Exhibit
4.2


Exchange
and Registration Rights Agreement


 


Dated as of March
19, 2003


 


among


 


La Quinta
Properties, Inc.,


 


Parent Guarantor,
and


 


Lehman Brothers
Inc., on behalf of the Initial Purchasers


 

















 


EXCHANGE
AND REGISTRATION RIGHTS AGREEMENT


 


This Exchange and
Registration Rights Agreement (this “Agreement”) is made and entered
into as of March 19, 2003 by and among La Quinta Properties, Inc., a Delaware
corporation (the “Company”), Parent Guarantor (as defined herein) and
Lehman Brothers Inc. on behalf of CIBC World Markets Corp., J.P. Morgan
Securities Inc., Fleet Securities, Inc. and Credit Lyonnaise Securities (USA)
Inc. (collectively, the “Initial Purchasers”).


 


This Agreement is made
pursuant to the Purchase Agreement, dated March 14, 2003 (the “Purchase
Agreement”), by and among the Company, Parent Guarantor (as defined herein)
and the Initial Purchasers, which provides for the sale by the Company to the
Initial Purchasers of $250,000,000 aggregate principal amount of the Company’s
8-7/8% Senior Notes due 2011 (the “Notes”).  The Notes are, and the Exchange Notes (as defined herein) will
be, guaranteed on a senior basis by Parent Guarantor (as defined herein).  In order to induce the Initial Purchasers to
purchase the Notes, the Company and Parent Guarantor have agreed to provide the
registration rights set forth in this Agreement.  The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 7 of the
Purchase Agreement.


 


The parties hereby agree
as follows:


 


SECTION 1.                                DEFINITIONS


 


As used in this
Agreement, the following capitalized terms shall have the following meanings:


 


Additional
Interest:  As defined
in Section 5(a) hereof.


 


Advice:  As defined in Section 6(e) hereof.


 


Agreement:  As defined in the preamble hereto.


 


Blackout Period:  As defined in Section 5(a) hereof.


 


Broker-Dealer:  Any broker or dealer registered under the
Exchange Act.


 


Closing Date:  The date of this Agreement.


 


Commission:  The U.S. Securities and Exchange Commission.


 


Company:  As defined in the preamble hereto.


 


Consummate:  A Registered Exchange Offer shall be deemed
“Consummated” for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement 


 


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relating to the Exchange Notes to be issued in the Exchange Offer, (ii)
the maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.


 


Damages Payment
Date:  With respect to
the Notes, each Interest Payment Date.


 


Effectiveness
Target Date:  As
defined in Section 5(a) hereof.


 


Exchange Act:  The U.S. Securities Exchange Act of 1934, as
amended.


 


Exchange Notes:  The Company’s 8-7/8% Senior Notes due 2011
to be issued pursuant to the Indenture in the Exchange Offer, together with the
related Guarantees.


 


Exchange Offer:  The registration by the Company under the
Securities Act of the Exchange Notes pursuant to a Registration Statement
pursuant to which the Company offers the Holders of all outstanding Transfer
Restricted Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Exchange Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities validly tendered in such exchange offer by such Holders.


 


Exchange Offer
Registration Statement: 
The Registration Statement relating to the Exchange Offer, including the
related Prospectus.


 


Guarantees:  Guarantees by Parent Guarantor of the
Company’s obligations under the Notes, the Exchange Notes and the Indenture.


 


Holder:  As defined in Section 2(b) hereof.


 


Indenture:  The Indenture, dated as of the date hereof,
among the Company, Parent Guarantor and U.S. Bank Trust National Association,
as trustee (the “Trustee”), pursuant to which the Notes and the Exchange
Notes are to be issued, as such Indenture may be amended or supplemented from
time to time in accordance with the terms thereof.


 


Initial Purchasers:  As defined in the preamble hereto.


 


Interest Payment
Date:  As defined in
the Indenture and the Notes.


 


NASD:  National Association of Securities Dealers,
Inc.


 


Notes:  As defined in the preamble hereto.


 


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Parent Guarantor:
La Quinta Corporation, a Delaware corporation.


 


Person:  An individual, partnership, corporation,
limited liability company, unincorporated organization, association,
joint-stock company, trust, joint venture, government or any agency or
political subdivision thereof or any other entity.


 


Prospectus:  The prospectus included in a Registration
Statement as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.


 


Purchase Agreement:  As defined in the preamble hereto.


 


Record Holder:  With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the record date with
respect to the Interest Payment Date on which such Damages Payment Date shall
occur.


 


Registration
Default:  As defined
in Section 5(a) hereof.


 


Registration
Statement:  Any
Registration Statement of the Company relating to (a) an offering of Exchange
Notes pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement,
which is filed pursuant to the provisions of this Agreement, in each case
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.


 


Securities Act:  The U.S. Securities Act of 1933, as amended.


 


Shelf Filing
Deadline:  As defined
in Section 4(a) hereof.


 


Shelf Registration
Period:  As defined in
Section 4(a) hereof.


 


Shelf Registration
Statement:  As defined
in Section 4(a) hereof.


 


TIA:  The U.S. Trust Indenture Act of 1939 (15
U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture.


