<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)*
FELCOR SUITE HOTELS, INC.
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
314305103
(CUSIP Number)
with a copy to:
Ralph B. Lake, Esq. John M. Newell, Esq.
Senior Vice President and Latham & Watkins
General Counsel 633 West Fifth Street
Promus Hotels, Inc. Suite 4000
755 Crossover Lane Los Angeles, California 90071
Memphis, TN 38117 (213) 485-1234
(901) 374-5100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 2, 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 / /.
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).
<PAGE>
SCHEDULE 13D
CUSIP No. 314305103
---------
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSON.
Promus Hotels, Inc.
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / /
OF A GROUP* (b) / /
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
BK
- -------------------------------------------------------------------------------
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 2,704,302
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) SHARED VOTING POWER
N/A
--------------------------------------------------
(9) SOLE DISPOSITIVE POWER
2,704,302
--------------------------------------------------
(10) SHARED DISPOSITIVE POWER
N/A
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,704,302
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
N/A
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 314305103
---------
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSON.
Promus Hotel Corporation
- -------------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / /
OF A GROUP* (b) / /
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
BK
- -------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- -------------------------------------------------------------------------------
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 2,704,302
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) SHARED VOTING POWER
N/A
--------------------------------------------------
(9) SOLE DISPOSITIVE POWER
2,704,302
--------------------------------------------------
(10) SHARED DISPOSITIVE POWER
N/A
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,704,302
- -------------------------------------------------------------------------------
(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
N/A
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the shares of Common Stock, $0.01 par value
per share (the "Common Stock"), of FelCor Suite Hotels, Inc., a Maryland
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c). This statement is being jointly filed by Promus Hotels,
Inc., a Delaware corporation ("PHI") and Promus Hotel Corporation, a Delaware
corporation ("PHC," and together with PHI, the "Reporting Persons"). PHI is a
wholly-owned subsidiary of PHC. PHC, through PHI, is one of the leading hotel
companies in the United States, operating the Embassy Suites, Embassy Vacation
Resort, Hampton Inn, Hampton Inn & Suites and Homewood Suites hotel brands. The
principal offices of each of the Reporting Persons are located at 755 Crossover
Lane, Memphis, Tennessee 38117.
For information with respect to the identity and background of each
executive officer and director of each of the Reporting Persons, see Schedule I
attached hereto.
(d)-(e). During the last five years, neither of the Reporting Persons
nor, to the best knowledge of the Reporting Persons, none of the other persons
identified in Schedule I: (i) have been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors); or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source of the $50,000,000 used for PHI's purchases (as described
in Item 5(c), below) of 1,886,792 shares of Common Stock (the "Shares") and the
$25,000,000 used for PHI's purchases (as described in Item 5 (c) below) of the
1,000,000 Units (as defined below) was borrowings under PHI's bank credit
facility, which is incorporated by reference herein as an exhibit hereto.
ITEM 4. PURPOSE OF TRANSACTION.
PHI acquired the 1,886,792 shares of Common Stock and
1,000,000 Units for investment purposes.
See Item 6, below, for a discussion of certain (i) registration rights
with respect to certain of the Shares and Units beneficially owned by PHI and
(ii) transfer restrictions relating to certain of the Shares and Units
beneficially owned by PHI. The Shares and Units were originally acquired
with the expectation that they would ultimately be disposed of. Accordingly,
subject to such transfer restrictions and depending on general market and
economic conditions affecting the Issuer and other relevant factors, PHI may
dispose of some or all of its Shares and Units from time to time in open
market transactions, private transactions or otherwise. PHI has determined to
dispose of its Shares and Units, subject to such transfer restrictions and
depending on general market and economic conditions.
