<PAGE>
OMB Number: 3235-0145
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Doubletree Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
258624-10-5
------------------------------------------------------------
(CUSIP Number)
Michael M. Pastore, General Electric Investment Corporation, 3003 Summer Street,
Stamford, CT 06904, (203) 326-3212.
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
November 8, 1996
------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box .
Check the following box if a fee is being paid with the statement . (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
EXHIBIT ON PAGE 27
TOTAL PAGES 78
<PAGE>
SCHEDULE 13D
CUSIP NO. 258624 10 5 PAGE 2 OF 78 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PT Investments, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
Not applicable
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 2,890,287-
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
2,890,287-
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,890,287-
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* x
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.3%
14 TYPE OF REPORTING PERSON*
CO
- -INCLUDES 262,753 SHARES ISSUABLE UPON EXERCISE OF WARRANTS AT ANY TIME BEFORE
NOVEMBER 8, 2001
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 78 Pages
<PAGE>
SCHEDULE 13D
CUSIP NO. 258624 10 5 PAGE 3 OF 78 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GE Investment Hotel Partners I, Limited Partnership
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 6,059,226
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
6,059,226
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,059,226
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* x
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.3%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 78 Pages
<PAGE>
SCHEDULE 13D
CUSIP NO. 258624 10 5 PAGE 4 OF 78 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GE Invesment Management Incorporated
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,755
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
1,775-
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,775
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* x
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
**
14 TYPE OF REPORTING PERSON*
CO
**PERCENTAGE OF BENEFICIAL OWNERSHIP IS LESS THAN 0.01%.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 78 Pages
<PAGE>
SCHEDULE 13D
CUSIP NO. 258624 10 5 PAGE 5 OF 78 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
General Electric Company
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
Not applicable
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of New York
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,775 (See 11 below)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
1,775 (See 11 below)
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,775 (these shares are owned beneficially and of record by a wholly
owned subsidiary of the reporting person)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* x
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
**
14 TYPE OF REPORTING PERSON*
CO
**PERCENTAGE OF BENEFICIAL OWNERSHIP IS LESS THAN 0.01%.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 5 of 78 Pages
<PAGE>
SCHEDULE 13D
CUSIP NO. 258624 10 5 PAGE 6 OF 78 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trustees of General Electric Pension Trust
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of New York
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 3,027,421-
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
3,027,421-
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,027,421-
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* x
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.6%
14 TYPE OF REPORTING PERSON*
EP
- -Includes 2,627,534 owned and record by a wholly owned subsidiary of the
reporting person and 262,753 shares issuable upon exercise of warrants owned by
such subsidiary.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 6 of 78 Pages
<PAGE>
ITEM 1. SECURITY AND ISSUER
- ------- -------------------
This statement relates to the common stock, $0.01 par value per share
("Common Stock"), of Doubletree Corporation (the "Issuer"), having its principal
executive offices at 410 North 44th Street, Suite 700, Phoenix, Arizona 85008.
The entities identified in the first paragraph of the response to Item
2 (the "Reporting Persons") have entered into a Joint Filing Agreement, dated
November 18, 1996, a copy of which is attached hereto as Schedule I.
ITEM 2. IDENTITY AND BACKGROUND
- ------- -----------------------
This statement is filed on behalf of GE Investment Hotel Partners I,
Limited Partnership, a Delaware limited partnership ("GEHOP"), General Electric
Company, a New York corporation ("GE"), GE Investment Management Incorporated, a
Delaware corporation and a wholly owned subsidiary of GE ("GEIM"), Trustees of
General Electric Pension Trust, a New York common law trust ("GEPT"), and PT
Investments, Inc., a Delaware corporation and a wholly owned subsidiary of GEPT
("PT"). GEIM is the general partner of GEHOP.
GEPT administers the pension assets held for the benefit of employees
of GE. PT acquires and holds title to property, collects income therefrom and
remits the entire amount of such income, less expenses, to an organization
exempt under Section 501(a) of the Internal Revenue Code of 1986. GE is a
diversified manufacturing and financial corporation. GEIM is a registered
investment advisor. GEHOP is a limited partnership engaged in investing in
hotel assets.
The address of the principal offices of GEHOP, GEPT, PT and GEIM is
3003 Summer Street, Stamford, Connecticut 06904. The address of the principal
offices of General Electric Company is 3135 Easton Turnpike, Fairfield CT 06431.
For information with respect to the identity and principal occupation
of each (i) executive officer and director of the general partner of GEHOP see
Schedule II attached hereto; (ii) executive officer and director of GEIM see
Schedule II attached hereto; (iii) executive officer and director of GE see
Schedule III attached hereto; (iv) executive officer and director of PT see
Schedule IV attached hereto; and (v) Trustee of GEPT see Schedule V attached
hereto.
Page 7 of 78 Pages
<PAGE>
During the last five years, neither any Reporting Person nor, to the
best knowledge of each Reporting Person, any person identified in Schedules II,
III, IV or V has (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such a proceeding was or is subject to a judgement, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
All Reporting Persons and, to the best knowledge of each Reporting
Person, all persons identified in Schedule II and III are United States
citizens, except Paolo Fresco, Vice Chairman of the Board and an Executive
Officer of GE, who is an Italian citizen, and Claudio X. Gonzalez, a Director of
GE, who is a Mexican citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION
- ------- --------------------------------------------------
Pursuant to a Securities Purchase Agreement dated as of October 31,
1996, a copy of which is attached hereto as Exhibit 2, on November 8, 1996, PT
purchased for $100,000,000 (a) 2,627,534 shares of the Issuer's Common Stock and
(b) five-year warrants to purchase 262,753 shares of the Issuer's Common Stock
at an exercise price of $38.06 per share (the "Warrants"). PT financed its
purchase of the shares through capital contributions from GEPT. GEPT funded the
contributions from its cash on hand.
ITEM 4. PURPOSE OF TRANSACTION
- ------- ----------------------
PT acquired the shares of Common Stock and the Warrants reported
herein as an investment and to provide the Issuer with funds to finance the
acquisition of Red Lion Hotels, Inc.
The Reporting Persons intend to reexamine their investment in the
Issuer from time to time and, depending on market considerations and other
factors, may purchase or sell shares of Common Stock, if appropriate
opportunities to do so are available, on such terms and at such time as they
consider advisable.
Subject to the foregoing, the Reporting Persons do not have any
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
Page 8 of 78 Pages
<PAGE>
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number of directors or to
fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
- ------- ------------------------------------
According to the Issuer's Quarterly Report on Form 10-Q for the period
ended September 30, 1996, there were 23,095,586 shares of Common Stock
outstanding as of October 11, 1996. In addition to the shares of Common Stock
(and shares of Common Stock issuable upon exercise of the Warrants) issued and
sold to PT as described herein, the Reporting Persons understand that (i) on
November 8, 1996, the outstanding securities of Red Lion Hotels, Inc. were
converted into the right to receive an aggregate of 7,381,588 shares of Common
Stock (less any fractional shares represented thereby) as merger consideration
pursuant to the Issuer's acquisition of Red Lion Hotels, Inc. and (ii) on
November 8, 1996 and November 13, 1996, the Issuer issued an aggregate of
6,440,000 shares of Common Stock in an underwritten public offering. Thus,
there were 39,544,708
Page 9 of 78 Pages
<PAGE>
shares (or, upon exercise of the Warrants, 39,807,461 shares) of Common Stock
outstanding on a pro forma basis as of October 11, 1996 after adjusting for such
issuances of additional shares of Common Stock (such amount, the "Total Adjusted
Outstanding Shares").
The Reporting Persons together beneficially own an aggregate of
9,088,402 shares of Common Stock (including 262,753 shares issuable upon
exercise of the Warrants and 10,000 shares issuable upon exercise of a certain
option, as discussed below), or 22.83% of the Total Adjusted Outstanding Shares.
(a) PT beneficially owns 2,890,287 shares of Common Stock,
representing 7.26% of the Total Adjusted Outstanding Shares. This number
includes 2,627,534 shares of Common Stock purchased by PT on November 8, 1996
and 262,753 shares issuable upon exercise of the Warrants purchased on November
8, 1996. A copy of the certificate evidencing the Warrants is attached hereto as
Exhibit 3.
GEPT beneficially owns 3,027,421 shares of Common Stock, representing
7.0% of the Total Adjusted Outstanding Shares. This number includes 2,890,287
shares of Common Stock beneficially owned by PT, which is a wholly owned
subsidiary of GEPT, as well as 137,134 shares of Common Stock held by GEPT.
GEHOP beneficially owns 6,059,226 shares of Common Stock, representing
15.32% of the Total Adjusted Outstanding Shares. This number includes 6,049,226
shares of Common Stock held by GEHOP and 10,000 shares subject to the vested
portion of an outstanding option to purchase 20,000 shares granted to GEHOP on
June 30, 1994.
GEIM, which is the general partner of GEHOP, beneficially owns 1,755
shares of Common Stock, representing less than 0.1% of the Total Adjusted
Outstanding Shares.
GE has beneficial ownership of 1,755 shares of Common Stock. These
shares are held beneficially and of record by GEIM, a wholly owned subsidiary of
GE.
GEHOP, GEIM and PT each expressly disclaim beneficial ownership of the
shares of the Issuer's Common Stock owned by filing persons other than itself,
GE disclaims beneficial ownership of the shares owned by GEHOP, GEPT and PT, and
GEPT disclaims beneficial ownership of the shares owned by GEHOP, GEIM and GE.
(b) To the best knowledge of the Reporting Persons, no person other
than the Reporting Persons has the power to vote or to direct the vote or to
dispose or direct
Page 10 of 78 Pages
<PAGE>
the disposition of any of the securities which any of the Reporting Persons may
be deemed to beneficially own.
(c) Except for the transactions described above effected by PT on
November 8, 1996, no Reporting Person has effected any transaction in shares of
Common Stock during the preceding sixty days and to the best knowledge of each
Reporting Person, no person identified in Schedules II, III, IV or V,
beneficially owns any shares of Common Stock or has effected any transaction in
shares of Common Stock during the preceding sixty days.
