<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 19, 1996.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------
LA QUINTA INNS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1724417
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
WESTON CENTRE
112 E. PECAN STREET
P.O. BOX 2636
SAN ANTONIO, TEXAS 78299-2636
(210) 302-6000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
--------------------------
JOHN F. SCHMUTZ
VICE PRESIDENT -- GENERAL COUNSEL
LA QUINTA INNS, INC.
WESTON CENTRE
112 E. PECAN STREET
P.O. BOX 2636
SAN ANTONIO, TEXAS 78299-2636
(210) 302-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
COPIES TO:
John M. Newell
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 485-1234
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective
as determined by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
investment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SECURITY* OFFERING PRICE* REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities....................... $250,000,000 100% $250,000,000 $86,207
</TABLE>
*Estimated solely for the purpose of calculating the registration fee.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 19, 1996
PROSPECTUS
$250,000,000
LA QUINTA INNS, INC.
DEBT SECURITIES
------------
La Quinta Inns, Inc. (the "Company" or "La Quinta") intends to issue from
time to time up to $250,000,000 aggregate principal amount of its Debt
Securities (the "Debt Securities"), or if any Debt Securities are issued at an
original issue discount, such greater amount as shall result in net proceeds to
the Company of $250,000,000, which will be offered to the public on terms
determined by market conditions at the time of sale. The Debt Securities may be
issued in one or more series with the same or various maturities at par, at a
premium, or with an original issue discount. When particular Debt Securities are
offered, a prospectus supplement ("Prospectus Supplement"), together with this
Prospectus, will be delivered setting forth the terms of such Debt Securities,
including, where applicable, the specific designation, aggregate principal
amount, denominations, maturity, rate and taxability of any interest (or manner
of calculation thereof) and time of payment thereof, any redemption provisions,
the initial public offering price and any other specific terms in connection
with the offering and sale of such Debt Securities. The Debt Securities will be
represented by global notes registered in the name of a nominee of The
Depository Trust Company, as Depository. Beneficial interests in the Debt
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository (with respect to participants'
interests) and its participants. Except as described in this Prospectus, Debt
Securities in certificated form will not be issued in exchange for the global
notes.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The Company may sell Debt Securities through underwriters, dealers or
agents, or directly to one or more purchasers. The Prospectus Supplement will
set forth the names of underwriters, dealers or agents, if any, any applicable
commissions or discounts and the net proceeds to the Company from any such sale.
See "Plan of Distribution" for possible indemnification arrangements for
underwriters, dealers, agents and purchasers.
, 1996
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY (THE
"OFFERING") TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED
IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE DEBT SECURITIES OFFERED HEREBY TO ANY PERSON IN
ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION
TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREBY
SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBT SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments, the
"Registration Statement") on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Debt Securities offered
hereby. This Prospectus, filed as a part of that Registration Statement, does
not contain all the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations of
the Commission. In addition, certain documents filed by the Company with the
Commission have been incorporated herein by reference. See "Incorporation of
Certain Information by Reference." For further information regarding La Quinta
and the Debt Securities offered hereby, reference is made to the Registration
Statement, including the exhibits and schedules thereto and the documents
incorporated herein by reference. The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549; and
at the regional offices of the Commission at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Common
Stock of the Company is listed on the New York Stock Exchange. Reports, proxy
statements and other information concerning the Company can also be inspected
and copied at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K (Commission file No. 1-7790) for
the fiscal year ended December 31, 1994 (filed with the Commission on March 15,
1995), the Company's Quarterly Report on Form 10-Q for the three month period
ended March 31, 1995 (filed with the Commission on May 15, 1995), the Company's
Current Report on Form 8-K (filed with the Commission on June 16, 1995), the
Company's Quarterly Report on Form 10-Q for the six month period ended June 30,
1995 (filed with the Commission on July 26, 1995), and the Company's Quarterly
Report on Form 10-Q for the nine month period ended September 30, 1995 (filed
with the Commission on November 9, 1995), are hereby incorporated by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, after the date of this Prospectus and prior to the
termination of the offering of the securities offered by this Prospectus, shall
be deemed to be incorporated by reference in this Prospectus and be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus, or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference, modifies or replaces such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified,
to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon written or oral request of any
such person, a copy of any or all of the documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to: La
Quinta Inns, Inc., 112 East Pecan Street, San Antonio, Texas 78205, Attention:
Investor Relations, telephone (210) 302-6000.
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THE COMPANY
La Quinta is the second largest owner/operator of hotels in the United
States, with 237 inns and more than 30,000 rooms. La Quinta operates primarily
in the mid-priced segment of the lodging industry. La Quinta achieved an average
occupancy percentage of 70.1% and an average daily rate of $47.65 for the year
ended December 31, 1994. Founded in 1968, the Company has inns located in 29
states, with strategic concentrations in Texas, Florida and California. La
Quinta currently owns a 100% interest in 230 of its inns and a 50% or greater
interest in an additional seven inns.
The Company was founded in San Antonio, Texas in 1968. La Quinta was
originally incorporated and became a publicly traded entity in 1972 and is
incorporated under the laws of the State of Texas. The principal executive
offices are located at Weston Centre, 112 E. Pecan Street, San Antonio, Texas
78205, telephone (210) 302-6000.
RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------- -------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.......................... 3.4x 2.9x 2.8x 2.4x 1.2x 1.3x 1.3x
</TABLE>
For purposes of calculating this ratio, earnings include net earnings (loss)
before income taxes, extraordinary items, and the cumulative effect of
accounting change, partners' equity in earnings and losses of combined
unincorporated ventures that have fixed charges, fixed charges net of interest
capitalized, and amortization of capitalized interest. Fixed charges include
interest expense on long-term debt (before capitalized interest) and the portion
of rental expense allocated to interest.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the Company intends
to use the net proceeds from the sale of the Debt Securities for general
corporate purposes, which may include the acquisition of additional properties
and other acquisition transactions, the expansion and improvement of certain
properties in the Company's portfolio, the repayment of certain indebtedness and
the repurchase of certain securities of the Company.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture")
dated as of September 15, 1995 between the Company and U.S. Trust Company of
Texas, N.A., as trustee (the "Trustee"). The following description of certain
provisions of the Indenture and the Debt Securities summarizes the material
terms thereof but does not purport to be complete, and such summaries are
subject to the detailed provisions of the Indenture to which reference is hereby
made, including the definition of certain terms used herein and those terms made
a part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended, and for other information regarding the Debt Securities. The Indenture
has been incorporated by reference as an exhibit to the Registration Statement
of which this Prospectus is a part. Numerical references in parentheses below
are to sections in the Indenture. Wherever particular sections or defined terms
of the Indenture are referred to, such sections or defined terms are
incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference.
GENERAL
The Indenture provides for issuance from time to time of debentures, notes
(including the Debt Securities) or other evidences of indebtedness by the
Company ("Securities") in an unlimited amount. Additional Securities may be
issued under the Indenture from time to time.
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The Debt Securities may be issued in one or more series with the same or
various maturities, at par, at a premium, or with an original issue discount.
Reference is made to the Prospectus Supplement relating to the particular series
of Debt Securities offered thereby for the following terms of the Debt
Securities: (i) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series; (ii) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under the Indenture and any
limitation on the ability of the Company to increase such aggregate principal
amount after the initial issuance of the Securities of that series; (iii) the
date or dates on which the principal of the Securities of the series is payable
(which date or dates may be fixed or extendible); (iv) the rate or rates (which
may be fixed or variable) per annum at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall accrue,
on which such interest shall be payable and (in the case of Registered
Securities (which is defined as any Security registered on the Security
Register)) on which a record shall be taken for the determination of Holders to
whom interest is payable and/or the method by which such rate or rates or date
or dates shall be determined; (v) if other than as provided in the Indenture,
the place or places where the principal of and any interest on Securities of the
series shall be payable, any Registered Securities of the series may be
surrendered for exchange, notices, demands to or upon the Company in respect of
the Securities of the series and the Indenture may be served and notice to
Holders may be published; (vi) the right, if any, of the Company to redeem
Securities of the series, in whole or in part, at its option and the period or
periods within which, the price or prices at which and any terms and conditions
upon which Securities of the series may be so redeemed, pursuant to any sinking
fund or otherwise; (vii) the obligation, if any, of the Company to redeem,
purchase or repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof and
the price or prices at which and the period or periods within which and any of
the terms and conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation; (viii) if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which Securities of the series shall be issuable; (ix) if other
than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration
of the maturity thereof; (x) if other than the coin or currency in which the
Securities of the series are denominated, the coin or currency in which payment
of the principal of or interest on the Securities of the series shall be payable
or if the amount of payments of principal of and/or interest on the Securities
of the series may be determined with reference to an index based on a coin or
currency other than that in which the Securities of the series are denominated,
the manner in which such amounts shall be determined; (xi) if other than the
currency of the United States of America, the currency or currencies, including
composite currencies, in which payment of the principal of and interest on the
Securities of the series shall be payable, and the manner in which any such
currencies shall be valued against other currencies in which any other
Securities shall be payable; (xii) whether the Securities of the series or any
portion thereof will be issuable as Registered Securities (and if so, whether
such Securities will be issuable as Registered Global Securities) or
Unregistered Securities (which is defined as any Security other than a
Registered Security) (with or without coupons), or any combination of the
foregoing, any restrictions applicable to the offer, sale or delivery of
Unregistered Securities or the payment of interest thereon and, if other than as
provided herein, the terms upon which Unregistered Securities of any series may
be exchanged for Registered Securities of such series and vice versa; (xiii)
whether and under what circumstances the Company will pay additional amounts on
the Securities of the series held by a person who is not a U.S. person in
respect of any tax, assessment or governmental charge withheld or deducted and,
if so, whether the Company will have the option to redeem such Securities rather
than pay such additional amounts; (xiv) if the Securities of the series are to
be issuable in definitive form (whether upon original issue or upon exchange of
a temporary Security of such series) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, the form and terms of
such certificates, documents or conditions; (xv) any trustees, depositaries,
authenticating or paying agents, transfer agents or the registrar or any other
agents with respect to the Securities of the series; (xvi) provisions, if any,
for the defeasance of the Securities of the series (including provisions
permitting defeasance of less than all Securities of the series), which
4
<PAGE>
provisions may be in addition to, in substitution for, or in modification of (or
any combination of the foregoing) the provisions of the Indenture; (xvii) if the
Securities of the series are issuable in whole or in part as one or more
Registered Global Securities, the identity of the Depositary for such Registered
Global Security or Securities (which Depositary shall, at the time of its
designation as Depositary and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation); (xviii) any other events of default or covenants with
respect to the Securities of the series; and (xix) any other terms of the
Securities of the series (which terms shall not be inconsistent with the
provisions of the Indenture).