<PAGE>
Except as set forth herein, the Reporting Persons have no present
plans or proposals with respect to any material change in the Issuer's business
or corporate structure or which relate to or would result in:
(1) the acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer;
(2) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(3) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(4) any change in the present board of directors or management
of the Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(5) any material change in the present capitalization or
dividend policy of the Issuer;
(6) 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;
(7) causing a class of securities of the Issuer to be delisted
from a national securities exchange or cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association;
(8) 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; or
(9) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on February 5, 1997, PHI
beneficially owned 1,886,792 Shares of Common Stock of the Issuer and
1,000,000 units of limited partner interest ("Units") in FelCor Suites
Limited Partnership, a Delaware limited partnership (the "Partnership"). The
Issuer, as sole general partner of the Partnership, is obligated (subject to
certain conditions), one year following the issuance of such Units, to redeem
the Units, at the option of the holders thereof, for a like number of Shares
of Common Stock or, at the option of the Issuer, for cash or a combination of
cash and Common Stock. The Issuer's charter prohibits ownership of more than
9.9% of any class of the Company's outstanding capital stock by any person
(the "Ownership Limit"). Taking into account the Ownership Limit, PHI
beneficially owns 2,704,302 Shares of Common Stock (including 817,510 Shares
issuable upon conversion of Units), or 9.9% of the total number of Shares of
Common Stock outstanding (based upon 26,498,676 shares of Common Stock
outstanding as of January 29, 1997, as set forth in the Issuer's Prospectus
Supplement filed with the Securities and Exchange Commission on January 29,
1997). If the Ownership Limit is disregarded, PHI would beneficially own
2,886,792 Shares of Common Stock (including 1,000,000 Shares issuable upon
conversion of Units) or 10.50% of the
<PAGE>
total number of Shares of Common Stock outstanding (based upon 26,498,676 Shares
of Common Stock outstanding as described above).
PHC may be deemed to beneficially own the Shares of Common Stock and
Units owned by PHI because PHI is a wholly-owned subsidiary of PHC. Except as
set forth herein, none of the Reporting Persons, nor, to the best knowledge of
the Reporting Persons, any person named in Schedule I, beneficially owns any
shares or Units.
(b) PHI has the sole power to vote or to direct the vote, and the
sole power to dispose or to direct the disposition of, the Shares and Units
beneficially owned by PHI. PHC may be deemed to have the sole power to vote or
direct the vote, and to dispose or direct the disposition of, the Shares and
Units beneficially owned by PHI due to the fact that PHI is a wholly-owned
subsidiary of PHC.
(c) The following chart sets forth the transactions in the Common
Stock effected by the Reporting Person during the 60 days prior to January 2,
1996 and thereafter through February 5, 1997.
<TABLE>
<CAPTION>
Number of Shares of Common Average Price
Purchaser Date Stock or Units Acquired Paid Per Share Type of Purchase
--------- ---- ----------------------- -------------- ----------------
<S> <C> <C> <C> <C>
PHI 11/06/95 800,000 Units $25.00 Purchase from Issuer
PHI 11/14/95 200,000 Units $25.00 Purchase from Issuer
PHI 11/14/95 189,756 Shares $26.50 Purchase from Issuer
PHI 01/02/96 1,333,100 Shares $26.50 Purchase from Issuer
PHI 02/21/96 94,339 Shares $26.50 Purchase from Issuer
PHI 04/02/96 104,028 Shares $26.50 Purchase from Issuer
PHI 05/10/96 165,569 Shares $26.50 Purchase from Issuer
</TABLE>
(d) Not applicable.
(e) Not applicable.
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Subscription Agreement, dated May 3, 1995, among PHI
(as transferee of Embassy Suites, Inc.), the Issuer and the Partnership (as
amended, the "First Subscription Agreement") and the Subscription Agreement,
dated October 17, 1995, among PHI, the Issuer and the Partnership (as
amended, the "Second Subscription Agreement"), (i) the Issuer has granted PHI
certain registration rights with respect to Shares owned or acquired (upon
redemption of Units) by PHI, and (ii) PHI has agreed that, during any
consecutive three month period, PHI shall be prohibited, unless the Issuer
shall otherwise consent thereto in writing, from selling more than 3% of the
outstanding Shares of Common Stock, whether pursuant to said registration
statement or otherwise, except in an underwritten public offering in which
the managing underwriter is one reasonably acceptable to the Issuer.
Pursuant to such registration rights, the Issuer has filed a shelf
registration covering the Shares owned or acquired (upon redemption of Units)
by PHI. Such shelf registration statement was declared effective by the SEC
on June 28, 1996 (Registration No. 333-004947).
The above description of the First and Second Subscription Agreements
are summaries only and do not purport to be complete descriptions of the terms
of the First and Second Subscription Agreements. These summaries are subject
to, and are qualified in their entirety by reference to, the detailed provisions
of the First and Second Subscription Agreements, which are filed as exhibits
hereto.
