
SUNTRUST BANK, ATLANTA
Specified Percentage:
4.6153846154%
By: /s/ Jennifer Harrelson
-----------------------------------
Name: Jennifer Harrelson
----------------------------
Title: Senior Vice President
----------------------------
By: /s/ Todd C. Davis
-----------------------------------
Name: Todd C. Davis
----------------------------
Title: Assistant Vice President
----------------------------
25 Park Place, 24th Floor
(Mail Code 120)
Atlanta, Georgia 30303
Attn: Todd C. Davis
Assistant Vice President
-94-
SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
BANK OF AMERICA ILLINOIS
333 Clay Street, Suite 4550
Houston, Texas 77002
THE BANK OF NOVA SCOTIA
Atlanta Agency
600 Peachtree Street N.E., Suite 2700
Atlanta, Georgia 30308
THE FROST NATIONAL BANK
100 West Houston Street
San Antonio, Texas 78205
GUARANTY FEDERAL BANK, F.S.B.
1100 N.E. Loop 410
San Antonio, Texas 78209
SOCIETE GENERALE, SOUTHWEST AGENCY
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
1020 N.E. Loop 410
San Antonio, Texas 78209
-95-
UNITED STATES NATIONAL BANK OF OREGON
111 SW Fifth Avenue
Portland, Oregon 97204
WELLS FARGO BANK, N.A.
420 Montgomery Street
San Francisco, California 94104
THE FUJI BANK, LIMITED,
Houston Agency
1221 McKinney Street, Suite 4100
Houston, Texas 77010
THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH
New York Branch
245 Park Avenue
New York, New York 10167
THE SANWA BANK, LIMITED, DALLAS AGENCY
2200 Ross Avenue, Suite 4100W
Dallas, Texas 75201
THE SUMITOMO BANK, LIMITED
277 Park Avenue
New York, New York 10172
SUNTRUST BANK, ATLANTA
25 Park Place, 24th Floor
Atlanta, Georgia 30303
-96-
EXHIBIT A
REVOLVING CREDIT NOTE
Dallas, Texas $_____________ February 7, 1997
LA QUINTA INNS, INC., a Texas corporation (the "Borrower"), for value
received, promises to pay to the order of ________________ ("Lender"), at the
principal office of ___________________, in lawful money of the United States
of America, the principal sum of _______________ DOLLARS ($_______), 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.
The Borrower promises to pay principal of and interest on the unpaid
principal balance of Revolving Credit Advances under this Revolving Credit
Note from time to time outstanding as set forth 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 Lenders, at 901 Main Street, Dallas, Texas 75202, in immediately
available funds.
This Revolving Credit Note is issued pursuant to and evidences Revolving
Credit Advances under the First Amended and Restated Credit Agreement, dated
as of February 7, 1997, 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:
___________________________________
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
- 2 -
EXHIBIT B
BID RATE NOTE
U.S. $325,000,000 Dated: February 7, 1997
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 THREE HUNDRED TWENTY-FIVE
MILLION AND NO/100 Dollars ($325,000,000) 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(i) 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(i) 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 First Amended and Restated Credit Agreement,
dated as of February 7, 1997, 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; 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 Bid Rate Note when due.
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:
-------------------------------------
William C. Hammett, Jr.
Senior Vice President-Chief Financial
Officer
- 2 -
EXHIBIT C
SWING LINE NOTE
U.S. $10,000,000.00 Dated: February 7, 1997
FOR VALUE RECEIVED, the undersigned, LA QUINTA INNS, INC., a Texas
corporation (the "Borrower"), 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 Borrower
pursuant to the Credit Agreement, payable at such times, and in such amounts,
as are specified in the Credit Agreement.
The Borrower 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 First Amended and Restated Credit Agreement,
dated as of February 7, 1997, 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; 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 their Swing Line Note when due.
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:
-------------------------------------
William C. Hammett, Jr.
Senior Vice President-Chief Financial
Officer
EXHIBIT D
GUARANTY
This Guaranty, dated as of February 7, 1997 (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 First Amended
and Restated Credit Agreement, dated as of February 7, 1997 (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.