The Indenture does not contain any restriction on the payment of dividends
or any financial covenants. The Indenture does not contain provisions which
would afford the Holders of the Debt Securities protection in the event of a
transfer of assets to a subsidiary and incurrence of unsecured debt by such
subsidiary, or in the event of a decline in the Company's credit quality
resulting from highly leveraged or other similar transactions involving the
Company.
The Debt Securities will be unsubordinated and unsecured obligations of the
Company ranking PARI PASSU with all existing and future unsubordinated and
unsecured obligations of the Company. Claims of Holders of Debt Securities will
be effectively subordinated to the claims of holders of the debt of the
Company's subsidiaries with respect to the assets of such subsidiaries. In
addition, claims of Holders of Debt Securities will be effectively subordinated
to the claims of holders of secured debt of the Company and its subsidiaries
with respect to the collateral securing such claims and claims of the Company as
the holder of general unsecured intercompany debt will be similarly effectively
subordinated to claims of holders of secured debt of its subsidiaries.
GLOBAL SECURITIES
Securities, including the Debt Securities, issued in the form of fully
registered global Securities (a "Registered Global Security") will be deposited
with The Depository Trust Company (the "Depositary") or a nominee thereof.
Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Registered Global Security may not be transferred
except as a whole by the Depositary for such Registered Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor. The Depositary
currently accepts only securities that are denominated in U.S. dollars.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited will be
designated by any dealers, underwriters or agents participating in the
distribution of such Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such Registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the owner of record of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Securities represented by such Registered Global Security for all purposes
under the Indenture. Except as set forth below, owners of beneficial interests
in a Registered Global Security will not be entitled to have the Securities
represented by such Registered Global Security registered in their names, and
will not receive or be entitled to receive physical
5
<PAGE>
delivery of such Securities in definitive form and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Registered Global Security must rely on the procedures
of the Depositary for such Registered Global Security and, if such person is not
a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder of record under the
Indenture. The Company understands that under existing industry practices, if
the Company requests any action of holders or if any owner of a beneficial
interest in a Registered Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
for such Registered Global Security would authorize the participants holding the
relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or would otherwise act upon the instruction of beneficial
owners holding through them.
Payments of principal of, premium, if any, and interest on Securities
represented by a Registered Global Security registered in the name of the
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
the Company, the Trustee or any other agent of the Company or agent of the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
such Registered Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depositary for any Securities represented by a
Registered Global Security, upon receipt of any payment of principal, premium,
if any, or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such Registered Global Security as
shown on the records of such Depositary. The Company also expects that payments
by participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participants.
If the Depositary for Securities represented by a Registered Global Security
notifies the Company that it is at any time unwilling or unable to continue as
Depositary or ceases to be eligible under applicable law, and a successor
Depositary eligible under applicable law is not appointed by the Company within
90 days, the Company will issue such Securities in definitive form in exchange
for such Registered Global Security. In addition, the Company may at any time
and in its sole discretion determine not to have any of the Securities of a
series represented by one or more Registered Global Securities and, in such
event, will issue Securities of such series in definitive form in exchange for
all of the Registered Global Security or Registered Global Securities
representing such Securities. Any Securities issued in definitive form in
exchange for a Registered Global Security will be registered in such name or
names as the Depositary shall instruct the Trustee. It is expected that such
instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
Registered Global Security.
SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES
So long as any Debt Securities are represented by Global Securities
registered in the name of the Depositary or its nominee, such Debt Securities
will trade in the Depositary's Same-Day Funds Settlement System, and secondary
market trading activity in such Debt Securities will therefore be required by
the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Debt Securities.
CERTAIN COVENANTS
The following covenants apply to all series of Securities, including the
Debt Securities.
6
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RESTRICTIONS ON LIENS. The Indenture provides that the Company will not,
and will not permit any Restricted Subsidiary (as defined herein) to, create or
incur any Lien (as defined herein) on any shares of stock, indebtedness or other
obligations of a Restricted Subsidiary (as defined herein) or any Principal
Property (as defined herein) of the Company or a Restricted Subsidiary, whether
such shares of stock, indebtedness or other obligations of a Restricted
Subsidiary or Principal Property are owned at the date of the Indenture or
thereafter acquired, unless the Company secures or causes such Restricted
Subsidiary to secure the outstanding Securities equally and ratably with all
indebtedness secured by such Lien, so long as such indebtedness shall be so
secured. This covenant shall not apply in the case of: (i) the creation of any
Lien on any shares of stock, indebtedness or other obligations of a Subsidiary
or any Principal Property acquired after the date of the Indenture (including
acquisitions by way of merger or consolidation) by the Company or a Restricted
Subsidiary contemporaneously with such acquisition, or within 180 days
thereafter, to secure or provide for the payment or financing of any part of the
purchase price thereof, or the assumption of any Lien upon any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
acquired after the date of the Indenture existing at the time of such
acquisition, or the acquisition of any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property subject to any Lien
without the assumption thereof, provided that every such Lien referred to in
this clause (i) shall attach only to the shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property so acquired and fixed
improvements thereon; (ii) any Lien on any shares of stock, indebtedness or
other obligations of a Subsidiary or any Principal Property existing at the date
of the Indenture; (iii) any Lien on any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property in favor of the Company or
any Restricted Subsidiary; (iv) any Lien on any Principal Property being
constructed or improved securing loans to finance such construction or
improvements; (v) any Lien on shares of stock, indebtedness or other obligations
of a Subsidiary or any Principal Property incurred in connection with the
issuance of tax-exempt governmental obligations (including, without limitation,
industrial revenue bonds and similar financings); (vi) any mechanics',
materialmen's, carriers' or other similar Liens arising in the ordinary course
of business with respect to obligations which are not yet due or which are being
contested in good faith; (vii) any Lien on any shares of stock, indebtedness or
other obligations of a Subsidiary or any Principal Property for taxes,
assessments or governmental charges or levies not yet delinquent, or already
delinquent but the validity of which is being contested in good faith; (viii)
any Lien on any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property arising in connection with legal
proceedings being contested in good faith, including any judgment Lien so long
as execution thereon is stayed; (ix) any landlord's Lien on fixtures located on
premises leased by the Company or a Restricted Subsidiary in the ordinary course
of business, and tenants' rights under leases, easements and similar Liens not
materially impairing the use or value of the property involved; (x) any Lien
arising by reason of deposits necessary to qualify the Company or any Restricted
Subsidiary to conduct business, maintain self-insurance, or obtain the benefit
of, or comply with, any law; and (xi) any renewal of or substitution for any
Lien permitted by any of the preceding clauses (i) through (x), provided, in the
case of a Lien permitted under clause (i), (ii) or (iv), the indebtedness
secured is not increased nor the Lien extended to any additional assets.