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
10.1 Subscription Agreement, dated as of May 3, 1995, among Promus Hotels,
Inc. (as transferee of Embassy Suites, Inc.), the Issuer and the
Partnership.
10.2 Subscription Agreement, dated as of October 17, 1995, among Promus
Hotels, Inc., the Issuer and the Partnership.(1)
10.3 Second Amendment to Subscription Agreements, dated as of December 12,
1995, among Promus Hotels, Inc., the Issuer and the Partnership.
10.4 Tranche A Credit Agreement, dated as of June 7, 1995, among Embassy
Suites, Inc., as Initial Borrower, Promus Hotels, Inc., as the Subsequent
Borrower, certain subsidiaries and related parties from time to time
party thereto, as Guarantors, the several lenders from time to time party
thereto, and NationsBank, N.A. (Carolinas), as Agent.(2)
10.5 First Amendment to Tranche A Credit Agreement, dated as of June 30, 1995,
by and among Embassy Suites, Inc., Promus Hotels, Inc., The Promus
Companies Incorporated, Promus Hotel Corporation and NationsBank, N.A.
(Carolinas).(3)
10.6 Tranche A Assignment and Assumption Agreement, dated as of June 30, 1995,
among Embassy Suites, Inc., Promus Hotels, Inc., The Promus Companies
Incorporated and NationsBank, N.A. (Carolinas).(3)
10.7 Second Amendment to Tranche A Credit Agreement, dated as of May 15, 1996,
by and among Embassy Suites, Inc., Promus Hotels, Inc., The Promus
Companies Incorporated, Promus Hotel Corporation, and NationsBank, N.A.
(Carolina).(4)
_____________________________
(1) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended September 30, 1995, filed
November 13, 1995, File No. 1-11463.
(2) Incorporated by reference from the Promus Hotel Corporation Current
Report on Form 8-K, filed June 15, 1995, File No. 1-11463.
(3) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended June 30, 1995, filed August
11, 1995, File No. 1-11463.
(4) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended June 30, 1996, filed August
12, 1996, File No. 1-11463.
<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.
PROMUS HOTELS, INC.
By: /s/ Ralph B. Lake
--------------------------------------
Name: Ralph B. Lake
Title: Senior Vice President
and General Counsel
PROMUS HOTEL CORPORATION
By: /s/ Ralph B. Lake
--------------------------------------
Name: Ralph B. Lake
Title: Senior Vice President
and General Counsel
Dated: February 5, 1997
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PROMUS HOTEL, INC.
EXECUTIVE OFFICERS AND DIRECTORS
Name Present Business Address Present Principal Occupation Citizenship
- ---- ------------------------ ---------------------------- -----------
<S> <C> <C> <C>
Raymond E. Schultz 755 Crossover Lane President & Chief Executive Officer U.S.A.
Memphis, TN 38117 and Director
David C. Sullivan 755 Crossover Lane Executive Vice President & Chief U.S.A.
Memphis, TN 38117 Operating Officer and Director
Donald H. Dempsey 755 Crossover Lane Senior Vice President & U.S.A.
Memphis, TN 38117 Chief Financial Officer and
Director
Thomas L. Keltner 755 Crossover Lane Senior Vice President U.S.A.
Memphis, TN 38117
Ralph B. Lake 755 Crossover Lane Senior Vice President & U.S.A.
Memphis, TN 38117 General Counsel
Mark C. Wells 755 Crossover Lane Senior Vice President U.S.A.
Memphis, TN 38117
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PROMUS HOTEL CORPORATION
EXECUTIVE OFFICERS AND DIRECTORS
Executive Officers
Name Present Business Address Present Principal Occupation Citizenship
- ---- ------------------------ ---------------------------- -----------
<S> <C> <C>
Michael D. Rose 755 Crossover Lane Chairman of the Board and U.S.A.
Memphis, TN 38117 Director
Raymond E. Schultz 755 Crossover Lane President & Chief Executive U.S.A.
Memphis, TN 38117 Officer and Director
David C. Sullivan 755 Crossover Lane Executive Vice President & U.S.A.