(d) No other person except for the Reporting Persons are known to
have the rights to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the shares of Common Stock beneficially owned
by the Reporting Persons and covered by this Schedule 13D.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONS WITH RESPECT TO
- ------- --------------------------------------------------------------------
SECURITIES OF THE ISSUER
-------------------------
There are no contracts, arrangements, understandings or relationships,
except the Amendment No. 3 to the Incorporation and Registration Rights
Agreement (a copy of which is attached hereto as Exhibit 1), the Securities
Purchase Agreement (a copy of which is attached hereto as Exhibit 2), the
Warrant Certificate (a copy of which is attached hereto as Exhibit 3), and the
outstanding option granted to GEHOP entitling GEHOP to purchase 20,000 shares of
Common Stock (a copy of which is attached hereto as Exhibit 4) among GEHOP,
GEIM, GE, GEPT or PT or, to the best of their knowledge, any executive officer
or director of any of them and any other person with respect to any securities
of the Issuer, including any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any securities of the
Issuer, finders fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of parcels.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
- ------- --------------------------------
Exhibit 1
Amendment No. 3 to the Incorporation and Registration Rights Agreement
Exhibit 2
Securities Purchase Agreement
Page 11 of 78 Pages
<PAGE>
Exhibit 3
Warrant Certificate for 262,753 Shares of Common Stock
Exhibit 4
Option to Purchase 20,000 Shares of Common Stock Held
by GEHOP
Page 12 of 78 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GE INVESTMENT HOTEL PARTNERS I,
LIMITED PARTNERSHIP
By: GE Investment Management Incorporated,
Its General Partner
By: /s/ Alan M. Lewis
--------------------------------
Name: Alan M. Lewis
Title: Executive Vice President
Dated: November 18, 1996
Page 13 of 78 Pages
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC COMPANY
By: /s/ Dale F. Frey
-----------------------
Name: Dale F. Frey
Title: Vice President
Dated: November 18, 1996
Page 14 of 78 Pages
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GE INVESTMENT MANAGEMENT, INCORPORATED
By: /s/ Alan M. Lewis
---------------------------------
Name: Alan M. Lewis
Title: Executive Vice President
Dated: November 18, 1996
Page 15 of 78 Pages
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GENERAL ELECTRIC PENSION TRUST
By: /s/ Alan M. Lewis
--------------------------------
Name: Alan M. Lewis
Title: Trustee
Dated: November 18, 1996
Page 16 of 78 Pages
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PT INVESTMENTS, INC.
By: /s/ Michael M. Pastore
-----------------------
Name: Michael M. Pastore
Title: Vice President
Dated: November 18, 1996
Page 17 of 78 Pages
<PAGE>
Schedule I
JOINT FILING AGREEMENT
----------------------
The undersigned parties hereby agree that the Schedule 13D filed
herewith (and any amendments thereto) relating to the Stock of Doubletree
Corporation is being filed jointly with the Securities and Exchange Commission
pursuant to Section 13-d-1(f) on behalf of each such person.
Dated: November 18, 1996
GE INVESTMENT HOTEL PARTNERS,
LIMITED PARTNERSHIP
By: GE Investment Management
Incorporated, Its General
Partner
By: /s/ Alan M. Lewis
--------------------------------
Name: Alan M. Lewis
Title: Executive Vice President
GENERAL ELECTRIC COMPANY
By: /s/ Dale F. Frey
--------------------------------
Name: Dale F. Frey
Title: Vice President
GE INVESTMENT MANAGEMENT
INCORPORATED
By: /s/ Alan M. Lewis
--------------------------------
Name: Alan M. Lewis
Title: Executive Vice President
TRUSTEES OF GENERAL ELECTRIC PENSION
TRUST
By: /s/ Alan M. Lewis
------------------------------
Name: Alan M. Lewis
Title: Trustee
Page 18 of 78 Pages
<PAGE>
PT INVESTMENTS, INC.
By: /s/ Michael M. Pastore
---------------------------------
Name: Michael M. Pastore
Title: Vice President
Page 19 of 78 Pages
<PAGE>
Schedule II
GE INVESTMENT MANAGEMENT INCORPORATED, General Partner
of GE Investment Hotel Partners I, Limited Partnership
The business address of each of the persons listed below is 3003 Summer
Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of the Officers of GE Investment
Management Incorporated are as follows:
OFFICERS
- --------
Dale F. Frey Chairman of the Board, Chief
Executive Officer and
President
Eugene K. Bolton Executive Vice President
Michael J. Cosgrove Executive Vice President
Ralph R. Layman Executive Vice President
Alan M. Lewis Executive Vice President,
General Counsel and Secretary
John H. Myers Executive Vice President
Geoffrey R. Norman Executive Vice President
Donald W. Torey Executive Vice President and
Treasurer
Stephen B. Hoover Senior Vice President
Philip A. Mercurio Senior Vice President
Philip A. Riordan Senior Vice President
Mark A. Dunham Senior Vice President
Suzanne D. Dowd Vice President
Ronald I. Felmus Vice President
Keith G. Smith Vice President
Michael D. Wright Vice President
Constance K. Doyle Vice President
Steven M. Beringer Vice President
Joseph M. Velez Vice President
Matthew J. Witkos Vice President
Christopher P. Mullahy Vice President
Michael S. Petrucelli Vice President - Finance
Michael M. Pastore Vice President and Assistant
Secretary
Matthew J. Simpson Vice President and Assistant
Secretary
Michael J. Strone Vice President and Assistant
Secretary
Page 20 of 78 Pages
<PAGE>
The names and principal occupations of the Directors of GE Investment
Management Incorporated are as follows:
Eugene K. Bolton Executive Vice President of
GEIM and Trustee of GEPT
Michael J. Cosgrove Executive Vice President of
GEIM and Trustee of GEPT
Dale F. Frey Chairman of the Board, Chief
Executive Officer and
President of GEIM and Trustee
of GEPT
Ralph R. Layman Executive Vice President of
GEIM and Trustee of GEPT
Alan M. Lewis Executive Vice President,
General Counsel and Secretary
of GEIM and Trustee of GEPT
John H. Myers Executive Vice President of
GEIM and Trustee of GEPT
Geoffrey R. Norman Executive Vice President
Donald W. Torey Executive Vice President and
Treasurer of GEIM and Trustee
of GEPT
Page 21 of 78 Pages
<PAGE>
Schedule III
GENERAL ELECTRIC COMPANY EXECUTIVE OFFICERS
-------------------------------------------
The business address of each of the persons listed below is 3135 Easton
Turnpike, Fairfield, Connecticut 06431.
The names and principal occupations of the Officers of General Electric
Company are as follows:
J.F. Welch, Jr. Chairman of the Board and Chief
Executive Officer
P. Fresco Vice Chairman of the Board and
Executive Officer
F.P. Doyle Executive Vice President
P.D. Ameen Vice President and Comptroller
J.R. Bunt Vice President and Treasurer
D.R. Calhoun Vice President - GE Transportation
Systems
W.J. Conaty Senior Vice President - Human
Resources
D.D. Dammerman Senior Vice President - Finance
L.S. Edelheit Senior Vice President - Corporate
Research and Development
D.F. Frey Vice President and Chairman and
President; GE Investments Corp.
B.W. Heineman, Jr. Senior Vice President - General
Counsel and Secretary
W.J. McNerney, Jr. Senior Vice President - GE Lighting
E.F. Murphy Senior Vice President - GE Aircraft
Engines
R.L. Nardelli Senior Vice President - GE Power
Systems
R.W. Nelson Vice President - Corporate
Financial Planning and Analysis
J.D. Opie Vice Chairman of the Board and
Executive Officer
G.M. Reiner Vice President - Corporate Business
Development
G.L. Rogers Vice President - GE Motors
J.R. Stonesifer Senior Vice President - GE
Appliances
J.M. Trani Senior Vice President - GE Medical
Systems
L.G. Trotter Senior Vice President - GE
Electrical Distribution and Control
Page 22 of 78 Pages
<PAGE>
CITIZENSHIP
-----------
(other than United States)
C.X. Gonzalez Mexico
P. Fresco Italy
The names and principal occupations of Directors of General Electric
Company are as follows:
H.B. Atwater, Jr. Retired Chairman, Chief Executive
Officer, and former Director,
General Mills, Inc.
D.W. Calloway Chairman of the Board, Chief
Executive Officer and Director,
PepsiCo, Inc.
S.S. Cathcart Retired Chairman, Illinois Tool
Works
D.D. Dammerman Senior Vice President-Finance,
General Electric Company
P. Fresco Vice Chairman of the Board and
Managing Director, Kimberly-Clark
de Mexico, S.A. de C.V.
C.X. Gonzalez Vice Chairman of the Board and
Executive Officer, General Electric
Company
R.E. Mercer Retired Chairman of the Board and
former Director, the Goodyear Tire
& Rubber Company
G.G. Michelson Director, Federated Department
Stores
J.O. Opie Vice Chairman of the Board and
Executive Officer, General Electric
Company
R.S. Penske President, Penske Corporation
B.S. Prieskel Former Senior Vice President,
Motion Picture Association of
America
F.H.T. Rhodes President Emeritus, Cornell
University
A.C. Sigler Chairman of the Board, Champion
International Corporation
D.A. Warner III Chairman of the Board, President,
and Chief Executive Officer, J.P.
Morgan & Co. Incorporated and
Morgan Guaranty Trust Company
Page 23 of 78 Pages
<PAGE>
J.F. Welch, Jr. Chairman of the Board and Chief
Executive Officer, General Electric
Company
Page 24 of 78 Pages
<PAGE>
Schedule IV
PT INVESTMENTS, INC.
--------------------
The business address of each of the persons listed below is 3003
Summer Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of each of the Executive Officers
of PT Investments, Inc. are as follows:
John H. Myers President
Rober J. Zalucki Vice President and Assistant
Secretary and Assistant Treasurer
David W. Wiederecht Vice President and Treasurer
Michael M. Pastore Vice President and Secretary
The names and principal occupations of each of the directors of PT
Investments, Inc. are as follows:
Alan M. Lewis Executive Vice President, General Counsel and
Secretary of GEIM and Trustee of GEPT
John H. Myers Executive Vice President of GEIM and Trustee of
GEPT
Page 25 of 78 Pages
<PAGE>
Schedule V
GENERAL ELECTRIC PENSION TRUST
- ------------------------------
The business address of each of the persons listed below is 3003
Summer Street, P.O. Box 7900, Stamford, Connecticut 06904.