(SECTION 4.3(A)) Notwithstanding the foregoing, the Company or any Restricted
Subsidiary may create or assume Liens in addition to those permitted by the
preceding sentence of this paragraph, and renew, extend or replace such Liens,
provided that at the time of such creation, assumption, renewal, extension or
replacement, and after giving effect thereto, Exempted Debt (as defined herein)
does not exceed 15% of Combined Net Worth (as defined herein). (SECTION 4.3(B))
RESTRICTIONS ON SALE AND LEASE-BACK TRANSACTIONS. The Indenture provides
that the Company will not, and will not permit any Restricted Subsidiary to,
sell or transfer, directly or indirectly, except to the Company or a Restricted
Subsidiary, any Principal Property as an entirety, or any substantial portion
thereof, with the intention of taking back a lease of such property, except a
lease for a period of three years or less at the end of which it is intended
that the use of such property by the lessee will be
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discontinued; PROVIDED that, notwithstanding the foregoing, the Company or any
Restricted Subsidiary may sell any such Principal Property and lease it back for
a longer period (i) if the Company or such Restricted Subsidiary would be
entitled, pursuant to the provisions of Section 4.3(a) described above under "--
Restrictions on Liens", to create a Lien on the property to be leased securing
Funded Debt (as defined herein) in an amount equal to the Attributable Debt (as
defined herein) with respect to such sale and lease-back transaction without
equally and ratably securing the outstanding Securities or (ii) if (A) the
Company promptly informs the Trustee of such transaction, and (B) the Company
causes an amount equal to the fair value (as determined by Board Resolution of
the Company) of such property to be applied: (1) to the purchase of other
property that will constitute Principal Property having a fair value at least
equal to the fair value of the property sold, or (2) to the retirement within
120 days after receipt of such proceeds, of Funded Debt incurred or assumed by
the Company or a Restricted Subsidiary (including the Securities); PROVIDED
further that, in lieu of applying all of or any part of such net proceeds to
such retirement, the Company may, within 75 days after such sale, deliver or
cause to be delivered to the applicable Trustee for cancellation either
debentures or notes evidencing Funded Debt of the Company (which may include the
Securities) or of a Restricted Subsidiary previously authenticated and delivered
by the applicable Trustee, and not theretofore tendered for sinking fund
purposes or called for a sinking fund or otherwise applied as a credit against
an obligation to redeem or retire such notes or debentures, and a certificate of
an officer of the Company (which shall be delivered to the Trustee) stating that
the Company elects to deliver or cause to be delivered such debentures or notes
in lieu of retiring Funded Debt as hereinabove provided. If the Company shall so
deliver debentures or notes to the applicable Trustee and the Company shall duly
deliver such officer's certificate, the amount of cash which the Company shall
be required to apply to the retirement of Funded Debt under this provision of
the Indenture shall be reduced by an amount equal to the aggregate of the then
applicable optional redemption prices (not including any optional sinking fund
redemption prices) of such debentures or notes, or, if there are no such
redemption prices, the principal amount of such debentures or notes; PROVIDED,
that in the case of debentures or notes which provide for an amount less than
the principal amount thereof to be due and payable upon a declaration of the
maturity thereof, such amount of cash shall be reduced by the amount of
principal of such debentures or notes that would be due and payable as of the
date of such application upon a declaration of acceleration of the maturity
thereof pursuant to the terms of the indenture pursuant to which such debentures
or notes were issued. (SECTION 4.4(A)) Notwithstanding the foregoing, the
Company or any Restricted Subsidiary may enter into sale and lease-back
transactions in addition to those permitted by this paragraph without any
obligation to retire any outstanding Securities or other Funded Debt, PROVIDED
that at the time of entering into such sale and lease-back transactions and
after giving effect thereto, Exempted Debt does not exceed 15% of Combined Net
Worth. (SECTION 4.4(B))
CERTAIN DEFINITIONS
The term "Attributable Debt" as defined in the Indenture means when used in
connection with a sale and lease-back transaction referred to above under "--
Restrictions on Sale and Lease-Back Transactions", on any date as of which the
amount thereof is to be determined, the product of (a) the net proceeds from
such sale and lease-back transaction multiplied by (b) a fraction, the numerator
of which is the number of full years of the term of the lease relating to the
property involved in such sale and lease-back transaction (without regard to any
options to renew or extend such term) remaining on the date of the making of
such computation and the denominator of which is the number of full years of the
term of such lease measured from the first day of such term.
The term "Combined Net Worth" as defined in the Indenture means, at any date
of determination, the combined shareholders' equity of the Company, as set forth
on the then most recently available combined balance sheet of the Company and
its combined subsidiaries and joint ventures.
The term "Exempted Debt" as defined in the Indenture means the sum, without
duplication, of the following items outstanding as of the date Exempted Debt is
being determined: (i) indebtedness of the Company and its Restricted
Subsidiaries incurred after the date of the Indenture and secured by
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liens created or assumed or permitted to exist pursuant to Section 4.3(b) of the
Indenture described above under "-- Restrictions on Liens" and (ii) Attributable
Debt of the Company and its Restricted Subsidiaries in respect of all sale and
lease-back transactions with regard to any Principal Property
entered into pursuant to Section 4.4(b) of the Indenture described above under
"-- Restrictions on Sale and Lease-Back Transactions."
The term "Funded Debt" as defined in the Indenture means all indebtedness
for money borrowed, including purchase money indebtedness, having a maturity of
more than one year from the date of its creation or having a maturity of less
than one year but by its terms being renewable or extendible, at the option of
the obligor in respect thereof, beyond one year from the date of its creation.
The terms "Holder" or "Securityholder" as defined in the Indenture mean the
registered holder of any Security with respect to registered Securities and the
bearer of any unregistered Security or any coupon appertaining thereto, as the
case may be.
The term "Lien" as defined in the Indenture means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind, or any other type of preferential arrangement that has the practical
effect of creating a security interest, in respect of such asset. For the
purposes of the Indenture, the Company or any Subsidiary shall be deemed to own
subject to a Lien any asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
The term "Original Issue Discount Security" as defined in the Indenture
means any Security that provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the maturity
thereof pursuant to Section 6.2 of the Indenture.
The term "Principal Property" as defined in the Indenture means land, land
improvements, buildings and associated equipment owned or leased pursuant to a
capital lease and used by the Company or a Restricted Subsidiary primarily in
the hotel business, but shall not include any such property financed through the
issuance of tax exempt governmental obligations (including, without limitation,
industrial revenue bonds and similar financings).
The term "Restricted Subsidiary" as defined in the Indenture means any
Subsidiary organized and existing under the laws of the United States of America
and the principal business of which is carried on within the United States of
America which owns or is a lessee pursuant to a capital lease of any Principal
Property other than:
(i) each Subsidiary the major part of whose business consists of
finance, banking, credit, leasing, insurance, financial services or other
similar operations, or any combination thereof;
(ii) each Subsidiary formed or acquired after the date hereof for the
purpose of acquiring the business or assets of another Person and which does
not acquire all or any substantial part of the business or assets of the
Company or any Restricted Subsidiary; and
(iii) the following unincorporated partnerships and joint ventures, each
of which currently owns one inn: La Quinta -- Houston I.H. 10, Ltd.; La
Quinta San Antonio -- South Joint Venture; La Quinta Austin Motor Hotel,
Ltd.; La Quinta -- Dallas Central Expressway, Ltd.; LQ Motor Inn Venture --
Austin No. 530; La Quinta -- Wichita, Kansas, No. 532, Ltd.; and LQ -- West
Bank Joint Venture;
PROVIDED, HOWEVER, that any Subsidiary may be declared a Restricted Subsidiary
by Board Resolution, effective as of the date such Board Resolution is adopted;
PROVIDED FURTHER, that any such declaration may be rescinded by further Board
Resolution, effective as of the date such further Board Resolution is adopted.
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The term "Subsidiary" as defined in the Indenture means with respect to any
Person, any corporation, association or other business entity of which more than
50% of the outstanding Voting Stock (as defined in the Indenture) is owned
directly or indirectly, by such Person and one or more other Subsidiaries of
such Person.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, the Company shall not consolidate with, merge with or
into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially as
an entirety in one transaction or a series of related transactions) to, any
Person (other than a consolidation with or merger with or into a Subsidiary or a
sale, conveyance, transfer, lease or other disposition to a Subsidiary) or
permit any Person to merge with or into the Company unless: (a) either (i) the
Company shall be the continuing Person or (ii) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
that acquired or leased such property and assets of the Company shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Securities and under the Indenture and
the Company shall have delivered to the Trustee an opinion of counsel stating
that such consolidation, merger or transfer and such supplemental indenture
complies with this provision and that all conditions precedent provided for in
the Indenture relating to such transaction have been complied with and that such
supplemental indenture constitutes the legal, valid and binding obligation of
the Company or such successor enforceable against such entity in accordance with
its terms, subject to customary exceptions; and (b) an officers' certificate to
the effect that immediately after giving effect to such transaction, no Default
(as defined in the Indenture) shall have occurred and be continuing and an
opinion of counsel as to the matters set forth in clause (a) shall have been
delivered to the Trustee. (SECTION 5.1) The meaning of the term "all or
substantially all of the assets" has not been definitely established and is
likely to be interpreted by reference to applicable state law if and at the time
the issue arises, and will be dependent on the facts and circumstances existing
at the time. Accordingly, there may be uncertainty as to whether a Holder of
Debt Securities can determine whether a sale of "all or substantially all of the
assets" has occurred and exercise any remedies such Holder may have as a result
thereof.