Memphis, TN 38117 Chief Operating Officer and
Director
Donald H. Dempsey 755 Crossover Lane Senior Vice President & U.S.A.
Memphis, TN 38117 Chief Financial Officer
Thomas L. Keltner 755 Crossover Lane Senior Vice President U.S.A.
Memphis, TN 38117
Ralph B. Lake 755 Crossover Lane Senior Vice President & U.S.A.
Memphis, TN 38117 General Counsel
Mark C. Wells 755 Crossover Lane Senior Vice President U.S.A.
Memphis, TN 38117
Non-Employee Directors
Name Present Business Address Present Principal Occupation Citizenship
- ---- ------------------------ ---------------------------- -----------
U. Beltram Ellis, Jr. Two Park Place, Suite 301 Chairman & Chief Executive U.S.A.
1888 Emery Street Officer
Atlanta, GA 30318 IXL Holdings, Inc.
Debra J. Fields 333 Main Street, Box 5000 Chairman of the Board U.S.A.
Park City, UT 84060 Mrs. Fields, Inc.
Christopher W. Hart 1081 Beacon Street President U.S.A.
Brookline, MA 02146 Spire Group
C. Warren Neel 716 Stokely Management Center Dean, The University of U.S.A.
Knoxville, TN 37996 Tennessee College of Business
Administration
Ben C. Peternell 1023 Cherry Road Senior Vice President, Human U.S.A.
Memphis, TN 38117 Resources & Communications
Harrah's Entertainment, Inc.
Michael I. Roth 1740 Broadway-E. Floor 13th Chairman & Chief Executive U.S.A.
New York, NY 10019 Officer Mutual of New York
Jay Stein 1200 Riverplace Blvd. Chairman & Chief Executive U.S.A.
Jacksonville, FL 32207 Officer Stein Mart, Inc.
<PAGE>
Ronald Terry International Place 2 Private investor U.S.A.
6410 Poplar Avenue-Suite 375
Memphis, TN 38119
</TABLE>
<PAGE>
EXHIBIT INDEX
10.1 Subscription Agreement, dated as of May 3, 1995, among Promus Hotels,
Inc. (as transferee of Embassy Suites, Inc.), the Issuer and the
Partnership.
10.2 Subscription Agreement, dated as of October 17, 1995, among Promus
Hotels, Inc., the Issuer and the Partnership.(1)
10.3 Second Amendment to Subscription Agreements, dated as of December 12,
1995, among Promus Hotels, Inc., the Issuer and the Partnership.
10.4 Tranche A Credit Agreement, dated as of June 7, 1995, among Embassy
Suites, Inc., as Initial Borrower, Promus Hotels, Inc., as the Subsequent
Borrower, certain subsidiaries and related parties from time to time
party thereto, as Guarantors, the several lenders from time to time party
thereto, and NationsBank, N.A. (Carolinas), as Agent.(2)
10.5 First Amendment to Tranche A Credit Agreement, dated as of June 30, 1995,
by and among Embassy Suites, Inc., Promus Hotels, Inc., The Promus
Companies Incorporated, Promus Hotel Corporation and NationsBank, N.A.
(Carolinas).(3)
10.6 Transche A Assignment and Assumption Agreement, dated as of June 30,
1995, among Embassy Suites, Inc., Promus Hotels, Inc., The Promus
Companies Incorporated and NationsBank, N.A. (Carolinas).(3)
10.7 Second Amendment to Tranche A Credit Agreement, dated as of May 15, 1996,
by and among Embassy Suites, Inc., Promus Hotels, Inc., The Promus
Companies Incorporated, Promus Hotel Corporation, and NationsBank, N.A.
(Carolina).(4)
_______________________
(1) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended September 30, 1995, filed
November 13, 1995, File No. 1-11463.
(2) Incorporated by reference from the Promus Hotel Corporation Current
Report on Form 8-K, filed June 15, 1995, File No. 1-11463.
(3) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended June 30, 1996, filed August
12, 1996, File No. 1-11463.
(4) Incorporated by reference from the Promus Hotel Corporation Quarterly
Report on Form 10-Q, for the quarter ended June 30, 1995, filed August
11, 1995, File No. 1-11463.