The names and principal occupations of each of the Trustees of the
General Electric Pension Trust are as follows:
Eugene K. Bolton Executive Vice President of GEIM
Michael J. Cosgrove Executive Vice President of GEIM
Dale F. Frey Chairman of the Board, Chief
Executive Officer and President of
GEIM
Ralph R. Layman Executive Vice President of GEIM
Alan M. Lewis Executive Vice President, General
Counsel and Secretary of GEIM
John H. Myers Executive Vice President of GEIM
Donald W. Torey Executive Vice President and
Treasurer of GEIM
Page 26 of 78 Pages
<PAGE>
EXHIBIT 1
---------
AMENDMENT NO. 3
INCORPORATION AND
REGISTRATION RIGHTS AGREEMENT
This Third Amendment to Incorporation and Registration Rights
Agreement (this "Third Amendment") dated as of November 8, 1996 is made by and
among Doubletree Corporation, a Delaware corporation (the "Company"), GE
Investment Hotel Partners I, Limited Partnership, a Delaware limited partnership
("GEHOP"), MetPark Funding, Inc., a Delaware corporation ("Met Sub"), The
Ueberroth Family Trust ("Ueberroth"), Ueberroth Investment Trust ("Investment"),
Mr. Richard J. Ferris ("Ferris"), Ridge Partners, L.P., a Delaware limited
partnership ("Ridge"), Mr. Robert M. Solmson (the "Representative"), for himself
and as attorney-in-fact for the RFS Shareholders (as defined in the Second
Amendment referred to below), Canadian Pacific Hotels Holdings (U.S.) Inc., a
Delaware corporation ("CPPHUS"), and Red Lion, a California Limited Partnership
(the "RL Partnership").
This Third Amendment amends the Incorporation and Registration Rights
Agreement dated as of December 16, 1993 (the "Original Agreement"), by and among
Doubletree Partners, a Delaware general partnership, GQ Owners, L.P., a Delaware
limited partnership, Canadian Pacific Hotels (U.S.) Inc., a Delaware corporation
("CPHUS"), Met Sub, Ueberroth and Ferris, as first amended by Amendment No. 1 to
Incorporation and Registration Rights Agreement dated as of June 30, 1994 (the
"First
Page 27 of 78 Pages
<PAGE>
Amendment"), by and among the parties to the Original Agreement, the Company,
GEHOP, Investment and Ridge, and as further amended by Amendment No. 2 to
Incorporation and Registration Rights Agreement dated as of February 27, 1996
(the "Second Amendment"), by and among CPPHUS, as successor in interest to CPHUS
under the Original Agreement and the First Amendment, and the parties hereto
other than the RL Partnership. Capitalized terms used and not otherwise defined
herein shall have the respective meanings assigned to such terms in the Original
Agreement, as amended by the First Amendment and the Second Amendment (as so
amended, the "Existing Agreement").
BACKGROUND
A. CPPHUS has sold all Eligible Securities beneficially owned by it.
B. The RL Partnership owns of record and beneficially 20,900,000
shares of common stock, par value $.01 per share, of Red Lion Hotels, Inc., a
Delaware corporation ("Red Lion"). Pursuant to the Agreement and Plan of Merger
dated as of September 12, 1996 (the "Merger Agreement"), by and among the
Company, RLH Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the Company, and Red Lion, at the Effective Time (as defined in
the Merger Agreement), such shares of Red Lion stock will be converted into the
right to receive, among other things, an aggregate of 4,836,260 shares (together
with any additional shares issued as a result of any stock split, stock dividend
or subdivision or reclassification of such shares,
Page 28 of 78 Pages
<PAGE>
the "Exchange Shares") of the Company's Common Stock. In order to induce the RL
Partnership, as a majority stockholder of Red Lion, to vote for approval and
adoption of the Merger Agreement and the Merger (as defined in the Merger
Agreement), the Parties wish to amend the Existing Agreement to include the RL
Partnership as a Party and to specify the relative rights and privileges of the
Partnership with respect to the subject matter thereof.
C. In connection with the Merger, an affiliate of GEHOP will
purchase from the Company 2,627,534 newly-issued shares of Common Stock (the
"New GEI Shares") and warrants to purchase up to 262,753 additional shares of
Common Stock, subject to adjustment (such additional shares of Common Stock
issuable upon exercise of such warrants, the "GEI Warrant Shares"). In order to
induce such affiliate of GEHOP to make such purchase, the Parties wish to amend
the Existing Agreement to include the New GEI Shares and, upon issuance, the GEI
Warrant Shares as Eligible Securities.
NOW THEREFORE, in consideration of the foregoing and intending to be
legally bound, the Parties agree as follows:
1. THE RL PARTNERSHIP. All references to "Holders" and the
"Parties" in the Existing Agreement shall be deemed to include the RL
Partnership, including, without limitation, references granting to Holders
certain "piggyback" registration rights pursuant to Section 3 of the Original
Agreement.
2. ADDITIONAL ELIGIBLE SECURITIES. All references to "Eligible
Securities" in the Existing Agreement shall be deemed
Page 29 of 78 Pages
<PAGE>
to include, without limitation, all Exchange Shares and all New GEI Shares and,
upon issuance, all GEI Warrant Shares. For purposes of the Existing Agreement,
as amended hereby, but for no other purpose whatsoever (whether express or
implied), the New GEI Shares and the GEI Warrant Shares will be aggregated
together with shares of Common Stock owned by GEHOP in order to determine the
amount of Eligible Securities or shares of Common Stock which relate to GEHOP.
3. DEMAND RIGHTS. (a) Section 2(a) of the Existing Agreement is
hereby amended to provide that in addition to the rights granted therein to
GEHOP, Met Sub and the Representative, the RL Partnership may, at any time after
the date which is 180 days following the date on which the Effective Time
occurs, deliver up to four Registration Requests to the Company, subject to
Section 2(b)(i) of the Existing Agreement as amended hereby. After receipt of a
Registration Request, the Company shall file and use its best efforts to cause
to become effective a registration statement under the Securities Act with
respect to the number of Exchange Shares specified in such request, all within
the time and in the manner specified in Section 2 of the Original Agreement.
(b) Section 2(a) of the Existing Agreement is hereby amended to
replace the term "The Partner", which begins the fifth sentence of such Section
2(a), with the term "The Holder."
(c) The first paragraph of Section 2(b)(i) of the Existing Agreement
is hereby amended and restated to read as follows:
Page 30 of 78 Pages
<PAGE>
"(i) if the Requesting Holder shall be GEHOP and the Registration
Request is not the last to which such Holder is entitled under Section 2(a) and
this Section 2(b)(i), or if the Requesting Holder shall be the Representative
and the Registration Request is made pursuant to Section 2(c) of Amendment No. 2
to this Agreement, or if the Requesting Holder shall be the RL Partnership and
the Registration Request is made pursuant to Section 3(a) of Amendment No. 3 to
this Agreement and is not the first or last such request to which the RL
Partnership is entitled pursuant to such Section 3(a):
(A) the number of shares of Eligible Securities to be registered on
behalf of each Holder shall be reduced (to zero, if necessary)
PRO RATA according to the number of shares requested to be
registered by each Holder; PROVIDED, HOWEVER, that in the case of
the first Registration Request made by GQ Owners, any
Registration Request made by the RL Partnership pursuant to
Section 3(a) of Amendment No. 3 to this Agreement (other than its
first or last such Registration Request) and the Registration
Request made by the Representative pursuant to Section 2(c) of
Amendment No. 2 to this Agreement, if the number of shares of
Eligible Securities requested to be registered by GQ Owners, the
RL Partnership or the Representative, as the case may be, shall
be reduced as a result of this Section 2(b)(i) by 20%
Page 31 of 78 Pages
<PAGE>
or more, such Requesting Holder shall be entitled to request one
registration in addition to (i) in the case of GQ Owners, the two
registration requests GQ Owners is entitled to under Section 2(a)
of this Agreement, (ii) in the case of the RL Partnership, the
four registration requests the RL Partnership is entitled to
under Section 3(a) of Amendment No. 3 to this Agreement and (iii)
in the case of the Representative, the one registration request
the Representative is entitled to under Section 2(c) of Amendment
No. 2 to this Agreement; and"
(d) The first paragraph of Section 2(b)(ii) of the Existing Agreement
is hereby amended and restated to read as follows:
"(ii) if the Requesting Holder shall be Met Sub, or if the Requesting
Holder shall be GEHOP exercising the last Registration Request to which it is
entitled under Section 2(a) and Section 2(b)(i) of the Existing Agreement, or if
the Requesting Holder shall be the RL Partnership exercising the first or last
Registration Request to which it is entitled under Section 3(a) of Amendment No.
3 to this Agreement:"
(e) Section 2(b)(ii)(C) of the Existing Agreement is hereby amended
to replace the term "Common Stock" used therein with the term "Eligible
Securities."
(f) Section 2 of the Existing Agreement is hereby amended to include
the following subsection (e):
Page 32 of 78 Pages
<PAGE>
"(e) A Holder shall be deemed not to have exercised a
Registration Request to which it is entitled under Section 2 if (i) the
registration statement relating to such Registration Request does not become
effective, or after it has become effective, is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court, in each case by reason of an act or omission by
the Company, or (ii) the conditions to closing specified in the purchase
agreement, or underwriting agreement entered into in connection with such
registration statement are not satisfied, and the offering and sale of Eligible
Securities to which such Registration Request relates is not consummated,
because of an act or omission by the Company (other than a failure of the
Company or any of its representatives to execute or deliver any closing
certificate by reason of facts or circumstances not within the control of the
Company or such representatives) or (iii) at any time after a Party delivers a
Registration Request and prior to the effectiveness of the registration
statement relating thereto, the preparation of such registration statement is
discontinued or such registration statement is withdrawn or abandoned, in each
case at the request of the Requesting Holder, and such Requesting Holder has
elected to pay and has paid to the Company in full all of the registration
expenses (including, without limitation, Company registration expenses)
referenced in Section 5 in connection with such registration statement."
Page 33 of 78 Pages
<PAGE>
(g) Section 13(a) of the Existing Agreement is hereby amended to
provide that one or more transferees of Eligible Securities owned by the RL
Partnership may deliver a Registration Request pursuant to Section 2 if (i) such
transferees have received such Eligible Securities in compliance with applicable
Federal and state securities laws, (ii) such transferees have agreed in a
writing, in form and substance reasonably satisfactory to the Company, to be
bound by the Existing Agreement, as amended by this Third Amendment and as
amended or modified hereafter, with the same duties and obligations as a Holder
thereunder, and (iii) the transferee or transferees that so deliver such
Registration Request hold at least a majority of the then outstanding Exchange
Shares which have not been sold pursuant to a registered public offering. In
addition, Section 13(a) is amended so that the references to "permitted
assign(s)" or "permitted transferee" shall mean any assignee or transferee of a
Holder.
4. PIGGYBACK RIGHTS. The RL Partnership hereby agrees that in the
event that shares of Eligible Securities requested by the Partnership to be
registered pursuant to Section 3 of the Existing Agreement are unable to be
included in a registration pursuant to market conditions then existing, as
provided in the Existing Agreement, the shares to be registered for the RL
Partnership shall be reduced by a pro rata amount with respect to the number of
shares requested to be registered by the RL Partnership.