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 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 and severally, hereby unconditionally and
irrevocably guarantees the punctual payment of, and promises to pay, when
due, whether at stated maturity, by mandatory prepayment, by acceleration
or otherwise, all obligations, indebtedness and liabilities, and all
rearrangements, renewals and extensions of all or any part thereof, of
Company or any other Obligor now or hereafter arising from, by virtue of or
pursuant to the Credit Agreement, the Notes, any other Loan Paper, and any
and all renewals and extensions thereof, or any part thereof, or future
amendments thereto, whether for principal, interest (including, without
limitation, interest, fees and other charges that would accrue or become
owing both prior to and subsequent to and but for the commencement of any
proceeding against or with respect to Company or any other Obligor under
any chapter of the Bankruptcy Code of 1978, 11 U.S.C. Section 101 ET SEQ.
whether or not a claim is allowed for the same in any such proceeding),
premium, fees, commissions, expenses or otherwise (such obligations being
the "OBLIGATION"), and agrees to pay any and all reasonable expenses
(including reasonable counsel fees and expenses) incurred in enforcement or
collection of all or any part thereof, whether such obligations,
indebtedness and liabilities are direct, indirect, fixed, contingent,
joint, several or joint and several, and any rights under this Guaranty.
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving
effect to all other liabilities of Guarantor, contingent or otherwise, that
are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Guarantor in respect of intercompany
indebtedness to Company, other Affiliates of Company or other Obligors to
the extent that such indebtedness would be discharged in an amount equal to
the amount paid by such Guarantor hereunder) and after giving effect as
assets, subject to PARAGRAPH 4(A) hereof, to the value (as determined under
the applicable provisions of Fraudulent Transfer Laws) of any rights to
subrogation or contribution of such Guarantor pursuant to (i) Applicable
Law or (ii) any agreement providing for an equitable allocation among such
Guarantor and other Obligors of obligations arising under guaranties by
such parties.
2. GUARANTY ABSOLUTE. Each Guarantor guarantees that 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
- 2 -
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;
- 3 -
(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
- 4 -
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.
- 5 -
(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. Furthermore, each Guarantor
represents that it is Solvent.
6. COVENANTS. Each Guarantor hereby expressly assumes, confirms, and
agrees to perform, observe, and be bound by all conditions and covenants set
forth in the Credit Agreement, to the extent applicable to it, as if it were a
signatory thereto. Each Guarantor further covenants and agrees (a) punctually
and properly to perform all of such Guarantor's covenants and duties under all
other Loan Papers; (b) from time to time promptly to furnish Administrative
Lender with any information or writings which Administrative Lender may request
concerning this Guaranty; and (c) promptly to notify Administrative Lender of
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.
- 6 -
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
- 7 -
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.
- 8 -
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. 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.
19. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN PAPERS,
REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
- -------------------------------------------------------------------------------
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- 9 -
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
LA QUINTA REALTY CORP.
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LA QUINTA PLAZA, INC.
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
Address for all Guarantors:
112 East Pecan Street, Suite 1200
San Antonio, Texas 78205
LA QUINTA FINANCIAL CORPORATION
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LA QUINTA INVESTMENTS, INC.
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
- 10 -
LQI ACQUISITION CORPORATION
By:
--------------------------------------
Name: John F. Schmutz
Title: Authorized Representative
LA QUINTA MOTOR INNS LIMITED PARTNERSHIP
By: La Quinta Realty Corp., its General Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LQ-BATON ROUGE JOINT VENTURE
By: La Quinta Inns, Inc., its Managing General
Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
- 11 -
LQM OPERATING PARTNERS, L.P.
By: La Quinta Realty Corp., its General Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LQ-BIG APPLE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., its Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
- 12 -
LQ-EAST IRVINE JOINT VENTURE
By: La Quinta Inns, Inc., its Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., its Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LQ-INVESTMENTS I
By: La Quinta Inns, Inc., its Managing General
Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., a General
Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
- 13 -
LQ-INVESTMENTS II
By: La Quinta Inns, Inc., its Managing General
Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., a General
Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LA QUINTA INNS OF LUBBOCK, INC.
By:
--------------------------------------
Name: John F. Schmutz
Title: Secretary
LA QUINTA INNS OF PUERTO RICO, INC.
By:
--------------------------------------
Name: John F. Schmutz
Title: Secretary
- 14 -
LA QUINTA DEVELOPMENT PARTNERS, L.P.
By: La Quinta Inns, Inc., its Sole General
Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
LQ MOTOR INN VENTURE-AUSTIN NO. 530
By: La Quinta Inns, Inc., a General Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., a General
Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
- 15 -
LA QUINTA SAN ANTONIO SOUTH JOINT VENTURE
By: La Quinta Inns, Inc., a General Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
By: La Quinta Investments, Inc., a General
Partner
By:
--------------------------------------
Name: John F. Schmutz
Title: Vice President-Secretary
LA QUINTA DENVER - PEORIA STREET, LTD.