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the Securities of
any series are: (a) the Company defaults in the payment of the principal of any
Security of such series when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking fund
installment, or otherwise; (b) the Company defaults in the payment of interest
on any Security of such series when the same becomes due and payable, and such
default continues for a period of 30 days; (c)(i) default by the Company or any
Restricted Subsidiary in the payment when due at maturity of any Funded Debt
(other than Funded Debt that is non-recourse to the Company and its Restricted
Subsidiaries) in excess of $15,000,000, whether such Funded Debt is outstanding
at the date of the Indenture or is thereafter outstanding, and the continuation
of such default for the greater of any period of grace applicable thereto or ten
days from the date of such default or (ii) an event of default, as defined in
any indenture, agreement or instrument evidencing or under which the Company
and/or any Restricted Subsidiary has at the date of the Indenture or shall
thereafter have outstanding at least $15,000,000 aggregate principal amount of
Funded Debt, shall happen and be continuing and such Funded Debt shall have been
accelerated so that the same shall be or become due and payable prior to the
date on which the same would otherwise have become due and payable, and such
acceleration shall not be rescinded or annulled or such indebtedness shall not
be discharged, within ten days; (d) the Company defaults in the performance of
or breaches any other covenant or agreement of the Company in the Indenture with
respect to any Security of such series or in the Securities of such series and
such default or breach continues for a period of 30 consecutive days after
written notice to the Company by the Trustee or to the Company and the Trustee
by the Holders of 25% or more in aggregate principal amount of the Securities of
all series affected thereby; (e) an
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involuntary case or other proceeding shall be commenced against the Company or
any Restricted Subsidiary with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered against the Company or any
Restricted Subsidiary under the federal bankruptcy laws as now or hereafter in
effect; (f) the Company or any Restricted Subsidiary (i) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Restricted Subsidiary or
for all or substantially all of the property and assets of the Company or any
Restricted Subsidiary or (iii) effects any general assignment for the benefit of
creditors; or (g) any other Event of Default established with respect to any
series of Securities issued pursuant to the Indenture occurs. (SECTION 6.1)
The Indenture provides that if an Event of Default described in clauses (a)
or (b) of the immediately preceding paragraph with respect to the Securities of
any series then outstanding occurs and is continuing, then, and in each and
every such case, except for any series of Securities the principal of which
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities of any such
affected series then outstanding under the Indenture (each such series treated
as a separate class) by notice in writing to the Company (and to the Trustee if
given by Securityholders), may declare the entire principal (or, if the
Securities of any such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such series
established pursuant to the Indenture) of all Securities of such affected
series, and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default described in clauses (c), (d) or (g) of the
immediately preceding paragraph with respect to the Securities of one or more
but not all series then outstanding or with respect to the Securities of all
series then outstanding occurs and is continuing, then, and in each and every
such case, except for any series of Securities the principal of which shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount (or, if the Securities of any such series
are Original Issue Discount Securities, the amount thereof accelerable as
described in this paragraph) of the Securities of all such affected series then
outstanding under the Indenture (treated as a single class) by notice in writing
to the Company (and to the Trustee if given by Securityholders), may declare the
entire principal (or, if the Securities of any such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series established pursuant to the Indenture) of all
Securities of all such affected series, and the interest accrued thereof, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable. If an Event of Default described in
clause (e) or (f) of the immediately preceding paragraph occurs and is
continuing, then the principal amount (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof established pursuant to the Indenture) of all the Securities then
outstanding and interest accrued thereon, if any, shall be and become
immediately due and payable, without any notice or other action by any Holder or
the Trustee to the full extent permitted by applicable law. Upon certain
conditions such declarations may be rescinded and annulled and past defaults may
be waived by the Holders of a majority in principal of the then outstanding
Securities of all such series that have been accelerated (voting as a single
class). (SECTION 6.2)
The Indenture contains a provision under which, subject to the duty of the
Trustee during a default to act with the required standard of care, (i) the
Trustee may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, officers' certificate, opinion of counsel (or
both), statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence or indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper person or persons and the Trustee need
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not investigate any fact or matter stated in the document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit; (ii) before the Trustee acts or refrains from
acting, it may require an officers' certificate and/or an opinion of counsel,
which shall conform to the requirements of the Indenture and the Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such certificate or opinion; subject to the terms of the Indenture, whenever
in the administration of the trusts of the Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action under the Indenture, such matter (unless other
evidence in respect thereof be specifically prescribed in the Indenture) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by an officers' certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of the Indenture upon the
faith thereof; (iii) the Trustee may act through its attorneys and agents not
regularly in its employ and shall not be responsible for the misconduct or
negligence of any agent or attorney appointed with due care by it under the
Indenture; (iv) any request, direction, order or demand of the Company mentioned
in the Indenture shall be sufficiently evidenced by an officers' certificate
(unless other evidence in respect thereof be specifically prescribed in the
Indenture); and any Board Resolution may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company; (v)
the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by the Indenture at the request, order or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction; (vi) the Trustee
shall not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within its rights or powers or for any action it
takes or omits to take in accordance with the direction of the Holders in
accordance with the Indenture relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under the Indenture; (vii) the
Trustee may consult with counsel and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it under the Indenture in
good faith and in reliance thereon; and (viii) prior to the occurrence of an
Event of Default under the Indenture and after the curing or waiving of all
Events of Default, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, officers'
certificate, opinion of counsel, Board Resolution, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document. (SECTION 7.2)
Subject to such provisions in the Indenture for the indemnification of the
Trustee and certain other limitations, the Holders of at least a majority in
aggregate principal amount (or, if any Securities are Original Issue Discount
Securities, such portion of the principal as is then accelerable under the
Indenture) of the outstanding Securities of all series affected (voting as a
single class), may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
the Indenture; PROVIDED, that the Trustee may refuse to follow any direction
that conflicts with law of the Indenture, that may involve the Trustee in
personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and PROVIDED FURTHER, that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Securities pursuant to this paragraph. (SECTION 6.5)
Subject to various provisions in the Indenture, the Holders of at least a
majority in principal amount (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as is then accelerable under the
Indenture) of the outstanding Securities of all series affected (voting as a
single class) by notice to the Trustee, may waive, on behalf of the Holders of
all the Securities of such series, an existing Default or Event of Default with
respect to the Securities of such series and its consequences, except a Default
in the payment of principal of or interest on any Security as specified
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in clauses (a) or (b) of Section 6.1 of the Indenture or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
with respect to the Securities of such series arising therefrom shall be deemed
to have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto. (SECTION 6.4)
The Indenture provides that no Holder of any Securities of any series may
institute any proceeding, judicial or otherwise, with respect to the Indenture
or the Securities of such series, or for the appointment of a receiver or
trustee, or for any other remedy under the Indenture, unless: (i) such Holder
has previously given to the Trustee written notice of a continuing Event of
Default with respect to the Securities of such series; (ii) the Holders of at
least 25% in aggregate principal amount of outstanding Securities of all such
series affected shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee under
the Indenture; (iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to the Trustee against any costs, liabilities
or expenses to be incurred in compliance with such request; (iv) the Trustee for
60 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and (v) during such 60-day period, the
Holders of a majority in aggregate principal amount of the outstanding
Securities of all such affected series have not given the Trustee a direction
that is inconsistent with such written request. A Holder may not use the
Indenture to prejudice the rights of another Holder or to obtain a preference or
priority over such other Holder. (SECTION 6.6)
The Indenture contains a covenant that the Company will file with the
Trustee, within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act. (SECTION 4.6)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides with respect to each series of Securities that,
except as otherwise provided in this paragraph, the Company may terminate its
obligations under the Securities of a series and the Indenture with respect to
Securities of such series if: (i) all Securities of such series previously
authenticated and delivered, with certain exceptions, have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it under
the Indenture; or (ii)(A) the Securities of such series mature within one year
or all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of redemption,
(B) the Company irrevocably deposits in trust with the Trustee, as trust funds
solely for the benefit of the Holders of such Securities, for that purpose,
money or U.S. Government Obligations or a combination thereof sufficient (unless
such funds consist solely of money, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any reinvestment, to
pay principal of and interest on the Securities of such series to maturity or
redemption, as the case may be, and to pay all other sums payable by it under
the Indenture, and (C) the Company delivers to the Trustee an officers'
certificate and an opinion of counsel, in each case stating that all conditions
precedent provided for in the Indenture relating to the satisfaction and
discharge of the Indenture with respect to the Securities of such series have
been complied with. With respect to the foregoing clause (i), only the Company's
obligations to compensate and indemnify the trustee under the Indenture shall
survive. With respect to the foregoing clause (ii), only the Company's
obligations to execute and deliver Securities of such series for authentication,
to set the terms of the Securities of such series, to maintain an office or
agency in respect of the Securities of such series, to have moneys held for
payment in trust, to register the transfer or exchange of Securities of such
series, to deliver Securities of such series for replacement or to be canceled,
to compensate and indemnify the Trustee and to appoint a successor trustee, and
its right to
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recover excess money held by the Trustee shall survive until such Securities are
no longer outstanding. Thereafter, only the Company's obligations to compensate
and indemnify the Trustee, and its right to recover excess money held by the
Trustee shall survive. (SECTION 8.1)
The Indenture provides that, except as otherwise provided in this paragraph,
the Company (i) will be deemed to have paid and will be discharged from any and
all obligations in respect of the Securities of any series, and the provisions
of the Indenture will no longer be in effect with respect to the Securities of
such series ("legal defeasance") and (ii) may omit to comply with any term,
provision or condition of the Indenture described above under "-- Certain
Covenants" (or any other specific covenant relating to such series provided for
in a Board Resolution or supplemental indenture which may by its terms be
defeased pursuant to the Indenture), and such omission shall be deemed not to be
an Event of Default under clauses (c), (d) or (g) of the first paragraph of "--
Events of Default" with respect to the outstanding Securities of a series
("covenant defeasance"); PROVIDED that the following conditions shall have been
satisfied: (A) the Company has irrevocably deposited in trust with the Trustee
as trust funds solely for the benefit of the Holders of the Securities of such
series, for payment of the principal of and interest on the Securities of such
series, money or U.S. Government Obligations or a combination thereof sufficient
(unless such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof deliver to the Trustee) without consideration of any
reinvestment and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, to pay and
discharge the principal of and accrued interest on the outstanding Securities of
such series to maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the Trustee), as the case may be; (B) such deposit
will not result in a breach or violation of, or constitute a default under, the
Indenture or any other material agreement or instrument to which the Company is
a party or by which it is bound; (C) no Default with respect to such Securities
of such series shall have occurred and be continuing on the date of such
deposit; (D) the Company shall have delivered to the Trustee an opinion of
counsel that (1) the Holders of the Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this provision of the Indenture and will
be subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and defeasance had
not occurred (which opinion, in the case of a legal defeasance, shall be based
upon a change in law) and (2) the Holders of the Securities of such series have
a valid security interest in the trust funds subject to no prior liens under the
Uniform Commercial Code, and (E) the Company has delivered to the Trustee an
officers' certificate and an opinion of counsel, in each case stating that all
conditions precedent provided for in the Indenture relating to the defeasance
contemplated have been complied with. In the case of legal defeasance under
clause (i) above, the opinion of counsel referred to in clause (D)(1) above may
be replaced by a ruling directed to the Trustee received from the Internal
Revenue Service to the same effect. Subsequent to legal defeasance under clause
(i) above, the Company's obligations to execute and deliver Securities of such
series for authentication, to set the terms of the Securities of such series, to
maintain an office or agency in respect of the Securities of such series, to
have moneys held for payment in trust, to register the transfer or exchange of
Securities of such series, to deliver Securities of such series for replacement
or to be canceled, to compensate and indemnify the Trustee and to appoint a
successor trustee, and its right to recover excess money held by the Trustee
shall survive until such Securities are no longer outstanding. After such
Securities are no longer outstanding, in the case of legal defeasance under
clause (i) above, only the Company's obligations to compensate and indemnify the
Trustee and its right to recover excess money held by the Trustee shall survive.
