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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
OCTOBER 7, 1997
----------------
LA QUINTA INNS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-7790 74-1724417
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification Number)
WESTON CENTRE
112 E. PECAN STREET
P.O. BOX 2636
SAN ANTONIO, TEXAS 78299-2636
(Address of principal executive offices)
(210) 302-6000
(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On October 3, 1997, La Quinta Inns, Inc. (the "Company" or "La Quinta")
announced the following information regarding the third quarter of 1997.
Occupancy for the third quarter was 75.0%, a 1.5 occupancy point
improvement over the same quarter of the prior year. This follows a one
occupancy point improvement in the second quarter and shows signficant progress
toward achieving La Quinta's initial objective of increasing occupancy and
market share upon completion of the Gold Medal rooms program.
The relative improvements in ADR for July and August 1997 over the
comparable months in 1996 were unfavorably impacted by substantial rate
premiums achieved during last year's Olympics as well as the unit level pricing
decisions in 1997 which contributed to the significant improvement in
occupancy in the third quarter. This resulted in an ADR increase for the
quarter of 3.6% over the 1996 quarter and a REVPAR increase of 5.8%. The month
of September achieved an 7.6% REVPAR improvement over the same month of 1996,
which was not impacted by the Olympics.
At the end of the quarter, La Quinta operated approximately 33,200 rooms
including 3,150 new rooms in 24 new Inn and Suite hotels. A number of Inn and
Suites hotels which were anticipated to open earlier in the year will now open
between October and December 1997. While the company continues to anticipate
having 36 Inn and Suites hotels open at the end of the year, this delay has
resulted in fewer available rooms and slower revenue growth in the third and
fourth quarters of 1997 than previously expected. These rooms will be in
service for the full 1998 year and La Quinta anticipates an approximate 10%
increase in available rooms for 1998 over 1997. This will result in
approximately 35,000 rooms open at the end of 1997 and 38,500 by the end of
1998.
As a result of the above factors, revenue increased by 13.1% to
approximately $138 million in the third quarter of 1997, a significant increase
over the comparable 1996 quarter but below many analyst estimates.
Although the accounting records are not closed for the quarter, it is
anticipated that the third quarter EBITDA margin will increase to approximately
49% resulting in a 15% increase in EBITDA over the same quarter of the prior
year.
Depreciation and interest expense resulting from capital expenditures for
the Gold Medal rooms program and the construction of new Inn and Suites hotels
are also exceeding most analyst estimates.
Net earnings for the quarter are estimated to be approximately $29 to $30
million, or 36 to 37 cents per share, compared to $20 million, or 25 cents per
share, during the third quarter of 1996. Net earnings for the 1997 quarter will
include gains on property transactions of $5.4 million, net of tax, or 7 cents
per share.
During the quarter, the company purchased approximately one million shares
of its common stock under its stock repurchase plan. As a result, the weighted
average number of common and common equivalent shares outstanding for the
quarter declined to 80,027,661. In addition, La Quinta's Board of Directors has
now authorized the repurchase of up to another $10 million of the company's
Common Stock under its existing stock repurchase program. Such repurchases
would be made from time to time in open market and in private transactions as
deemed appropriate by the company, with all repurchased shares becoming
treasury shares.
These statements about estimated results are preliminary and are based on
currently available information and management assumptions. The Company
anticipates releasing its third quarter earnings on October 21.
ITEM 7. FINANCIAL STATEMENTS, FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
1. Distribution Agreement, dated as of October 7, 1997, by and between
Registrant, Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co. and
NationsBanc Montgomery Securities, Inc.
4.1 Officer's Certificate pursuant to the Indenture, dated as of September 15,
1995 by and between Registrant and U.S. Trust Company of Texas, N.A., as
Trustee (without exhibits).
4.2 Form of Fixed Rate Note described in Exhibit 4.1
4.3 Form of Floating Rate Note described in Exhibit 4.1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LA QUINTA INNS, INC.
By: /s/ Gary L. Mead
------------------------------------
Gary L. Mead
President and
Chief Executive Officer
Date: October 7, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
1. Distribution Agreement, dated as of October 7, 1997, by and
between Registrant, Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and NationsBanc Montgomery Securities,
Inc.
4.1 Officer's Certificate pursuant to the Indenture, dated as of
September 15, 1995 by and between Registrant and U.S. Trust
Company of Texas, N.A., as Trustee (without exhibits).
4.2 Form of Fixed Rate Note described in Exhibit 4.1
4.3 Form of Floating Rate Note described in Exhibit 4.1.
</TABLE>
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EXHIBIT 1
LA QUINTA INNS, INC.
$300,000,000
Medium-Term Notes
Due More Than 9 Months From Date of Issue
DISTRIBUTION AGREEMENT
October 7, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
NationsBanc Montgomery Securities, Inc.
100 North Tryon Street
Charlotte, North Carolina
Dear Sirs and Mesdames:
La Quinta Inns, Inc., a Texas corporation (the "COMPANY"), confirms
its agreement with each of you with respect to the issue and sale from time to
time by the Company of up to $300,000,000 aggregate initial offering price of
its medium-term notes due more than 9 months from date of issue (the "NOTES").
The Notes will be issued under an Indenture dated as of September 15, 1995 (the
"INDENTURE") between the Company and U.S. Trust Company of Texas, N.A., as
Trustee (the "TRUSTEE"), and will have the maturities, interest rates,
redemption provisions, if any, and other terms as set forth in supplements to
the Basic Prospectus referred to below.
Subject to (i) reservation by the Company of the right to sell and to
accept offers to purchase the Notes directly to or from investors on its own
behalf and (ii) Section 14, the Company hereby appoints Morgan Stanley & Co.
Incorporated ("MORGAN STANLEY"), Goldman. Sachs & Co. ("GOLDMAN") and
NationsBanc
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Montgomery Securities, Inc. ("NATIONSBANC") (each individually, an "AGENT" and
collectively, the "AGENTS") as its agents for the purpose of soliciting and
receiving offers to purchase Notes from the Company by others and, on the basis
of the representations and warranties herein contained, but subject to the
terms and conditions herein set forth, each Agent agrees to use reasonable
efforts to solicit and receive offers to purchase Notes upon terms acceptable
to the Company at such times and in such amounts as the Company shall from time
to time specify. In addition, any Agent may also purchase Notes as principal
pursuant to a Terms Agreement relating to such sale (a "TERMS AGREEMENT") in
accordance with the provisions of Section 2(b) hereof.
1. Registration and Prospectus. The Company has filed with the
Securities and Exchange Commission (the "COMMISSION") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "ACT"), a
registration statement on Form S-3 under the Act (File No. 333-33789),
including a prospectus relating to the offer and sale of $300,000,000 aggregate
principal amount of the Company's debt securities (including the Notes), which
registration statement has been declared effective and copies of which have
been heretofore delivered to you. Such registration statement in the form in
which it was declared effective (including all financial schedules and exhibits
and including all documents incorporated or deemed to be incorporated by
reference therein through the date hereof), is hereinafter referred to as the
"REGISTRATION STATEMENT." The Company proposes to file with the Commission from
time to time, pursuant to Rule 424(b) of the Act, supplements to the prospectus
relating to the Registration Statement that will describe certain terms of the
Notes. The term "BASIC PROSPECTUS" as used in this Agreement means the
prospectus dated August 25, 1997 relating to the Registration Statement. The
term "PROSPECTUS" means the Basic Prospectus together with the prospectus
supplement or supplements (each a "PROSPECTUS SUPPLEMENT") specifically
relating to the Notes, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424. Any reference in this Agreement to the
Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act as of the date of the Registration Statement or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "EXCHANGE ACT"), that, upon filing,
are incorporated by reference therein, as required by paragraph (b) of Item 12
of Form S-3. As used herein, the term "INCORPORATED DOCUMENTS" means, at any
time, the documents that at such time are incorporated by reference in the
Registration Statement, the Prospectus, or any amendment or supplement thereto.
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2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. In connection with an Agent's actions
as agent hereunder, such Agent agrees to use its reasonable best efforts to
solicit offers to purchase Notes upon the terms and conditions set forth in the
Prospectus as then amended or supplemented.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of at least one business
day's prior notice from the Company, the Agents will forthwith suspend
solicitations of offers to purchase Notes from the Company until such time as
the Company has advised the Agents that such solicitation may be resumed. While
such solicitation is suspended, the Company shall not be required to deliver
any certificates, opinions or letters in accordance with Sections 7(a), 7(b)
and 7(c); provided, however, that if the Registration Statement or Prospectus
is amended or supplemented during the period of suspension (other than by an
amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Notes or for a change the Agents deem to be immaterial), no Agent shall be
required to resume soliciting offers to purchase Notes until the Company has
delivered such certificates, opinions and letters as such Agent may request.
The Company agrees to pay to each Agent, as consideration for the sale
of each Note resulting from a solicitation made or an offer to purchase
received by such Agent, a commission in the form of a discount from the
purchase price of such Note equal to the percentage set forth below of the
purchase price of such Note:
<TABLE>
<CAPTION>
Term Commission Rate
---- ---------------
<S> <C>
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to less than 30 years .750%
From 30 years and beyond To be negotiated
</TABLE>
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Each Agent is authorized to solicit offers to purchase the Notes only
in the principal amounts of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000. Each Agent shall communicate to the Company,
orally or in writing, each offer to purchase Notes received by such Agent as
agent that in its judgment should be considered by the Company. The Company
shall have the sole right to accept offers to purchase Notes and may reject any
offer in whole or in part. Each Agent shall have the right to reject, in its
discretion reasonably exercised, any offer to purchase Notes, and any such
rejection shall not be deemed a breach of its agreements contained herein. The
procedural details relating to the issue and delivery of Notes sold by the
Agents as agents and the payment therefor shall be as set forth in the
Administrative Procedures (as hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement. In
connection with such sale, the Company will enter into a Terms Agreement that
will provide for the sale of such Notes to and the purchase thereof by such
Agent. Each Terms Agreement may be in the form of Exhibit A hereto or may take
the form of an exchange of any form of written telecommunication between such
Agent and the Company.
An Agent's commitment to purchase Notes as principal, pursuant to a
Terms Agreement, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by such Agent
pursuant thereto, the maturity date of such Notes, the price to be paid to the
Company for such Notes, the interest rate and interest rate formula, if any,
applicable to such Notes and any other terms of such Notes. Each such Terms
Agreement shall also specify any requirements for officers' certificates,
opinions of counsel and letters from the independent public accountants of the
Company pursuant to Section 6 hereof. A Terms Agreement may also specify
certain provisions relating to the reoffering of such Notes by such Agent.
Each Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Unless otherwise specified in a Terms Agreement,
the procedural details relating to the issue and delivery of Notes purchased by
an Agent as principal and the payment therefor shall be as set forth in the
Administrative Procedures. Each date of delivery of and payment for Notes to be
purchased by an Agent as principal, whether pursuant to a Terms Agreement or
otherwise, is referred to herein as a "SETTLEMENT DATE".
(c) Administrative Procedures. The Agents and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Medium-Term Notes Administrative Procedures (attached hereto
as Exhibit B) (the "ADMINISTRATIVE PROCEDURES"), as amended from time to time.
The
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Administrative Procedures may be amended only by written agreement of the
Company and the Agents.
(d) Delivery. The documents required to be delivered by Section 6
of this Agreement as a condition precedent to the Agents' obligations to begin
soliciting offers to purchase Notes as agents of the Company shall be delivered
at the office of Davis Polk & Wardwell, counsel for the Agents, not later than
5:00 p.m., New York time, on the date hereof, or at such other time and/or
place as the Agents and the Company may agree upon in writing, but in no event
later than the day prior to the earlier of (i) the date on which the Agents
begin soliciting offers to purchase Notes and (ii) the first date on which the
Company accepts any offer by an Agent pursuant to a Terms Agreement. The date
of delivery of such documents is referred to herein as the "COMMENCEMENT DATE".
(e) Obligations Several. The Company acknowledges that the
obligations of the Agents under this Agreement are several and not joint.
3. Agreements of the Company. The Company agrees with each Agent
that:
(a) The Company shall advise the Agents promptly (i) if and when
any amendment or supplement to the Basic Prospectus (except that notice of the
filing of an amendment or supplement to the Basic Prospectus that merely sets
forth the terms or a description of particular Notes shall only be given to the
Agent or Agents offering such Notes) is filed and when any post-effective
amendment to the Registration Statement becomes effective, (ii) of the receipt
of any comments from the Commission that relate to the Registration Statement
or any request by the Commission for an amendment of or a supplement to the
Registration Statement or the Basic Prospectus or for additional information
and (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of receipt by the Company of
notice of the suspension of qualification of the Notes for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purpose by the
Commission or any state securities commission or other regulatory authority. If
at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption of the Notes under any state securities or Blue Sky laws, the
Company shall use every reasonable effort to obtain the withdrawal or lifting
of such order at the earliest possible time.
(b) Prior to the termination of the offering of the Notes pursuant
to this Agreement or any Terms Agreement, the Company shall not file any
amendment or supplement to the Registration Statement or make any amendment or
supplement to the Basic Prospectus, of which the Agents shall not previously
have been advised and
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provided a copy prior to the filing thereof and to which the Agents shall
reasonably object in writing, provided that (i) the foregoing requirement shall
not apply to any of the Company's periodic filings with the Commission required
to be filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
copies of which filings the Company will cause to be delivered to the Agents
promptly after being transmitted for filing with the Commission and (ii) any
Prospectus Supplement that merely sets forth the terms or a description of
particular Notes shall only be reviewed and approved by the Agent or Agents
offering such Notes. If the Basic Prospectus is amended or supplemented as a
result of the filing under the Exchange Act of any document incorporated by
reference in the Prospectus, no Agent shall be obligated to solicit offers to
purchase Notes so long as it is not reasonably satisfied with such document.
(c) The Company shall expeditiously furnish to each Agent, without
charge, a signed copy of the Registration Statement, including exhibits and
amendments and as many copies of the Prospectus (and of any amendment or
supplement to the Prospectus and documents incorporated by reference) as each
Agent may reasonably request.
(d) At any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, if any event occurs as a
result of which it becomes necessary, in the judgment of the Company or in the
reasonable opinion of counsel for the Agents, to amend or supplement the
Prospectus (as then amended or supplemented) in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Act or any other law, the Company shall promptly notify the
Agents by telephone (with confirmation in writing) to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, the Agents shall
forthwith suspend such solicitation and cease using the Prospectus, as then
amended or supplemented. If the Company shall decide to amend or supplement the
Registration Statement or Prospectus, as then amended or supplemented, it shall
so advise the Agents promptly by telephone (with confirmation in writing) and,
at its expense, shall prepare and, subject to the provisions of subsection (b)
above, file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances under which they were
made, be misleading, and the Prospectus, as so amended or supplemented, will
comply with the Act or such other law, and shall expeditiously furnish to the
Agents without charge such number of copies thereof as the Agents may
reasonably request. If any documents, certificates, opinions and letters
furnished to the Agents pursuant to paragraph (g) below and Sections 7(a), 7(b)
and 7(c) in connection with the preparation and filing of such amendment or
supplement are reasonably satisfactory in all respects to the Agents, upon the
filing with the Commission of such amendment
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or supplement to the Prospectus or upon the effectiveness of an amendment to
the Registration Statement, the Agents will resume the solicitation of offers
to purchase Notes hereunder. Notwithstanding any other provision of this
Section 3(d), until the distribution of any Notes an Agent may own as principal
has been completed, if any event described above in this paragraph (d) occurs,
the Company will, at its own expense, forthwith prepare and cause to be filed
promptly with the Commission an appropriate amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented,
reasonably satisfactory in all respects to such Agent, will supply such amended
or supplemented Prospectus to such Agent in such quantities as it may
reasonably request and shall furnish to such Agent pursuant to paragraph (g)
below and Sections 7(a), 7(b) and 7(c) such documents, certificates, opinions
and letters as it may request in connection with the preparation and filing of
such amendment or supplement.
(e) The Company will endeavor to qualify the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the Agents
shall reasonably request and to maintain such qualifications for so long as the
Agents shall reasonably request; provided, however, that the Company shall not
be required to register or qualify as a foreign corporation or to take any
action which would subject it to general service of process in suits, other
than those arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject.
(f) The Company shall make generally available to its security
holders as soon as reasonably practicable a combined earnings statement
covering a period of at least 12 months beginning after the "effective date"
(as defined in Rule 158 under the Act) of the Registration Statement with
respect to each sale of Notes (but in no event later than 90 days after such
date) that shall satisfy the provisions of Section 11(a) of the Act.
(g) The Company shall furnish without charge to each Agent such
relevant documents and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration Statement,
the Basic Prospectus, any amendments or supplements thereto, the Indenture, the
Notes, this Agreement, the Administrative Procedures, any Terms Agreement and
the performance by the Company of its obligations hereunder or thereunder as
such Agent may from time to time reasonably request.