 


Transfer
Restricted Securities: 
Each Note or Exchange Note (including the related Guarantees), as
applicable, until the earliest to occur of (a) the date on which such Note is
exchanged by a person other than a Broker-Dealer in the Exchange Offer in
exchange for an Exchange Note, so long as such person is not prohibited from
reselling such Exchange Notes to the public without delivering a prospectus and
the Prospectus contained in the Exchange Offer Registration Statement is not
sufficient for such purpose, (b) following the exchange by a Broker-Dealer in
the Exchange Offer of a Note for an Exchange Note, the date on which that Exchange
Note is sold to a purchaser who receives from that Broker-Dealer on or prior to
the date of such sale a copy of the 


 


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Prospectus contained in
the Exchange Offer Registration Statement, (c) the date on which such Note has
been effectively registered under the Securities Act and disposed of in
accordance with a Shelf Registration Statement and (d) the date on which such
Note is eligible to be distributed to the public pursuant to Rule 144 under the
Securities Act.


 


Underwritten
Registration or Underwritten Offering:  A registration in which securities of the
Company are sold to an underwriter for reoffering to the public.


 


SECTION 2.                                SECURITIES SUBJECT TO
THIS AGREEMENT


 


(a)                                  Transfer
Restricted Securities.  The
securities entitled to the benefits of this Agreement are the Transfer
Restricted Securities.


 


(b)                                 Holders
of Transfer Restricted Securities. 
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a “Holder”) whenever such Person owns Transfer Restricted
Securities.


 


SECTION 3.                                REGISTERED EXCHANGE
OFFER


 


(a)                                  Unless
the Exchange Offer shall not be permissible under applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with) or one of the events set forth in Section 4(a)(ii) has occurred, the
Company and Parent Guarantor shall (i) use their reasonable best efforts to
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 150 days after the Closing Date, a
Registration Statement under the Securities Act relating to the Exchange Notes
and the Exchange Offer, (ii) use their reasonable best efforts to cause such
Registration Statement to be declared effective by the Commission on or prior
to 210 days after the Closing Date, (iii) in connection with the foregoing,
file (A) all pre-effective amendments to such Registration Statement as may be
necessary in order to cause such Registration Statement to become effective,
(B) if applicable, a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Securities Act and (C) cause all necessary
filings in connection with the registration and qualification of the Exchange
Notes to be made under the blue sky laws of such jurisdictions as are necessary
to permit Consummation of the Exchange Offer and (iv) upon the effectiveness of
such Registration Statement, commence the Exchange Offer.  The Exchange Offer shall be on the
appropriate form permitting registration of the Exchange Notes to be offered in
exchange for the Transfer Restricted Securities and to permit resales of
Exchange Notes held by Broker-Dealers as contemplated by Section 3(c) below.


 


(b)                                 The
Company and Parent Guarantor shall use their reasonable best efforts to cause
the Exchange Offer Registration Statement to be effective continuously and
shall keep the Exchange Offer open for a period of not less than the minimum
period required under applicable U.S. federal and state securities laws to Consummate
the Exchange Offer; provided, however, that in no event
shall such period be less than 20 business days.  The Company and Parent Guarantor shall cause the Exchange Offer
to 


 


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comply, in all material respects, with all applicable U.S. federal and
state securities laws.  No securities
other than the Exchange Notes and the Guarantees shall be included in the
Exchange Offer Registration Statement. 
The Company and Parent Guarantor shall use their respective reasonable
best efforts to cause the Exchange Offer to be Consummated on or prior to 30
business days, or longer, if required by the federal securities laws, after the
date on which the Exchange Offer Registration Statement was declared effective
by the Commission.


 


(c)                                  The
Company and Parent Guarantor shall indicate in a “Plan of Distribution” section
of the Prospectus contained in the Exchange Offer Registration Statement that
any Broker-Dealer who holds Notes that are Transfer Restricted Securities and
that were acquired for its own account as a result of market-making activities
or other trading activities (other than Transfer Restricted Securities acquired
directly from the Company), may exchange such Notes pursuant to the Exchange
Offer; however, such Broker-Dealer may be deemed to be an “underwriter” within
the meaning of the Securities Act and must, therefore, deliver a prospectus
meeting the requirements of the Securities Act in connection with any resales
of the Exchange Notes received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement.  Such “Plan of Distribution”
section shall also contain all other information with respect to such resales
by Broker-Dealers that the Commission may require in order to permit such
resales pursuant thereto, but such “Plan of Distribution” shall not name any
such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by the Commission.


 


The Company and Parent
Guarantor shall use their reasonable best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Exchange Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities
or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
at least 90 days after the Consummation of the Exchange Offer.


 


The Company and Parent
Guarantor shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such
90-day period in order to facilitate such resales.


 


SECTION 4.                                SHELF REGISTRATION


 


(a)                                  Shelf
Registration.  If (i) the Company
and Parent Guarantor are not required to file an Exchange Offer Registration
Statement or cannot Consummate the Exchange Offer because the Exchange Offer is
not permitted by applicable U.S. law or Commission policy (after the procedures
set forth in Section 6(a) below have been complied with) or (ii) any Holder of
Transfer Restricted Securities that is either a “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act) or a 


 


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non-U.S. person (within the meaning of Regulation S under the
Securities Act) shall notify the Company prior to the 20th day following the
Consummation of the Exchange Offer that such Holder (A) is prohibited by applicable
U.S. law or Commission policy from participating in the Exchange Offer, (B) may
not resell the Exchange Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) is a Broker-Dealer and holds Notes acquired
directly from the Company or one of its affiliates, then the Company and Parent
Guarantor shall:


 


(x)                                   use
their respective reasonable best efforts to cause to be filed a Registration
Statement pursuant to Rule 415 under the Securities Act, which may be an
amendment to the Exchange Offer Registration Statement if permitted by the
rules and regulations of the Commission (in either event, the “Shelf
Registration Statement”) on or prior to the earliest to occur of (1) the
60th day after the date on which the Company and Parent Guarantor determine
that they are not required to file the Exchange Offer Registration Statement,
or permitted to Consummate the Exchange Offer and (2) the 60th day after the
date on which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) of paragraph (a) above (such earliest
date being the “Shelf Filing Deadline”), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities by
the Holders which shall have provided the information required pursuant to
Section 4(b) hereof; and


 


(y)                                 use
their respective reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before the 120th day
after the Shelf Filing Deadline.