(SECTIONS 8.2 AND 8.3)
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Trustee may amend or
supplement the Indenture or the Securities of any series without notice to or
the consent of any Holder: (1) to cure any ambiguity, defect or inconsistency in
the Indenture; PROVIDED that such amendments or supplements shall not materially
and adversely affect the interests of the Holders; (2) to comply with Article 5
14
<PAGE>
(which relates to the covenant regarding "-- Restrictions on Mergers and Sales
of Assets") of the Indenture; (3) to comply with any requirements of the
Securities and Exchange Commission in connection with the qualification of the
Indenture under the Trust Indenture Act; (4) to evidence and provide for the
acceptance of appointment under the Indenture with respect to the Securities of
any or all series by a successor Trustee; (5) to establish the form or forms or
terms of Securities of any series or of the coupons appertaining to such
Securities as permitted under the Indenture; (6) to provide for uncertificated
or unregistered Securities and to make all appropriate changes for such purpose;
(7) to change or eliminate any provisions of the Indenture with respect to all
or any series of the Securities not then outstanding (and, if such change is
applicable to fewer than all such series of the Securities, specifying the
series to which such change is applicable), and to specify the rights and
remedies of the Trustee and the Holders of such Securities in connection
therewith; and (8) to make any change that does not materially and adversely
affect the rights of any Holder. (SECTION 9.1)
The Indenture also contains provisions whereby the Company and the Trustee,
subject to certain conditions, without prior notice to any Holders, may amend
the Indenture and the outstanding Securities of any series with the written
consent of the Holders of a majority in principal amount of the Securities then
outstanding of all series affected by such supplemental indenture (all such
series voting as one class), and the Holders of a majority in principal amount
of the outstanding Securities of all series affected thereby (all such series
voting as one class) by written notice to the Trustee may waive future
compliance by the Company with any provision of the Indenture or the Securities
of such series. Notwithstanding the foregoing provisions, without the consent of
each Holder affected thereby, an amendment or waiver, including a waiver
pursuant to Section 6.4 of the Indenture, may not: (i) extend the stated
maturity of the principal of, or any sinking fund obligation or any installment
of interest on, such Holder's Security, or reduce the principal amount thereof
or the rate of interest thereon (including any amount in respect of original
issue discount), or any premium payable with respect thereto, or adversely
affect the rights of such Holder under any mandatory redemption or repurchase
provision or any right of redemption or repurchase at the option of such Holder,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon the acceleration of the maturity thereof or
the amount thereof provable in bankruptcy, or change any place of payment where,
or the currency in which, any Security or any premium or the interest thereof is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the due date therefor; (ii) reduce the percentage in
principal amount of outstanding Securities of the relevant series the consent of
whose Holders is required for any such supplemental indenture, for any waiver of
compliance with certain provisions of the Indenture; (iii) waive a Default in
the payment of principal of or interest on any Security of such Holder; or (iv)
modify any of the provisions of this section of the Indenture, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby. A supplemental indenture which changes or
eliminates any covenant or other provision of the Indenture which has expressly
been included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of Holders of Securities of such series
with respect to such covenant or provision, shall be deemed not to affect the
rights under the Indenture of the Holders of Securities of any other series or
of the coupons appertaining to such Securities. It shall not be necessary for
the consent of any Holder under this section of the Indenture to approve the
particular form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof. After an amendment,
supplement or waiver under this section of the Indenture becomes effective, the
Company or, at the request of the Company, the Trustee shall give to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver. The Company or, at the request of the Company, the Trustee will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver. (SECTION
9.2)
15
<PAGE>
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Debt Securities being offered hereby: (i) directly
to purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions either: (i) at a fixed price or prices which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase the Debt Securities may be solicited directly by the
Company. Offers to purchase Debt Securities may also be solicited by agents
designated by the Company from time to time. Any such agent, who may be deemed
to be an "underwriter" as that term is defined in the Securities Act, involved
in the offer or sale of the Debt Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act may then resell such
Debt Securities to the public at varying prices to be determined by such dealer
at the time of resale.
If an underwriter or underwriters are utilized in the sales, the Company
will execute an underwriting agreement with such underwriters at the time of
sale of them and the name of the underwriters will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
the Debt Securities in respect of which this Prospectus is delivered to the
public. In connection with the sale of Debt Securities, such underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Debt Securities for whom they may act as agents. Underwriters may
also sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Any underwriting compensation paid by the Company to underwriters in
connection with the offering of Debt Securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be set
forth in the Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with the Company, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act. Underwriters and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or other persons to solicit offers by certain institutions
to purchase Debt Securities pursuant to contracts providing for payment and
delivery on a future date or dates. Institutions with which such contracts may
be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and others.
The obligations of any purchaser under any such contract will not be subject to
any conditions except that (a) the purchase of the Debt Securities shall not at
the time of delivery be prohibited under the laws of the jurisdiction to which
such purchaser is subject and (b) if the Debt Securities are also being sold to
underwriters, the Company shall have sold to such underwriters the Debt
Securities not sold for delayed delivery. The underwriters, dealers and such
other persons will not have any responsibility in respect to the validity or
performance of such contracts. The Prospectus Supplement relating to such
contracts will set forth
16
<PAGE>
the price to be paid for Debt Securities pursuant to such contracts, the
commissions payable for solicitation of such contracts and the date or dates in
the future for delivery of Debt Securities pursuant to such contracts.
LEGAL MATTERS
Certain legal matters with respect to the Debt Securities offered hereby
will be passed upon for the Company by John F. Schmutz, Vice President --
General Counsel of the Company and Latham & Watkins, Los Angeles, California.
Certain legal matters in connection with an offering made by this Prospectus may
be passed upon for the underwriters or agents by counsel named in the Prospectus
Supplement.
EXPERTS
The combined balance sheets of La Quinta Inns, Inc., as of December 31, 1994
and 1993, and the related combined statements of operations, shareholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1994 incorporated by reference herein and elsewhere in the
Registration Statement (as defined under "Available Information"), have been
incorporated by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP
refers to the adoption of Statement of Financial Accounting Standards No. 109 in
1993.
With respect to the unaudited interim financial information for the three
month periods ended March 31, 1995 and 1994, three and six month periods ended
June 30, 1995 and 1994 and three and nine month periods ended September 30, 1995
and 1994, incorporated by reference herein, KPMG Peat Marwick LLP has reported
that they applied limited procedures in accordance with professional standards
for a review of such information. However, their separate reports included in
the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1995, June 30, 1995 and September 30, 1995, and incorporated by reference
herein, state that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
reports on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited interim financial information because neither of those
reports is a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of the
Securities Act of 1933.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the fees and expenses, other than
underwriting discounts and commissions, payable or reimbursable by the Company
in connection with the issuance and distribution of the Debt Securities:
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 86,207
Printing and Engraving Expenses.................................. 40,000
Blue Sky Fees and Expenses....................................... 2,000
Legal Fees and Expenses.......................................... 25,000
Accounting Fees.................................................. 7,500
Miscellaneous Expenses........................................... 14,293
---------
Total.......................................................... $ 175,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02A(16) of the Texas Business Corporation Act, as amended (the
"TBCA"), empowers the Company to indemnify its directors, officers, employees
and agents in a variety of circumstances and to purchase and maintain liability
insurance for those persons, but only to the extent permitted by Article 2.02-1
of the TBCA.
Article 2.02-1 of the TBCA provides that a corporation may indemnify any
person who was, is or is threatened to be made a party to any suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative because the person is or was a director of the Company or is or
was serving at its request in the same or another capacity in another
corporation or business association against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred if it is determined: (i)
that the person conducted himself in good faith, (ii) that the person reasonably
believed his conduct, with respect to his official capacity, was in the best
interest of the Company, or, in all other cases, his conduct was at least not
opposed to the best interests of the Company, and (iii) in the case of any
criminal proceeding, that the person had no reasonable cause to believe his
conduct was unlawful.
Article Eleven of the Company's Restated Articles of Incorporation, as
amended (the "Articles"), and Article V of the Company's Amended and Restated
By-Laws, as amended (the "By-Laws"), provide for indemnification of directors,
officers, employees and agents of the Company in a variety of circumstances.
Article V of the By-Laws provides that the Company shall indemnify any person
who was, is, or is threatened to be made a named party or who is called as a
witness in any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative, who is or
was a director or officer, to the fullest extent permitted by the TBCA, as now
existing or hereafter amended, including to the extent that any such action,
suit or proceeding may involve the negligence of a director or officer. In
addition, the Company has purchased and maintains insurance on behalf of
directors and officers of the Company against any liability asserted against
such persons and incurred by them in such capacity and arising out of their
status as directors or officers of the Company.
On November 15, 1990, the Board of Directors of the Company approved and
adopted the terms and provisions of two separate forms of indemnification
agreements (the "Agreements"), one for directors of the Company, including
subsidiaries, and the other for officers or key employees of the Company,
including its subsidiaries. The Agreements provide the Company's directors,
officers and key employees with a contractual right to indemnification for
actions taken by them in their respective roles or otherwise on behalf of the
Company. This contractual right insures that directors and officers will be
indemnified by the Company to the fullest extent permitted by Texas law even if
subsequent events result in a change in the control of the Company. There are
two forms of the
II-1
<PAGE>
Agreement because the TBCA limits a corporation's ability to indemnify its
directors under any circumstance, but allows a corporation to expand the
statutory limits as to indemnification of officers and employees.
The Agreements entered into between the Company and its directors beginning
in November 1990 and thereafter obligate the Company to indemnify a director who
was, is, or is threatened to be made a party or witness to any suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, because the person is or was a director of the Company against
judgments, penalties, fines, settlements, and reasonable attorneys' fees and
expenses actually incurred if it is determined: (i) that the director conducted
himself in good faith, (ii) that the director reasonably believed (a) with
respect to activities in his official capacity that his conduct was in the best
interests of the Company, (b) with respect with all other cases that his conduct
was at least not opposed to the best interests of the Company, and (iii) in the
case of any criminal proceeding, that the director had no reasonable cause to
believe that his conduct was unlawful. The Agreements entered into between the
Company and its officers beginning in November 1990 and thereafter do not
contain the foregoing limitations.