(h) Between the date of any Terms Agreement by an Agent and the
Settlement Date with respect to such Terms Agreement, the Company shall not,
without the prior written consent of such Agent, which shall not be
unreasonably withheld, offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company or warrants to purchase debt securities of
the Company substantially similar to the Notes (other than (i) the Notes to be
sold pursuant to such Terms Agreement,
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(ii) Notes previously agreed to be sold by the Company and (iii) commercial
paper and short-term bank loans issued in the ordinary course of business),
except as may otherwise be provided in such Terms Agreement.
(i) The Company shall notify the Agents promptly in writing of any
downgrading, or of its receipt of any notice of any intended or potential
downgrading or of any review for possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating organization", as
such term is defined for purposes of Rule 436(g)(2) under the Act.
4. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each Agent as of the Commencement
Date, as of each date on which the Company accepts an offer to purchase Notes
(including any purchase by an Agent as principal, pursuant to a Terms
Agreement), as of each date the Company issues and delivers Notes and as of
each date the Registration Statement or the Basic Prospectus is amended or
supplemented, as follows (it being understood that such representations,
warranties and agreements shall be deemed to relate to the Registration
Statement, the Basic Prospectus and the Prospectus, each as amended or
supplemented to each such date):
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect and no
proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. (i) Each part
of the Registration Statement, when such part became or becomes effective, and
the Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act; (ii) each part of the
Registration Statement, when such part became effective, did not contain, and
each such part, as amended or supplemented, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and any supplement or amendment thereto do not and will
not at any such time contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; except that (1) this representation and warranty
does not apply (A) to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Agent furnished to the Company in writing by or on
behalf of any Agent through any Agent expressly for use therein
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or (B) to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "TRUST INDENTURE ACT"), of the Trustee (the "FORM T-1") and (2)
the representations and warranties set forth in clauses (i) and (iii) above,
when made as of the Commencement Date or as of any date on which an Agent
solicits offers to purchase Notes or on which the Company accepts an offer to
purchase Notes, shall be deemed not to cover information concerning an offering
of particular Notes to the extent such information will be set forth in a
supplement to the Basic Prospectus.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act, and any further Incorporated Documents so
filed will, when they are filed, conform in all material respects with the
requirements of the Exchange Act; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(d) All of the Company's subsidiaries (collectively, the
"SUBSIDIARIES") as of the most recent year-end are listed in an exhibit to the
Company's most recent Annual Report on Form 10-K (the "FORM 10-K"), which is
incorporated by reference into the Registration Statement. The Company and each
of the Subsidiaries that is a "significant subsidiary" (as defined in
Regulation S-X under the Act) (collectively, the "SIGNIFICANT SUBSIDIARIES")
has been duly organized, is validly existing (if applicable, as a corporation
in good standing) under the laws of its jurisdiction of organization and has
full corporate (or partnership) power and authority to carry on its business as
it is currently being conducted (and, in the case of the Company, to execute,
deliver and perform this Agreement) and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a material adverse effect, singly or in the aggregate, on
the condition (financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(e) All of the issued and outstanding shares of capital stock of,
or other ownership interests in, each Significant Subsidiary have been duly
authorized and validly issued, and certain shares of capital stock of each
Significant Subsidiary are
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owned, directly or through Subsidiaries, by the Company as set forth in the
Incorporated Documents. All such shares or other ownership interests in each
Significant Subsidiary are fully paid and nonassessable, and are free and clear
of any security interest, mortgage, pledge, claim, lien or encumbrance (each, a
"LIEN"), except for Liens that are in the aggregate immaterial to the business
of the Company and the Subsidiaries, taken as a whole.
(f) Neither the Company nor any of the Significant Subsidiaries is
in violation of or in default in the performance of any of their respective
charters or bylaws (or partnership agreements, as the case may be) or any bond,
debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or other contract, lease or other instrument to which
the Company or any of the Significant Subsidiaries is a party or by which it or
any of them is bound, or to which any of the property or assets of the Company
or any of the Significant Subsidiaries is subject, except as could not, singly
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(g)(x) As of the Commencement Date, this Agreement has been duly
authorized by all necessary corporate action of the Company and has been duly
and validly executed and delivered, and (y) as of the date of any Terms
Agreement and Settlement Date, each of this Agreement and any applicable Terms
Agreement has been duly authorized by all necessary corporate action of the
Company and has been duly and validly executed and delivered by the Company.
(h) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized by all necessary corporate action of
the Company and has been duly executed and delivered by the Company in
accordance with its terms. The Indenture conforms in all material respects to
the descriptions thereof in the Prospectus. Assuming the due execution and
delivery thereof by the Trustee, the Indenture is a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except to the extent that a waiver of rights under any usury laws
may be unenforceable and subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought at law or in equity).
(i)(x) With respect to the representation made as of any date other
than a date on which the Company accepts an offer to purchase Notes (including
any purchase by an Agent as principal pursuant to a Terms Agreement) or a date
on which the Company issues and delivers Notes, the forms of Notes have been
duly authorized by the Company and, when the terms of a particular Note and its
issuance and sale have been duly established in conformity with the Indenture,
and when such Note has been
10
<PAGE> 11
duly executed and authenticated in accordance with the Indenture and delivered
to and duly paid for by the purchasers thereof in accordance with this
Agreement or any applicable Terms Agreement, such Note will conform in all
material respects to the descriptions thereof in the Prospectus and will be
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with its terms and entitled to the benefits of the
Indenture, except to the extent that a waiver of rights under any usury laws
may be unenforceable and subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought at law or in equity) and (y) with respect to the
representations made as of a date on which the Company accepts an offer to
purchase Notes (including any purchase by an Agent as principal pursuant to a
Terms Agreement) and as of a date on which the Company issues and deliver
Notes, the Notes have been duly authorized by the Company and when such Notes
have been duly executed and authenticated in accordance with the Indenture and
delivered to and duly paid for by the purchasers thereof in accordance with the
applicable Terms Agreement, such Notes will conform in all material respects to
the descriptions thereof in the Prospectus and will be legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture, except to the extent
that a waiver of rights under any usury laws may be unenforceable and subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws, now or hereafter in effect, relating to or
affecting creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought at law or in equity).
(j) The execution and delivery of this Agreement, any applicable
Terms Agreement, the Indenture and the Notes by the Company and the performance
of this Agreement, the Indenture and the Notes (i) does not require any
consent, approval, authorization or order of or registration or filing with any
court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may be required for the registration of the
Notes under the Act and the Trust Indenture Act and compliance with the state
securities or Blue Sky laws of various jurisdictions, all of which have been or
will be effected in accordance with this Agreement) and (ii) will not conflict
with or result in a breach of any of the terms or provisions of, or constitute
a default or cause an acceleration of any obligation under, any of the
respective charters or bylaws (or partnership agreements, as the case may be)
of the Company or any of the Significant Subsidiaries or any material bond,
note, debenture or other evidence of indebtedness or any material indenture,
mortgage, deed of trust or other material contract, lease or other instrument
to which the Company or any of the Significant Subsidiaries is a party or by
which any of them is bound, or to which any of the property or assets of the
Company or any of the Significant Subsidiaries is subject, or any order of any
court or governmental agency
11
<PAGE> 12
or authority entered in any proceeding to which the Company or any of the
Significant Subsidiaries was or is a party or by which any of them is bound or
(solely with respect to actions by the Company or the Significant Subsidiaries)
violate any applicable federal, state or local law, rule, administrative
regulation or ordinance or administrative or court decree, any of the foregoing
of which could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(k) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, pending against the Company
or any of the Significant Subsidiaries that is required to be disclosed in the
Registration Statement or the Prospectus, or that could, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
materially and adversely to affect the performance of the Company's obligations
pursuant to this Agreement, any applicable Terms Agreement, the Indenture or
the Notes and, to the best of the Company's knowledge, no such proceedings are
contemplated or threatened. No action has been taken with respect to the
Company or any of the Significant Subsidiaries, and no statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency that suspends the effectiveness of the Registration Statement or
suspends the sale of the Notes in any jurisdiction referred to in Section 3(e)
hereof; no injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued with respect to the
Company or any of the Significant Subsidiaries that suspends the effectiveness
of the Registration Statement or suspends the sale of the Notes in any
jurisdiction referred to in Section 3(e) hereof; other than the litigation
matters or proceedings described in the Form 10-K under the caption "Item 3.
Legal Proceedings" and in Part II of the Company's Form 10-Q, if any, filed
since the Form 10-K, under the caption "Item 1. Legal Proceedings", no action,
suit or proceeding before any court or arbitrator or any governmental body,
agency or official (domestic or foreign), is pending against or, to the best of
the Company's knowledge, threatened against, the Company or any of the
Significant Subsidiaries that, if adversely determined, could, singly or in the
aggregate, reasonably be expected in any manner to invalidate this Agreement,
any applicable Terms Agreement, the Indenture or the Notes; and every request
of the Commission, or any securities authority or agency of any jurisdiction,
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) has been complied with in all material respects. No
contract or document of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to or
incorporated by reference in the Registration Statement is not so described or
filed or incorporated by reference as required.
(l) The firm of accountants that has certified or shall certify
the applicable combined financial statements and supporting schedules of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus are
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<PAGE> 13
independent public accountants with respect to the Company and the
Subsidiaries, as required by the Act and the Exchange Act. The combined
financial statements, together with related notes, included or incorporated by
reference in the Prospectus and the Registration Statement comply as to form in
all material respects with the requirements of the Act and the Exchange Act and
fairly present, in all material respects, the financial position of the Company
and the Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles in the United States
of America consistently applied throughout such periods, except as disclosed in
the notes to such financial statements; and the other financial and statistical
information and the supporting schedules included or incorporated by reference
in the Prospectus and in the Registration Statement present fairly, in all
material respects, the information required to be stated therein.
(m) Except as disclosed in the Registration Statement and the
Prospectus, (i) neither the Company nor any of the Significant Subsidiaries has
incurred any liabilities or obligations, direct or contingent, that are
material to the Company and the Subsidiaries, taken as a whole, nor entered
into any transaction not in the ordinary course of business that is material to
the Company and the Subsidiaries, taken as a whole, (ii) there has been no
decision or judgment in the nature of litigation adverse to the Company or any
of the Significant Subsidiaries that is material to the Company and the
Subsidiaries taken as a whole, and (iii) there has been no material adverse
change in the condition (financial or other), business, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole (any of the
above, a "MATERIAL ADVERSE CHANGE").
(n) The Company and each of the Significant Subsidiaries possess
such licenses, certificates, authorizations, approvals, franchises, trademarks,
service marks, trade names, permits and other rights issued by local, state,
federal or foreign regulatory agencies or bodies as are necessary to conduct
the businesses now conducted by them and the lack of which could reasonably be
expected to have a Material Adverse Effect on the Company and the Subsidiaries,
taken as a whole, and neither the Company nor any of the Significant
Subsidiaries has, to the best of the Company's knowledge, received any notice
of proceedings relating to the revocation or modification of any such
certificate, authorization, approval, franchise, trademark, service mark, trade
name, permit or right that, if the subject of any unfavorable decision, ruling
or finding, could reasonably be expected to have a Material Adverse Effect.
(o) Except as disclosed in the Prospectus or except as could not,
singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect, (a) to the best of the Company's knowledge, neither the Company nor the
Subsidiaries is in violation of any federal, state or local law or regulation
relating to pollution or
13
<PAGE> 14
protection of public health or welfare or the environment, including, without
limitation, the storage, handling, transportation, emissions, discharges,
releases or threatened releases of pollutants, contaminates, hazardous or toxic
materials, substances or wastes, or petroleum or petroleum products
("ENVIRONMENTAL LAWS"), (b) the Company and each of the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and the
Company and each of the Subsidiaries are in compliance with all terms and
conditions of any such permit, license or approval and (c) neither the Company
nor, to the best of the Company's knowledge, any of the Subsidiaries, has
received any notice or communication from any governmental agency or any
written notice from any other person regarding violation of or liability under
Environmental Laws and (d) there is no pending action or proceeding, or to the
best of the Company's knowledge, pending or threatened claim or investigation
against the Company or any of the Subsidiaries regarding violation of or
liability under Environmental Laws.
(p) To the best of the Company's knowledge, (i) each of the
Company and the Subsidiaries has good and marketable title to all property
(real and personal) described in the Prospectus as being owned by it, in fee
simple in the case of real property (other than in the case of certain
buildings the land under which is leased to the Company pursuant to long-term
leases that are valid, subsisting and enforceable against the Company), free
and clear of all liens, claims, security interests or other encumbrances except
such as are described in the Registration Statement and the Prospectus or in a
document filed as an exhibit to the Registration Statement and (ii) all the
property described in the Registration Statement and the Prospectus as being
held under lease by each of the Company and the Significant Subsidiaries is
held by it under valid, subsisting and enforceable leases, except (with respect
to any matter specified in clause (i) or (ii) above) such as would not, singly
or in the aggregate, have a Material Adverse Effect.
(q) The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba.
Notwithstanding the foregoing, the representations and warranties set
forth in Section 4(b)(i) and (iii), (i) (except as to the authorization of the
Notes) and (j), when made as of the Commencement Date, with respect to any
Notes the payments of principal or interest on which will be determined by
reference to one or more currency exchange rates, commodity prices, equity
indices or other factors, shall be deemed not to address the application of the
Commodity Exchange Act, as amended, or the rules, regulations or
interpretations of the Commodity Futures Trading Commission.
14
<PAGE> 15
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Agent
and each person, if any, who controls any Agent within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission that has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Agent furnished in writing to the Company by such Agent
expressly for use therein, provided, however, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Agent from whom the person asserting any
such losses, claims, damages or liabilities purchased the Notes concerned, if
(a) a prospectus relating to such Notes was required to be delivered by such
Agent under the Act in connection with such purchase, (b) any such loss, claim,
damage or liability of such Agent results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the sale of
such Notes to such person, a copy of the Prospectus and (c) the Company had
previously furnished copies of the Prospectus to such Agent and delivery of
such Prospectus would have cured the defect giving rise to such losses, claims,
damages or liabilities. The foregoing indemnity agreement shall be in addition
to any liability that the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Agent or any person controlling any Agent in respect of which indemnity may be
sought against the Company, such Agent or such controlling person shall
promptly notify the parties against whom indemnification is being sought (the
"INDEMNIFYING PARTIES"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Agent or any such controlling person shall have the right to
employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Agent or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Agent or such controlling person and
the
15
<PAGE> 16
indemnifying parties and such Agent or such controlling person shall have been
advised by its counsel that representation of such indemnified party and any
indemnifying party by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential conflicting
interests between them (in which case the indemnifying party shall not have the
right to assume the defense of such action, suit or proceeding on behalf of
such Agent or such controlling person). It is understood, however, that the
indemnifying parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Agents and controlling persons, which firm shall be
designated in writing by Morgan Stanley or, if Morgan Stanley is not an
indemnified party, by the Agents that are indemnified parties, and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Agent, to the extent provided in the preceding paragraph,
and any such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(c) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to such Agent, but only
with respect to information relating to such Agent furnished in writing by such
Agent expressly for use in the Registration Statement, the Prospectus or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against any Agent pursuant to this subsection (c), such Agent shall have
the rights and duties given to the indemnifying parties by subsection (b) above
(except that if the Company shall have assumed the defense thereof such Agent
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Agent's expense), and the Company, its directors, any such
officer and any such controlling person shall have the rights and duties given
to the Agents by subsection (b) above. The foregoing indemnity agreement shall
be in addition to any liability that any Agent may otherwise have.
16
<PAGE> 17
(d) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party under subsection (a) or (c) above in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, in connection with any offering of Notes, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and each Agent on the other hand from the offering of such Notes, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and such Agent on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and each Agent on the other hand in connection with the offering of such Notes
shall be deemed to be in the same proportion as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company bear
to the total commissions received by each Agent in connection with the offering
of such Notes. The relative fault of the Company on the one hand and the Agents
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Agents on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Each Agent's obligation to
contribute pursuant to this Section 5 shall be several (in the proportion that
the principal amount of the Notes the sale of which by or through such Agent
gave rise to such losses, claims, damages or liabilities bears to the aggregate
principal amount of the Notes the sale of which by or through any Agent gave
rise to such losses, claims, damages or liabilities) and not joint.
(e) The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by a pro
rata allocation (even if the Agents were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in subsection (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 5, no Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes referred to in subsection (d) above that were offered and sold to the
public through such Agent exceeds the amount of any damages that such Agent has
17
<PAGE> 18
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Agent or any person controlling any
Agent, the Company, its directors or officers or any person controlling the
Company, (ii) acceptance of any Notes and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor to any Agent or any person
controlling any Agent, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
5.