 


Subject to Section 5(b),
the Company and Parent Guarantor shall use their reasonable best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes or
Exchange Notes by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 4(a), and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
ending on the earlier of two years following the Closing Date or such shorter
period that will terminate when all Notes or Exchange Notes covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement (such period being the “Shelf Registration Period”).


 


(b)                                 Provision
by Holders of Certain Information in Connection with the Shelf Registration
Statement.  No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted Securities in
any Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 days after receipt
of a request therefor, such information as the Company may reasonably request
for use in connection with any Shelf Registration


 


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Statement or Prospectus or preliminary Prospectus included
therein.  No Holder of Transfer
Restricted Securities shall be entitled to Additional Interest pursuant to
Section 5 hereof unless and until such Holder shall have used its reasonable
best efforts to provide all such reasonably requested information.  Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.


 


SECTION 5.                                ADDITIONAL INTEREST


 


(a)                                  If
(i) any of the Registration Statements required by this Agreement are not filed
with the Commission on or prior to the date specified for such filing in
Sections 3(a) and 4(a), as applicable, (ii) any of such required Registration
Statements have not been declared effective by the Commission on or prior to the
date specified for such effectiveness in Sections 3(a) and 4(a), as applicable,
(each, an “Effectiveness Target Date”), (iii) the Exchange Offer has not
been Consummated within 30 business days, or longer, if required by federal
securities laws, after the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement has been declared effective or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable in
connection with resales of Transfer Restricted Securities without being
succeeded within two (2) business days by a post-effective amendment to such
Registration Statement that cures such failure and that is itself immediately
declared effective (except as permitted in paragraph (b); such period of time
during which any such Registration Statement is not effective or any such
Registration Statement or the related Prospectus is not usable being referred
to as a “Blackout Period”) (each such event referred to in clauses (i)
through (iv), a “Registration Default”), the Company and Parent
Guarantor, jointly and severally, agree to pay additional interest (“Additional
Interest”) to each Holder of Transfer Restricted Securities adversely
affected by such Registration Default, in an amount equal to $.05 per week per
$1,000 principal amount of Transfer Restricted Securities held by such Holder
with respect to the first 90-day period immediately following the occurrence of
such Registration Default.  The amount
of Additional Interest shall increase by an additional $.05 per week per $1,000
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period (or portion thereof) until all Registration Defaults
have been cured, up to a maximum amount of Additional Interest of $.50 per week
per $1,000 principal amount of Transfer Restricted Securities.  All accrued Additional Interest shall be
paid to Record Holders by the Company and Parent Guarantor in the same manner
as interest is paid under the Notes. 
Following the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, the accrual of Additional Interest
with respect to such Transfer Restricted Securities will cease.


 


(b)                                 A
Registration Default referred to in Section 5(a)(iv) shall be deemed not to
have occurred and be continuing in relation to a Registration Statement or the
related Prospectus if (i) the Blackout Period has occurred solely as a result
of (x) the filing of a post-effective amendment to such Shelf Registration
Statement to incorporate


 


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annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events with
respect to the Company that would need to be described in such Registration
Statement or the related Prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into the Registration Statement) such Registration
Statement and the related Prospectus to describe such events; provided,
however,
that in any case if such Blackout Period occurs for a continuous period in
excess of 30 days, a Registration Default shall be deemed to have occurred on
the 31st day of such Blackout Period and Additional Interest shall be payable
in accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured or until the Company is no
longer required pursuant to this Agreement to keep such Registration Statement
effective or such Registration Statement or the related Prospectus usable; provided,
further,
that in no event shall the total of all Blackout Periods exceed 45 days in the
aggregate of any 12-month period.


 


All payment obligations
of the Company and Parent Guarantor set forth in this section that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such payment obligations with respect to such security shall have
been satisfied in full.


 


SECTION 6.                                REGISTRATION PROCEDURES


 


(a)                                  Exchange
Offer Registration Statement.  In
connection with the Exchange Offer, the Company and Parent Guarantor shall
comply with all of the provisions of Section 6(c) below, shall use their
reasonable best efforts to effect such exchange to permit the sale of Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and shall comply with all of the following
provisions:


 


(i)                                     As
a condition to its participation in the Exchange Offer pursuant to the terms of
this Agreement, each Holder of Transfer Restricted Securities shall furnish,
upon the request of the Company, prior to the Consummation thereof, a written
representation to the Company and Parent Guarantor (which may be contained in
the letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an affiliate of the Company or
Parent Guarantor, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any Person to participate in, a
distribution of the Exchange Notes to be issued in the Exchange Offer and (C)
it is acquiring the Exchange Notes in its ordinary course of business.  In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Company’s and Parent
Guarantor’s preparations for the Exchange Offer.  Each Holder hereby acknowledges and agrees that any Broker-


 


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Dealer and any such
Holder using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991), as
interpreted in the Commission’s letter to Shearman & Sterling dated July 2,
1993, and similar no-action letters, and (2) must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction and that such a secondary resale transaction
should be covered by an effective Registration Statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Exchange Notes obtained by such Holder in
exchange for Notes acquired by such Holder directly from the Company.