The Agreements also mandate the indemnification of directors or officers who
serve as witnesses in any proceeding (subject to certain limitations) and who
have been wholly successful as a party on the merits or otherwise in the defense
of any proceeding.
As to directors, the Agreements also limit indemnification to reasonable
attorneys' fees and expenses actually incurred if a director is found in a
proceeding to be liable to the Company or is found liable on the basis that he
received an improper benefit, and further absolutely prohibit any
indemnification of a director who has been found liable in a proceeding for
willful or intentional misconduct in the performance of his duties to the
Company.
Provisions authorizing indemnification or advancement of expenses contained
in the Company's Articles, By-Laws or the Agreements are valid only to the
extent that such provisions are consistent with provisions of Article 2.02-1 of
the TBCA. Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy expressed in the Act and is, therefore, unenforceable.
The Articles also contain a provision which eliminates certain potential
liability of directors of the Company for monetary damages to the full extent
permitted by the laws of the State of Texas as interpreted and applied by the
courts. The provision does not, however, eliminate the duty of care or the duty
of loyalty owed to the Company by its directors; instead, it only eliminates
monetary damage awards for actions or omissions by directors that breach the
duty of care owed to the Company and its shareholders. Moreover, this provision
does not in any way limit or eliminate the liability of directors of the Company
for (i) breaches of their duty of loyalty to the Company and its shareholders,
(ii) failing to act in good faith, intentional misconduct or knowing violations
of law, (iii) obtaining an improper personal benefit for themselves, (iv) any
liability expressly imposed by statute, or (v) an unlawful stock repurchase or
payment of dividends.
Furthermore, said limitation pertains solely to claims against a director
arising out of his role as a director and does not relieve a director, if he is
also an officer of the Company, from any liability arising from his role as an
officer. Finally, the provision does not apply to the responsibilities of
directors under any other law such as federal and state securities laws or
statutes expressly providing for liability of directors of corporations.
II-2
<PAGE>
ITEM 16. EXHIBITS.
The following exhibits are filed as part of the Registration Statement:
<TABLE>
<C> <S>
*1 Form of Underwriting Agreement.
4(a) Indenture, dated as of September 15, 1995, between La Quinta Inns, Inc. and
U.S. Trust Company of Texas, N.A., as Trustee (filed as Exhibit 4(a) to the
Company's Registration Statement on Form S-3 (Registration No. 33-61755),
as amended, and incorporated herein by reference).
*4(b) Form of Debt Security of La Quinta Inns, Inc.
5(a) Opinion of John F. Schmutz, Esq. as to certain aspects of the legality of
the securities being registered.
5(b) Opinion of Latham & Watkins as to certain aspects of the legality of the
securities being registered.
12 Computation of Ratio of Earnings to Fixed Charges.
15 Awareness Letter of KPMG Peat Marwick LLP.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of John F. Schmutz, Esq. (included in Exhibit 5(a)).
23(c) Consent of Latham & Watkins (included in Exhibit 5(b)).
24 Powers of Attorney (contained on the signature pages hereof).
25 Statement of Eligibility of Trustee on Form T-1.
<FN>
- ------------------------
* To be filed by amendment or incorporated by reference with the offering of the
securities.
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) La Quinta hereby undertakes:
(1) To file during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) To include
any prospectus required by section 10(a)(3) of the Securities Act of 1933
(the "Act"); (ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement; (iii) To include any material information
with respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) La Quinta hereby undertakes that, for purposes of determining any
liability under the Act, each filing of La Quinta's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Certain arrangements indemnifying La Quinta, and officers, directors and
controlling persons of La Quinta are set forth in Item 15 above. Insofar as
indemnification for liabilities arising under the Act may be permitted to
directors, officers and controlling persons of La Quinta pursuant to the
foregoing provisions, or otherwise, La Quinta has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by La Quinta of expenses incurred or paid by a director,
officer or controlling person of La Quinta in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, La Quinta will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements on Form S-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Antonio, State of Texas, on the 19th day of January, 1996.
LA QUINTA INNS, INC.
BY: WILLIAM C. HAMMETT, JR.
-----------------------------------
Name: William C. Hammett, Jr.
Title: Senior Vice President --
Accounting and
Administration
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Gary L. Mead, Michael A. Depatie, William C.
Hammett, Jr. and John F. Schmutz and each of them, any one of whom may act
without joiner of the other, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any or all pre- and
post-effective amendments to this Registration Statement or any registration
statement for the same offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, and each of them, or the substitute or substitutes of any or all of
them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------- --------------------------------- ------------------
<C> <S> <C>
GARY L. MEAD President, Chief Executive
- ------------------------------------- Officer and Director (Principal January 19, 1996
(Gary L. Mead) Executive Officer)
MICHAEL A. DEPATIE
- ------------------------------------- Senior Vice President -- Finance January 19, 1996
(Michael A. Depatie) (Principal Financial Officer)
WILLIAM C. HAMMETT, JR. Senior Vice President --
- ------------------------------------- Accounting and Administration January 19, 1996
(William C. Hammett, Jr.) (Principal Accounting Officer)
WILLIAM H. CUNNINGHAM
- ------------------------------------- Director January 19, 1996
(William H. Cunningham)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------- --------------------------------- ------------------
<C> <S> <C>
PETER STERLING
- ------------------------------------- Director January 19, 1996
(Peter Sterling)
KENNETH T. STEVENS
- ------------------------------------- Director January 19, 1996
(Kenneth T. Stevens)
THOMAS M. TAYLOR
- ------------------------------------- Director January 19, 1996
(Thomas M. Taylor)
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
- ------------ ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
*1 Form of Underwriting Agreement.
4(a) Indenture, dated as of September 15, 1995, between La Quinta Inns, Inc. and U.S. Trust
Company of Texas, N.A., as Trustee (filed as Exhibit 4(a) to the Company's Registration
Statement on Form S-3 (Registration No. 33-61755), as amended, and incorporated herein by
reference).
*4(b) Form of Debt Security of La Quinta Inns, Inc.
5(a) Opinion of John F. Schmutz, Esq. as to certain aspects of the legality of the securities
being registered.
5(b) Opinion of Latham & Watkins as to certain aspects of the legality of the securities being
registered.
12 Computation of Ratio of Earnings to Fixed Charges.
15 Awareness Letter of KPMG Peat Marwick LLP.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of John F. Schmutz, Esq. (included in Exhibit 5(a)).
23(c) Consent of Latham & Watkins (included in Exhibit 5(b)).
24 Powers of Attorney (contained on the signature pages hereof).
25 Statement of Eligibility of Trustee on Form T-1.
<FN>
- ------------------------
* To be filed by amendment or incorporated by reference with the offering of the
securities.
</TABLE>
<PAGE>
EXHIBIT 5(a)
LA QUINTA INNS, INC.
112 E. Pecan Street
San Antonio, Texas 78299
January 19,1996
La Quinta Inns, Inc.
112 E. Pecan Street
San Antonio, TX 78299-2636
Re: SHELF REGISTRATION OF $250,000,000
AGGREGATE PRINCIPAL AMOUNT OF DEBT
SECURITIES
Ladies and Gentlemen:
In connection with the registration of $250,000,000
aggregate principal amount of Debt Securities (the "Securities")
by La Quinta Inns, Inc., a Texas corporation (the "Company"),
under the Securities Act of 1933, as amended (the "Act"), on
Form S-3 filed with the Securities and Exchange Commission
(the "Commission") on January 19, 1996 (the "Registration
Statement"), you have requested my opinion with respect to the
matters set forth below.
In my capacity as Vice President-General Counsel of the
Company in connection with such registration, I am familiar with
the proceedings taken and proposed to be taken by the Company in
connection with the authorization and issuance of the Securities,
and for the purposes of this opinion, have assumed such
proceedings will be timely completed in the manner presently
proposed. In addition, I, or members of my staff, have made such
legal and factual examinations and inquiries, including an
examination of originals or copies certified or otherwise
identified to my satisfaction of such documents, corporate
records and instruments, as I have deemed necessary or
appropriate for purposes of this opinion.
<PAGE>
La Quinta Inns, Inc.
January 19, 1996
Page 2
In my examination, I have assumed the genuineness of
all signatures, the authenticity of all documents submitted to me
as originals, and the conformity to authentic original documents
of all documents submitted to me as copies.
I am opining herein as to the effect on the subject
transaction only of the internal laws of the State of Texas and I
express no opinion with respect to the applicability thereto, or
the effect thereon, of the laws of any other jurisdiction or as
to any matters of municipal law or the laws of any other local
agencies within the State of Texas.
Capitalized terms used herein without definition have
the meanings ascribed to them in the Registration Statement.
Subject to the foregoing and the other matters set
forth herein, it is my opinion that as of the date hereof the
Securities have been duly authorized by all necessary corporate
action of the Company.
I consent to your filing this opinion as an exhibit to
the Registration Statement and to the reference to me contained
under the heading "Legal Matters."
Very truly yours,
/s/ John F. Schmutz
John F. Schmutz
Vice President-General Counsel
<PAGE>
EXHIBIT 5(b)
LATHAM & WATKINS
885 Third Avenue
Suite 1000
New York, New York 10022-4802
(212) 906-1200
January 19, 1996
La Quinta Inns, Inc.