6. Conditions of the Obligations of the Agents. Each Agent's
obligation to solicit offers to purchase Notes as agent of the Company, each
Agent's obligation to purchase Notes as principal pursuant to any Terms
Agreement and the obligation of any other purchaser to purchase Notes will be
subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of the Company's officers
made in each certificate furnished pursuant to the provisions hereof and to the
performance and observance by the Company of all covenants and agreements
herein contained on its part to be performed and observed (in the case of an
Agent's obligation to solicit offers to purchase Notes, at the time of such
solicitation, and, in the case of an Agent's or any other purchaser's
obligation to purchase Notes, at the time the Company accepts the offer to
purchase such Notes and at the time of purchase) and (in each case) to the
following additional conditions precedent when and as specified:
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<PAGE> 19
(a) Prior to such solicitation or purchase, as the case may be:
(i) (A) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or any Agent, threatened by the Commission, and (B) any
request of the Commission for additional information (to be included
in the registration statement or the Prospectus or otherwise) shall
have been complied with to the relevant Agent's satisfaction.
(ii) There shall not have occurred (A) any downgrading or any
notice of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Act, (B) any
change in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company and the
Subsidiaries, taken as a whole, not contemplated by the Prospectus, as
amended or supplemented at the time of such solicitation or at the
time such offer to purchase was made, that, in the relevant Agent's
reasonable opinion, is material and adverse and that makes it, in the
reasonable judgment of such Agent, impracticable to market the Notes
on the terms and in the manner contemplated by the Prospectus, as
amended or supplemented.
(iii) (A) Trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall not have been suspended or materially limited, (B)
trading in any securities of the Company on any exchange or in any
over-the- counter market shall not have been suspended, (C) a general
moratorium on commercial banking activities in New York or Texas shall
not have been declared by either federal or state authorities, or (D)
there shall not have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, that in the
reasonable judgment of the relevant Agent, is material and adverse and
in the case of any of the events in (A), (B), (C) or (D), such event,
singly or together with any other such event, makes it, in the
reasonable judgment of the relevant Agent, impracticable to market the
Notes on the terms and in the manner contemplated by the Prospectus,
as amended or supplemented at the time of such solicitation or at the
time such offer to purchase was made.
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<PAGE> 20
(I) except, in each case described in paragraph (ii) or (iii)
above, as disclosed to the relevant Agent in writing by the Company prior to
such solicitation or, in the case of a purchase of Notes, as disclosed to the
relevant Agent in writing before the offer to purchase such Notes was made or
(II) unless in each case described in (iii) above, the relevant event shall
have occurred and been known to the relevant Agent before such solicitation or,
in the case of a purchase of Notes, before the offer to purchase such Notes was
made.
(b) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall have
received:
(i) The opinion, dated as of such date, of Latham & Watkins,
counsel for the Company to the effect that:
(A)(x) with respect to the opinion dated as of the
Commencement Date, assuming that the forms of Notes have been
duly authorized by the Company, when the terms of a particular
Note and its issuance and sale have been duly established in
conformity with the Indenture, and when such Note has been
duly executed by the Company and the Trustee and completed and
authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the purchasers thereof in
accordance with this Agreement or any applicable Terms
Agreement, such Note will be entitled to the benefit of the
Indenture and will constitute a valid and binding obligation
of the Company enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws then or thereafter in effect relating to or affecting
rights and remedies of creditors generally, and to general
principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and to the
discretion of the court before which any proceeding therefor
may be brought and (y) with respect to the opinion dated as of
the Settlement Date, assuming that the Notes have been duly
authorized by the Company, when such Notes have been duly
executed and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the purchasers
thereof in accordance with the applicable Terms Agreement,
such Note will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws then or thereafter in effect relating to or affecting
rights and remedies of creditors, and to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or
20
<PAGE> 21
in equity) and to the discretion of the court before which any
proceeding therefor may be brought;
(B) the Indenture, assuming due authorization,
execution and delivery thereof by the Trustee, is a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws then or thereafter in effect
relating to or affecting rights and remedies of creditors, and
to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity) and
to the discretion of the court before which any proceeding
therefor may be brought;
(C) the forms of Notes (in the case of the opinion
dated as of the Commencement Date) or the Notes (in the case
of the opinion dated as of the Settlement Date) and the
Indenture conform in all material respects to the descriptions
thereof contained in the Registration Statement and the
Prospectus under the headings "Description of Debt Securities"
and "Description of Notes";
(D) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and,
to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the Act and no proceedings therefor have
been initiated by the Commission; and any required filing of
the Prospectus, and any supplements thereto, pursuant to Rule
424(b) or Rule 434 under the Act has been made in the manner
and within the time period required by Rule 424(b) under the
Act; the Indenture has been duly qualified under the Trust
Indenture Act;
(E) To the best of such counsel's knowledge, no
consent, approval, authorization or order of, or filing with,
any federal or New York court or governmental agency or body
is required to be obtained or made by the Company for (x) the
execution and delivery of this Agreement (in the case of the
opinion dated as of the Commencement Date) or (y) the
consummation of the sale of the Notes by the Company pursuant
to the applicable Terms Agreement (in the case of the opinion
dated as of the Settlement Date), except (A) such as have been
obtained under the Act and the Trust Indenture Act and (B)
such as may be required under the state securities laws, Blue
Sky laws or
21
<PAGE> 22
real estate syndication laws in connection with the purchase
and sale of the Notes;
(F) The Registration Statement and the Prospectus, as
then supplemented or amended, comply as to form in all
material respects with the requirements for registration
statements on Form S-3 under the Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel need express no opinion with
respect to (1) the financial statements, schedules and other
financial and statistical data included in the Registration
Statement or the Prospectus or incorporated therein or (2) the
Form T-1. In passing upon the compliance as to form of the
Registration Statement and the Prospectus, such counsel may
assume that the statements made and incorporated by reference
therein are correct and complete;
(G) (x) The execution and the delivery of this
Agreement (in the case of the opinion dated as of the
Commencement Date) or (y) the purchase of the Notes by the
Agents and the sale of the Notes by the Company pursuant to
the terms of the applicable Terms Agreement (in the case of
the opinion dated as of the Settlement Date) will not result
in the breach of or a default under those agreements
identified to such counsel by an officer of the Company as
material to the Company;
(H) The statements set forth in the Prospectus
Supplement under the headings "Plan of Distribution" (but only
with respect to the first paragraph (excluding the last
sentence therein), the third paragraph and the fourth
paragraph) and "Certain U.S. Federal Income Tax
Considerations" and in the Basic Prospectus under the heading
"Plan of Distribution" (but only with respect to the third and
fourth paragraphs), insofar as such statements constitute a
summary of legal matters, are accurate in all material
respects.
Such opinion may be limited to the internal laws of the State of New
York and the federal laws of the United States. Such counsel may rely
as to factual matters on certificates of officers of the Company and
of state officials, in which case their opinion shall state that they
are so doing. Such opinion also shall take further exceptions that
shall be reasonably acceptable to the relevant Agents.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, representatives of the Agents and their counsel, at which
the contents of the
22
<PAGE> 23
Registration Statement and Prospectus and any amendments or
supplements thereto, if any, and related matters were discussed and,
although such counsel need not pass upon and need not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus
or any amendments or supplements thereto, if any, and such counsel may
state that they have made no independent check or verification
thereof, during the course of such participation, (relying as to
materiality to a large extent upon the statements of officers and
other representatives of the Company), no facts came to such counsel's
attention that caused such counsel to believe that the Registration
Statement (as amended or supplemented, if applicable, and including
the Incorporated Documents), at the time such Registration Statement
or any post-effective amendment became effective and on the date such
opinion is delivered, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus (including the Incorporated Documents) as amended or
supplemented, as of its date and as of the date such opinion is
delivered, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; it being understood that such counsel need express no
belief with respect to (i) the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus or incorporated therein or (ii) the Form
T-1.
(ii) The opinion, dated as of such date, of John F. Schmutz,
Esq., Vice President and General Counsel of the Company, to the effect
that:
(A) To the best of such counsel's knowledge, no
authorization, approval, consent or order of, or registration
or filing with, any court or governmental authority or agency
is required to be obtained or made by the Company for (x)
execution and delivery of this Agreement (in the case of the
opinion dated as of the Commencement Date) or (y) the
consummation of the sale of the Notes by the Company pursuant
to the applicable Terms Agreement (in the case of the opinion
dated as of the Settlement Date), except (1) such as have been
obtained under the Act and the Trust Indenture Act and (2)
such as may be required under the state securities, Blue Sky
laws or real estate syndication laws or regulations of any
jurisdiction in the United States in connection with the sale
of the Notes;
(B) (1) The Company has corporate power and authority
to enter into this Agreement, any applicable Terms Agreement,
the
23
<PAGE> 24
Indenture and the Notes and (2) each of this Agreement, any
applicable Terms Agreement, the Indenture and the forms of
Notes (in the case of the opinion dated as of the Commencement
Date) or the Notes (in the case of the opinion dated as of the
Settlement Date) has been duly authorized by all necessary
corporate action by the Company, and each of this Agreement
and the Indenture has been duly executed and delivered by the
Company;
(C) (x) The execution and the delivery of this
Agreement (in the case of the opinion dated as of the
Commencement Date) or (y) the purchase of the Notes by the
Agents and the sale of the Notes by the Company pursuant to
the terms of the applicable Terms Agreement (in the case of
the opinion dated as of the Settlement Date) will not conflict
with or constitute a breach of or a default under the
certificate or articles of incorporation or bylaws, or other
organizational documents, of the Company or any of the
Significant Subsidiaries or the terms of any material
agreement or instrument to which the Company or any of the
Significant Subsidiaries is a party or by which any of them is
bound, or to which any of the properties of the Company or any
of the Significant Subsidiaries is subject, or will result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the
Significant Subsidiaries, or result in any violation of any
statute, rule or regulation applicable to the Company or, to
the best of such counsel's knowledge, any judgment,
injunction, order or decree of any court or governmental
agency or body having jurisdiction over the Company or any of
the Significant Subsidiaries or any of their respective
properties;
(D) Each of the Company and, to the best of such
counsel's knowledge, the Significant Subsidiaries that is a
corporation has been duly incorporated and is validly existing
and is a corporation in good standing under the laws of its
jurisdiction of its incorporation, and each of the Company
and, to the best of such counsel's knowledge, the Significant
Subsidiaries has the corporate (or partnership) power and
authority and all necessary governmental authorizations,
approvals, orders, licenses, certificates, franchises and
permits of and from all governmental regulatory officials and
bodies to own and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction in which such qualification is required wherein
it owns or leases material property or conducts business,
except where the failure
24
<PAGE> 25
so to qualify could not reasonably be expected to have a
Material Adverse Effect;
(E) To the best of such counsel's knowledge (1) there
are no franchises, contracts, indentures, mortgages, leases,
loan agreements, notes or other agreements or instruments to
which the Company or any Significant Subsidiary is a party or
by which any of them may be bound that are required to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to or incorporated by reference in the
Registration Statement other than those described therein or
filed or incorporated by reference as exhibits thereto and (2)
the statements in the Form 10-K under the caption "Item 3.
Legal Proceedings" and in Part II of the Company's Form 10-Q,
if any, filed since the Form 10-K, under the caption "Item 1.
Legal Proceedings", in each case insofar as they relate to
statements of law or legal conclusions, are accurate in all
material respects;
(F) The Company and the Significant Subsidiaries own
all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets and rights described in
the Prospectus as being owned by them or any of them or
necessary for the conduct of their respective businesses, and
such counsel is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and
the Significant Subsidiaries with respect to the foregoing;
(G) To the best of such counsel's knowledge, there is
no current, pending or threatened action, suit or proceeding
before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of the Significant
Subsidiaries or any of their respective properties of a
character required to be disclosed in the Registration
Statement and the Prospectus that is not adequately so
disclosed;
(H) At the time it became effective and on the date
such opinion is delivered, the Registration Statement (except
for (1) financial statements, the notes thereto and related
schedules and other financial, numerical, statistical or
accounting data included or incorporated therein or omitted
therefrom and (2) the Form T-1, as to which no opinion need be
expressed) and the Prospectus complied and complies as to form
in all material respects with the applicable requirements of
the Act; and each of the Incorporated Documents (except for
financial statements, the notes thereto and related schedules
25
<PAGE> 26
and other financial, numerical, statistical or accounting data
included therein or omitted therefrom, as to which no opinion
need be expressed) complies as to form in all material
respects with the Exchange Act;
(I) The statements in the Registration Statement and
the Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents, or refer to statements of
law or legal conclusions, are accurate and present fairly the
information required to be shown; and
(J) Neither the Company nor any of the Subsidiaries
is an "investment company" required to be registered under
Section 8 of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), or an entity "controlled by an
investment company" required to be registered under Section 8
of the Investment Company Act.
Such opinion may be limited to the internal laws of the State
of Texas and the federal laws of the United States. Such opinion shall
take further exceptions that shall be reasonably acceptable to the
relevant Agents.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company, representatives of the Agents and their counsel, at which
the contents of the Registration Statement and Prospectus and any
amendments or supplements thereto (including the Incorporated
Documents) and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus or any amendments or
supplements thereto, on the basis of the foregoing, relying as to the
factual matters underlying the determination of materiality to a large
extent upon the statements of officers and other representatives of
the Company, no facts came to such counsel's attention that caused
such counsel to believe that the Registration Statement (as amended or
supplemented, if applicable, and including the Incorporated
Documents), at the time such Registration Statement or any
post-effective amendment became effective and on the date such opinion
is delivered, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or the
Prospectus, as amended or supplemented, as of its date and as of the
date such opinion is delivered, contained an untrue statement of a
material fact or omitted to state a
26
<PAGE> 27
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; it being understood that such counsel need express no
belief with respect to (i) the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus or incorporated therein or (ii) the Form
T-1.
(iii) The opinion, dated as of such date, of Davis Polk &
Wardwell, counsel for the Agents, with respect to the matters referred
to in clauses (i)(A), (i)(B), (i)(C), (i)(F) and (i)(H) (but only with
respect to the statements set forth in the Prospectus under the
heading "Plan of Distribution") and in the last paragraph of (i) above
and such other related matters as the relevant Agents may request.
Notwithstanding the foregoing, the opinions described in clauses (i)(A),
(i)(C), (i)(E), (i)(F), (i)(G), (ii)(A), (ii)(C), (ii)(H), (ii)(I) and the last
paragraphs in (i) and (ii) above, when contained in an opinion delivered on the
Commencement Date or pursuant to Section 7(b), shall be deemed not to address
the application of the Commodity Exchange Act, as amended, or the rules,
regulations or interpretations of the Commodity Futures Trading Commission to
Notes the payments of principal or interest on which will be determined by
reference to one or more currency exchange rates, commodity prices, equity
indices or other factors.
(c) On the Commencement Date and, if called for by any agreement
by an Agent to purchase Notes as principal, on the corresponding Settlement
Date, KPMG Peat Marwick LLP, independent certified public accountants, or any
other independent certified public accountants shall have furnished to the
relevant Agents a letter or letters, dated as of the Commencement Date or such
Settlement Date, as the case may be, substantially in the forms approved by
such Agents.
(d) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, the relevant Agents shall have
received a certificate, dated such Commencement Date or Settlement Date, as the
case may be, signed by an executive officer of the Company reasonably
acceptable to the relevant Agents to the effect set forth in subparagraph
(a)(ii)(A) above and to the effect that (i) the representations and warranties
of the Company contained herein are true and correct as of such date and (ii)
the Company has not failed on or prior to such date to have performed or
complied in all material respects with any of its agreements herein contained
and required to be performed or complied with by it hereunder on or prior to
such date.
27
<PAGE> 28
(e) On the Commencement Date and on each Settlement Date, the
Company shall have furnished to the relevant Agents such appropriate further
information, certificates and documents as they may reasonably request.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the relevant Agents and their counsel.
Any certificate or document signed by any officer of the Company and
delivered to the relevant Agents, or to counsel for the relevant Agents, shall
be deemed a representation and warranty by the Company to each relevant Agent
as to the statements made therein.
7. Additional Agreements of the Company.
(a)(i) Each time the Registration Statement or Prospectus is amended
or supplemented (other than by (x) an amendment or supplement providing solely
for a change in the interest rates, redemption provisions, amortization
schedules or maturities offered on the Notes or for a change the Agents deem to
be immaterial or (y) an amendment or supplement through the filing of a Form
8-K), the Company will deliver or cause to be delivered forthwith to each Agent
a certificate signed by an executive officer of the Company, dated the date of
such amendment or supplement, as the case may be, in form reasonably
satisfactory to the Agents, of the same tenor as the certificate referred to in
Section 6(d) relating to the Registration Statement or the Prospectus as
amended or supplemented to the time of delivery of such certificate and (ii)
each time the Registration Statement or Prospectus is amended or supplemented
by an amendment or supplement through the filing of a Form 8-K relating to a
change the Agents deem to be material, upon request of any Agent in writing,
the Company will deliver or cause to be delivered forthwith to such Agent a
certificate signed by an executive officer of the Company, dated the date of
such amendment or supplement, as the case may be, in form reasonably
satisfactory to such Agent, of the same tenor as the certificate referred to in
Section 6(d) relating to the Registration Statement or the Prospectus as
amended or supplemented to the time of delivery of such certificate.