 


(ii)                                  Prior
to effectiveness of the Exchange Offer Registration Statement, the Company and
Parent Guarantor shall state to the Commission that the Company and Parent
Guarantor are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991) and
shall represent to the Commission that neither the Company nor Parent Guarantor
has entered into any arrangement or understanding with any Person to distribute
the Exchange Notes to be received in the Exchange Offer and that, to the best
of the Company’s and Parent Guarantor’s information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes received in the
Exchange Offer; and


 


(iii)                               shall
issue, upon the request of any Holder of Notes covered by the Exchange Offer,
Exchange Notes, having an aggregate principal amount equal to the aggregate
principal amount of Notes surrendered to the Company by such Holder in exchange
therefor; such Exchange Notes to be registered in the name of such Holder or in
the name of the purchaser(s) of such Exchange Notes, as the case may be; in
return, the Notes held by such Holder shall be surrendered to the Company for
cancellation.


 


(b)                                 Shelf
Registration Statement.  In connection
with the Shelf Registration Statement, the Company and Parent Guarantor shall
comply with all the provisions of Section 6(c) below and shall use their
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof, and pursuant thereto the Company and
Parent Guarantor will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for
the sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.


 


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(c)                                  General
Provisions.  In connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Notes and Exchange Notes by Broker-Dealers), the Company and
Parent Guarantor shall:


 


(i)                                     use
their reasonable best efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements (including, if
required by the Securities Act or any regulation thereunder, financial
statements of Parent Guarantor) for the period specified in Sections 3 or 4 of
this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein (A)
to contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company and Parent Guarantor shall file promptly an
appropriate amendment to such Registration Statement, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of either
clause (A) or (B), use their reasonable best efforts to cause such amendment to
be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter.  Notwithstanding
the foregoing, the Company and Parent Guarantor may allow the Shelf
Registration Statement to cease to become effective and usable if (x) the board
of directors of the Company determines in good faith that it is in the best
interests of the Company not to disclose the existence of or facts surrounding
any proposed or pending material corporate transaction involving the Company or
Parent Guarantor, and the Company notifies the Holders within two business days
after such boards of directors make such determination or (y) the Prospectus
contained in the Shelf Registration Statement contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading; provided that the two-year period referred
to in Section 4(a) hereof during which the Shelf Registration Statement is
required to be effective and usable shall be extended by the number of days
during which such Registration Statement was not effective or usable pursuant
to the foregoing provisions; and provided further that Additional Interest
shall accrue on the Notes as provided in Section 5 hereof;


 


(ii)                                  prepare
and file with the Commission such amendments and post-effective amendments to
the Registration Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in Sections 3 or 4
hereof, as applicable; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the


 


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disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to the
Prospectus;


 


(iii)                               cooperate
with the selling Holders of Transfer Restricted Securities and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);


 


(iv)                              use
their reasonable best efforts to cause the Transfer Restricted Securities
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities;


 


(v)                                 if
any fact or event contemplated by clause (d)(i)(D) below shall exist or have
occurred, prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading;


 


(v)                                 provide
a CUSIP, CINS or ISIN number, as applicable, for all Transfer Restricted
Securities not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit with
the depositary;


 


(vi)                              cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter (including
any “qualified independent underwriter”) that is required to be retained in
accordance with the rules and regulations of the NASD;


 


(vii)                           otherwise
use their reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to their security
holders, as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an


 


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offering, beginning with the
first month of the Company’s first fiscal quarter commencing after the
effective date of the Registration Statement;


 


(ix)                                cause
the Indenture to be qualified under the TIA not later than the effective date
of the first Registration Statement required by this Agreement, and, in
connection therewith, cooperate with the Trustee and the Holders of Notes and
Exchange Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use their reasonable best efforts to cause the Trustee to execute,
all documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such Indenture
to be so qualified in a timely manner; and


 


(x)                                   provide
promptly to any Holder upon such Holder’s written request each document filed
with the Commission pursuant to the requirements of Section 13 and Section 15
of the Exchange Act.


 


(d)                                 Additional
Provisions Applicable to Shelf Registration Statements.  In connection with each Shelf Registration
Statement, during the Shelf Registration Period, the Company and Parent
Guarantor shall:


 


(i)                                     advise
the underwriter(s), if any, and selling Holders of Transfer Restricted Securities
promptly and, if requested by such Persons, to confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the Shelf Registration Statement
or any post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Shelf Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement under the
Securities Act, of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale in any
jurisdiction or of the initiation of any proceeding for any of the preceding
purposes and (D) of the existence of any fact or the happening of any event
that requires the making of any additions to or changes in the Shelf
Registration Statement or the Prospectus in order that the Shelf Registration
Statement and the Prospectus do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.  If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any U.S. state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under U.S. state securities
or blue sky laws, the Company and Parent Guarantor shall use their reasonable
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;


 


13

















 