112 E. Pecan Street
San Antonio, Texas 78299-2636
Re: SHELF REGISTRATION OF $250,000,000
AGGREGATE PRINCIPAL AMOUNT OF DEBT
SECURITIES
Ladies and Gentlemen:
In connection with the registration of $250,000,000
aggregate principal amount of Debt Securities (the "Securities")
by La Quinta Inns, Inc., a Texas corporation (the "Company"),
under the Securities Act of 1933, as amended (the "Act"), on
Form S-3 filed with the Securities and Exchange Commission
(the "Commission") on January 19, 1996 (the "Registration
Statement"), you have requested our opinion with respect to the
matters set forth below.
In our capacity as your counsel in connection with such
registration, we are familiar with the proceedings taken and
proposed to be taken by the Company in connection with the
authorization and issuance of the Securities, and for the
purposes of this opinion, have assumed such proceedings will be
timely completed in the manner presently proposed. We have also
assumed for purposes of this opinion that each of the Securities
and the Indenture has been duly authorized by all necessary
corporate action by the Company. In addition, we have made such
legal and factual examinations and inquiries, including an
examination of originals or copies certified or otherwise
identified to our satisfaction of such documents, corporate
records and instruments, as we have deemed necessary or
appropriate for purposes of this opinion.
<PAGE>
La Quinta Inns, Inc.
January 19, 1996
Page 2
In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to authentic original documents
of all documents submitted to us as copies.
We are opining herein as to the effect on the subject
transaction only of the internal laws of the State of New York,
and we express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other
jurisdiction or as to any matters of municipal law or the laws of
any other local agencies within the State of New York.
Capitalized terms used herein without definition have
the meanings ascribed to them in the Registration Statement.
Based on the foregoing, and subject to the proposed
additional proceedings being taken as now contemplated prior to
the issuance of a particular series of Securities and the terms
of the particular series of Securities being otherwise in
compliance with then applicable law, it is our opinion that as of
the date hereof the Securities, when executed, authenticated and
delivered by or on behalf of the Company against payment
therefor inaccordance with the terms of the Indenture, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
The opinion rendered in the preceding paragraph
relating to the enforceability of the Securities is subject to
the following exceptions, limitations and qualifications: (i) the
effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors; (ii) the effect
of general principles of equity, whether enforcement is
considered in a proceeding in equity or law, and the discretion
of the court before which any proceeding therefor may be brought;
(iii) the unenforceability under certain circumstances under law
or court decisions of provisions providing for the indemnification
of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public
policy; and (iv) the manner by which the acceleration of the
Securities may affect the collectibility of that portion of the
stated principal amount thereof which might be determined to
constitute unearned interest thereon.
To the extent that the obligations of the Company under
the Indenture may be dependent upon such matters, we assume for
purposes of this opinion that the Trustee is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization; that the Trustee is duly qualified
to engage in the activities contemplated by the Indenture; that
the Indenture has been duly authorized, executed and delivered by
the Trustee and constitutes the legal, valid and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with its terms; that the Trustee is in compliance,
generally and with respect to acting as a trustee under the
Indenture, with all applicable laws and regulations; and that the
Trustee has the requisite organizational and legal power and
authority to perform its
<PAGE>
La Quinta Inns, Inc.
January 19, 1996
Page 3
obligations under the Indenture.
We consent to your filing this opinion as an exhibit to
the Registration Statement and to the reference to our firm
contained under the heading "Legal Matters."
Very truly yours,
/s/ Latham & Watkins
<PAGE>
EXHIBIT 12
LA QUINTA INNS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------- ------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings (loss) before income taxes
and extraordinary items and
cumulative effect of accounting
change............................ $ 68,970 $ 50,546 $ 61,991 $ 31,836 $ (7,270) $ 2,185 $ 3,398
Partners' equity in earnings and
losses............................ 9,611 8,724 11,406 12,965 15,081 9,421 8,408
Partners' equity in earnings of
combined unincorporated ventures
that do not have fixed charges.... (1,452) (1,198) (1,577) (1,652) (1,504) (845) (802)
Fixed charges...................... 32,015 30,278 40,814 32,477 34,270 40,012 42,269
Interest capitalized............... (817) (811) (889) -- (50) -- --
Amortization of capitalized
interest......................... . 599 574 772 799 799 1,064 1,064
-------- -------- ---------- --------- --------- --------- ---------
Earnings as adjusted............. $108,926 $ 88,113 $ 112,517 $ 76,425 $ 41,326 $ 51,837 $ 54,337
-------- -------- ---------- --------- --------- --------- ---------
-------- -------- ---------- --------- --------- --------- ---------
Fixed charges:
Interest on long-term debt
(before capitalized interest)... $ 31,220 $ 29,470 $ 39,749 $ 31,366 $ 33,137 $ 38,713 $ 40,911
Portion of rental expense
allocated to interest........... 795 808 1,065 1,111 1,133 1,299 1,358
-------- -------- ---------- --------- --------- --------- ---------
Total fixed charges............ $ 32,015 $ 30,278 $ 40,814 $ 32,477 $ 34,270 $ 40,012 $ 42,269
-------- -------- ---------- --------- --------- --------- ---------
-------- -------- ---------- --------- --------- --------- ---------
Ratio of earnings to fixed
charges........................... 3.4x 2.9x 2.8x 2.4x 1.2x 1.3x 1.3x
-------- -------- ---------- --------- --------- --------- ---------
-------- -------- ---------- --------- --------- --------- ---------
</TABLE>
<PAGE>
EXHIBIT 15
La Quinta Inns, Inc.
San Antonio, Texas
Ladies and Gentlemen:
With respect to this registration statement, we acknowledge our awareness of
the incorporation by reference therein of our reports dated April 21, 1995, July
20, 1995, and October 31, 1995 related to our reviews of the interim financial
information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are
not considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
KPMG PEAT MARWICK LLP
San Antonio, Texas
January 19, 1996
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
La Quinta Inns, Inc.
We consent to the use of our audit report, dated January 23, 1995 on the
combined balance sheets as of December 31, 1994 and 1993, and the related
combined statements of operations, shareholders equity and cash flows for
each of the years in the three-year period ended December 31, 1994,
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the Prospectus.
Our audit report refers to the adoption of Statement of Financial
Accounting Standards No. 109 in 1993.
KPMG PEAT MARWICK LLP
San Antonio, Texas
January 19, 1996
<PAGE>
EXHIBIT 25
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)_________
_______________
U.S. TRUST COMPANY OF TEXAS, N.A.
(Exact name of trustee as specified in its charter)
75-2353745
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
2001 Ross Avenue, Suite 2700 75201-2936
Dallas, Texas (Zip Code)
(Address of trustee's
principal executive offices)
Compliance Officer
U.S. Trust Company of Texas, N.A.
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201-2936
(214) 754-1200
(Name, address and telephone number of agent for service)
_______________
La Quinta Inns, Inc.
(Exact name of obligor as specified in its charter)
Texas 74-1724417
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
112 East Pecan Street
San Antonio, Texas 78205
(Address of principal executive offices) (Zip Code)
_______________
Debt Securities
(Title of the indenture securities)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
GENERAL
1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of Dallas (11th District), Dallas, Texas
(Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Dallas, Texas
The Office of the Comptroller of the Currency, Dallas, Texas
(b) Whether it is authorized to exercise corporate trust powers.
The Trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
Trustee, describe each such affiliation.
None.
3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting securities of
the Trustee:
As of August 8, 1995
- -------------------------------------------------------------------------------
Col A. Col B.
- -------------------------------------------------------------------------------
Title of Class Amount Outstanding
- -------------------------------------------------------------------------------
Capital Stock - par value $100 per share 5,000 shares
4. TRUSTEESHIPS UNDER OTHER INDENTURES.
Not Applicable
5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
Not Applicable
<PAGE>
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
Not Applicable
7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR OFFICIALS.
Not Applicable
8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Not Applicable
9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
Not Applicable
10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
Not Applicable
11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON OWNING
50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
Not Applicable
12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
Not Applicable
13. DEFAULTS BY THE OBLIGOR.
Not Applicable
14. AFFILIATIONS WITH THE UNDERWRITERS.
Not Applicable
15. FOREIGN TRUSTEE.
Not Applicable
16. LIST OF EXHIBITS.
T-1.1 - A copy of the Articles of Association of U.S. Trust Company of
Texas, N.A.; incorporated herein by reference to Exhibit T-1.1 filed
with Form T-1 Statement, Registration No. 22-21897.
<PAGE>
16. (con't.)
T-1.2 - A copy of the certificate of authority of the Trustee to commence
business; incorporated herein by reference to Exhibit T-1.2 filed
with Form T-1 Statement, Registration No. 22-21897.
T-1.3 - A copy of the authorization of the Trustee to exercise corporate
trust powers; incorporated herein by reference to Exhibit T-1.3
filed with Form T-1 Statement, Registration No. 22-21897.
T-1.4 - A copy of the By-laws of the U.S. Trust Company of Texas, N.A., as
amended to date; incorporated herein by reference to Exhibit T-1.4
filed with Form T-1 Statement, Registration No. 22-21897.
T-1.5 - The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
T-1.6 - A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
NOTE
As of July 24, 1995 the Trustee had 5,000 shares of Capital Stock outstanding,
all of which are owned by U.S. T.L.P.O. Corp. As of August 5, 1993
U.S. T.L.P.O. Corp. had 35 shares of Capital Stock outstanding, all of which are
owned by U.S. Trust Corporation. U.S. Trust Corporation had outstanding
9,653,964 shares of $5 par value Common Stock as of
July 24, 1995.
The term "Trustee" in Items 2, 5, 6, 7, 8, 9, 10 and 11 refers to each of U.S
Trust Company of Texas, N.A., U.S. T.L.P.O. Corp. and U.S. Trust Corporation.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of
all the facts on which to base responsive answers to Items 2, 5, 6, 7, 9,
10 and 11, the answers to said Items are based upon incomplete information.
Items 2, 5, 6, 7, 9, 10 and 11 may, however, be considered correct unless
amended by an amendment to this Form T-1.