Page 34 of 78 Pages
<PAGE>
5. NOTICES. Section 13(b) of the Existing Agreement is hereby
amended to add subsection (viii) as follows:
"(viii) if to the RL Partnership to Red Lion, a California Limited
Partnership, c/o Kohlberg Kravis Roberts & Co., 2800 Sand Hill Road,
Suite 200, Menlo Park, California 94025; telephone (415) 233-6560;
telecopier (415) 233-6561.
6. AMENDMENTS. The first sentence of Section 13(d) of the Existing
Agreement is hereby amended and restated in its entirety to read as follows:
"This Agreement may not be amended or modified, and no provision
hereof may be waived, except in writing, and such writing shall only
be effective with respect to a Party who has executed such writing;
PROVIDED, HOWEVER, that any such amendment, modification or waiver
shall only be required to be so executed by a Party the rights of
which under this Agreement would be adversely affected in any material
respect by such amendment, modification or waiver."
7. COUNTERPARTS. This Third Amendment may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
Page 35 of 78 Pages
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Third
Amendment as of the date first written above.
DOUBLETREE CORPORATION METPARK FUNDING, INC.
By: By:
------------------------- -------------------------
Name: Name:
Title: Title:
RIDGE PARTNERS, L.P GE INVESTMENT HOTEL PARTNERS
I, LIMITED PARTNERSHIP
By: Kelrick, Inc., its general
partner By: GE Investment Management
Incorporated, its general
partner
By:
------------------------- By:
Name: --------------------
Title: Name:
Title:
THE UEBERROTH FAMILY TRUST THE REPRESENTATIVE
By:
------------------------- -------------------------
Peter V. Ueberroth Robert M. Solmson
Trustee
-------------------------
Robert M. Solmson, as
attorney-in-fact for the
RFS Shareholders
Page 36 of 78 Pages
<PAGE>
UEBERROTH INVESTMENT TRUST RED LION, a California
Limited Partnership
By: By: RLA-GP Inc., its general
--------------------------- partner
Alice J. Saviez
Not individually, but
solely as Trustee By:
----------------------
Name:
Title:
- --------------------------------
Richard J. Ferris
Page 37 of 78 Pages
<PAGE>
CANADIAN PACIFIC HOTELS
HOLDINGS (U.S.) INC.
By: ________________________
------------------------
Name:
Title:
Page 38 of 78 Pages
<PAGE>
EXHIBIT 2
---------
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of October 31, 1996 (this
"Agreement"), by and between Doubletree Corporation, a Delaware corporation (the
"Seller"), and the Trustees of General Electric Pension Trust, a New York
common law trust (the "Buyer"). Capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in the Merger
Agreement referred to below.
RECITALS
WHEREAS, the Seller, RLH Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of the Seller ("Merger Sub"), and Red Lion Hotels,
Inc., a Delaware corporation ("Red Lion"), are parties to an Agreement and Plan
of Merger dated as of September 12, 1996 (the "Merger Agreement"), pursuant to
which Merger Sub will merge with and into Red Lion (the "Merger") and Red Lion
will become a wholly owned subsidiary of the Seller; and
WHEREAS, in order to finance a portion of the Cash Consideration
payable under the Merger Agreement and other fees and expenses related to the
Merger, the Seller wishes to issue and sell to the Buyer or an affiliate
thereof, and the Buyer wishes to purchase (or to cause an affiliate of the Buyer
to purchase) from the Seller, (i) the number of shares of Common Stock, par
value $.01 per share, of the Seller ("Common Stock") determined in accordance
with Section 1.2 below (the "Shares") and (ii) warrants, substantially in the
form attached hereto as EXHIBIT A, entitling the holders thereof to purchase an
aggregate of 10% of such number of Shares (the "Warrants"), all upon the terms
and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
Section 1.1 PURCHASE AND SALE OF SECURITIES. Upon the terms and
subject to the conditions set forth in this Agreement, the Buyer agrees to
purchase (or to cause an affiliate of the Buyer to purchase) from the Seller,
and the Seller agrees to issue and sell to the Buyer or such affiliate, the
Shares and the Warrants (collectively, the "Securities"), for an aggregate
Page 39 of 78 Pages
<PAGE>
purchase price of $100,000,000 in immediately available funds (the "Purchase
Price").
Section 1.2 ELECTED PRICE. The actual number of Shares purchased
hereunder shall be equal to the quotient (rounded to the nearest whole number)
of the Purchase Price divided by the "Elected Price" determined as follows:
(a) The Seller has heretofore notified the Buyer that the expected
date of the Closing under the Merger Agreement is November 8, 1996. The Seller
shall use its best efforts to notify the Buyer of any changes hereafter in the
expected date of the Closing (the original notice, and each notice of change, of
the expected date of the Closing, a "Closing Date Notice").
(b) The parties have agreed that, at or prior to the close of business
on the twentieth day immediately prior to the date on which the Closing occurs
(the "Closing Date"), the Buyer shall be entitled to elect a per Share purchase
price (the "Elected Price") consisting of either (i) the Acquisition Price (as
defined below), or (ii) the Market Price (as defined below), by giving written
notice to the Seller of its election thereof (an "Election Notice"). For
purposes hereof:
"Acquisition Price" means an implied price per share of Common Stock
equal to the product obtained by multiplying (i) a fraction, the numerator
of which is the initial Exchange Ratio or 0.2398 and the denominator of
which is the final adjusted Exchange Ratio, by (ii) $36.7253. For purposes
of illustration, assuming that the Final Parent Stock Price were $45
(resulting in a final adjusted Exchange Ratio of 0.2153), then the
Acquisition Price would be equal to $40.90. All calculations of the
Acquisition Price shall be made in a manner consistent with the foregoing
illustration.
"Market Price" means (A) if the Seller shall consummate an
underwritten public offering of at least $100,000,000 of its Common Stock
at or immediately prior to the Closing, the per share price at which shares
of Common Stock are sold to the underwriters (e.g. net of any underwriting
discounts) in connection with such underwritten public offering, or (B)
otherwise, the Final Parent Stock Price under the Merger Agreement.
(c) The Buyer has delivered an Election Notice dated October 10, 1996
in which it elected the Acquisition Price to be the Elected Price. The Buyer
shall be entitled hereafter to change its election with respect to the Elected
Price by delivering one or more subsequent Election Notices, specifying a
different Elected Price. If the actual Closing Date is three (3) or more days
later than November 8, 1996, the last Election Notice received by the Seller not
less than 20 business days (as defined in the Merger Agreement) prior to the
actual Closing Date shall
Page 40 of 78 Pages
<PAGE>
supersede all other Election Notices given hereunder, and the Elected Price
determined in accordance with such last Election Notice shall be final and
binding upon the parties hereto.
Section 1.3 CLOSING. Subject to the satisfaction or waiver of the
conditions to closing set forth in Article IV hereof, the closing of the
purchase and sale of the Securities hereunder shall take place at the time, date
and place of the Closing under the Merger Agreement. At the Closing,(a) the
Seller shall issue and deliver to the Buyer (or an affiliate thereof designated
by the Buyer) one or more certificates representing each of the Securities, all
registered in the name of the Buyer or such affiliate, against (b) payment by
the Buyer or such affiliate, as the case may be, to the Seller of the Purchase
Price by wire transfer of immediately available funds to an account or accounts
designated by the Seller in a written notice delivered to the Buyer not later
than two (2) business days prior to the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
hereby represents and warrants to the Buyer as follows:
(a) ORGANIZATION AND POWER. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby.
(b) AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement by the Seller and the consummation of the
transactions pursuant hereto have been duly and validly authorized by all
necessary corporate action on the part of the Seller. This Agreement has
been duly executed and delivered by the Seller and constitutes the legal,
valid and binding obligation of the Seller, enforceable against the Seller
in accordance with its terms, except as such enforceability may be limited
by any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
or by the application of general principles of equity (regardless of
whether such equitable principles are applied in a proceeding at law or in
equity).
(c) NO CONFLICT. Subject to making the filings and obtaining the
approvals identified in the next paragraph, the execution and delivery of
this Agreement by the Seller do not,
Page 41 of 78 Pages
<PAGE>
and the performance by the Seller of its obligations hereunder and the
consummation by the Seller of the transactions pursuant hereto will not,
(i) conflict with or violate the certificate of incorporation or by-laws of
the Seller, (ii) conflict with or violate any law, statute, rule,
regulation, order, judgment, writ, injunction or decree applicable to the
Seller, or (iii) result in any violation or breach of, or constitute a
default under, any agreement, contract or other instrument to which the
Seller is a party.
(d) CONSENTS AND APPROVALS. The execution and delivery of this
Agreement by the Seller do not, and the performance by the Seller of its
obligations hereunder and the consummation by the Seller of the
transactions pursuant hereto will not, require the Seller to obtain any
consent, approval, authorization or permit of, or to make any filing with
or notification to, any Governmental Entity or other Person except as
required by the HSR Act, the Securities Act, the Exchange Act and Blue Sky
Laws.
(e) LITIGATION. There is no action, suit, claim or proceeding
pending or, to the knowledge of the Seller, threatened against the Seller
or any of its subsidiaries by or before any court or other Governmental
Entity which seeks to enjoin or prohibit the performance by the Seller of
its obligations hereunder or the consummation by the Seller of any of the
transactions pursuant hereto.
(f) TITLE TO SECURITIES. (i) The Shares have been duly authorized
and, when issued in accordance with this Agreement, will be validly issued,
fully paid and nonassessable and subject to no preemptive rights. Upon
issuance of the Shares to the Buyer or its affiliate as aforesaid, the
Buyer or such affiliate (as the case may be) will acquire good and
marketable title to the Shares, free and clear of any liens and
encumbrances.
(ii) The Warrants have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued. Upon issuance of
the Warrants to the Buyer or its affiliate as aforesaid, the Buyer or such
affiliate (as the case may be) will acquire good and marketable title to
the Warrants, free and clear of any liens and encumbrances. At all times
following the Closing during which any Warrants are outstanding and
exercisable, the Seller will reserve and keep available out of its
authorized Common Stock, solely for issuance and delivery upon exercise of
Warrants, at least the number of shares of Common Stock issuable upon
exercise of all then outstanding Warrants. The shares of Common Stock that
are issued upon exercise of Warrants will, when issued in accordance with
the terms thereof, be duly authorized, validly issued, fully paid,
nonassessable, subject to no preemptive rights, and free and clear of any
liens or encumbrances.