(ii)                                  if
requested in writing, furnish to each of the selling Holders of Transfer
Restricted Securities and each of the underwriter(s), if any, before filing with
the Commission, copies of any Shelf Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Shelf
Registration Statement or Prospectus (including all documents incorporated by
reference after the initial filing of such Shelf Registration Statement), which
documents will be subject to the review of such Holders and underwriter(s), if
any, for a period of at least five business days, and the Company and Parent
Guarantor will not file any such Shelf Registration Statement or Prospectus or
any amendment or supplement to any such Shelf Registration Statement or
Prospectus (including all such documents incorporated by reference) to which a
selling Holder of Transfer Restricted Securities covered by such Shelf Registration
Statement or the underwriter(s), if any, shall reasonably object within five
business days of receipt thereof; such Holders and underwriter(s) shall be
deemed to have reasonably objected to such filing if such Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to
be filed, contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or fails to comply,
in any material respect, with the applicable requirements of the Securities
Act;


 


(iii)                               promptly
prior to the filing of any document that is to be incorporated by reference
into a Shelf Registration Statement or Prospectus,  provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company’s and Parent Guarantor’s
representatives available for discussion of such document and other customary due
diligence matters, and include such information in such document prior to the
filing thereof as such selling Holders or underwriter(s), if any, reasonably
may request;


 


(iv)                              make
available for inspection at reasonable times at each of the Company’s principal
places of business by the selling Holders of Transfer Restricted Securities,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney or accountant retained by such selling
Holders or any of the underwriter(s), who shall certify to the Company and
Parent Guarantor that they have a current intention to sell Transfer Restricted
Securities pursuant to a Shelf Registration Statement, such relevant financial
and other records, pertinent corporate documents and properties of the Company
and Parent Guarantor as reasonably requested and cause the Company’s and Parent
Guarantor’s officers, directors and employees to respond to such inquiries as
shall be reasonably necessary, in the reasonable judgment of counsel to such
Holders, to conduct a reasonable investigation; provided, however,
that the foregoing inspection and information gathering shall be coordinated on
behalf of the selling Holders by one counsel designated by and on behalf of
such Holders and, provided,  further, that each such party shall be
required to maintain in confidence and not disclose to any other Person any
information or records


 


14

















 


reasonably designated by
the Company in writing as being confidential, until such time as (A) such
information becomes a matter of public record (whether by virtue of its
inclusion in such Shelf Registration Statement or otherwise), (B) such Person
shall be required so to disclose such information pursuant to a subpoena or
order of any court or other governmental agency or body having jurisdiction
over the matter (subject to the requirements of such order, and only after such
Person shall have given the Company prompt prior written notice of such
requirement) or (C) such information is required to be set forth in such Shelf
Registration Statement or the Prospectus included therein or in an amendment to
such Shelf Registration Statement or an amendment or supplement to such
Prospectus in order that such Shelf Registration Statement, Prospectus, amendment
or supplement, as the case may be, does not contain an untrue statement of a
material fact or omit to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading;


 


(v)                                 if
requested by any selling Holders of Transfer Restricted Securities or the
underwriter(s), if any, promptly incorporate in any Shelf Registration
Statement or Prospectus pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without limitation,
information relating to the “Plan of Distribution” of the Transfer Restricted
Securities, information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase price
being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; provided, however,
that the Company shall not be required to take any action pursuant to this
Section 6(d)(v) that would, in the opinion of counsel for the Company
reasonably satisfactory to the Initial Purchasers, violate applicable law;


 


(vi)                              deliver
to each selling Holder of Transfer Restricted Securities and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company and Parent Guarantor hereby consent to the
use of the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;


 


(vii)                           furnish
to each Holder whose Transfer Restricted Securities have been included in a
Shelf Registration Statement in connection with such exchange or sale, without
charge, at least one copy of the Registration Statement, as first filed with
the Commission, and of each amendment thereto, including all


 


15

















 


documents incorporated by
reference therein and all exhibits (including exhibits incorporated therein by
reference);


 


(viii)                        enter into
an underwriting agreement on not more than one occasion in the case of an
offering pursuant to a Shelf Registration, and make such representations and
warranties, and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement, all to
such extent as may be reasonably requested by any Holder or Holders of Transfer
Restricted Securities who hold at least 25% in aggregate principal amount of
such class of Transfer Restricted Securities; provided that the Company
and Parent Guarantor shall not be required to enter into any such agreement
more than once with respect to all of the Transfer Restricted Securities and
may delay entering into such agreement if the board of directors of each of the
Company and Parent Guarantor determines in good faith that it is in the best
interests of the Company and Parent Guarantor not to disclose the existence of
or facts surrounding any proposed or pending material corporate transaction
involving the Company and Parent Guarantor; and in connection with an
Underwritten Registration, the Company and Parent Guarantor shall:


 


(A)                              furnish
to the Initial Purchasers, the Holders of Transfer Restricted Securities who
hold at least 25% in aggregate principal amount of such class of Transfer
Restricted Securities and each underwriter, if any, in such substance and scope
as they may reasonably request and as are customarily made in connection with
an offering of debt securities pursuant to a Shelf Registration Statement upon
the effective date of the Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an Underwritten Offering of Transfer
Restricted Securities upon the date of the closing under the underwriting
agreement related thereto):


 


(1)                                  a
certificate, dated the date of effectiveness of the Shelf Registration
Statement signed by (y) the respective chief executive officer, the respective
President or any Vice President and (z) the respective chief financial officer
of each of the Company and Parent Guarantor confirming, as of the date thereof,
the matters set forth in Section 7(n) of the Purchase Agreement and such other
matters as such parties may reasonably request;