(b) Each time the Company furnishes a certificate pursuant to
Section 7(a), the Company will furnish or cause to be furnished forthwith to
each Agent written opinions of (i) general counsel of the Company and (ii) upon
request of any Agent in writing, Latham & Watkins, or any other counsel
reasonably satisfactory to the Agents. Any such opinions shall be dated the
date of such amendment or supplement, as the case may be, shall be in a form
satisfactory to the Agents and shall be of the same tenor as the opinions
referred to in Section 6(b)(i) and 6(b)(ii), as the case may be, but modified
to relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion. In lieu of such
28
<PAGE> 29
opinion, counsel last furnishing such an opinion to an Agent may furnish to
each Agent a letter to the effect that such Agent may rely on such last opinion
to the same extent as though it were dated the date of such letter (except that
statements in such last opinion will be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented to the time of delivery
of such letter.)
(c) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus, the Company shall cause its independent public
accountants forthwith to furnish each Agent with a letter, dated the date of
such amendment or supplement, as the case may be, in form satisfactory to the
Agents, of the same tenor as the letter referred to in Section 6(c), with
regard to the amended or supplemental financial information included or
incorporated by reference in the Registration Statement or the Prospectus as
amended or supplemented to the date of such letter.
8. Position of the Agents. In acting under this Agreement and in
connection with the sale of any Notes by the Company (other than Notes sold to
an Agent pursuant to a Terms Agreement), each Agent is acting solely as agent
of the Company and does not assume any obligation towards or relationship of
agency or trust with any purchaser of Notes. An Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company, but such Agent shall not have any liability to the Company in the
event any such purchase is not consummated for any reason. If the Company shall
default in its obligations to deliver Notes to a purchaser whose offer it has
accepted, the Company shall hold the relevant Agent harmless against any loss,
claim, damage or liability arising from or as a result of such default and
shall, in particular, pay to such Agent the commission it would have received
had such sale been consummated.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by the
Company of its obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), the Prospectus and each
amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the Prospectus, the
Incorporated Documents, and all amendments or supplements to any of them, as
may be reasonably requested for use in connection with the offering and sale of
the Notes; (iii) the preparation, printing, authentication, issuance and
delivery of the Notes, including any stamp taxes in connection with the
original issuance and sale of the Notes; (iv) the printing (or reproduction)
and delivery of this Agreement, the Indenture, the preliminary and supplemental
Blue Sky Memoranda
29
<PAGE> 30
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Notes; (v) the registration or
qualification of the Notes for offer and sale under the state securities or
Blue Sky laws of the several states as provided herein (including the
reasonable fees, expenses and disbursements of counsel for the Company relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such registration and qualification);
(vi) the filing fees and the fees and expenses of counsel for the Agents in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc.; (vii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Notes; (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Trustee and its
counsel; (ix) any fees charged by rating agencies for the rating of the Notes;
(x) the reasonable fees and disbursements of counsel for the Agents incurred in
connection with the offering and sale of the Notes, including any opinions to
be rendered by such counsel hereunder; and (xi) any reasonable out-of-pocket
expenses incurred by the Agent; provided that any advertising expenses
(including tombstones) incurred by the Agents shall have been approved by the
Company and that the Agents are solely responsible for their road show
expenses.
10. Termination. This Agreement may be terminated at any time by
the Company or, as to any Agent, by the Company or such Agent upon the giving
of written notice of such termination to the other parties hereto, but without
prejudice to any rights, obligations or liabilities of any party hereto accrued
or incurred prior to such termination. The termination of this Agreement shall
not require termination of any Terms Agreement, and the termination of any such
Terms Agreement shall not require termination of this Agreement. If this
Agreement is terminated, the provisions of the third paragraph of Section 2(a),
Section 2(e), the last sentence of Section 3(d) and Sections 3(f), 5, 8, 9,
11(b), 12(a) and 13 shall survive; provided that if at the time of termination
an offer to purchase Notes has been accepted by the Company but the time of
delivery to the purchaser or its agent of such Notes has not occurred, the
provisions of Sections 2(b), 2(c), 3(b), 3(e), 3(g), 3(h), 3(i), 6 and 7 shall
also survive until such delivery has been made.
11. Notices; Successors.
(a) Except as otherwise provided in this Agreement, notice given
pursuant to any provision of this Agreement shall be in writing and shall be
delivered (i) if to the Company, at the office of the Company at Weston Centre,
112 E. Pecan Street, P.O. Box 2636, San Antonio, Texas 78299-2636, Attention:
John F. Schmutz, Esq., Vice President and General Counsel (Fax no.: (210) 302-
6016); (ii) if to Morgan Stanley, at 1585 Broadway, 2nd Floor, New York, New
York 10036, Attention: Manager-
30
<PAGE> 31
Continuously Offered Products (Fax no.: (212) 761-0780), with a copy to Morgan
Stanley, at 1585 Broadway, 34th Floor, New York, New York 10036, Attention:
Peter Cooper, Investment Banking Information Center (Fax no.: (212) 761-0260);
(iii) if to Goldman, at 85 Broad Street, New York, New York 10004, Attention:
Money Market Originations Department (Fax no.: (212) 902-0683); or (iv) if to
NationsBanc, at NC1-007-07-01, 100 N. Tryon Street, Charlotte, NC 28255,
Attention: Medium-Term Notes, Lynn McConnell, Tel. no.: (704) 386-6616, Fax
no.: (704) 388-9939.
(b) Each of this Agreement and any applicable Terms Agreement has
been and is made solely for the benefit of the Agents, the Company, its
directors and officers and the other controlling persons referred to in Section
5 hereof and their respective successors and assigns, to the extent provided
herein, and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any Agent of
any of the Notes in his status as such purchaser.
12. Applicable Law; Counterparts. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
(b) This Agreement may be signed in various counterparts that
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
13. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements, representations, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any Terms Agreement will remain in full force and
effect, regardless of any termination of this Agreement or any such Terms
Agreement, any investigation made by or on behalf of an Agent or the Company or
any of the officers, directors or controlling persons referred to in Section 5
and delivery of and payment for the Notes.
14. Amendments. (a) This Agreement may be amended or supplemented
if, but only if, such amendment or supplement is in writing and is signed by
the Company and each Agent; provided that the Company may, from time to time,
upon prior notice (which may be oral if promptly confirmed in writing) to the
Agents but without the consent of any Agent, amend this Agreement to add as a
party hereto one or more additional firms registered under the Exchange Act,
whereupon each such firm shall become an Agent hereunder on the same terms and
conditions as the other
31
<PAGE> 32
Agents that are parties hereto. The Agents shall sign any amendment or
supplement giving effect to the addition of any such firm as an Agent under
this Agreement.
(b) The Company may, from time to time, upon prior notice (which
notice may be oral if promptly confirmed in writing) to the Agents but without
the consent of any Agent, enter into one or more additional agreements for
distribution of the Notes with one or more firms registered under the Exchange
Act; provided, however that any such agreement entered into pursuant to this
subparagraph (b) shall include (i) terms and conditions substantially similar
to those contained in this Agreement and (ii) commission rates identical to
those contained in section 2(a) of this Agreement.
15. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
32
<PAGE> 33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and you.
Very truly yours,
LA QUINTA INNS, INC.
By: /s/ GARY L. MEAD
---------------------------------
Name: Gary L. Mead
Title: President and Chief
Executive Officer
The foregoing Agreement
is hereby confirmed
and accepted as of the
date first above written.
MORGAN STANLEY & CO. INCORPORATED
By: /s/ HAROLD J. HENDERSHOT, III
---------------------------------
Name: Harold J. Hendershot, III
Title: Vice President
GOLDMAN, SACHS & CO.
By: /s/ GOLDMAN, SACHS & CO.
--------------------------------
(Goldman, Sachs & Co.)
NATIONSBANC MONTGOMERY
SECURITIES, INC.
By: /s/ LYNN MCCONNELL
--------------------------------
Name: Lynn McConnell
Title: Director
33
<PAGE> 34
EXHIBIT A
LA QUINTA INNS, INC.
MEDIUM-TERM NOTES
TERMS AGREEMENT
[Date]
La Quinta Inns, Inc.
Weston Centre
112 East Pecan Street
Post Office Box 2636
San Antonio, Texas 78299-2636
Attention: John F. Schmutz, Esq.
Vice President and General Counsel
Re: Distribution Agreement dated October 7, 1997
(the "DISTRIBUTION AGREEMENT")
[We agree to purchase your Medium-Term Notes having the following
terms:](1)
[We agree to purchase, severally and not jointly, the principal amount
of Notes set forth below opposite our names:
<TABLE>
<CAPTION>
Principal Amount
Name of Notes
---- ----------------
<S> <C> <C>
Morgan Stanley & Co.
Incorporated
Goldman, Sachs & Co.
NationsBanc Montgomery Securities, Inc.
Total . . . . . . $
-----------------
</TABLE>
- -------------------
(1) Use this if the transaction is not syndicated.
<PAGE> 35
The Notes shall have the following terms:](2)
<TABLE>
<S> <C> <C>
All Notes: Fixed Rate Notes: Floating Rate Notes:
- --------- ---------------- -------------------
Principal amount: Interest Rate: Base rate:
Purchase price: Applicability Index maturity:
of modified
Price to public: payment upon Spread:
acceleration:
Settlement date Spread multiplier:
and time: If yes, state
issue price: Alternate rate
Place of event spread:
delivery: Amortization
schedule: Initial interest
Specified rate:
currency:
Initial interest
Maturity date: reset date:
Initial accrual Interest reset
period OID: dates:
Total amount Interest reset
of OID: period:
Original yield Maximum interest
to maturity: rate:
Optional repayment Minimum interest
date(s): rate:
Optional redemption Interest payment
date(s): period:
Initial redemption Interest payment
date: dates:
Initial redemption Calculation agent:
percentage:
</TABLE>
- -------------------
(2) Use this if the transaction is syndicated.
2
<PAGE> 36
Annual redemption
percentage
decrease:
Other terms:
The provisions of Sections 2(b), 2(c), 3, 4, 5, 6, 7, 11,
12(a) and 13 of the Distribution Agreement and the related definitions
are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.
[If on the Settlement Date any one or more of the Agents shall
fail or refuse to purchase Notes that it has or they have agreed to
purchase on such date, and the aggregate amount of Notes which such
defaulting Agent or Agents agreed but failed or refused to purchase is
not more than one-tenth of the aggregate amount of the Notes to be
purchased on such date, the other Agents shall be obligated severally
in the proportions that the amount of Notes set forth opposite their
respective names above bears to the aggregate amount of Notes set
forth opposite the names of all such non-defaulting Agents, or in such
other proportions as _______________may specify, to purchase the Notes
which such defaulting Agent or Agents agreed but failed or refused to
purchase on such date; provided that in no event shall the amount of
Notes that any Agent has agreed to purchase pursuant to this Agreement
be increased pursuant to this paragraph by an amount in excess of
one-ninth of such amount of Notes without the written consent of such
Agent. If on the Settlement Date any Agent or Agents shall fail or
refuse to purchase Notes and the aggregate amount of Notes with
respect to which such default occurs is more than one-tenth of the
aggregate amount of Notes to be purchased on such date, and
arrangements satisfactory to _____________ and the Company for the
purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part
of any non-defaulting Agent or the Company. In any such case either
_____________ or the Company shall have the right to postpone the
Settlement Date but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be
effected. Any action taken
3
<PAGE> 37
under this paragraph shall not relieve any defaulting Agent from
liability in respect of any default of such Agent under this
Agreement.(3)
This Agreement is subject to termination on the terms
incorporated by reference herein. If this Agreement is so terminated,
the provisions of Sections 5, 9, 11(b), 12(a) and 13 of the
Distribution Agreement shall survive for the purposes of this
Agreement.
The following information, opinions, certificates, letters and
documents referred to in Section 6 of the Distribution Agreement will
be required:
--------------------
Very truly yours,
[MORGAN STANLEY & CO.
INCORPORATED]
By:
---------------------------------
Name:
Title:
[GOLDMAN, SACHS & CO.]
By:
---------------------------------
Name:
Title
[NATIONSBANC MONTGOMERY
SECURITIES, INC.]
By:
---------------------------------
Name:
Title:
- -------------------
(3) Delete if the transaction is not syndicated.
4
<PAGE> 38
Accepted:
LA QUINTA INNS, INC.
By:
--------------------------
Name:
Title:
5
<PAGE> 39
EXHIBIT B
LA QUINTA INNS, INC.
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
-------------------------
Explained below are the administrative procedures and specific terms
of the offering of Medium-Term Notes (the "NOTES"), on a continuous basis by La
Quinta Inns, Inc. (the "COMPANY") pursuant to the Distribution Agreement, dated
as of October 7, 1997 (the "DISTRIBUTION AGREEMENT") among the Company and
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co. and NationsBanc
Montgomery Securities, Inc. (the "AGENTS"). The Notes will be issued under an
Indenture dated as of September 15, 1995 (the "INDENTURE") between the Company
and U.S. Trust Company of Texas, N.A., as trustee (the "TRUSTEE"). In the
Distribution Agreement, the Agents have agreed to use reasonable efforts to
solicit purchases of the Notes, and the administrative procedures explained
below will govern the issuance and settlement of any Notes sold through an
Agent, as agent of the Company. An Agent, as principal, may also purchase Notes
for its own account, pursuant to a terms agreement (a "TERMS AGREEMENT"), as
contemplated by the Distribution Agreement. The administrative procedures
explained below will govern the issuance and settlement of any Notes purchased
by an Agent, as principal, unless otherwise specified in the applicable Terms
Agreement.
The Trustee will be the Registrar, Calculation Agent, Authenticating
Agent and Paying Agent for the Notes and will perform the duties specified
herein. Each Note will be represented by either a Global Security (as defined
below) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "BOOK-ENTRY
NOTE") or a certificate delivered to the holder thereof or a person designated
by such holder (a "CERTIFICATED NOTE"). Except as set forth in the Indenture,
an owner of a Book-Entry Note will not be entitled to receive a Certificated
Note.
Book-Entry Notes, which will be payable only in U.S. dollars, will be
issued in accordance with the administrative procedures set forth in Part I
hereof as they may subsequently be amended as the result of changes in DTC'S
<PAGE> 40
operating procedures. Certificated Notes will be issued in accordance with the
administrative procedures set forth in Part II hereof. Unless otherwise defined
herein, terms defined in the Indenture, the Notes or any prospectus supplement
relating to the Notes shall be used herein as therein defined.
The Company will advise the Agents in writing of the employees of the
Company with whom the Agents are to communicate regarding offers to purchase
Notes and the related settlement details.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Bringdown Letter
of Representation from the Company and the Trustee to DTC, dated as of October
7, 1997, and a Medium-Term Note Certificate Agreement between the Trustee and
DTC, dated as of February 2, 1993 (the "MTN CERTIFICATE AGREEMENT"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"SETTLEMENT" below) for one or more Book-Entry Notes,
the Company will issue a single global security in
fully registered form without coupons (a "GLOBAL
SECURITY") representing up to U.S. $300,000,000
principal amount of all such Notes that have the same
Original Issue Date, Maturity Date and other terms.
Each Global Security will be dated and issued as of
the date of its authentication by the Trustee. Each
Global Security will bear an "Interest Accrual Date,"
which will be (i) with respect to an original Global
Security (or any portion thereof), its original
issuance date and (ii) with respect to any Global
Security (or any portion thereof) issued subsequently
upon exchange of a Global Security, or in lieu of a
destroyed, lost or stolen Global Security, the most
recent Interest Payment Date to which interest has
been paid or duly provided for on the predecessor
Global Security (or if no such payment or provision
has been made, the original issuance date of the
predecessor Global Security), regardless of the date
of authentication of such subsequently issued Global
Security. Book-Entry Notes
2
<PAGE> 41
will be payable only in U.S. dollars. No Global
Security will represent any Certificated Note.
Denominations: Book-Entry Notes will be issued in principal amounts
of U.S. $1,000 or any amount in excess thereof that is
an integral multiple of U.S. $1,000. Global Securities
will be denominated in principal amounts not in excess
of U.S. $300,000,000.