Page 42 of 78 Pages
<PAGE>
(g) USE OF PROCEEDS. The Purchase Price will be used solely to pay a
portion of the Cash Consideration and other fees and expenses related to
the Merger.
(h) BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
issuance and sale of Securities pursuant hereto based upon arrangements
made by or on behalf of the Seller.
(i) FULL DISCLOSURE. No representation or warranty by the Seller
contained in this Agreement or in the Registration Statement on Form S-3
(File No. 333-13161), as amended, of the Seller contains any untrue
statement of a material fact by the Seller or omits to state a material
fact required to be stated therein or necessary to make the statements
contained therein by the Seller, in light of the circumstances under which
it was made, not false or misleading.
Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
hereby represents and warrants to the Seller as follows:
(a) ORGANIZATION AND POWER. The Buyer is a common law trust duly
organized, validly existing and in good standing under the laws of the
State of New York, and has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(b) AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance of this Agreement by the Buyer and the consummation of the
transactions pursuant hereto have been duly and validly authorized by all
necessary action on the part of the Buyer. This Agreement has been duly
executed and delivered by the Buyer and constitutes the legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as such enforceability may be limited by
any applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
the application of general principles of equity (regardless of whether such
equitable principles are applied in a proceeding at law or in equity).
(c) NO CONFLICT. Subject to making the filings and obtaining the
approvals identified in the next paragraph, the execution and delivery of
this Agreement by the Buyer do not, and the performance by the Buyer of its
obligations hereunder and the consummation by the Buyer or its affiliate of
the transactions pursuant hereto will not, (i) conflict with or violate the
trust instrument or other organization documents of the Buyer or any such
affiliate, (ii) conflict with or
Page 43 of 78 Pages
<PAGE>
violate any law, statute, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Buyer or any such affiliate, or
(iii) result in any violation or breach of, or constitute a default under,
any agreement, contract or other instrument to which the Buyer or any such
affiliate is a party.
(d) CONSENTS AND APPROVALS. The execution and delivery of this
Agreement by the Buyer do not, and the performance by the Buyer of its
obligations hereunder and the consummation by the Buyer or its affiliate of
the transactions pursuant hereto will not, require the Buyer or any such
affiliate to obtain any consent, approval, authorization or permit of, or
to make any filing with or notification to, any Governmental Entity or
other Person except as required by the HSR Act, the Securities Act, the
Exchange Act and Blue Sky Laws.
(e) LITIGATION. There is no action, suit, claim or proceeding
pending or, to the knowledge of the Buyer, threatened against the Buyer or
any of its subsidiaries by or before any court or other Governmental Entity
which seeks to enjoin or prohibit the performance by the Buyer of its
obligations hereunder or the consummation by the Buyer or its affiliate of
any of the transactions pursuant hereto.
(f) INVESTMENT INTENT. The Securities are being acquired by the
Buyer or an affiliate thereof for the account of the Buyer or such
affiliate, as the case may be, without a present view to the distribution
or resale thereof or of any interest therein (it being understood that the
Buyer or any such affiliate shall have the right to sell or otherwise
dispose of any such Securities or any Common Stock deliverable upon
exercise of the Warrants, pursuant to registration or an exemption
therefrom under the Securities Act and Blue Sky Laws).
(g) BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
purchase of Securities pursuant hereto based upon arrangements made by or
on behalf of the Buyer or any affiliate thereof.
ARTICLE III
COVENANTS
Section 3.1 FURTHER ASSURANCES. Each of the parties hereto shall use
all commercially reasonable good faith efforts to take, or cause to be taken,
all actions, and do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations (including, without limitation,
under the HSR Act, the Securities Act, the Exchange Act and Blue Sky Laws), and
Page 44 of 78 Pages
<PAGE>
consult with and fully cooperate with and provide reasonable assistance to each
other party hereto and their respective Representatives in order, to consummate
and make effective the transactions contemplated hereby as promptly as
practicable hereafter.
Section 3.2 EXPENSES. The Seller shall bear all expenses incurred
by the parties hereto in connection with this Agreement or any of the
transactions contemplated hereby.
ARTICLE IV
CONDITIONS
Section 4.1 CONDITIONS. The obligation of the Seller to issue and
sell the Securities to the Buyer or an affiliate thereof designated by the
Buyer, and the obligation of the Buyer to purchase (or to cause an affiliate
thereof to purchase) the Securities hereunder, shall be subject to the
satisfaction at or prior to the Closing of the following conditions, either or
both of which may be waived, in whole or in part, to the extent permitted by
applicable law:
(a) any waiting period (and any extension thereof) under the HSR Act
applicable to the issuance and sale of the Securities shall have expired or
been terminated; and
(b) the Closing under the Merger Agreement shall have occurred.
Section 4.2 ADDITIONAL BUYER CONDITIONS. The obligation of the Buyer
to purchase, or to cause an affiliate to purchase, the Securities hereunder
shall also be subject to the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by applicable law:
(a) each of the representations and warranties of the Seller
contained in this Agreement shall be true and correct as of the Closing
Date as though made on and as of the Closing Date (except where the failure
to be so true and correct would not, individually or in the aggregate, have
a Parent Material Adverse Effect), and the Buyer and any such affiliate
shall have received a certificate executed by an executive officer of the
Seller to such effect;
(b) the Buyer or any such affiliate shall have received an opinion or
opinions, in form and substance reasonably satisfactory to the Buyer or
such affiliate, dated the Closing Date, from the General Counsel of the
Seller or Dewey Ballantine, special counsel to the Seller, to the effect
that:
Page 45 of 78 Pages
<PAGE>
(i) the Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(ii) the execution, delivery and performance of this Agreement by the
Seller and the consummation of the transactions pursuant hereto have been
duly and validly authorized by all necessary corporate action on the part
of the Seller; this Agreement has been duly executed and delivered by the
Seller and constitutes the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by the application of general principles
of equity (regardless of whether such equitable principles are applied in a
proceeding at law or in equity);
(iii) the Shares have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable and, to the knowledge of such counsel, subject to no
preemptive rights;
(iv) the Warrants have been duly authorized and, when issued in
accordance with this Agreement, will be validly issued; and the shares of
Common Stock that are issued upon exercise of the Warrants will, when
issued in accordance with the terms of the Warrants, be validly issued,
fully paid and nonassessable and, to the knowledge of such counsel, subject
to no preemptive rights; and
(v) assuming the accuracy of the representations and warranties of
the Buyer set forth in Section 2.2(f) hereof, the issuance, sale and
delivery of the Securities by the Seller are exempt from registration under
the Securities Act; and
(c) the Seller shall have entered into the Registration Rights
Agreement (or another agreement, in form and substance reasonably
satisfactory to the Buyer, providing for the Shares and any shares of
Common Stock issuable upon exercise of the Warrants to be covered by the
existing registration rights of the Buyer under the "Existing Agreement"
referred to in the form of Registration Rights Agreement attached as
Exhibit B to the Merger Agreement).
Section 4.3 ADDITIONAL SELLER CONDITION. The obligation of the
Seller to issue and sell the Securities hereunder shall also be subject to the
condition that each of the
Page 46 of 78 Pages
<PAGE>
representations and warranties of the Buyer contained in this Agreement shall be
true and correct as of the Closing Date as though made on and as of the Closing
Date (except where the failure to be so true and correct would not, individually
or in the aggregate, have a material adverse effect on the ability of the Buyer
to perform its obligations hereunder or the ability of the Buyer or any
affiliate thereof to consummate the transactions pursuant hereto), and the
Seller shall have received a certificate executed by a trustee of the Buyer to
such effect.
Page 47 of 78 Pages
<PAGE>
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or when mailed by registered or certified mail,
postage prepaid, or when given by facsimile transmission, as follows:
(a) If to the Seller:
Doubletree Corporation
410 North 44th Street
Suite 700
Phoenix, Arizona 85008
Telecopy No.: (602) 220-6602
Attention: Chief Financial Officer
(b) If to the Buyer:
General Electric Investment Corporation
3003 Summer Street
P.O. Box 7900
Stamford, Connecticut 06905
Telecopy No.: (203) 326-4179
Attention: David W. Wiederecht
or to such other person as either party hereto shall designate by written notice
to the other in the manner provided in this Section 5.1.
Section 5.2 LIMITED LIABILITY. Any monetary obligation or liability
of the Buyer under this Agreement shall be enforced solely against the assets of
the Buyer and not against the Trustees of the Buyer or General Electric Company
or any affiliate thereof.
Section 5.3 ENTIRE AGREEMENT. This Agreement (including the
documents specifically referred to herein) constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings between the parties with
respect thereto.
Section 5.4 AMENDMENTS. This Agreement may only be amended or
modified in an instrument executed by both parties hereto. This Agreement may
not be assigned, in whole or in part, by either party hereto without the prior
written consent of the other party hereto.
Section 5.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State
Page 48 of 78 Pages
<PAGE>
of New York, without giving effect to the conflict of law principles thereof.
Section 5.6 COUNTERPARTS. This Agreement may be executed by the
parties in two counterparts, each of which when so executed shall be an original
and all of which together shall constitute one and the same instrument.
Page 49 of 78 Pages
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date and year first written above.
DOUBLETREE CORPORATION
By:__________________________
--------------------------
Name:
Title:
TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By:__________________________
--------------------------
Name: John H. Myers
Title: Trustee
Page 50 of 78 Pages
<PAGE>
EXHIBIT A
---------
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
Void after 5:00 P.M. __________ Warrants to Purchase
(unless previously terminated Common Stock Dated:
under the circumstances described ___________________
herein)
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE COMMON STOCK OF
DOUBLETREE CORPORATION
------------------------------------
FOR VALUE RECEIVED, Doubletree Corporation, a Delaware corporation (the
"Company"), hereby certifies that, _________________ ("Holder"), the holder of
these Warrants (the "Warrants", and each right to purchase a share of Common
Stock, a "Warrant") is entitled, subject to the terms set forth below, at any
time on or after ______________, or from time to time thereafter, but not later
than _______________, to purchase from the Company __________ fully paid and
nonassessable shares of Common Stock, par value $.01 per share ("Common Stock"),
of the Company. These Warrants and all rights hereunder, to the extent such
rights shall not have been exercised, shall terminate and become null and void
at 5:00 p.m., New York time, on ___________.
These Warrants shall be subject to the terms set forth in the
Securities Purchase Agreement dated as of October 31, 1996 by and between the
Company and the Trustees of General Electric Pension
----------------------------
1 Insert fifth anniversary of date of original issuance.
2 Insert date of original issuance.
3 Insert date of original issuance.
4 Insert fifth anniversary of original date of issuance.
5 Insert 10% of the number of Shares issued and sold at the
Closing.