 


(2)                                  an
opinion, dated the date of effectiveness of such Shelf Registration Statement,
of securities counsel for the Company covering matters similar to those set
forth in Section 7(d) of the Purchase Agreement, which are appropriate for the
circumstances provided herefor, and such other matters as such parties may
reasonably request, and in any event including a statement (which may be
similar to the statement contained in the letter delivered pursuant to Section
7(d) of the Purchase Agreement) to the effect that such counsel has
participated in conferences


 


16

















 


with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, the Initial Purchasers’ representatives and the
Initial Purchasers’ counsel in connection with the preparation of such Shelf
Registration Statement and the related Prospectus although such counsel has not
independently verified the accuracy, completeness or fairness of such
statements in such Shelf Registration Statement; and that such counsel advises
that, on the basis of the foregoing, such counsel’s work in connection with
this work did not disclose information that gave such counsel reason to believe
that the Shelf Registration Statement, at the time such Shelf Registration
Statement or any post-effective amendment thereto became effective 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 in
light of the circumstances under which they were made, not misleading, or that
the Prospectus contained in such Shelf Registration Statement as of its date
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.  Such counsel may state further that such
counsel expresses no view with respect to, assumes no responsibility for, and
has not independently verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules, the financial projections and other
financial, statistical and accounting data included or incorporated by
reference in the Shelf Registration Statement contemplated by this Agreement or
the related Prospectus; and


 


(3)                                  a
customary comfort letter, dated as of the date of effectiveness of the Shelf
Registration Statement from the Company’s independent accountants, in the customary
form and covering matters of the type customarily covered in comfort letters to
underwriters in connection with primary underwritten offerings, and affirming
the matters set forth in the comfort letters delivered pursuant to Sections
7(i) and 7(j) of the Purchase Agreement;


 


(B)                                set
forth in full or incorporated by reference in the underwriting agreement, if
any, the indemnification provisions and procedures of Section 8 hereof with
respect to all parties to be indemnified pursuant to said Section; and


 


(C)                                deliver
such other documents and certificates as may be reasonably requested by such
parties to evidence compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company and Parent Guarantor pursuant to this clause (viii), if
any.


 


17

















 


If at any time during the Shelf Registration Period the representations
and warranties of the Company or Parent Guarantor contemplated in clause (A)(1)
above cease to be true and correct, the Company or Parent Guarantor shall so
advise the Initial Purchasers and the underwriters, if any, and each selling
Holder promptly and, if requested by such Persons, shall confirm such advice in
writing; and


 


(ix)                                prior
to any public offering of Transfer Restricted Securities cooperate with the
selling Holders of Transfer Restricted Securities the underwriter(s), if any,
and their respective counsel in connection with the registration and qualification
of the Transfer Restricted Securities under the securities or blue sky laws of
such jurisdictions as the selling Holders of Transfer Restricted Securities or
underwriter(s) may reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement
filed pursuant to Section 4 hereof; provided, however, that the Company
and Parent Guarantor shall not be obligated to qualify as a foreign corporation
in any jurisdiction in which they are not now so qualified or to take any
action that would subject them to general consent to service of process or
taxation, other than as to matters and transactions relating to the Shelf
Registration Statement, in any jurisdiction where they are not now so subject.


 


(e)                                  Each
Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice from the Company of the existence of any fact of the kind
described in Section 6(d)(i) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the Shelf
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof, or
until it is advised in writing (the “Advice”) by the Company that the
use of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the Prospectus.  If so directed by the Company, each Holder
will deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice.  In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Shelf Registration Statement set forth in Section 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(d)(i) hereof to and including the date when each selling Holder
covered by such Shelf Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof
or shall have received the Advice.


 


(f)                                    The
Company and Parent Guarantor may require each Holder of Transfer Restricted
Securities as to which any registration is being effected to furnish to the
Company such information regarding such Holder and such Holder’s intended
method of distribution of the applicable Transfer Restricted Securities as the
Company may from time to time reasonably request in writing, but only to the
extent that such


 


18

















 


information is required
in order to comply with the Securities Act. 
Each such Holder agrees to notify the Company as promptly as practicable
of (i) any inaccuracy or change in information previously furnished by such
Holder to the Company or (ii) the occurrence of any event, in either case, as a
result of which any Prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or such Holder’s
intended method of distribution of the applicable Transfer Restricted
Securities or omits to state any material fact regarding such Holder or such
Holder’s intended method of distribution of the applicable Transfer Restricted
Securities required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading and promptly to furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such Prospectus shall not contain, with respect to such Holder or the
distribution of the applicable Transfer Restricted Securities an 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.


 


SECTION 7.                                REGISTRATION EXPENSES


 


(a)                                  All
expenses incident to the Company’s and Parent Guarantor’s performance of or
compliance with this Agreement will be borne by the Company and Parent
Guarantor regardless of whether a Registration Statement becomes effective,
including without limitation and as applicable:  (i) all Commission, securities exchange or NASD registration and
filing fees and expenses (including filings made by any Initial Purchasers or
Holder with the NASD (and, if applicable, the fees and expenses of any
“qualified independent underwriter” and its counsel that may be required by the
rules and regulations of the NASD)); (ii) all fees and expenses of compliance by
the Company and Parent Guarantor with U.S. federal securities and state blue
sky or securities laws and compliance with the rules of the NASD; (iii) all
expenses of printing (including printing certificates for the Exchange Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services; (iv) all fees and disbursements of counsel for the Company
and Parent Guarantor; (v) all fees and disbursements of independent certified
public accountants of the Company (including the expenses of any special audit
and comfort letters required by or incident to such performance) and (vi) the
reasonable fees and disbursements of one nationally recognized law firm with
experience in securities law matters designated by the Holders of a majority in
principal amount of Transfer Restricted Securities covered by the Shelf
Registration Statement to act as counsel for the Holders of those Transfer
Restricted Securities in connection therewith.