Preparation If any offer to purchase a Book-Entry Note is accepted
of Pricing by or on behalf of the Company, the Company
Supplement: will prepare a pricing supplement (a "PRICING
SUPPLEMENT") reflecting the terms of such Note. The
Company (i) will arrange to file a copy of such
Pricing Supplement with the Commission in accordance
with the applicable paragraph of Rule 424(b) under the
Act and (ii) will, as soon as possible and in any
event not later than 11:00 A.M., New York City time,
on the Business Day immediately following the
applicable trade date, deliver the number of copies of
such Pricing Supplement to the relevant Agent as such
Agent shall request, at the following address:
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
Attention: Medium-Term Note Trading Desk,
Carlos Cabrera
Tel: (212) 761-2000
Fax: (212) 761-8846
If to Goldman:
Goldman, Sachs & Co.
85 Broad Street, 26th Floor
New York, NY 10004
Attention: Medium-Term Note Trading,
Karen Robertson
Fax: (212) 902-0658
3
<PAGE> 42
If to NationsBanc:
NationsBanc Montgomery Securities, Inc.
NC1-007-0701
100 N. Tryon Street
Charlotte, NC 28255
Attention: Medium-Term Notes,
Lynn McConnell
Tel: (704) 386-6616
Fax: (704) 388-9939
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements, and the Prospectuses to
which they are attached (other than those retained for
files), will be destroyed.
Settlement: The receipt by the Company of immediately available
funds in payment for a Book-Entry Note and the
authentication and issuance of the Global Security
representing such Note shall constitute "settlement"
with respect to such Note. All offers accepted by the
Company will be settled on the third Business Day next
succeeding the date of acceptance pursuant to the
timetable for settlement set forth below, unless the
Company and the purchaser agree to settlement on
another day, which shall be no earlier than the next
Business Day.
Settlement Settlement Procedures with regard to each Book-Entry
Procedures: Note sold by the Company to or through an Agent
(unless otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Book-Entry Note
and of the following settlement information:
1. Principal amount.
2. Maturity Date.
4
<PAGE> 43
3. In the case of a Fixed Book-Entry
Note, the Interest Rate, whether such
Note will pay interest annually or
semiannually and whether such Note is
an Amortizing Note, and, if so, the
amortization schedule, or, in the
case of a Floating Rate Book-Entry
Note, the Initial Interest Rate (if
known at such time), Interest Payment
Date(s), Interest Payment Period,
Calculation Agent, Base Rate, Index
Maturity, Interest Reset Period,
Initial Interest Reset Date, Interest
Reset Dates, Spread or Spread
Multiplier (if any), Minimum Interest
Rate (if any), Maximum Interest Rate
(if any) and the Alternate Rate Event
Spread (if any).
4. Redemption or repayment provisions
(if any).
5. Settlement date and time (Original
Issue Date).
6. Interest Accrual Date.
7. Price.
8. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
9. Whether the Note is an Original Issue
Discount Note (an "OID NOTE"), and if
it is an OID Note, the total amount
of OID, the yield to maturity, the
initial accrual period OID and the
applicability of Modified Payment
upon Acceleration (and, if so, the
Issue Price).
10. Whether the Note is an Indexed Note,
and if it is an Indexed Note, the
Indexed Currency or Currencies, the
Payment Currency, the Exchange Rate
Agent, the Reference Dealers, the
Face Amount, the Fixed
5
<PAGE> 44
Amount of each Indexed Currency and
the Aggregate Fixed Amount of each
Indexed Currency.
11. Whether the Note is a Renewable Note,
and if it is a Renewable Note, the
Initial Maturity Date and the Final
Maturity Date.
12. Whether the Company has the option to
extend the Original Maturity Date of
the Note, and, if so, the Final
Maturity Date of such Note.
13. Whether the Company has the option to
reset the Interest Rate, the Spread
or the Spread Multiplier of the Note.
14. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmission
(confirmed in writing at any time on the same
date) of the information set forth in
Settlement Procedure "A" above. The Trustee
will then assign a CUSIP number to the Global
Security representing such Note and will
notify the Company and the relevant Agent of
such CUSIP number by telephone as soon as
practicable.
C. The Trustee will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, the relevant Agent and
Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc.:
1. The information set forth in
Settlement Procedure "A".
2. The Initial Interest Payment Date for
such Note, the number of days by
which such date succeeds the related
DTC Record Date (which in the case of
Floating Rate Notes which reset daily
or weekly, shall be the date five
calendar days immediately preceding
6
<PAGE> 45
the applicable Interest Payment Date
and, in the case of all other Notes,
shall be the Record Date as defined
in the Note) and, if known, the
amount of interest payable on such
Initial Interest Payment Date.
3. The CUSIP number of the Global
Security representing such Note.
4. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
5. Whether such Note is an Amortizing
Note (by an appropriate notation in
the comments field of DTC's
Participant Terminal System).
6. The number of participant accounts to
be maintained by DTC on behalf of the
relevant Agent and the Trustee.
D. The Trustee will complete and authenticate the
Global Security representing such Note.
E. DTC will credit such Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such
Note to the relevant Agent's participant
account and (ii) debit such Agent's settlement
account and credit the Trustee's settlement
account for an amount equal to the price of
such Note less such Agent's commission (if
any). The entry of such a deliver order shall
constitute a representation and warranty by
the Trustee to DTC that (a) the Global
Security representing such Book-Entry Note has
been issued and authenticated and (b) the
Trustee is holding such Global Security
pursuant to the MTN Certificate Agreement.
7
<PAGE> 46
G. Unless the relevant Agent is the end purchaser
of such Note, such Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit
such Note to such Agent's participant account
and credit such Note to the participant
accounts of the Participants with respect to
such Note and (ii) to debit the settlement
accounts of such Participants and credit the
settlement account of such Agent for an amount
equal to the price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. The Trustee will credit to the account of the
Company maintained at NationsBanc of Texas,
N.A., or such other account as the Company
shall have specified to such Agent and the
Trustee in immediately available funds the
amount transferred to the Trustee in
accordance with Settlement Procedure "F".
J. Unless the relevant Agent is the end purchaser
of such Note, such Agent will confirm the
purchase of such Note to the purchaser either
by transmitting to the Participants with
respect to such Note a confirmation order or
orders through DTC's institutional delivery
system or by mailing a written confirmation to
such purchaser.
K. Monthly, the Trustee will send to the Company
a statement setting forth the principal amount
of Notes outstanding as of that date under the
Indenture and setting forth a brief
description of any sales of which the Company
has advised the Trustee that have not yet been
settled.
8
<PAGE> 47
Settlement For sales by the Company of Book-Entry Notes to or
Procedures through an Agent (unless otherwise specified
Timetable: pursuant to a Terms Agreement) for settlement on the
first Business Day after the sale date, Settlement
Procedures "A" through "J" set forth above shall be
completed as soon as possible but not later than the
respective times in New York City set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C>
A 11:00 A.M. on sale date
B 12:00 Noon on sale date
C 2:00 P.M. on sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
</TABLE>
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A", "B"
and "C" shall be completed as soon as practicable but
no later than 11:00 A.M., 12:00 Noon and 2:00 P.M.,
respectively, on the first Business Day after the sale
date. If the Initial Interest Rate for a Floating Rate
Book-Entry Note has not been determined at the time
that Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but no later than 12:00
Noon and 2:00 P.M., respectively, on the first
Business Day before the settlement date. Settlement
Procedure "H" is subject to extension in accordance
with any extension of Fedwire closing deadlines and in
the other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Trustee, after receiving notice from
the Company or the relevant Agent, will deliver to
DTC, through DTC's Participant Terminal System, a
cancellation message to such effect by no later than
2:00 P.M. on the Business Day immediately preceding
the scheduled settlement date.
9
<PAGE> 48
Failure If the Trustee fails to enter an SDFS deliver order to
Settle: with respect to a Book-Entry Note pursuant to
Settlement Procedure "F", the Trustee may deliver to
DTC, through DTC's Participant Terminal System, as
soon as practicable a withdrawal message instructing
DTC to debit such Note to the Trustee's participant
account, provided that the Trustee's participant
account contains a principal amount of the Global
Security representing such Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global
Security, the Trustee will mark such Global Security
"cancelled," make appropriate entries in the
Trustee's records and send such cancelled Global
Security to the Company. The CUSIP number assigned to
such Global Security shall, in accordance with the
procedures of the CUSIP Service Bureau of Standard &
Poor's Corporation, be cancelled and not immediately
reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Global Security for
two Global Securities, one of which shall represent
such Book-Entry Note or Notes and shall be cancelled
immediately after issuance and the other of which
shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the relevant Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement Procedures
"F" and "G", respectively. Thereafter, the Trustee
will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
10
<PAGE> 49
any actions in accordance with its SDFS operating
procedures then in effect.
In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to
have been represented by a Global Security, the
Trustee will provide, in accordance with Settlement
Procedures "D" and "F", for the authentication and
issuance of a Global Security representing the
Book-Entry Notes to be represented by such Global
Security and will make appropriate entries in its
records.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as Registrar in connection with the Certificated
Notes.
Issuance: Each Certificated Note will be dated and issued as of
the date of its authentication by the Trustee. Each
Certificated Note will bear an Original Issue Date,
which will be (i) with respect to an original
Certificated Note (or any portion thereof), its
original issuance date (which will be the settlement
date) and (ii) with respect to any Certificated Note
(or portion thereof) issued subsequently upon transfer
or exchange of a Certificated Note or in lieu of a
destroyed, lost or stolen Certificated Note, the
original issuance date of the predecessor Certificated
Note, regardless of the date of authentication of such
subsequently issued Certificated Note.
Preparation If any offer to purchase a Certificated Note is
Pricing accepted by or on behalf of the Company, the Company
Supplement: will prepare a Pricing Supplement reflecting the
terms of such Note. The Company (i) will arrange to
file a copy of such Pricing Supplement with the
Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act and (ii) will,
as soon as possible and in any event not later than
11:00 A.M., New York City time, on the Business Day
immediately following the applicable trade date,
deliver the number of copies of such Pricing
Supplement to the relevant Agent as such Agent shall
request at the following addresses:
11
<PAGE> 50
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
Attention: Medium-Term Note
Trading Desk,
Carlos Cabrera
Tel: (212) 761-2000
Fax: (212) 761-8846
If to Goldman:
Goldman, Sachs & Co.
85 Broad Street, 26th Floor
New York, NY 10004
Attention: Medium-Term Note
Trading,
Karen Robertson
Fax: (212) 902-0658
If to NationsBanc:
NationsBanc Montgomery Securities, Inc.
NC1-007-0701
100 N. Tryon Street
Charlotte, NC 28255
Attention: Medium-Term Notes,
Lynn McConnell
Tel: (704) 386-6616
Fax: (704) 388-9939
In each instance that a Pricing Supplement is
prepared, the relevant Agent will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements, and the Prospectuses to
which they are attached (other than those retained for
files), will be destroyed.
Settlement: The receipt by the Company of immediately available
funds in exchange for an authenticated Certificated
Note delivered to the relevant Agent and such Agent's
delivery of such Note against receipt of immediately
available funds
12
<PAGE> 51
shall constitute "settlement" with respect to such
Note. All offers accepted by the Company will be
settled on the third Business Day next succeeding the
date of acceptance pursuant to the timetable for
settlement set forth below, unless the Company and the
purchaser agree to settlement on another date, which
date shall be no earlier than the next Business Day.
Settlement Settlement Procedures with regard to each Certificated
Procedures: Note sold by the Company to or through an Agent
(unless otherwise specified pursuant to a Terms
Agreement) shall be as follows:
A. The relevant Agent will advise the Company by
telephone that such Note is a Certificated
Note and of the following settlement
information:
1. Name in which such Note is to be
registered ("REGISTERED OWNER").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the Interest Rate,
whether such Note will pay interest
annually or semiannually and whether
such Note is an Amortizing Note and,
if so, the amortization schedule, or,
in the case of a Floating Rate
Certificated Note, the Initial
Interest Rate (if known at such
time), Interest Payment Date(s),
Interest Payment Period, Calculation
Agent, Base Rate, Index Maturity,
Interest Reset Period, Initial
Interest Reset Date, Interest Reset
Dates, Spread or Spread Multiplier
(if
13
<PAGE> 52
any), Minimum Interest Rate (if any),
Maximum Interest Rate (if any) and
the Alternate Rate Event Spread (if
any).
7. Redemption or repayment provisions
(if any).
8. Settlement date and time (Original
Issue Date).
9. Interest Accrual Date.
10. Price.
11. Agent's commission (if any)
determined as provided in the
Distribution Agreement.
12. Denominations.
13. Whether the Note is an OID Note, and
if it is an OID Note, the total
amount of OID, the yield to maturity,
the initial accrual period OID and
the applicability of Modified Payment
upon Acceleration (and if so, the
Issue Price).
14. Whether the Note is an Indexed Note,
and if it is an Indexed Note, the
Indexed Currency or Currencies, the
Payment Currency, the Exchange Rate
Agent, the Reference Dealers, the
Face Amount, the Fixed Amount of each
Indexed Currency and the Aggregate
Fixed Amount of each Indexed
Currency.
15. Whether the Note is a Renewable Note,
and if it is a Renewable Note, the
Initial Maturity Date and the Final
Maturity Date.
16. Whether the Company has the option to
extend the Original Maturity Date of
the Note, and, if so, the Final
Maturity Date of such Note.
14
<PAGE> 53
17. Whether the Company has the option to
reset the Interest Rate, the Spread
or the Spread Multiplier of the Note.
18. Any other applicable terms.
B. The Company will advise the Trustee by
telephone or electronic transmission
(confirmed in writing at any time on the same
date) of the information set forth in
Settlement Procedure "A" above.
C. The Company will have delivered to the Trustee
a pre-printed four-ply packet for such Note,
which packet will contain the following
documents in forms that have been approved by
the Company, the relevant Agent and the
Trustee:
1 Note with customer confirmation.
2. Stub One - For the Trustee.
3. Stub Two - For the relevant Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Note and
authenticate such Note and deliver it (with
the confirmation) and Stubs One and Two to the
relevant Agent at the following address:
If to Morgan Stanley:
Bank of New York
Dealer Clearance Department
1 Wall Street
3rd Floor, Window 3B
New York NY 10005
Attention: For the account of
Morgan Stanley & Co. Incorporated
15
<PAGE> 54
If to Goldman:
Goldman, Sachs & Co.
85 Broad Street, 6th Floor
New York, NY 10004
Attention: Corporate Bond Operations
Tel: (212) 902-5836
If to NationsBanc:
NationsBanc Montgomery Securities, Inc.
NC1-007-0701
100 N. Tryon Street
Charlotte, NC 28255
Attention: Medium-Term Notes,
Lynn McConnell
Tel: (704) 386-6616
Fax: (704) 388-9939
Such Agent will acknowledge receipt of the
Note by stamping or otherwise marking Stub One
and returning it to the Trustee. Such delivery
will be made only against such acknowledgment
of receipt and evidence that instructions have
been given by such Agent for payment to the
account of the Company at NationsBanc of
Texas, N.A., or to such other account as the
Company shall have specified to such Agent and
the Trustee, in immediately available funds,
of an amount equal to the price of such Note
less such Agent's commission (if any). In the
event that the instructions given by such
Agent for payment to the account of the
Company are revoked, the Company will as
promptly as possible wire transfer to the
account of such Agent an amount of immediately
available funds equal to the amount of such
payment made.
E. Unless the relevant Agent is the end purchaser
of such Note, such Agent will deliver such
Note (with confirmation) to the customer
against payment in immediately available
funds. Such Agent will obtain the
acknowledgment of receipt of such Note by
retaining Stub Two.
16
<PAGE> 55
F. The Trustee will send Stub Three to the
Company by first-class mail. Monthly, the
Trustee will also send to the Company a
statement setting forth the principal amount
of the Notes outstanding as of that date under
the Indenture and setting forth a brief
description of any sales of which the Company
has advised the Trustee that have not yet been
settled.
Settlement For sales by the Company of Certificated Notes to or
Procedures through an Agent (unless otherwise specified pursuant
Timetable: to a Terms Agreement), Settlement Procedures "A"
through "F" set forth above shall be completed on or
before the respective times in New York City set forth
below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
---------- ----
<S> <C>
A 2:00 P.M. on day before settlement
date
B 3:00 P.M. on day before settlement
date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
</TABLE>
Failure If a purchaser fails to accept delivery of and make
to Settle: payment for any Certificated Note, the relevant Agent
will notify the Company and the Trustee by telephone
and return such Note to the Trustee. Upon receipt of
such notice, the Company will immediately wire
transfer to the account of such Agent an amount equal
to the price of such Note less such Agent's commission
in respect of such Note (if any). Such wire transfer
will be made on the settlement date, if possible, and
in any event not later than the Business Day following
the settlement date. If the failure shall have
occurred for any reason other than a default by such
Agent in the performance of its obligations hereunder
and under the Distribution Agreement, then the Company
will reimburse such Agent or the Trustee, as
appropriate, on an equitable basis for its loss of the
use of the funds during the period when they were
credited to the account of the Company. Immediately
upon receipt of the Certificated Note in respect of
which such failure occurred, the Trustee will mark
such Note "cancelled," make appropriate entries in the
Trustee's records and send such Note to the Company.