6 Insert fifth anniversary of the date of original issuance.
Page 51 of 78 Pages
<PAGE>
Trust, pursuant to which these Warrants are being issued, and to the following
terms and conditions:
SECTION 1. EXERCISE OF WARRANTS; EXERCISE PRICE; ADJUSTMENTS
-------------------------------------------------
RELATIVE TO EXERCISE OF WARRANTS
--------------------------------
1A. EXERCISE OF WARRANTS. (a) Subject to the conditions of this
Section 1, the holder of any Warrant at the holder's option may exercise such
holder's rights under all or any part of the Warrants to purchase Common Stock
(the "Warrant Shares") at a price equal to $_______ (the "Exercise Price") at
any time on or after the date hereof. The Warrant Shares and the Exercise Price
are subject to certain adjustments as set forth in this Section 1 and the terms
Warrant Shares and Exercise Price as used herein shall as of any time be deemed
to include all such adjustments to be given effect as of such time in accordance
with the terms hereof.
1B. STOCK DIVIDENDS. In case at any time the Company shall declare a
dividend or make any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock or any stock or securities convertible
into or exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "CONVERTIBLE SECURITIES"), the Exercise Price in
effect on the record date for such dividend or distribution shall be
proportionately reduced. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution payable in shares of Common Stock or in Convertible
Securities, then such record date shall be deemed to be the date of the issue of
the shares of Common Stock deemed to have been issued as a result of the
declaration of such dividend or the making of such other distribution, as the
case may be, unless such dividend or other distribution is to be measured by the
market price of the Common Stock in effect on the date such dividend or other
distribution is made, in which case such date shall be deemed to be the date of
the issue of the shares of Common Stock deemed to have been so issued. For
purposes of such adjustment, the number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of
the Company.
1C. SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased and the number of shares of
Common Stock issuable upon exercise of each Warrant shall be proportionately
decreased.
----------------------------
7 Insert final Elected Price.
Page 52 of 78 Pages
<PAGE>
1D. CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or sale, transfer or other disposition
of all or substantially all of its properties to another corporation, shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Company immediately theretofore issuable upon exercise of the Warrants, such
shares of stock, securities or properties, if any, as may be issuable or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
issuable upon exercise of the Warrants had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of each holder of Warrants to the end that
the provisions hereof (including without limitation provisions for adjustment of
the Exercise Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition, unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing or otherwise acquiring such properties
shall assume, by written instrument executed and mailed or delivered to the
holders of Warrants at the last address of such holders appearing on the books
of the Company, the obligation to deliver to such holders such shares of stock,
securities or properties as, in accordance with the foregoing provisions, such
holders may be entitled to acquire. The above provisions of this subparagraph
shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers, or other dispositions.
1E. OTHER ADJUSTMENTS. In case (i) the Company shall issue or sell
any shares of its Common Stock for a consideration per share less than the fair
market value thereof at the time of such issues of sale, or issue or grant any
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or Convertible Securities at an exercise price per share of Common
Stock less than the fair market value thereof on the date of such issue or
grant, or issue or sell any Convertible Securities having a conversion or
exchange price per share of Common Stock less than the fair market value thereof
on the date of such issue or sale, or (ii) any other corporate event or
transaction of the Company, outside the ordinary course of business consistent
with past practice, not specified or contemplated by this Section 1 occurs which
equitably requires an anti-dilutive adjustment to the Warrants represented
Page 53 of 78 Pages
<PAGE>
hereby, the Board of Directors of the Company shall make such appropriate
adjustments to the Warrants as it may determine in its reasonable business
judgment.
1F. NOTICE OF ADJUSTMENT. Upon any adjustment of the Exercise Price,
then and in each such case the Company shall promptly deliver to the Holder a
certificate of the chief financial officer of the Company setting forth the
Exercise Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares of Common Stock issuable upon Exercise of the
Warrant or Warrants held by each holder of Warrants, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
1G. PROHIBITION OF CERTAIN ACTIONS. The Company will not (i)
authorize or issue, or agree to authorize or issue, any shares of its capital
stock of any class preferred as to dividends or as to the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Company unless the rights of the holders thereof shall be limited to a fixed sum
or percentage of par value in respect of participation in dividends and in the
distribution of such assets or (ii) take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all of the Warrants would exceed the
total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.
1H. STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of Warrants as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants, and the Company will maintain at all times all other rights and
privileges sufficient to enable it to fulfill all its obligations hereunder.
The Company covenants that all shares of Common Stock which shall be so issuable
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from preemptive or similar rights on the part of the holders
of any shares of capital stock or securities of the Company, and free from all
Liens and charges with respect to the issue thereof; and without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to assure that the par value, if
any, per share of the Common Stock is at all times equal to or less than the
then effective Exercise Price. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be so issued without
violation by the Company of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.
1I. REGISTRATION AND LISTING OF COMMON STOCK. If any shares of
Common Stock required to be reserved for purposes of exercise of Warrants
hereunder require registration with or approval
Page 54 of 78 Pages
<PAGE>
of any governmental authority under any Federal or state law (other than the
Securities Act) before such shares may be issued upon exercise, the Company
will, at its expense and as expeditiously as possible, use its best efforts to
cause such shares to be duly registered or approved, as the case may be. Shares
of Common Stock issuable upon exercise of the Warrants shall be registered by
the Company under the Securities Act or similar statute then in effect if
required by paragraph 11 and subject to the conditions stated in such paragraph.
If and so long as the Common Stock is listed on any national securities
exchange, the Company will, at its expense, obtain promptly and maintain the
approval for listing on each such exchange upon official notice of issuance, of
shares of Common Stock issuable upon exercise of the then outstanding Warrants
and maintain the listing of such shares after their issuance; and the Company
will also list on such national securities exchange, will register under the
Securities Exchange Act of 1933, as amended (the "Exchange Act"), and will
maintain such listing of, any other securities that at any time are issuable
upon exercise of the Warrants, if and at the time that any securities of the
same class shall be listed on such national securities exchange by the Company
or shall require registration under the Exchange Act.
1J. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of such Warrant.
1K. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. No Warrant shall
entitle any holder thereof to any of the rights of a shareholder of the Company.
No provision of this Warrant, in the absence of the actual exercise of such
Warrant or any part thereof by the holder thereof into Common Stock issuable
upon such exercise, shall give rise to any liability on the part of such holder
as a shareholder of the Company, whether such liability shall be asserted by the
Company or by creditors of the Company.
SECTION 2. METHOD OF EXERCISE OF WARRANTS
------------------------------
The Warrants may be exercised by the surrender of this Certificate,
with the Form of Subscription attached hereto duly executed by the holder, to
the Company at its principal office, accompanied by payment of the Exercise
Price for the number of shares of Common Stock specified. The Warrants may be
exercised for less than the full number of shares of Common Stock called for
hereby by surrender of this Certificate in the manner and at the place provided
above, accompanied by payment for the number of shares of Common Stock being
purchased. If the Warrants should be exercised in part only, the Company shall,
upon surrender of this Warrant Certificate for cancellation, execute and deliver
a new Warrant Certificate evidencing the right of the holder to purchase the
balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant Certificate at the office of the Company, in proper form for
Page 55 of 78 Pages
<PAGE>
exercise, accompanied by the full Exercise Price in cash or certified or bank
cashier's check, the holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to the
holder.
As soon as practicable after the exercise of these Warrants in whole
or in part and, in any event, within ten days thereafter, the Company at its
expense will cause to be issued in the name of and delivered to the holder a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock (and any new Warrants) to which the holder shall be
entitled upon such exercise. Each certificate for shares of Common Stock so
delivered shall be in such denominations as may be requested by the holder and
shall be registered in the name of the holder or such other name as the holder
may designate.
SECTION 3. PAYMENT OF TAXES
----------------
The issuance of certificates for shares of Common Stock upon exercise
of the Warrants shall be made without charge to the holders of the Warrants
exercised for any issuance tax in respect thereto; PROVIDED, HOWEVER, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of the Warrant or Warrants exercised.
SECTION 4. MUTILATED OR MISSING WARRANT CERTIFICATES
-----------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant Certificate, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification and upon surrender and cancellation of this Warrant Certificate,
if mutilated, the Company will execute and deliver a new Warrant Certificate of
like tenor and date.
Page 56 of 78 Pages
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, as of the day and year first above written.
DOUBLETREE CORPORATION
By:
------------------------------
Name:
Title:
Page 57 of 78 Pages
<PAGE>
FORM OF SUBSCRIPTION
--------------------
DATE: 19
TO: DOUBLETREE CORPORATION
The Undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise all or part of the purchase right represented by such
Warrants for, and to purchase thereunder, shares of Common
Stock of DOUBLETREE CORPORATION (the "Company") and herewith makes payment of $
to the Company, evidenced by delivery of , and requests
that the certificate of such shares be issued in the name of, and be delivered
to , whose address is .
(Name of Holder)
(Authorized Signatory)
(Address)
Page 58 of 78 Pages
<PAGE>
EXHIBIT 3
---------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
Void after 5:00 P.M., November 8, Warrants to Purchase
2001 (unless previously term- Common Stock Dated:
inated under the circumstances November 8, 1996
described herein)
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE COMMON STOCK OF
DOUBLETREE CORPORATION
------------------------------------
FOR VALUE RECEIVED, Doubletree Corporation, a Delaware corporation (the
"Company"), hereby certifies that, PT Investments, Inc. ("Holder"), the holder
of these Warrants (the "Warrants", and each right to purchase a share of Common
Stock, a "Warrant") is entitled, subject to the terms set forth below, at any
time on or after November 8, 1996, or from time to time thereafter, but not
later than November 8, 2001 to purchase from the Company 262,753 fully paid and
nonassessable shares of Common Stock, par value $.01 per share ("Common Stock"),
of the Company. These Warrants and all rights hereunder, to the extent such
rights shall not have been exercised, shall terminate and become null and void
at 5:00 p.m., New York time, on November 8, 2001.
These Warrants shall be subject to the terms set forth in the
Securities Purchase Agreement dated as of October 31, 1996 by and between the
Company and the Trustees of General Electric Pension Trust, pursuant to which
these Warrants are being issued, and to the following terms and conditions:
SECTION 1. EXERCISE OF WARRANTS; EXERCISE PRICE; ADJUSTMENTS
--------------------------------------------------
RELATIVE TO EXERCISE OF WARRANTS
--------------------------------
1A. EXERCISE OF WARRANTS. (a) Subject to the conditions of this
Section 1, the holder of any Warrant at the holder's option may exercise such
holder's rights under all or any part of the Warrants to purchase Common Stock
(the "Warrant Shares") at a price per share equal to $38.06 (the "Exercise
Price") at any time on or after the date hereof. The Warrant Shares and the
Exercise Price are subject to certain adjustments as set forth in this Section 1
and the terms Warrant Shares and Exercise Price as used herein shall as of
Page 59 of 78 Pages
<PAGE>
any time be deemed to include all such adjustments to be given effect as of such
time in accordance with the terms hereof.