 


The Company will, in any
event, bear its and Parent Guarantor’s internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company or
Parent Guarantor.


 


19

















 


(b)                                 Each
Holder of Transfer Restricted Securities will pay all underwriting discounts,
if any, and commissions and transfer taxes, if any, relating to the disposition
of such Holder’s Transfer Restricted Securities.


 


SECTION 8.                                INDEMNIFICATION


 


(a)                                  The
Company and Parent Guarantor shall, jointly and severally, indemnify and hold
harmless each Holder of Transfer Restricted Securities, its officers and employees
and each Person, if any, who controls any such Holders, within the meaning of
the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases, sales
and registration of the Notes, the Guarantees and the Exchange Notes), to which
that Holder, officer, employee or controlling Person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
preliminary Prospectus or Prospectus or in any amendment or supplement thereto;
(ii) the omission or alleged omission to state in any Registration Statement,
preliminary Prospectus or Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
or (iii) any act or failure to act or any alleged act or failure to act by any
Holder of Transfer Restricted Securities in connection with, or relating in any
manner to, the Notes, the Guarantees or 
the Exchange Notes or the offering contemplated by any Registration
Statement, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company and Parent Guarantor shall
not be liable under this clause (iii) to the extent that it is determined
in a final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Holder through its gross
negligence or willful misconduct); and shall reimburse each Holder and each
such officer, employee or controlling Person promptly upon demand for any legal
or other expenses reasonably incurred by that Holder, officer, employee or
controlling Person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company
and Parent Guarantor shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement, preliminary Prospectus or
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Holder furnished to the
Company by or on behalf of any Holder specifically for inclusion therein; provided,
further,
that with respect to any such untrue statement or omission made in any
preliminary Prospectus or Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of the Holder, its officers and
employees and any Person who controls such Holder, from whom the Person
asserting any such


 


20

















 


losses, claims, damages or liabilities purchased the Notes, Guarantees
or Exchange Notes concerned if, to the extent that such sale was a sale by the
Holder and any such loss, claim, damage or liability of such Holder is a result
of the fact that (A) a copy of the Prospectus (or the Prospectus as then amended
or supplemented) was not sent or given to such Person at or prior to written
confirmation of the sale of such Notes or Exchange Notes to such Person or (B)
the untrue statement or omission in the preliminary Prospectus or Prospectus
delivered to the Person was corrected in the Prospectus (or the Prospectus as
then amended or supplemented) unless such failure to deliver the Prospectus was
a result of noncompliance by the Company with Section 6(d)(vi) hereof.  The foregoing indemnity agreement is in
addition to any liability which the Company and Parent Guarantor may otherwise
have to any Holder or to any officer, employee or controlling Person of that
Holder.


 


(b)                                 Each
Holder, severally and not jointly, shall indemnify and hold harmless each of
the Company, Parent Guarantor, their respective directors, officers and
employees, and each Person, if any, who controls either of the Company or
Parent Guarantor within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company, Parent Guarantor or any such director, officer
or controlling Person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary Prospectus
or Prospectus, or in any amendment or supplement thereto or (ii) the omission
or alleged omission to state in any Registration Statement, preliminary
Prospectus or Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Holders furnished to the Company by or on behalf of that Holder specifically
for inclusion therein, and shall reimburse the Company, Parent Guarantor and
each such director, officer, employee and controlling Person, promptly upon
demand, for any legal or other expenses reasonably incurred by the Company,
Parent Guarantor or each such director, officer, employee or controlling Person
in connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred.  The foregoing indemnity
agreement is in addition to any liability which any Holder may otherwise have
to the Company, Parent Guarantor or any such director, officer, employee or
controlling Person.


 


(c)                                  Promptly
after receipt by an indemnified party under this Section 8 of notice of any
claim or the commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it


 


21

















 


has been materially prejudiced by such failure and; provided,
further,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8.  If any such claim or action
shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party to
the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, any indemnified
party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel has been specifically authorized by the indemnifying party in
writing, or (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and
in the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm
of attorneys (in addition to local counsel) at any time for all such
indemnified parties, which firm shall be designated in writing by (x) Lehman
Brothers Inc. if the indemnified parties under this Section 8 consist of the
Initial Purchasers or any of their respective officers, employees or
controlling Persons, (y) by the Company, if the indemnified parties under this
Section 8 consist of any of the Company, Parent Guarantor or any of their
respective directors, officers, employees or controlling Persons or (z) by the
Holders of the majority of the aggregate principal amount of Notes then
outstanding, in the case of parties indemnified pursuant to Section 8(a).  Each indemnified party, as a condition of
the indemnity agreement contained in this Section 8, shall use its reasonable
best efforts to cooperate with the indemnifying party in the defense of any
such claim.  No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld),


 


22

















 


but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment.