17
<PAGE> 1
EXHIBIT 4.1
LA QUINTA INNS, INC.
OFFICERS' CERTIFICATE
Pursuant to Sections 2.2 and 10.4 of the Indenture dated as of
September 15, 1995 (the "Indenture"), between La Quinta Inns, Inc. (the
"Issuer") and U.S. Trust Company of Texas, N.A., as Trustee (the "Trustee"),
the undersigned officers of the Issuer do hereby certify as follows in
connection with the issuance from time to time under the Indenture of the
Issuer's Medium-Term Notes due more than nine months from date of issue (the
"Notes"), with an aggregate initial public offering price not to exceed
$300,000,000:
1. In our opinion, when all of the terms of the Notes
have been established in conformity with the Indenture, all conditions
precedent under the Indenture to the issuance and authentication of the Notes
and the delivery of the Notes by the Issuer shall have been complied with.
2. The undersigned have read the conditions referred to
in paragraph 1 above and the definitions in the Indenture relating thereto.
3. The statements of the undersigned contained herein
are based upon our participation in the preparation of the forms of the Notes
and a review of the Indenture.
4. Each of the undersigned has made such examination or
investigation as is necessary in our opinion to enable the undersigned to
express an informed opinion as to whether the conditions referred to in
paragraph 1 above have been complied with.
5. The forms of the Notes are attached hereto as
Exhibits A-1 and A-2.
6. The form and the terms of the Notes have been
established in compliance with the Indenture.
<PAGE> 2
Dated: October 7, 1997
Very truly yours,
LA QUINTA INNS, INC.
By: /s/ Irene C. Primera
----------------------------------
Name: Irene C. Primera
Title: Vice President and
Controller
By: /s/ Michael Moline
----------------------------------
Name: Michael Moline
Title: Assistant Secretary
2
<PAGE> 1
EXHIBIT 4.2
[FORM OF FACE OF SECURITY]
LA QUINTA INNS, INC.
MEDIUM-TERM NOTE
Fixed Rate Note
REGISTERED REGISTERED
No. FXR [PRINCIPAL AMOUNT]
CUSIP:
[Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]*
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE
METHOD) SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF
APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
* Delete if this is not a Registered Global Security
<PAGE> 2
<TABLE>
====================================================================================================================================
<S> <C> <C> <C>
ORIGINAL ISSUE DATE: INITIAL REDEMPTION INTEREST RATE: ORIGINAL MATURITY
DATE: DATE:
- ------------------------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL DATE: INITIAL REDEMPTION PERCENTAGE: APPLICABILITY OF OPTIONAL REPAYMENT
MODIFIED PAYMENT UPON DATES(S):
ACCEL- ERATION:
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL AMOUNT OF OID: ANNUAL REDEMPTION PERCENTAGE If yes, state Issue
REDUCTION: Price:
- ------------------------------------------------------------------------------------------------------------------------------------
ORIGINAL YIELD TO MATURITY:
- ------------------------------------------------------------------------------------------------------------------------------------
INITIAL ACCRUAL PERIOD:
- ------------------------------------------------------------------------------------------------------------------------------------
APPLICABILITY OF ISSUER'S OPTION TO APPLICABILITY OF ANNUAL
EXTEND ORIGINAL MATURITY DATE: INTEREST PAYMENTS:
- ------------------------------------------------------------------------------------------------------------------------------------
If yes, state Final Maturity Date:
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:
====================================================================================================================================
</TABLE>
La Quinta Inns, Inc., a Texas corporation (together with its
successors and assigns, the "Issuer"), for value received, hereby promises to
pay to:_______________________________________________________________________
_______, or registered assignees, the principal sum of _______________________
dollars, on the Original Maturity Date specified above or, if the maturity
hereof is extended in accordance with the procedures set forth below to an
Extended Maturity Date, as defined below, on such Extended Maturity Date (except
to the extent previously redeemed or repaid) and to pay interest thereon at the
Interest Rate per annum specified above or, if the interest rate herein is reset
or re-established in connection with an extension of maturity in accordance with
the procedures specified on the reverse hereof, at the interest rate per annum
determined pursuant to such procedures, from the Interest Accrual Date specified
above until the principal hereof is paid or duly made available for payment
2
<PAGE> 3
(except as provided below), semiannually (unless otherwise specified on the
face hereof) in arrears on the 15th day of January and July in each year
(unless otherwise specified on the face hereof) (each such date an "Interest
Payment Date") commencing on the Interest Payment Date next succeeding the
Interest Accrual Date specified above, and at maturity (or on any redemption or
repayment date); provided, however, that if the Interest Accrual Date occurs
between a Record Date, as defined below, and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date succeeding the Interest Accrual Date to the registered holder of this Note
on the Record Date with respect to such second Interest Payment Date; and
provided, further, that if this Note is subject to "Annual Interest Payments,"
interest payments shall be made annually in arrears and the term "Interest
Payment Date" shall be deemed to mean the 15th day of July in each year.
Interest on this Note will accrue from the most recent
Interest Payment Date to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for, from the Interest Accrual
Date, until the principal hereof has been paid or duly made available for
payment (except as provided below). The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, subject to
certain exceptions described herein, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the date 15 calendar days prior to such Interest Payment Date (whether or
not a Business Day) (each such date a "Record Date"); provided, however, that
interest payable at maturity (or on any redemption or repayment date) will be
payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law, regulation or executive order to close in The City of New
York.
Payment of the principal of this Note, any premium and the
interest due at maturity (or on any redemption or repayment date) will be made
in immediately available funds upon surrender of this Note at the office or
agency of the Paying Agent, as defined on the reverse hereof, maintained for
that purpose in the Borough of Manhattan, The City of New York, or at such
other paying agency as the Issuer may determine. Payment of the principal of
and premium, if any, and interest on this Note will be made by U.S. dollar
check mailed to the address of the person entitled thereto as such address
shall appear in the Note register. Notwithstanding the foregoing, (a) the
Depository, as holder of Global Notes, shall be entitled to receive payments of
interest by wire transfer of immediately available funds and (b) a holder of
$10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date will be entitled to receive payments of interest, other
than interest due at maturity or on any date of redemption or repayment, by
wire transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
3
<PAGE> 4
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture, as defined
on the reverse hereof, or be valid or obligatory for any purpose.
4
<PAGE> 5
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: LA QUINTA INNS, INC.
(SEAL)
By
---------------------------
Name:
Title:
ATTEST:
By
- ------------------------------------ ---------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Indenture.
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By
----------------------------------
Authorized Officer
5
<PAGE> 6
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of Medium-Term
Notes, having maturities more than nine months from the date of issue (the
"Notes") of the Issuer. The Notes are issuable under an Indenture, dated as of
September 15, 1995 (the "Indenture"), between the Issuer and U.S. Trust Company
of Texas, N.A., as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities of the Issuer, the Trustee
and holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed U.S. Trust Company of
Texas, N.A. at its corporate trust office in The City of New York as the paying
agent (the "Paying Agent," which term includes any additional or successor
Paying Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
Unless otherwise provided on the face hereof, this Note will
not be subject to any sinking fund and, unless otherwise provided on the face
hereof in accordance with the provisions of the following two paragraphs, will
not be redeemable or subject to repayment at the option of the holder prior to
maturity.
If so indicated on the face of this Note, this Note may be
redeemed in whole or in part at the option of the Issuer on or after the
Initial Redemption Date specified on the face hereof on the terms set forth on
the face hereof, together with interest accrued and unpaid hereon to the date
of redemption (except as provided below). If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated
on the face hereof will be reduced on each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction specified on the
face hereof until the redemption price of this Note is 100% of the principal
amount hereof, together with interest accrued and unpaid hereon to the date of
redemption (except as provided below). Notice of redemption shall be mailed to
the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 days prior to the date fixed for redemption, subject to all the
conditions and provisions of the Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed portion
hereof shall be issued in the name of the holder hereof upon the cancellation
hereof; but in any event, the principal amount of the Note remaining
outstanding after redemption must be an Authorized Denomination (as defined
below).
Notwithstanding the foregoing, this Note may be redeemed in
accordance with the terms of any Extension Notice, as defined below, sent to
the holder hereof as described below.
6
<PAGE> 7
If so indicated on the face of this Note, this Note will be
subject to repayment at the option of the holder on the Optional Repayment Date
or Dates specified on the face hereof on the terms set forth herein. On any
Optional Repayment Date, this Note will be repayable in whole or in part in
increments of $1,000 at a price equal to 100% of the principal amount to be
repaid, together with interest accrued and unpaid hereon to the date of
repayment (except as provided below). For this Note to be repaid at the option
of the holder hereof, the Paying Agent must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, at least 30 but not
more than 60 days prior to the date of repayment, (i) this Note with the form
entitled "Option to Elect Repayment" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or a trust company in the United States setting forth the
name of the holder of this Note, the principal amount hereof, the certificate
number of this Note or a description of this Note's tenor and terms, the
principal amount hereof to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Note, together
with the form entitled "Option to Elect Repayment" duly completed, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter; provided, that
such telegram, telex, facsimile transmission or letter shall only be effective
if this Note and form duly completed are received by the Paying Agent by such
fifth Business Day. Exercise of such repayment option by the holder hereof
shall be irrevocable. In the event of repayment of this Note in part only, a
new Note or Notes for the amount of the unpaid portion hereof shall be issued
in the name of the holder hereof upon the cancellation hereof; provided,
however, that the principal amount of such Note or Notes must be an Authorized
Denomination.
If so indicated on the face of this Note, the Issuer has the
option to extend the Original Maturity Date hereof for one or more periods of
one or more whole years (each an "Extension Period") up to but not beyond the
Final Maturity Date specified on the face hereof and in connection therewith to
establish a new interest rate and new redemption provisions for the Extension
Period.
The Issuer may exercise such option by notifying the Paying
Agent of such exercise at least 45 but not more than 60 days prior to the
Original Maturity Date or, if the maturity hereof has already been extended,
prior to the maturity date then in effect (an "Extended Maturity Date"), such
notice to be accompanied by the form of the Extension Notice referred to below.
No later than 38 days prior to the Original Maturity Date or an Extended
Maturity Date, as the case may be (each, a "Maturity Date"), the Paying Agent
will mail to the holder hereof a notice (the "Extension Notice") relating to
such Extension Period, first class mail, postage prepaid, setting forth (a) the
election of the Issuer to extend the maturity of this Note; (b) the new
Extended Maturity Date; (c) the interest rate applicable to the Extension
Period; and (d) the provisions, if any, for redemption during the Extension
Period, including the date or dates on which, the period or periods during
which and the price or prices at which such redemption may occur during the
Extension Period. Upon the mailing by the Paying Agent of an Extension Notice
to the holder of this Note, the maturity hereof shall be extended
automatically,
7
<PAGE> 8
and, except as modified by the Extension Notice and as described in the next
paragraph, this Note will have the same terms it had prior to the mailing of
such Extension Notice.
Notwithstanding the foregoing, not later than 10:00 A.M., New
York City time, on the twentieth calendar day prior to the Maturity Date in
effect immediately preceding the mailing of the applicable Extension Notice (or
if such day is not a Business Day, not later than 10:00 A.M., New York City
time, on the immediately succeeding Business Day), the Issuer may, at its
option, revoke the interest rate provided for in such Extension Notice and
establish a higher interest rate for the Extension Period by causing the Paying
Agent to send notice of such higher interest rate to the holder of this Note by
first class mail, postage prepaid, or by such other means as shall be agreed
between the Issuer and the Paying Agent. Such notice shall be irrevocable.
All Notes with respect to which the Maturity Date is extended in accordance
with an Extension Notice will bear such higher interest rate for the Extension
Period, whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder
of this Note will have the option to require the Issuer to repay this Note on
the Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more than
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M.,
New York City time, on the immediately succeeding Business Day).
Interest payments on this Note will include interest accrued
to but excluding the Interest Payment Dates or the Maturity Date (or any
earlier redemption or repayment date), as the case may be. Unless otherwise
provided on the face hereof, interest payments for this Note will be computed
and paid on the basis of a 360-day year of twelve 30-day months.
In the case where the Interest Payment Date or the Maturity
Date (or any redemption or repayment date) does not fall on a Business Day,
payment of interest, premium, if any, or principal otherwise payable on such
date need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date or on the Maturity Date (or any redemption or repayment date), and no
interest on such payment shall accrue for the period from and after the
Interest Payment Date or the Maturity Date (or any redemption or repayment
date) to such next succeeding Business Day.
8
<PAGE> 9
This Note and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, unless otherwise provided on the face hereof, is issuable only
in fully registered form, without coupons, and is issuable only in
denominations of $1,000 and any integral multiple of $1,000 in excess thereof
("Authorized Denominations").
The Trustee has been appointed registrar for the Notes, and
the Trustee will maintain at its office in The City of New York a register for
the registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Indenture
with respect to the redemption of Notes. Notes are exchangeable at said office
for other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and executed
by the registered holder in person or by the holder's attorney duly authorized
in writing. The date of registration of any Note delivered upon any exchange
or transfer of Notes shall be such that no gain or loss of interest results
from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced
or be destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or
stolen Note, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that such Note was destroyed or lost or stolen and, if required, upon
9
<PAGE> 10
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
In case an Event of Default with respect to the Notes, as
defined in the Indenture, shall have occurred and be continuing, the principal
hereof and the interest accrued hereon, if any, may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
It is also provided in the Indenture that, subject to certain
conditions, the Holders of at least a majority in principal amount of the
outstanding Notes of all series affected (voting as a single class), by notice
to the Trustee, may waive an existing Default or Event of Default with respect
to the Notes of such series and its consequences, except a Default in the
payment of principal of or interest on any Note 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 Note affected. Upon any such waiver,
such Default shall cease to exist, and no Event of Default with respect to the
Notes 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.
If the face hereof indicates that this Note is subject to
"Modified Payment upon Acceleration," then (i) if the principal hereof is
declared to be due and payable as described in the preceding paragraph, the
amount of principal due and payable with respect to this Note shall be limited
to the aggregate principal amount hereof multiplied by the sum of the Issue
Price specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Indenture prior to
the acceleration of payment of this Note, the principal amount hereof shall
equal the amount that would be due and payable hereon, calculated as set forth
in clause (i) above, if this Note were declared to be due and payable on the
date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Indenture following the acceleration of payment of this
Note, the principal amount hereof shall equal the amount of principal due and
payable with respect to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions which provide that, without
prior notice to any Holders, the Company and the Trustee may amend the
Indenture and the Notes of any series with the written consent of the Holders
of a majority in principal amount of the outstanding Notes 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 Notes of
all series affected thereby (all such series voting as one class) by
10
<PAGE> 11
written notice to the Trustee may waive future compliance by the Company with
any provision of the Indenture or the Notes of such series; provided that,
without the consent of each Holder of the Notes of each series affected
thereby, an amendment or waiver, including a waiver of past defaults, 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 Note, 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 Note that would be due and payable upon an acceleration of the
maturity or the amount thereof provable in bankruptcy, or change any place of
payment where, or the currency in which, any Note or any premium or the
interest thereon 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 Notes 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 or
certain Defaults and their consequences provided for in the Indenture; (iii)
waive a Default in the payment of principal of or interest on any Note of such
Holder; or (iv) modify any of the provisions of the Indenture governing
supplemental indentures with the consent of Securityholders 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.
So long as this Note shall be outstanding, the Issuer will
cause to be maintained an office or agency for the payment of the principal of
and premium, if any, and interest on this Note as herein provided in the
Borough of Manhattan, The City of New York, and an office or agency in said
Borough of Manhattan for the registration, transfer and exchange as aforesaid
of the Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.
The Indenture provides that a series of Notes may include one
or more tranches (each a "tranche") of Notes, including Notes issued in a
periodic offering. The Securities of different tranches may have one or more
different terms, including authentication dates and public offering prices, but
all the Notes within each such tranche shall have identical terms, including
authentication date and public offering price. Notwithstanding any other
provision of the Indenture, subject to certain exceptions, with respect to
sections of the Indenture concerning the execution, authentication and terms of
the Notes, redemption of the Notes, Events of Default of the Notes, defeasance
of the Notes and amendment of the Indenture, if any series of Notes includes
more than one tranche, all provisions of such sections applicable to any series
of Notes shall be deemed equally applicable to each tranche of any series of
Notes in the same manner as though originally designated a series unless
otherwise provided with respect to such series or
11
<PAGE> 12
tranche pursuant to a board resolution or a supplemental indenture establishing
such series or tranche.
No provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in
the Indenture.
12
<PAGE> 13
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM- as tenants in common
TEN ENT- as tenants by the entireties
JT TEN- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT-
---------------------------------
(Cust)
Custodian
----------------------------------
(Minor)
Under Uniform Gifts to Minors Act-
--------------------
(State)
Additional abbreviations may also be used though not in the
above list.
---------------
13
<PAGE> 14
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
- -------------------------------------------------------------------
- -------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS
INCLUDING ZIP CODE, OF ASSIGNEE]
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably
constituting and appointing such person attorney to transfer
such note on the books of the Issuer, with full power of
substitution in the premises.
Dated:
-----------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular without
alteration or enlargement or any change whatsoever; signature(s) must
be guaranteed by an eligible guarantor institution (banks, stock
brokers, savings and loan associations and credit unions with
membership in an approved signature guaranteed medallion program)
pursuant to Securities and Exchange Commission Rule 17Ad-15.
14
<PAGE> 15
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Issuer to repay the within Note (or portion thereof specified below) pursuant
to its terms at a price equal to the principal amount thereof, together with
interest to the Optional Repayment Date, to the undersigned at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is
to be repaid, specify the portion thereof which the holder elects to have
repaid: _______________________; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portion of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid):___________________________________________________.
Dated:
--------------------- ---------------------------------
NOTICE: The signature on this Option to Elect Repayment must
correspond with the name as written upon the face of the
within instrument in every particular without alteration or
enlargement; signature(s) must be guaranteed by an eligible
guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved
signature guaranteed medallion program) pursuant to Securities
and Exchange Commission Rule 17Ad-15.
15
<PAGE> 1
EXHIBIT 4.3
[FORM OF FACE OF SECURITY]
LA QUINTA INNS, INC.
MEDIUM-TERM NOTE
Floating Rate Note
REGISTERED REGISTERED
No. FLR [PRINCIPAL AMOUNT]
CUSIP:
[Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]*
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE
METHOD) SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF
APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
* Delete if this is not a Registered Global Security
<PAGE> 2
<TABLE>
================================================================================================================
<S> <C> <C>
BASE RATE: ORIGINAL ISSUE DATE: ORIGINAL MATURITY DATE:
- ----------------------------------------------------------------------------------------------------------------
INDEX MATURITY: INTEREST ACCRUAL DATE: INTEREST PAYMENT DATE(S):
- ----------------------------------------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
- ----------------------------------------------------------------------------------------------------------------
ALTERNATE RATE INITIAL INTEREST RESET DATE: INTEREST RESET PERIOD:
EVENT SPREAD:
- ----------------------------------------------------------------------------------------------------------------
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET DATES:
- ----------------------------------------------------------------------------------------------------------------
REPORTING SERVICE: MINIMUM INTEREST RATE: CALCULATION AGENT:
- ----------------------------------------------------------------------------------------------------------------
INITIAL REDEMPTION DATE:
- ----------------------------------------------------------------------------------------------------------------
INITIAL REDEMPTION PERCENTAGE: TOTAL AMOUNT OF OID:
- ----------------------------------------------------------------------------------------------------------------
ANNUAL REDEMPTION PERCENTAGE ORIGINAL YIELD TO MATURITY:
REDUCTION:
- ----------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: OPTIONAL REPAYMENT DATE(S): INITIAL ACCRUAL PERIOD OID:
================================================================================================================
</TABLE>
La Quinta Inns, Inc., a Texas corporation (together with its
successors and assigns, the "Issuer"), for value received, hereby promises to
pay to: _____________________________________________________________________,
or registered assignees, the principal sum of ________________________________
dollars on the Maturity Date specified above (except to the extent redeemed or
repaid prior to the Maturity Date) and to pay interest thereon, from the
Interest Accrual Date specified above at a rate per annum equal to the Initial
Interest Rate specified above until the Initial Interest Reset Date specified
above, and thereafter at a rate per annum determined in accordance with the
provisions specified on the reverse hereof until the principal hereof is paid
or duly made available for payment. The Issuer will pay interest in arrears
monthly, quarterly, semiannually or annually as specified above as the Interest
Payment Period on each Interest Payment Date (as specified above), commencing
with the first Interest Payment Date next succeeding the Interest Accrual Date
specified above, and on the Maturity Date (or any redemption or repayment
date); provided, however, that if the Interest Accrual Date occurs between a
Record Date, as defined below, and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date succeeding
the Interest Accrual Date to the registered holder of this Note on the Record
Date with respect to such second Interest Payment Date; and provided, further,
that if an Interest Payment Date (other than the Maturity Date or redemption or
repayment date) would fall on a day that is not a Business Day, as defined on
the reverse hereof, such Interest Payment Date shall be the following day that
is a Business Day, except that if the Base Rate specified above is LIBOR and
such next Business Day falls in the next calendar month, such Interest Payment
Date shall be the immediately preceding day that is a Business
2
<PAGE> 3
Day; and provided, further, that if the Maturity Date or redemption or
repayment date would fall on a day that is not a Business Day, such payment
shall be made on the following day that is a Business Day and no interest shall
accrue for the period from and after such Maturity Date or redemption or
repayment date.
Interest on this Note will accrue from the most recent date to
which interest has been paid or duly provided for, or, if no interest has been
paid or duly provided for, from the Interest Accrual Date, until the principal
hereof has been paid or duly made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, subject to certain exceptions described herein, be paid to the person in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the date 15 calendar days prior to such Interest Payment
Date (whether or not a Business Day) (each such date a "Record Date");
provided, however, that interest payable on the Maturity Date (or any
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable.
Payment of the principal of this Note, any premium and the
interest due at the Maturity Date (or any redemption or repayment date) will be
made in immediately available funds upon surrender of this Note at the office
or agency of the Paying Agent, as defined on the reverse hereof, maintained for
that purpose in the Borough of Manhattan, The City of New York, or at such
other paying agency as the Issuer may determine. Payment of the principal of
and premium, if any, and interest on this Note will be made by U.S. dollar
check mailed to the address of the person entitled thereto as such address
shall appear in the Note register. Notwithstanding the foregoing, (a) the
Depository, as holder of the Global Notes, shall be entitled to receive
payments by wire transfer of immediately available funds and (b) a holder of
$10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date will be entitled to receive payments of interest, other
than interest due at maturity or any date of redemption or repayment, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
3
<PAGE> 4
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed under its corporate seal.
DATED: LA QUINTA INNS, INC.
(SEAL)
By
-------------------------------
Name:
Title:
ATTEST:
By
- -------------------------------------- -------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the within-
mentioned Indenture.
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By
-----------------------------------
Authorized Officer
4
<PAGE> 5
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of Medium-Term Notes,
having maturities more than nine months from the date of issue (the "Notes") of
the Issuer. The Notes are issuable under an Indenture, dated as of September
15, 1995 (the "Indenture"), between the Issuer and U.S. Trust Company of Texas,
N.A., as Trustee (the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities of the Issuer, the Trustee and
holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed U.S. Trust Company of
Texas, N.A. at its corporate trust office in The City of New York as the paying
agent (the "Paying Agent," which term includes any additional or successor
Paying Agent appointed by the Issuer) with respect to the Notes. The terms of
individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Indenture. To the extent not inconsistent herewith, the terms of the Indenture
are hereby incorporated by reference herein.
Unless otherwise provided on the face hereof, this Note will not
be subject to any sinking fund and, unless otherwise provided on the face
hereof in accordance with the provisions of the following two paragraphs, will
not be redeemable or subject to repayment at the option of the holder prior to
maturity.
Unless otherwise indicated on the face of this Note, this Note may
not be redeemed prior to the Maturity Date. If so indicated on the face of
this Note, this Note may be redeemed in whole or in part at the option of the
Issuer on or after the Initial Redemption Date specified on the face hereof on
the terms set forth on the face hereof, together with interest accrued and
unpaid hereon to the date of redemption. If this Note is subject to "Annual
Redemption Percentage Reduction," the Initial Redemption Percentage indicated
on the face hereof will be reduced on each anniversary of the Initial
Redemption Date by the Annual Redemption Percentage Reduction specified on the
face hereof until the redemption price of this Note is 100% of the principal
amount hereof, together with interest accrued and unpaid hereon to the date of
redemption. Notice of redemption shall be mailed to the registered holders of
the Notes designated for redemption at their addresses as the same shall appear
on the Note register not less than 30 nor more than 60 days prior to the date
fixed for redemption, subject to all the conditions and provisions of the
Indenture. In the event of redemption of this Note in part only, a new Note or
Notes for the amount of the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof but in any event, the
principal amount of the Note remaining outstanding after redemption must be an
Authorized Denomination.
Notwithstanding the foregoing, this Note may be redeemed in
accordance with the terms of any Extension Notice, as defined below, sent to
the holder hereof as described below.
Unless otherwise indicated on the face of this Note, this Note
shall not be subject to repayment at the option of the holder prior to the
Maturity Date. If so indicated on the face of
5
<PAGE> 6
this Note, this Note will be subject to repayment at the option of the holder
on the Optional Repayment Date or Dates specified on the face hereof on the
terms set forth herein. On any Optional Repayment Date, this Note will be
repayable in whole or in part in increments of $1,000 at a price equal to 100%
of the principal amount to be repaid, together with interest accrued and unpaid
hereon to the date of repayment. For this Note to be repaid at the option of
the holder hereof, the Paying Agent must receive at its corporate trust office
in the Borough of Manhattan, The City of New York, at least 30 but not more
than 60 days prior to the date of repayment, (i) this Note with the form
entitled "Option to Elect Repayment" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or a trust company in the United States setting forth the
name of the holder of this Note, the principal amount hereof, the certificate
number of this Note or a description of this Note's tenor and terms, the
principal amount hereof to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Note, together
with the form entitled "Option to Elect Repayment" duly completed, will be
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter; provided, that
such telegram, telex, facsimile transmission or letter shall only be effective
if this Note and form duly completed are received by the Paying Agent by such
fifth Business Day. Exercise of such repayment option by the holder hereof
shall be irrevocable. In the event of repayment of this Note in part only, a
new Note or Notes for the amount of the unpaid portion hereof shall be issued
in the name of the holder hereof upon the cancellation hereof; provided,
however, that the principal amount of such Note or Notes must be an Authorized
Denomination.
If so indicated on the face of this Note, the Issuer has the
option to extend the Original Maturity Date hereof for one or more periods of
one or more whole years (each an "Extension Period") up to but not beyond the
Final Maturity Date specified on the face hereof and in connection therewith to
establish a new interest rate and new redemption provisions for the Extension
Period.
The Issuer may exercise such option by notifying the Paying Agent
of such exercise at least 45 but not more than 60 days prior to the Original
Maturity Date or, if the maturity hereof has already been extended, prior to
the maturity date then in effect (an "Extended Maturity Date"), such notice to
be accompanied by the form of the Extension Notice referred to below. No later
than 38 days prior to the Original Maturity Date or an Extended Maturity Date,
as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the
holder hereof a notice (the "Extension Notice") relating to such Extension
Period, first class mail, postage prepaid, setting forth (a) the election of
the Issuer to extend the maturity of this Note; (b) the new Extended Maturity
Date; (c) the interest rate applicable to the Extension Period; and (d) the
provisions, if any, for redemption during the Extension Period, including the
date or dates on which, the period or periods during which and the price or
prices at which such redemption may occur during the Extension Period. Upon
the mailing by the Paying Agent of an Extension Notice to the holder of this
Note, the maturity hereof shall be extended automatically, and, except as
modified by the Extension Notice and as described in the next paragraph, this
Note will have the same terms it had prior to the mailing of such Extension
Notice.
6
<PAGE> 7
Notwithstanding the foregoing, not later than 10:00 A.M., New York
City time, on the twentieth calendar day prior to the Maturity Date in effect
immediately preceding the mailing of the applicable Extension Notice (or if
such day is not a Business Day, not later than 10:00 A.M., New York City time,
on the immediately succeeding Business Day), the Issuer may, at its option,
revoke the interest rate provided for in such Extension Notice and establish a
higher interest rate for the Extension Period by causing the Paying Agent to
send notice of such higher interest rate to the holder of this Note by first
class mail, postage prepaid, or by such other means as shall be agreed between
the Issuer and the Paying Agent. Such notice shall be irrevocable. All Notes
with respect to which the Maturity Date is extended in accordance with an
Extension Notice will bear such higher interest rate for the Extension Period,
whether or not tendered for repayment.
If the Issuer elects to extend the maturity hereof, the holder of
this Note will have the option to require the Issuer to repay this Note on the
Maturity Date in effect immediately preceding the mailing of the applicable
Extension Notice at a price equal to the principal amount hereof plus any
accrued and unpaid interest to such date. In order for this Note to be so
repaid on such Maturity Date, the holder hereof must follow the procedures set
forth above for optional repayment, except that the period for delivery of this
Note or notification to the Paying Agent shall be at least 25 but not more than
35 days prior to the Maturity Date in effect immediately preceding the mailing
of the applicable Extension Notice and except that if the holder hereof has
tendered this Note for repayment pursuant to this paragraph he may, by written
notice to the Paying Agent, revoke any such tender for repayment until 3:00
P.M., New York City time, on the twentieth calendar day prior to the Maturity
Date then in effect (or, if such day is not a Business Day, until 3:00 P.M.,
New York City time, on the immediately succeeding Business Day).
This Note will bear interest at the rate determined in accordance
with the applicable provisions below by reference to the Base Rate shown on the
face hereof based on the Index Maturity, if any, shown on the face hereof (i)
plus or minus the Spread, if any, and/or (ii) multiplied by the Spread
Multiplier, if any, specified on the face hereof. Commencing with the Initial
Interest Reset Date specified on the face hereof, the rate at which interest on
this Note is payable shall be reset as of each Interest Reset Date (as used
herein, the term "Interest Reset Date" shall include the Initial Interest Reset
Date). The Interest Reset Dates will be the Interest Reset Dates specified on
the face hereof; provided, however, that the interest rate in effect for the
period from the Interest Accrual Date to the Initial Interest Reset Date will
be the Initial Interest Rate. If any Interest Reset Date would otherwise be a
day that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding day that is a Business Day, except that if the Base Rate
specified on the face hereof is LIBOR and such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the next preceding
Business Day. As used herein, "Business Day" means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law, regulation or executive order
to close in The City of New York, and if this Note bears interest calculated by
reference to LIBOR, that is also a London Banking Day.
The Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate,
7
<PAGE> 8
Prime Rate and CMT Rate will be the second Business Day next preceding such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to LIBOR shall be
the second London Banking Day preceding such Interest Reset Date. As used
herein, "London Banking Day" means any day on which dealings in deposits in the
Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to the Treasury Rate shall
be the day of the week in which such Interest Reset Date falls on which
Treasury bills normally would be auctioned; provided, however, that if as a
result of a legal holiday an auction is held on the Friday of the week
preceding such Interest Reset Date, the related Interest Determination Date
shall be such preceding Friday; and provided, further, that if an auction shall
fall on any Interest Reset Date, then the Interest Reset Date shall instead be
the first Business Day following the date of such auction.
Unless otherwise specified on the face hereof, the "Calculation
Date" pertaining to an Interest Determination Date will be the earlier of (i)
the tenth calendar day after such Interest Determination Date or, if such day
is not a Business Day, the next succeeding Business Day, or (ii) the Business
Day preceding the applicable Interest Payment Date or Maturity Date (or, with
respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.
Determination of CD Rate. If the Base Rate specified on the face
hereof is the CD Rate, the CD Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date for negotiable certificates of deposit having the Index Maturity specified
on the face hereof as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H.15(519), Selected Interest Rates," or
any successor publication of the Board of Governors of the Federal Reserve
System ("H.15(519)"), under the heading "CDs (Secondary Market)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the CD Rate will be the rate on such
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity specified on the face hereof as published by the Federal Reserve Bank
of New York in its daily statistical release "Composite 3:30 P.M. Quotations
for U.S. Government Securities" ("Composite Quotations") under the heading
"Certificates of Deposit." If neither of such rates is published by 3:00 P.M.,
New York City time, on such Calculation Date, then the CD Rate on such Interest
Determination Date will be calculated by the Calculation Agent referred to on
the face hereof and will be the arithmetic mean of the secondary market offered
rates as of 10:00 A.M., New York City time, on such Interest Determination Date
for certificates of deposit in an amount that is representative for a single
transaction at that time with a remaining maturity closest to the Index
Maturity specified on the face hereof of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable certificates of deposit of major U.S.
money center banks with a remaining maturity closest to the Index Maturity
specified on the face hereof in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate in effect for the applicable period will be the same
as the CD Rate for
8
<PAGE> 9
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate).