1B. STOCK DIVIDENDS. In case at any time the Company shall declare a
dividend or make any other distribution upon any class or series of stock of the
Company payable in shares of Common Stock or any stock or securities convertible
into or exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "CONVERTIBLE SECURITIES"), the Exercise Price in
effect on the record date for such dividend or distribution shall be
proportionately reduced. In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or
other distribution payable in shares of Common Stock or in Convertible
Securities, then such record date shall be deemed to be the date of the issue of
the shares of Common Stock deemed to have been issued as a result of the
declaration of such dividend or the making of such other distribution, as the
case may be, unless such dividend or other distribution is to be measured by the
market price of the Common Stock in effect on the date such dividend or other
distribution is made, in which case such date shall be deemed to be the date of
the issue of the shares of Common Stock deemed to have been so issued. For
purposes of such adjustment, the number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of
the Company.
1C. SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares of Common
Stock issuable upon exercise of each Warrant shall be proportionately increased,
and conversely, in case the outstanding shares of Common Stock of the Company
shall be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased and the
number of shares of Common Stock issuable upon exercise of each Warrant shall be
proportionately decreased.
1D. CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or sale, transfer or other disposition
of all or substantially all of its properties to another corporation, shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Company immediately theretofore issuable upon exercise of the Warrants, such
shares of stock, securities or properties, if any, as may be issuable or payable
with respect to or in exchange for a
Page 60 of 78 Pages
<PAGE>
number of outstanding shares of such Common Stock equal to the number of shares
of such Common Stock immediately theretofore issuable upon exercise of the
Warrants had such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests of each holder
of Warrants to the end that the provisions hereof (including without limitation
provisions for adjustment of the Exercise Price) shall thereafter be applicable,
as nearly equivalent as may be practicable in relation to any shares of stock,
securities or properties thereafter deliverable upon the exercise thereof. The
Company shall not effect any such consolidation, merger, sale, transfer or other
disposition, unless prior to or simultaneously with the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing or otherwise acquiring
such properties shall assume, by written instrument executed and mailed or
delivered to the holders of Warrants at the last address of such holders
appearing on the books of the Company, the obligation to deliver to such holders
such shares of stock, securities or properties as, in accordance with the
foregoing provisions, such holders may be entitled to acquire. The above
provisions of this subparagraph shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers,
or other dispositions.
1E. OTHER ADJUSTMENTS. In case (i) the Company shall issue or sell
any shares of its Common Stock for a consideration per share less than the fair
market value thereof at the time of such issue or sale, or issue or grant any
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or Convertible Securities at an exercise price per share of Common
Stock less than the fair market value thereof on the date of such issue or
grant, or issue or sell any Convertible Securities having a conversion or
exchange price per share of Common Stock less than the fair market value thereof
on the date of such issue or sale, or (ii) any other corporate event or
transaction of the Company, outside the ordinary course of business consistent
with past practice, not specified or contemplated by this Section 1 occurs which
equitably requires an anti-dilutive adjustment to the Warrants represented
hereby, then the Board of Directors of the Company shall make such appropriate
adjustments to the Warrants as it may determine in its reasonable business
judgment.
1F. NOTICE OF ADJUSTMENT. Upon any adjustment of the Exercise Price
or the number of shares issuable upon exercise of any Warrants represented
hereby, then and in each such case the Company shall promptly deliver to the
Holder a certificate of the chief financial officer of the Company setting forth
the Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares of Common Stock issuable upon exercise of the
Warrant or Warrants held by each holder of Warrants, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
Page 61 of 78 Pages
<PAGE>
1G. PROHIBITION OF CERTAIN ACTIONS. The Company will not (i)
authorize or issue, or agree to authorize or issue, any shares of its capital
stock of any class preferred as to dividends or as to the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Company unless the rights of the holders thereof shall be limited to a fixed sum
or percentage of par value in respect of participation in dividends and in the
distribution of such assets or (ii) take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all of the Warrants would exceed the
total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.
1H. STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of Warrants as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants, and the Company will maintain at all times all other rights and
privileges sufficient to enable it to fulfill all its obligations hereunder.
The Company covenants that all shares of Common Stock which shall be so issuable
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from preemptive or similar rights on the part of the holders
of any shares of capital stock or securities of the Company, and free from all
Liens and charges with respect to the issue thereof; and without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to assure that the par value, if
any, per share of the Common Stock is at all times equal to or less than the
then effective Exercise Price. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be so issued without
violation by the Company of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed.
1I. REGISTRATION AND LISTING OF COMMON STOCK. If any shares of
Common Stock required to be reserved for purposes of exercise of Warrants
hereunder require registration with or approval of any governmental authority
under any Federal or state law (other than the Securities Act) before such
shares may be issued upon exercise, the Company will, at its expense and as
expeditiously as possible, use its best efforts to cause such shares to be duly
registered or approved, as the case may be. Shares of Common Stock issuable
upon exercise of the Warrants shall be registered by the Company under the
Securities Act or similar statute then in effect if required by paragraph 11 and
subject to the conditions stated in such paragraph. If and so long as the
Common Stock is listed on The Nasdaq Stock Market's National Market or any
national securities exchange, the Company will, at its expense, obtain promptly
and maintain the approval for listing on each such exchange upon official notice
of issuance, of shares of Common Stock issuable upon exercise of the then
outstanding Warrants and maintain the listing of such
Page 62 of 78 Pages
<PAGE>
shares after their issuance; and the Company will also list on such national
securities exchange, will register under the Securities Exchange Act of 1933, as
amended (the "Exchange Act"), and will maintain such listing of, any other
securities that at any time are issuable upon exercise of the Warrants, if and
at the time that any securities of the same class shall be listed on such
national securities exchange by the Company or shall require registration under
the Exchange Act.
1J. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of such Warrant.
1K. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. No Warrant shall
entitle any holder thereof to any of the rights of a shareholder of the Company.
No provision of this Warrant, in the absence of the actual exercise of such
Warrant or any part thereof by the holder thereof into Common Stock issuable
upon such exercise, shall give rise to any liability on the part of such holder
as a shareholder of the Company, whether such liability shall be asserted by the
Company or by creditors of the Company.
SECTION 2. METHOD OF EXERCISE OF WARRANTS
------------------------------
(a) The Warrants may be exercised by the surrender of this
Certificate, with the Form of Subscription attached hereto duly executed by the
holder, to the Company at its principal office, accompanied by payment of the
Exercise Price for the number of shares of Common Stock specified. The Warrants
may be exercised for less than the full number of shares of Common Stock called
for hereby by surrender of this Certificate in the manner and at the place
provided above, accompanied by payment for the number of shares of Common Stock
being purchased. If the Warrants should be exercised in part only, the Company
shall, upon surrender of this Warrant Certificate for cancellation, execute and
deliver a new Warrant Certificate evidencing the right of the holder to purchase
the balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant Certificate at the office of the Company, in proper form for
exercise, accompanied by the full Exercise Price in cash or certified or bank
cashier's check, the holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to the
holder.
(b) Alternatively, at the option of the Holder, the Warrants may be
exercised by the exchange of all of or part of the Warrants (a "Warrant
Exchange"), into the number of shares of Common Stock determined in accordance
with this Section 2(b), by surrendering this Certificate, with the Form of
Subscription attached hereto duly executed by the Holder, to the Company at its
principal
Page 63 of 78 Pages
<PAGE>
office. If the Warrants should be exercised in part only, the Company shall,
upon surrender of this Warrant Certificate for cancellation, execute and deliver
a new Warrant Certificate evidencing the right of the Holder to purchase the
balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant Certificate at the office of the Company, in proper form for
exercise, the Holder shall be deemed to be the holder of record of the shares of
Common Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or the certificates
representing such Common Stock shall not then be actually delivered to the
Holder. In connection with any Warrant Exchange, this Warrant Certificate shall
represent the right to subscribe for and acquire the number of shares of Common
Stock (rounded to the next highest integer) equal to (i) the number of shares
specified by the Holder in its Form of Subscription (the "Total Number") less
(ii) the number of shares equal to the quotient obtained by dividing (A) the
product of the Total Number and the existing Exercise Price by (B) the
"volume-weighted average quote" of the reported sales prices per share of Common
Stock quoted on The Nasdaq Stock Market's National Market ("NASDAQ"), as
reported by Bloomberg L.P., for the ten consecutive trading days immediately
preceding the exercise of the Warrant (or the comparable closing price if the
Common Stock shall not then be quoted on NASDAQ or reported by Bloomberg L.P.).
(c) As soon as practicable after the exercise of these Warrants in
whole or in part and, in any event, within ten days thereafter, the Company at
its expense will cause to be issued in the name of and delivered to the holder a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock (and any new Warrants) to which the holder shall be
entitled upon such exercise. Each certificate for shares of Common Stock so
delivered shall be in such denominations as may be requested by the holder and
shall be registered in the name of the holder or such other name as the holder
may designate.
SECTION 3. PAYMENT OF TAXES
----------------
The issuance of certificates for shares of Common Stock upon exercise
of the Warrants shall be made without charge to the holders of the Warrants
exercised for any issuance tax in respect thereto; PROVIDED, HOWEVER, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of the Warrant or Warrants exercised.
SECTION 4. MUTILATED OR MISSING WARRANT CERTIFICATES
-----------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant Certificate, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification and upon surrender and cancellation of this Warrant Certificate,
if mutilated,
Page 64 of 78 Pages
<PAGE>
the Company will execute and deliver a new Warrant Certificate of like tenor and
date.
Page 65 of 78 Pages
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, as of the day and year first above written.
DOUBLETREE CORPORATION
By:
------------------------------
Name:
Title:
Page 66 of 78 Pages
<PAGE>
FORM OF SUBSCRIPTION
--------------------
DATE: 19
TO: DOUBLETREE CORPORATION
The Undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise all or part of the purchase right represented by such
Warrants for, and
to purchase thereunder, [ shares of Common Stock of DOUBLETREE
CORPORATION (the "Company") and
herewith makes payment of $ to the Company,
evidenced by delivery of ,] [alternatively, pursuant to Section
2(b) of the Warrants: [___ (the "Total Number") number of shares of Common Stock
of DOUBLETREE CORPORATION (the "Company") in a Warrant Exchange described in
Section 2(b) of the Warrants,] and requests that the certificate of such shares
be issued in the name of, and be delivered to , whose address is
.