 


(d)                                 If
the indemnification provided for in this Section 8 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and Parent Guarantor, on the one hand, and the Holders on the other, from the
sale of the Transfer Restricted Securities 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 and Parent Guarantor, on
the one hand and the Holders on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or Parent
Guarantor, on the one hand, or the Holders, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission.  The Company, Parent Guarantor and the Holders agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were to
be determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein.  The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim.  Notwithstanding
the provisions of this Section 8(d), no Holder shall be required to contribute
any amount in excess of the amount by which the net proceeds received by it in
connection with its sale of Notes exceeds the amount of any damages which such
Holder has otherwise paid or become liable to pay by reason of the 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 Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.  The Holders’
obligations to contribute as provided in this Section 8(d) are several and not
joint.


 


23

















 


SECTION 9.                                RULE 144A


 


The Company and Parent
Guarantor hereby agrees with each Holder of Transfer Restricted Securities,
during any period in which the Company or Parent Guarantor is not subject to
Section 13 or 15(d) of the Exchange Act within the two-year period following
the Closing Date, to make available to any Holder or beneficial owner of
Transfer Restricted Securities, in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities from such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.


 


SECTION 10.                          PARTICIPATION IN UNDERWRITTEN
REGISTRATIONS


 


No Holder may participate
in any Underwritten Registration hereunder unless such Holder (a) agrees to
sell such Holder’s Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.


 


SECTION 11.                          SELECTION OF UNDERWRITERS


 


Subject to Section
6(d)(i), the Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering at such Holders’ expense.  In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided that such investment bankers and managers must be
reasonably satisfactory to the Company.


 


SECTION 12.                          MISCELLANEOUS


 


(a)                                  Remedies.  The Company and Parent Guarantor agree that
monetary damages (including Additional Interest) would not be adequate
compensation for any loss incurred by reason of breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.


 


(b)                                 No
Inconsistent Agreements.  Neither
the Company nor Parent Guarantor will, on or after the date of this Agreement,
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof.  Except as
disclosed in the Offering Memorandum (as such term is defined in the Purchase
Agreement), neither the Company nor Parent Guarantor has previously entered into
any agreement granting any registration rights with respect to its securities
to any Person.  The rights granted to
the


 


24

















 


Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company’s or Parent
Guarantor’s securities under any agreement in effect on the date hereof.


 


(c)                                  Adjustments
Affecting the Notes.  The Company
and Parent Guarantor will not take any action, or permit any change to occur,
with respect to the Notes that would materially and adversely affect the
ability of the Holders to Consummate any Exchange Offer except such actions or
changes as required by law.


 


(d)                                 Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given unless the Company
has obtained the written consent of Holders of a majority of the outstanding
principal amount of the Transfer Restricted Securities affected by such amendment,
modification, supplement, waiver or consent. 
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being tendered pursuant to such Exchange Offer may be given by the Holders
of a majority of the outstanding principal amount of Transfer Restricted Securities
being tendered or registered.


 


(e)                                  Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested), telex,
facsimile or air courier guaranteeing overnight delivery:


 


(i)                                     if
to a Holder, at the address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar under the Indenture; and


 


(ii)                                  if
to the Company to:


 


                                                La
Quinta Properties, Inc.


                                                909
Hidden Ridge, Suite 600


                                                Irving,
Texas  75039


                                                Attention:  General Counsel


                                                Fax:                           (214)
492-6403


 


                                                if
to Parent Guarantor to:


 


                                                La
Quinta Corporation


                                                909
Hidden Ridge, Suite 600


                                                Irving,
Texas  75039


                                                Attention:  General Counsel


                                                Fax:
                        (214) 492-6403


 


25

















 


 


                                                in
each case, with a copy to:


 


                                                Goodwin
Procter LLP


                                                Exchange
Place


                                                53
State Street


                                                Boston,
Massachusetts  02109


                                                Attention:  Scott F. Duggan, Esq.


                                                Fax:                           (617)
523-1231


 


Any such notices and communications
shall take effect at the time of receipt thereof.  The Company shall be entitled to act and rely upon any notice or
communication given or made by the Initial Purchasers.


 


Copies of all such
notices, demands or other communications shall be concurrently delivered by the
Person giving the same to the Trustee at the address specified in the
Indenture.


 


(f)                                    Successors
and Assigns.  This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties, including without limitation and without the need for an
express assignment, subsequent Holders; provided, however, that this Agreement
shall not inure to the benefit of or be binding upon a successor or assign of a
Holder unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder.


 


(g)                                 Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


 


(h)                                 Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


 


(i)                                     Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED, IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.


 


(j)                                     Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.


 


(k)                                  Entire
Agreement.  This Agreement together
with the other Operative Documents (as defined in the Purchase Agreement) is
intended by the parties 


 


26

















 


as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company and Parent
Guarantor with respect to the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.


 


[Signature pages
follow.]


 


27

















 


IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.


 


	
   

  	
   

  	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  La Quinta Properties, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
       /s/
  David L. Rea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  David L. Rea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice
  President and

  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  La
  Quinta Corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
       /s/
  David L. Rea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
  David L. Rea

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice President
  and

  Chief Financial Officer

  	
   

  



 


SIGNATURE PAGES TO
REGISTRATION RIGHTS AGREEMENT


 


28

















 


 


Accepted on behalf of the
Initial Purchasers:


 


	
  Lehman
  Brothers Inc.

  
	
   

  
	
  By:

  	
       /s/
  John Cokinos

  	
   

  
	
   

  	
  Name:

  	
  John Cokinos

  
	
   

  	
  Title:

  	
  Senior Vice President

  
				



 


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