Determination of Commercial Paper Rate. If the Base Rate
specified on the face hereof is the Commercial Paper Rate, the Commercial Paper
Rate with respect to this Note shall be determined on each Interest
Determination Date and shall be the Money Market Yield (as defined herein) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper," or if not so published prior to 9:00 A.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the Commercial Paper Rate shall be the Money Market Yield of the rate on
such Interest Determination Date for commercial paper of the Index Maturity
specified on the face hereof as published in Composite Quotations under the
heading "Commercial Paper." If neither of such rates is published by 3:00
P.M., New York City time, on such Calculation Date, then the Commercial Paper
Rate shall be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 A.M., New York City time, on such Interest Determination Date
of three leading dealers in commercial paper in The City of New York selected
by the Calculation Agent for commercial paper of the Index Maturity specified
on the face hereof, placed for an industrial issuer whose bond rating is "AA,"
or the equivalent, from a nationally recognized rating agency; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate in effect
for the applicable period will be the same as the Commercial Paper Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial Interest
Rate).
"Money Market Yield" shall be the yield calculated in accordance
with the following formula:
Money Market Yield = D x 360
---------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the Index Maturity specified on the face hereof.
Determination of Federal Funds Rate. If the Base Rate specified
on the face hereof is the Federal Funds Rate, the Federal Funds Rate with
respect to this Note shall be determined on each Interest Determination Date
and shall be the rate on such date for Federal Funds as published in H.15(519)
under the heading "Federal Funds (Effective)," or, if not so published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate will be the rate on such Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If neither of such rates is published by 3:00
P.M., New York City time, on such Calculation Date, the Federal Funds Rate for
such Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates for the last transaction in
overnight Federal funds as of 9:00 A.M., New York City time, on such Interest
Determination
9
<PAGE> 10
Date arranged by three leading brokers in Federal funds transactions in The
City of New York selected by the Calculation Agent; provided, however, that if
the brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate in effect for the applicable
period will be the same as the Federal Funds Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable hereon shall be the Initial Interest Rate).
Determination of LIBOR. If the Base Rate specified on the face
hereof is LIBOR, LIBOR with respect to this Note shall be determined on each
Interest Determination Date as follows:
(i) As of the Interest Determination Date, the Calculation
Agent will determine (a) if "LIBOR Reuters" is specified as the Reporting
Service on the face hereof, the arithmetic mean of the offered rates
(unless the specified Designated LIBOR Page (as defined below) by its terms
provides only for a single rate, in which case such single rate shall be
used) for deposits in the London interbank market in the Index Currency for
the period of the Index Maturity specified on the face hereof, commencing
on the second London Banking Day immediately following such Interest
Determination Date, which appear on the Designated LIBOR Page at
approximately 11:00 A.M., London time, on such Interest Determination Date,
if at least two such offered rates appear (unless, as aforesaid, only a
single rate is required) on such Designated LIBOR Page, or (b) if "LIBOR
Telerate" is specified as the Reporting Service on the face hereof, the
rate for deposits in the Index Currency for the period of the Index
Maturity, commencing on such Interest Determination Date, that appears on
the Designated LIBOR Page at approximately 11:00 A.M., London time, on such
Interest Determination Date. If fewer than two offered rates appear (if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof
and calculation of LIBOR is based on the arithmetic mean of the offered
rates) or if no rate appears (if (i) "LIBOR Telerate" is specified as the
Reporting Service on the face hereof or (ii) "LIBOR Reuters" is specified
as the Reporting Service on the face hereof and the Designated LIBOR Page
by its terms provides only for a single rate), LIBOR in respect of that
Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is specified as the
Reporting Service on the face hereof and calculation of LIBOR is based on
the arithmetic mean of the offered rates) or no rate appears (if (i) "LIBOR
Telerate" is specified as the Reporting Service on the face hereof or (ii)
"LIBOR Reuters" is specified as the Reporting Service on the face hereof
and the Designated LIBOR Page by its terms provides only for a single
rate), the Calculation Agent will request the principal London offices of
each of four major reference banks in the London interbank market, as
selected by the Calculation Agent (after consultation with the Issuer), to
provide the Calculation Agent with its offered quotations for deposits in
the Index Currency for the period of the Index Maturity specified on the
face hereof, commencing on the second London Banking Day immediately
following such Interest Determination Date, to prime banks in the London
interbank market at approximately 11:00 A.M., London time, on such Interest
Determination Date and in a principal amount equal to an amount of not less
10
<PAGE> 11
than $1 million that is representative of a single transaction in such
Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR in respect of
that Interest Determination Date will be the arithmetic mean of rates
quoted at approximately 11:00 A.M. (or such other time specified on the
face hereof), in the City of New York on such Interest Determination Date,
by three major banks in the City of New York selected by the Calculation
Agent (after consultation with the Issuer) on such Interest Determination
Date for loans in the Index Currency to leading European banks, for the
period of the Index Maturity specified on the face hereof commencing on the
second London Banking Day immediately following such Interest Determination
Date and in a principal amount of not less than $1 million that is
representative of a single transaction in such Index Currency in such
market at such time; provided, however, that if the banks selected as
aforesaid by the Calculation Agent are not quoting rates as mentioned in
this sentence, "LIBOR" for such Interest Reset Period will be the same as
LIBOR for the immediately preceding Interest Reset Period (or, if there was
no such Interest Reset Period, the rate of interest payable on the LIBOR
Notes for which LIBOR is being determined shall be the Initial Interest
Rate). "Index Currency" means U.S. dollars. "Designated LIBOR Page" means
either (a) if "LIBOR Reuters" is designated as the Reporting Service on the
face hereof, the display on the Reuters Monitor Money Rates Service for the
purpose of displaying the London interbank rates of major banks for the
Index Currency, or (b) if "LIBOR Telerate" is designated as the Reporting
Service on the face hereof, the display on the Dow Jones Telerate Service
for the purpose of displaying the London interbank rates of major banks for
the Index Currency. If neither LIBOR Reuters nor LIBOR Telerate is
specified as the Reporting Service on the face hereof, LIBOR for the Index
Currency will be determined as if LIBOR Telerate (Page 3750) had been
specified.
Determination of Prime Rate. If the Base Rate specified on the
face hereof is the Prime Rate, the Prime Rate with respect to this Note shall
be determined on each Interest Determination Date and shall be the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime Rate
for such Interest Determination Date will be the arithmetic mean of the rates
of interest publicly announced by each bank named on the Reuters Screen
USPRIME1 (as defined below) as such bank's prime rate or base lending rate as
in effect for such Interest Determination Date as quoted on the Reuters Screen
USPRIME1 on such Interest Determination Date, or, if fewer than four such rates
appear on the Reuters Screen USPRIME1 for such Interest Determination Date, the
rate shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of business on
such Interest Determination Date by at least two of the three major money
center banks in The City of New York selected by the Calculation Agent from
which quotations are requested. If fewer than two quotations are provided, the
Prime Rate shall be calculated by the Calculation Agent and shall be determined
as the arithmetic mean on the basis of the prime rates in The City of New York
by the appropriate number of substitute banks or trust companies organized and
doing business under the laws of the United States, or any State thereof, in
each case having total equity capital of at least $500 million and being
subject to supervision or examination by federal or state authority, selected
by the Calculation Agent to quote such rate or rates; provided, however, that
if the
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<PAGE> 12
banks or trust companies selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the "Prime Rate" in effect for the applicable
period will be the same as the Prime Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable on the Prime Rate Notes for which such Prime Rate is being
determined shall be the Initial Interest Rate). "Reuters Screen USPRIME1"
means the display designated as page "USPRIME1" on the Reuters Monitor Money
Rates Service (or such other page as may replace the USPRIME1 on that service
for the purpose of displaying prime rates or base lending rates of major United
States banks).
Determination of Treasury Rate. If the Base Rate specified on the
face hereof is the Treasury Rate, the Treasury Rate with respect to this Note
shall be determined on each Interest Determination Date and shall be the rate
for the auction held on such date of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof, as
published in H.15(519) under the heading "Treasury Bills--auction average
(investment)," or if not so published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the auction
average rate on such Interest Determination Date (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity specified on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 P.M., New York City time, on such
Interest Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity specified on the
face hereof; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate for such Interest Reset Date will be the same as the Treasury
Rate for the immediately preceding Interest Reset Period (or, if there was no
such Interest Reset Period, the rate of interest payable hereon shall be the
Initial Interest Rate).
Determination of CMT Rate. If the Base Rate is the CMT Rate as
specified on the face hereof, "CMT Rate" means with respect to any Interest
Determination Date, the rate displayed on the Designated CMT Telerate Page (as
defined below) under the caption "...Treasury Constant Maturities... Federal
Reserve Board Release H.15...Mondays Approximately 3:45 p.m.," under the column
for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, such Interest Determination Date and (ii)
if the Designated CMT Telerate Page is 7052, the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 p.m., New York City time on the related
Calculation Date, then the CMT Rate for such Interest Determination Date will
be such Treasury Constant Maturity rate for the Designated CMT Maturity Index
as published in the relevant H.15(519). If such rate is no longer published,
or, if not published by 3:00 p.m., New York City time, on the related
Calculation
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<PAGE> 13
Date, then the CMT Rate for such Interest Determination Date, will be such
Treasury Constant Maturity rate for the Designated CMT Maturity Index (or other
United States Treasury rate for the Designated CMT Maturity Index) for the
Interest Determination Date with respect to such Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If such
information is not provided by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity, based on
the arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time on the Interest Determination Date
reported, according to their written records, by three leading primary United
States government securities dealers (each, a "Reference Dealer") in The City
of New York (which may include the Agents or their affiliates selected by the
Calculation Agent (from five such Reference Dealers selected by the Calculation
Agent, after consultation with the Issuer, and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury notes") with an original maturity approximately the Designated CMT
Maturity Index and remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year. If the Calculation Agent cannot obtain
three such Treasury notes quotation, the CMT Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time on the Interest
Determination Date of three Reference Dealers in The City of New York (from
five such Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100,000,000. If three or four (and not five) of such Reference dealers
are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated: provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate for such Interest Reset Date will be the same as
the CMT Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable on this Note
for which the CMT Rate is being determined shall be the Initial Interest Rate).
If two Treasury notes with an original maturity as described in the third
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the Treasury note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated in an applicable Pricing Supplement (or
any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported
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<PAGE> 14
in H.15(519). If no such page is specified in the applicable Pricing
Supplement, the Designated CMT Telerate Page shall be 7052, for the most recent
week.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in an applicable Pricing Supplement with respect to which the
CMT Rate will be calculated. If no such maturity is specified in the
applicable Pricing Supplement, the Designated CMT Maturity Index shall be 2
years.
Notwithstanding the foregoing, the interest rate hereon shall not
be greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next
Interest Reset Date.
Interest payments on this Note will include interest accrued to
but excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Accrued interest hereon
shall be an amount calculated by multiplying the face amount hereof by an
accrued interest factor. Such accrued interest factor shall be computed by
adding the interest factor calculated for each day in the period for which
interest is being paid. The interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the
Base Rate is CD Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate or
LIBOR, as specified on the face hereof, or by the actual number of days in the
year if the Base Rate is the Treasury Rate or the CMT Rate, as specified on the
face hereof. All percentages resulting from any calculation of the rate of
interest on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (.0000001), with five one-millionths
of a percentage point rounded upward, and all dollar amounts used in or
resulting from such calculation on this Note will be rounded to the nearest
cent (with one-half cent rounded upward). The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
This Note and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or exchange
hereof, unless otherwise provided on the face hereof, is issuable only in fully
registered form, without coupons, and is issuable only in denominations of
$1,000 and any integral multiple of $1,000 in excess thereof ("Authorized
Denominations").
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<PAGE> 15
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Indenture
with respect to the redemption of Notes. Notes are exchangeable at said office
for other Notes of other authorized denominations of equal aggregate principal
amount having identical terms and provisions. All such exchanges and transfers
of Notes will be free of charge, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and executed
by the registered holder in person or by the holder's attorney duly authorized
in writing. The date of registration of any Note delivered upon any exchange
or transfer of Notes shall be such that no gain or loss of interest results
from such exchange or transfer.
In case any Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and such Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, a new Note of like tenor will be issued by the Issuer
in exchange for the Note so mutilated or defaced, or in lieu of the Note so
destroyed or lost or stolen, but, in the case of any destroyed or lost or
stolen Note, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that such Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
In case an Event of Default with respect to the Notes, as defined
in the Indenture, shall have occurred and be continuing, the principal hereof
and the interest accrued hereon, if any, may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
It is also provided in the Indenture that, subject to certain
conditions, the Holders of at least a majority in principal amount of the
outstanding Notes of all series affected (voting as a single class), by notice
to the Trustee, may waive an existing Default or Event of Default with respect
to the Notes of such series and its consequences, except a Default in the
payment of
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<PAGE> 16
principal of or interest on any Note 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 Note affected. Upon any such waiver, such Default
shall cease to exist, and nay Event of Default with respect to the Notes 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.
If the face hereof indicates that this Note is subject to
"Modified Payment upon Acceleration," then (i) if the principal hereof is
declared to be due and payable as described in the preceding paragraph, the
amount of principal due and payable with respect to this Note shall be limited
to the aggregate principal amount hereof multiplied by the sum of the Issue
Price specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Indenture prior to
the acceleration of payment of this Note, the principal amount hereof shall
equal the amount that would be due and payable hereon, calculated as set forth
in clause (i) above, if this Note were declared to be due and payable on the
date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Indenture following the acceleration of payment of this
Note, the principal amount hereof shall equal the amount of principal due and
payable with respect to this Note, calculated as set forth in clause (i) above.
The Indenture contains provisions which provide that, without
prior notice to any Holders, the Company and the Trustee may amend the
Indenture and the Notes of any series with the written consent of the Holders
of a majority in principal amount of the outstanding Notes 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 Notes 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 Notes of such series; provided that, without
the consent of each Holder of the Notes of each series affected thereby, an
amendment or waiver, including a waiver of past defaults, 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 Note, 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 Note that would be due and payable upon an acceleration of the
maturity or the amount thereof provable in bankruptcy, or change any place of
payment where, or the currency in which, any Note or any premium or the
interest thereon 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 Notes 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 or
certain Defaults and their consequences provided for in the Indenture; (iii)
waive a Default in the payment of principal of or interest on any Note of such
Holder; or (iv) modify any of the
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<PAGE> 17
provisions of the Indenture governing supplemental indentures with the consent
of Noteholders 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 Note affected thereby.
So long as this Note shall be outstanding, the Issuer will cause
to be maintained an office or agency for the payment of the principal of and
premium, if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated.
The Indenture provides that a series of Securities may include one
or more tranches (each a "tranche") of Notes, including Notes issued in a
periodic offering. The Notes of different tranches may have one or more
different terms, including authentication dates and public offering prices, but
all the Notes within each such tranche shall have identical terms, including
authentication date and public offering price. Notwithstanding any other
provision of the Indenture, subject to certain exceptions, with respect to
sections of the Indenture concerning the execution, authentication and terms of
the Notes, redemption of the Notes, Events of Default of the Notes, defeasance
of the Notes and amendment of the Indenture, if any series of Securities
includes more than one tranche, all provisions of such sections applicable to
any series of Notes shall be deemed equally applicable to each tranche of any
series of Notes in the same manner as though originally designated a series
unless otherwise provided with respect to such series or tranche pursuant to a
board resolution or a supplemental indenture establishing such series or
tranche.
No provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
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<PAGE> 18
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM- as tenants in common
TEN ENT- as tenants by the entireties
JT TEN- as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT- Custodian
---------------- --------------
(Cust) (Minor)
Under Uniform Gifts to Minors Act
--------------------------
(State)
Additional abbreviations may also be used though not in the above
list.
---------------
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<PAGE> 20
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS
INCLUDING ZIP CODE,OF ASSIGNEE]
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
the within Note and all rights thereunder,
hereby irrevocably constituting and appointing
such person attorney to transfer such note on
the books of the Issuer, with full power of
substitution in the premises.
Dated:
--------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular
without alteration or enlargement or any change whatsoever;
signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations
and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange
Commission Rule 17Ad-15.
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<PAGE> 21
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Issuer to repay the within Note (or portion thereof specified below) pursuant
to its terms at a price equal to the principal amount thereof, together with
interest to the Optional Repayment Date, to the undersigned at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to
be repaid, specify the portion thereof which the holder elects to have repaid:
_____________________________________________; and specify the denomination or
denominations (which shall not be less than the minimum authorized
denomination) of the Notes to be issued to the holder for the portion of the
within Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid): __________________.
Dated:
--------------------- --------------------------------
NOTICE: The signature on this Option to Elect Repayment must correspond
with the name as written upon the face of the within instrument in
every particular without alteration or enlargement; signature(s)
must be guaranteed by an eligible guarantor institution (banks,
stock brokers, savings and loan associations and credit unions
with membership in an approved signature guarantee medallion
program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
21