-----------------------------
(Name of Holder)
-----------------------------
(Authorized Signatory)
-----------------------------
(Address)
Page 67 of 78 Pages
<PAGE>
EXHIBIT 4
---------
OPTION AGREEMENT
THIS AGREEMENT, dated as of June 30, 1994, is made by and between
Doubletree Corporation, a Delaware corporation hereinafter referred to as the
"Company," and GE Investment Hotel Partners I, Limited Partnership ("GEHOP"), an
affiliate of the Company or Subsidiary of the Company, hereinafter referred to
as "Optionholder":
WHEREAS, the Company wishes to afford the Optionholder the opportunity
to purchase an option to purchase 20,000 shares of its $.01 par value Common
Stock (the "Option"); and
WHEREAS, the Board of Directors (the "Board") of the Company has
determined that it would be to the advantage and best interest of the Company
and its stockholders to grant the Option, and has advised the Company thereof
and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.1 - BOARD
- ----------- -----
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - COMMON STOCK
- ----------- ------------
"Common Stock" shall mean the Common Stock of the Company, par value
$.01 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock. Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.
Page 68 of 78 Pages
<PAGE>
SECTION 1.3 - Company
- ----------- -------
"Company" shall mean Doubletree Corporation, a Delaware corporation.
SECTION 1.4 - EXCHANGE ACT
- ----------- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.5 - FAIR MARKET VALUE
- ----------- -----------------
"Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the mean between the highest and lowest selling price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any, on such date, or if shares were not traded on such date, then
on the closest preceding date on which a trade occurred, or (ii) if Common Stock
is not traded on an exchange, the mean between the closing representative bid
and asked prices for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Committee acting in good faith.
SECTION 1.6 - GEHOP
- ----------- -----
"GEHOP" shall mean GE Investment Hotel Partners I, Limited
Partnership.
SECTION 1.7 - SECRETARY
- ----------- ---------
"Secretary" shall mean the Secretary of the Company.
SECTION 1.8 - SECURITIES ACT
- ----------- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.9 - SUBSIDIARY
- ----------- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
SECTION 1.10 - OPTION
- ------------ ------
"Option shall mean an option granted under this Agreement.
Page 69 of 78 Pages
<PAGE>
SECTION 1.11 - OPTIONHOLDER
- ------------ ------------
"Optionholder" shall mean GEHOP.
ARTICLE II
SALE OF OPTION
--------------
SECTION 2.1 - SALE OF OPTION
- ----------- --------------
In consideration of the payment of the amount set forth in Section 2.2
hereof, and for other good and valuable consideration, on the date hereof the
Company irrevocably grants to the Optionholder the option to purchase any part
or all of an aggregate of 20,000 shares of its $.01 par value Common Stock upon
the terms and conditions set forth in this Agreement.
SECTION 2.2 - CONSIDERATION TO THE COMPANY
- ----------- ----------------------------
In consideration of the granting of the Option by the Company, the
Optionholder shall pay to the Company an aggregate amount of $200.00 in cash
upon the execution of this Agreement.
SECTION 2.3 - EXERCISE PRICE
- ----------- --------------
The purchase price of the shares of stock covered by the Option shall
be $13.00 per share without commission or other charge.
SECTION 2.4 - ADJUSTMENTS IN OPTION
- ----------- ---------------------
(a) In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company, or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split up, stock dividend or
combination of shares, the Board shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the Optionholder's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option may include any
necessary corresponding adjustment in the Option price per share, but shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices). Any such adjustment made by the
Board shall be final and binding upon the Optionholder, the Company and all
other interested persons.
(b) Notwithstanding the foregoing, in the event of such a
reorganization, merger, consolidation, recapitalization, reclassification, stock
split up, stock dividend or combination, or
Page 70 of 78 Pages
<PAGE>
other adjustment or event which results in shares of Common Stock being
exchanged for or converted into cash, securities or other property, the Company
will have the right to terminate this Agreement as of the date of the exchange
or conversion, in which case all options, rights and other awards under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III
PERIOD OF EXERCISEABILITY
-------------------------
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
- ----------- ------------------------------
The Option shall become exercisable in four (4) cumulative
installments as follows:
(a) The first installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
first anniversary of the date the Option is granted.
(b) The second installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
second anniversary of the date the Option is granted.
(c) The third installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
third anniversary of the date the Option is granted.
(d) The fourth installment shall consist of twenty-five percent (25%)
of the shares covered by the Option and shall become exercisable on the
fourth anniversary of the date the Option is granted.
SECTION 3.2 - DURATION OF EXERCISABILITY
- ----------- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Page 71 of 78 Pages
<PAGE>
SECTION 3.3 - EXPIRATION OF OPTION
- ----------- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted;
(b) The effective date of either the merger or consolidation of the
Company with or into another corporation, the exchange of all or substantially
all of the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock (other than an acquisition by the General Electric
Pension Trust or its affiliates, by Canadian Pacific or its affiliates, by
Richard Ferris or by Peter Ueberroth of more than 50% of the Company's then
outstanding voting stock), or the liquidation or dissolution of the Company,
unless the Board waives this provision in writing. At least ten (10) days prior
to the effective date of such merger, consolidation, exchange, acquisition,
liquidation or dissolution, the Board shall give the Optionholder notice of such
event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
- ----------- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, the exchange of all or substantially all of the assets
of the Company for the securities of another corporation, the acquisition by
another corporation or person of all or substantially all of the Company's
assets or fifty percent (50%) or more of the Company's then outstanding voting
stock (other than an acquisition by the General Electric Pension Trust or its
affiliates, by Canadian Pacific or its affiliates, by Richard Ferris or by Peter
Ueberroth of more than 50% of the Company's then outstanding voting stock), or
the liquidation or dissolution of the Company, this Option shall be exercisable
as to all the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); provided, however, that
this acceleration of exercisability shall not take place if:
(a) Such acceleration of exercisability would be inconsistent with
the requirements of Rule 16b-3;
(b) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(c) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by the
succeeding employer corporation or a parent or subsidiary of such corporation.
Page 72 of 78 Pages
<PAGE>
The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
EXERCISE OF OPTION
------------------
SECTION 4.1 - PARTIAL EXERCISE
- ----------- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
SECTION 4.2 - MANNER OF EXERCISE
- ----------- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionholder stating that the
Option or portion is thereby exercised, such notice complying with all
applicable rules established by the Board; and
(b) (i) Full payment (in cash) for the shares with respect to which
such Option or portion is exercised; or
(ii) With the consent of the Board, (A) shares of the Company's
Common Stock owned by the Optionholder duly endorsed for transfer to the Company
or (B) subject to the timing requirements of Section 4.3, shares of the
Company's Common Stock issuable to the Optionholder upon exercise of the Option,
with a Fair Market Value on the date of Option exercise equal to the aggregate
purchase price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i) and (ii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Optionholder, stating that the shares
of stock are being acquired for the Optionholder's own account, for investment
and without any present intention of
Page 73 of 78 Pages
<PAGE>
distributing or reselling said shares or any of them except as may be permitted
under the Securities Act and then applicable rules and regulations thereunder,
and that the Optionholder will indemnify the Company against and hold it free
and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above. The Board may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Board may require an opinion of counsel acceptable to it to the
effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Board, (i) shares
of the Company's Common Stock owned by the Optionholder duly endorsed for
transfer, or (ii) subject to the timing requirements of Section 4.3, shares of
the Company's Common Stock issuable to the Optionholder upon exercise of the
Option, having a Fair Market Value at the date of Option exercise equal to the
sums required to be withheld, may be used to make all or part of such payment.
SECTION 4.3 - CERTAIN TIMING REQUIREMENTS
- ----------- ---------------------------
Shares of the Company's Common Stock issuable to the Optionholder upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionholder to use shares of the Company's
Common Stock issuable to the Optionholder upon exercise of the Option to pay all
or part of the Option price or the withholding taxes (subject to the approval of
the Board) made at least six (6) months prior to the payment of such Option
price or withholding taxes.
Page 74 of 78 Pages
<PAGE>
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
- ----------- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;
and
(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
it is required to withhold upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience, provided, however, that the Company shall
undertake and diligently pursue satisfaction of the foregoing conditions within
a reasonable time after exercise of the Option.
SECTION 4.5 - RIGHTS AS SHAREHOLDER
- ----------- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
----------------
SECTION 5.1 - ADMINISTRATION
- ----------- --------------
The Board shall have the power to interpret this Agreement and to
adopt such rules for the administration, interpretation and
Page 75 of 78 Pages
<PAGE>
application of this Agreement as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Board in good faith shall be final and binding upon
the Optionholder, the Company and all other interested persons. No member of
the Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Agreement or the Option.
SECTION 5.2 - OPTION NOT TRANSFERABLE
- ----------- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionholder or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution, and provided, further, that Optionholder shall have the right to
assign or distribute the Option, in whole or in part, to Optionholder's partners
upon Optionholder's dissolution or liquidation, whereupon each assignee or
distributee shall be entitled to all rights hereunder as to the portion of the
Option conveyed to it.
SECTION 5.3 - SHARES TO BE RESERVED
- ----------- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 - NOTICES
- ----------- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionholder shall be addressed to GEHOP at P.O. Box
7900, 3003 Summer Street, Stamford, Connecticut 06904-7900, Attention: General
Counsel, with a copy to Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York 10019, Attn: Sanford W. Morhouse, Esq. (WCS/49376). By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different
address for notices to be given to him. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
Page 76 of 78 Pages
<PAGE>
SECTION 5.5 - TITLES
- ----------- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - CONSTRUCTION
- ----------- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
SECTION 5.7 - CONFORMITY TO SECURITIES LAWS
- ----------- -----------------------------
The Optionholder acknowledges that this Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder. Notwithstanding anything herein
to the contrary, this Agreement shall be administered, and the Option is granted
and may be exercised, only in such a manner as to conform to such laws, rules
and regulations. To the extent permitted by applicable law, this Agreement
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
Page 77 of 78 Pages
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
Doubletree Corporation
By:
-----------------------------------
WILLIAM L. PEROCCHI, EXECUTIVE VICE
PRESIDENT, CHIEF FINANCIAL OFFICER
AND SECRETARY
GE Investment Hotel Partners I, Limited Partnership
By: GE Investment Management Incorporated, its general partner
By:
---------------------------
Title:
------------------------
Taxpayer Identification Number:
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