By: La Quinta Inns, Inc., its General Partner
- 16 -
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
LQ-LNL LIMITED PARTNERSHIP
By: La Quinta Inns, Inc., its Managing General
Partner
By:
--------------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President-Chief
Financial Officer
- 17 -
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Dated _______________, 199__
Reference is made to the First Amended and Restated Credit Agreement, dated
as of February 7, 1997 (the "Credit Agreement") among La Quinta Inns, Inc., a
Texas corporation ("Borrower"), NationsBank of Texas, N.A. as Administrative
Lender ("Administrative Lender"), and the lenders parties thereto. Terms
defined in the Credit Agreement are used herein with the same meaning.
___________________ ("Assignor") and ___________________ ("Assignee")
agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, a __% interest in and to all of
Assignor's rights and obligations under the Credit Agreement as of the
Effective Date (as defined below), with respect to such percentage interest
in Assignor's Commitment as in effect on the Effective Date, the principal
amount of 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.
2. Assignor (a) represents and warrants that (i) as of the date hereof
its Commitment (without giving effect to assignments thereof which have not
yet become effective) is $________ and, as of the date hereof, the
outstanding principal amount of 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.
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement and the other Loan Papers, together with copies of the financial
statements referred to in 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].
4. The effective date for this Assignment and Acceptance shall be
_____________, 199__ (the "Effective Date").
5. Upon such acceptance as of the Effective Date and upon the remittance
of a $3,500 processing fee to the Administrative Lender, (a) Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and
(b) Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance from and after the Effective Date, whenever the
Administrative Lender shall receive a payment, or whenever the Administrative
Lender shall make an application of funds, in respect of any aggregate
outstanding principal amount of 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, 5.22, 8.3, 8.5, or 10.2 of the Credit Agreement), the
Administrative Lender shall pay over to each of the Lenders an amount equal to
(i) such Lender's Pro Rata Share (as defined below) of such aggregate amount of
principal, (ii) such Lender's Pro Rata Share of such aggregate amount of
interest, and (iii) such Lender's Pro Rata Share of such aggregate amount of the
commitment fee.
The "Pro Rata Share" of any aggregate amount means, with respect to such
Lender, the amount equal to the product obtained by multiplying (i) such
aggregate amount and (ii) a fraction, the numerator of which is such Lender's
Commitment, or after the Revolving Credit Advances
- 2 -
have been made, the principal amount of the Revolving Credit Advances owing
to such Lender and the denominator of which is the sum of the Commitments of
all of the Lenders, or after the Revolving Credit Advances have been made,
the aggregate principal amount of the Revolving Credit Advances owing to all
of the Lenders.
7. In the event that, after the Administrative Lender has paid to any
Lender its Pro Rata Share of any such payment received by the Administrative
Lender or any such application made by the Administrative Lender, such payment
or application is rescinded or must otherwise be returned or must be paid over
by the Administrative Lender for 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.
8. 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.
9. Assignee's Specified Percentage shall be ___%.
10. This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
[NAME OF ASSIGNOR]
By:
---------------------------------
Name:
---------------------------
Title:
---------------------------
- 3 -
Accepted this ___ day of ____________, 199___
NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
---------------------------------
Name:
--------------------------
Title:
--------------------------
LA QUINTA INNS, INC.
By:
---------------------------------
Name:
--------------------------
Title:
--------------------------
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Schedule I
ASSIGNEE'S ADDRESS
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1. ADDRESS FOR THE ADVANCES AND RECEIPT OF NOTICES
2. INITIAL LIBOR LENDING OFFICE
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EXHIBIT F
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and Address
of Prospective Participant
or Assignee]
Re: First Amended and Restated Credit Agreement, dated as of February 7,
1997, among La Quinta Inns, Inc. (the "Borrower"), the Lenders a party
thereto, and NationsBank of Texas, N.A., as Administrative Lender.
Dear ______________:
As a Lender party to the above-referenced Credit Agreement (the "CREDIT
AGREEMENT"; capitalized terms used herein shall have the same meaning given
to them in the Credit Agreement), we have agreed with the Borrower pursuant
to Section 10.10 of the Credit Agreement to use reasonable precautions to
keep confidential, except as otherwise provided therein, all non-public
information identified by the Borrower as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 10.10, we are permitted to provide you, as a
prospective [PARTICIPANT] [ASSIGNEE], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form.
Such information will not be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [PARTICIPATION] [ASSIGNMENT] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe
and sound banking practices, to keep such information confidential, provided
that nothing herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
your counsel or to counsel for any of the Lenders or the Administrative
Lender, (iii) to bank examiners, auditors or accountants of any of the
Lenders, (iv) to the Administrative Lender, or any other Lender, (v) in
connection with any litigation to which you or any one or more of the Lenders
are a party; provided, further, that, unless specifically prohibited by
___________, 199__
Page 2
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,
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By:
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Title:
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THE FOREGOING IS AGREED TO AS
OF THE DATE OF THIS LETTER.
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By:
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Name:
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Title:
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