In answering any items in this Statement of Eligibility and Qualification which
relates to matters peculiarly within the knowledge of the obligors or their
directors or officers, or an underwriter for the obligors, the Trustee has
relied upon information furnished to it by the obligors and will rely on
information to be furnished by the obligors or such underwriter, and the Trustee
disclaims responsibility for the accuracy or completeness of such information.
_______________
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
U.S Trust Company of Texas, N.A., a national banking association organized under
the laws of the United States of America, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Dallas, and State of Texas on the
19th day of January, 1996.
U.S. Trust Company of Texas, N.A., Trustee
By: /s/ John C. Stohlmann
------------------------
John C. Stohlmann
Vice President
<PAGE>
Exhibit T-1.5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939 as amended in connection with the proposed issue of La Quinta Inns, Inc.
Debt Securities, we hereby consent that reports of examination by Federal,
State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
U.S. Trust Company of Texas, N.A.
By: /s/ John C. Stohlmann
--------------------------
John C. Stohlmann
Vice President
<PAGE>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
Expires March 31, 1996
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
- -----------------------------------------------------------------------------
[LOGO] Please refer to page i, /1/
Table of Contents, for
the required disclosure
of estimated burden.
- -----------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC OFFICES ONLY AND
TOTAL ASSETS OF LESS THAN $100 MILLION--FFIEC 034
REPORT AT THE CLOSE OF BUSINESS SEPTEMBER 30, 1995 (950930)
-----------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks);
12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with domestic offices only. Banks
with branches and consolidated subsidiaries in U.S. territories and
possessions, Edge or Agreement subsidiaries, foreign branches, consolidated
foreign subsidiaries, or International Banking Facilities must file FFIEC 031.
- -----------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Alfred B. Childs SVP & Cashier
- ------------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and
Income (including the supporting schedules) have been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and are true to the best of my knowledge and belief.
/s/ ALFRED B. CHILDS
- ------------------------------------------------------
Signature of Officer Authorized to Sign Report
October 18, 1995
- ------------------------------------------------------
Date of Signature
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in
some cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it
has been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate
Federal regulatory authority and is true and correct.
/s/ STUART PEARMAN
- ------------------------------------------------------
Director (Trustee)
/s/ J.T. MOORE, JR.
- ------------------------------------------------------
Director (Trustee)
/s/ PETER J. DENKER
- ------------------------------------------------------
Director (Trustee)
- -----------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate
Federal Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the SPECIAL RETURN ADDRESS
ENVELOPE PROVIDED. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2127 Espey Court, Suite 204, Crofton, MD 21114.
- -----------------------------------------------------------------------------
FDIC Certificate Number | | | | | |
----------------
(RCRI 9050)
__ __
| |
CALL NO. 193 34 09-30-95
STBK: 48-6797 02805 STCERT: 48-33217
U.S. TRUST COMPANY OF TEXAS, NATIONAL
2001 ROSS AVENUE, SUITE 2700
DALLAS, TX 75201
| |
__ __
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, FEDERAL DEPOSIT
INSURANCE CORPORATION, OFFICE OF THE COMPTROLLER OF THE CURRENCY
<PAGE>
U.S. Trust Company of Texas, N.A. Call Date: 09/30/95 ST-BK: 486797 FFIEC 034
2001 Ross Avenue Page RC-1
Dallas, TX 75201 Vendor ID: D Cert: 33217
9
Transit Number: 11101765
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT OUTSTANDING AS OF THE LAST BUSINESS DAY OF THE
QUARTER.
SCHEDULE RC - BALANCE SHEET
C100 -
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions:
RCON
a. Noninterest-bearing balances and currency and coin (1,2)........................................ 0081 472 1.a
RCON
b. Interest-bearing balances (3)................................................................... 0071 40 1.b
2. Securities:
RCON
a. Held-to-maturity securities (from Schedule RC-B, column A)...................................... 1754 0 2.b
RCON
b. Available-for-sale securities (from Schedule RC-B, column D).................................... 1773 4,770 2.b
3. Federal funds sold and securities purchased under agreements to resell:
RCON
a. Federal funds sold (4).......................................................................... 0276 0 3.a
RCON
b. Securities purchased under agreements to resell (5)............................................. 0277 0 3.b
4. Loans and lease financing receivables:
RCON
a. Loans and leases, net of unearned income (from Schedule RC-C).......... 2122 29,887 4.a
RCON
b. LESS: Allowance for loan and lease losses.............................. 3123 451 4.b
RCON
c. LESS: Allocated transfer risk reserve.................................. 3128 0 4.c
RCON
d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c)... 2125 29,436 4.d
RCON
5. Trading assets..................................................................................... 3545 0 5.
RCON
6. Premises and fixed assets (including capitalized leases)........................................... 2145 631 6.
RCON
7. Other real estate owned (from Schedule RC-M)....................................................... 2150 0 7.
RCON
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)........... 2130 0 8.
RCON
9. Customers' liability to this bank on acceptances outstanding....................................... 2155 0 9.
RCON
10. Intangible assets (from Schedule RC-M)............................................................. 2143 0 10.
RCON
11. Other assets (from Schedule RC-F).................................................................. 2160 660 11.
RCON
12. a. Total assets (sum of items 1 through 11)........................................................ 2170 36,009 12.a
RCON
b. Losses deferred pursuant to 12 U.S.C. 1823(j)................................................... 0306 0 12.b
RCON
c. Total assets and losses deferred pursuant to 12 U.S.C. 1823 (j) (sum of 12.a and 12.b).......... 0307 36,009 12.c
</TABLE>
__________
(1) Includes cash items in process of collection and unposted debits.
(2) The amount reported in this item must be greater than or equal to the
sum of Schedule RC-M, item 3.a and 3.b.
(3) Includes time certificates of deposit not held for trading.
(4) Report "term federal funds sold" in Schedule RC, item 4.a, "Loans and
leases, net of unearned income", and in Schedule RC-C, part I.
(5) Report securities purchased under agreements to resell that involve the
receipt of immediately available funds and mature in one business day or
roll over under a continuing contract in Schedule RC, item 3.a, "Federal
funds sold."
<PAGE>
U.S. Trust Company of Texas, N.A. Call Date: 09/30/95 ST-BK: 486797 FFIEC 034
2001 Ross Avenue Page RC-2
Dallas, TX 75201 Vendor ID: D Cert: 33217
/10/
Transit Number: 11101765
SCHEDULE RC - CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
<S> <C> <C> <C> <C> <C>
13. Deposits
RCON
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E) 2200 11,457 13.a
RCON
(1) Noninterest-bearing (1)------------------------------------------------ 6631 2,173 13.a.1
RCON
(2) Interest-bearing------------------------------------------------------- 6636 9,284 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs
(1) Noninterest-bearing----------------------------------------------------
(2) Interest-bearing-------------------------------------------------------
14. Federal funds purchased and securities sold under agreements to repurchase:
RCON
a. Federal funds purchased (2)------------------------------------------------------------- 0278 0 14.1
RCON
b. Securities sold under agreements to repurchase (3)-------------------------------------- 0279 0 14.b
RCON
15. a. Demand notes issued to the U.S. Treasury------------------------------------------------ 2840 0 15.a
RCON
b. Trading liabilities--------------------------------------------------------------------- 3548 0 15.b
16. Other borrowed money:
RCON
a. With original maturity of one year or less---------------------------------------------- 2332 0 16.a
RCON
b. With original maturity of more than one year-------------------------------------------- 2333 6,000 16.b
RCON
17. Mortgage indebtedness and obligations under capitalized leases----------------------------- 2910 0 17.
RCON
18. Bank's liability on acceptances executed and outstanding---------------------------------- 2920 0 18.
RCON
19. Subordinated notes and debentures--------------------------------------------------------- 3200 0 19.
RCON
20. Other liabilities (from Schedule RC-G)---------------------------------------------------- 2930 550 20.
RCON
21. Total liabilities (sum of items 13 through 20)-------------------------------------------- 2948 18,007 21.
RCON
22. Limited-life preferred stock and related surplus------------------------------------------ 3282 0 22.
EQUITY CAPITAL
RCON
23. Perpetual preferred stock and related surplus--------------------------------------------- 3838 7,000 23.
RCON
24. Common stock------------------------------------------------------------------------------ 3230 500 24.
RCON
25. Surplus (exclude all surplus related to preferred stock)---------------------------------- 3839 8,384 25.
RCON
26. a. Undivided profits and capital reserves------------------------------------------------- 3632 2,119 26.a
RCON
b. Net unrealized holding gains (losses) on available-for-sale securities---------------- 8434 (1) 26.b
27. Cumulative foreign currency translation adjustments---------------------------------------
RCON
28. a. Total equity capital (sum of items 23 through 27)-------------------------------------- 3210 18,002 28.a
RCON
b. Losses deferred pursuant to 12 U.S.C. 1823(j)------------------------------------------ 0306 0 28.b
c. Total equity capital and losses deferred pursuant to 12 U.S.C. 1823(j) RCON
(sum of items 28.a and 28.b)---------------------------------------------------------- 3559 18,002 28.c
29. Total liabilities, limited-life preferred stock, equity capital, and losses deferred RCON
pursuant to 12 U.S.C. 1823(j) (sum of items 21, 22, and 28.c)---------------------------- 2257 36,009 29.
MEMORANDUM
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent RCON NUMBER
external auditors as of any date during 1994_______________________________________________ 6724 N/A M.1
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
</TABLE>
_________________________
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Report "term federal funds purchased" in Schedule RC, item 16, "Other
borrowed Money."
(3) Report securities sold under agreements to repurchase that involve the
receipt of immediately available funds and mature in one business day
or roll over under a continuing contract in Schedule RC, item 14.a,
"Federal funds purchased".