<PAGE>
EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement") is made and entered into this
3rd day of May, 1995, by and among Embassy Suites, Inc. ("Embassy"), a Delaware
corporation, FelCor Suite Hotels, Inc. (the "Company"), a Delaware corporation,
and FelCor Suites Limited Partnership (the "Partnership"), a Delaware limited
partnership.
WITNESSETH:
WHEREAS, Embassy owns, operates and franchises hotels under the trademark
and service mark Embassy Suites-Registered Trademark- ("Embassy Suites hotels");
WHEREAS, the Company owns an approximate 73.6% general partner interest in
the Partnership which owns nine Embassy Suites-Registered Trademark- hotels,
all of which hotels are leased by the Partnership to DJONT Operations, L.L.C.
(the "Lessee");
WHEREAS, all of the hotels owned by the Partnership are operated by the
Lessee under franchise licenses from Embassy pursuant to franchise license
agreements between the Lessee and Embassy (the "Existing Franchise Agreements")
and eight of the hotels are managed on behalf of the Lessee by Embassy pursuant
to management agreements between the Lessee and Embassy (the "Existing
Management Agreements");
WHEREAS, the Company, through the Partnership, is in the business of
acquiring hotels and, in connection therewith, expects to undertake a public
offering of its common stock, $0.01 par value (the "Common Stock"), pursuant to
a registration statement to be filed with the Securities and Exchange Commission
(the "SEC") on or shortly after May 4, 1995 (the "Public Offering"), all of the
proceeds of which will be contributed by the Company to the Partnership for use
by the Partnership, in part, to acquire additional hotels that may be converted
to, or are, Embassy Suite hotels;
WHEREAS, in order to induce the Partnership to acquire Qualifying Hotels
(as defined herein), Embassy desires to subscribe for the purchase of up to
$25,000,000 in units of limited partner interest (the "Units") of the
Partnership and the Partnership desires to sell such Units to Embassy, upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
<PAGE>
1. SUBSCRIPTION. Embassy hereby subscribes for and agrees to purchase,
from time to time, up to an aggregate of $25,000,000 in Units at the purchase
price determined in accordance with Section 2 below. Embassy shall close the
purchase of the Units in increments of $5,000,000 in price upon receipt of
notice from the Partnership that the Partnership is acquiring a Qualifying
Hotel. Each Unit shall be redeemable by Embassy, at any time following one year
after the date of first issuance of such Units hereunder, for one share of
Common Stock, subject to the restrictions contained Section 7.5 of the Amended
and Restated Agreement of Limited Partnership of the Partnership (the
"Partnership Agreement"), a copy of which agreement is attached hereto as
EXHIBIT A; provided, that if Embassy is subject to Section 16 of the Securities
Exchange Act of 1934, as amended, the Partnership shall not satisfy such
redemption in whole or in part with cash without the consent of Embassy.
2. PURCHASE PRICE. The purchase price (the "Purchase Price") for each of
the Units shall be equal to the public offering price per share at which shares
of Common Stock are sold in the Public Offering.
3. CONDITIONS TO PURCHASE.
(a) The following shall be conditions precedent to the obligations of
Embassy to effect each purchase of Units subscribed for herein, and of the
Partnership to sell and issue any Units to Embassy subscribed for herein;
(i) The Public Offering shall have been completed and the
Partnership shall have received the proceeds thereof in an amount of not
less than $65 million, without material waiver or amendment of the
conditions to closing of the underwriters therein.
(ii) The Partnership shall have entered into a definitive
agreement for the acquisition of a Qualifying Hotel in connection with each
incremental purchase obligation of Embassy arising hereunder and shall have
provided written notice thereof to Embassy, which notice shall contain a
description of the hotel and the basis for the Partnership's belief that
such hotel is a Qualifying Hotel, and shall further contain a specific
request from the Partnership that Embassy purchase $5,000,000 in Units in
accordance with its subscription obligation hereunder. For purposes
hereof, a "Qualifying Hotel" shall mean either (i) a hotel that,
immediately prior to the acquisition thereof by the Partnership, is not an
Embassy Suites hotel but meets the minimum standards (subject to any
waivers approved or improvements required by Embassy) then in effect for
the conversion of a hotel to an Embassy Suites hotel
-2-
<PAGE>
and for which the Lessee has been granted a franchise license or commitment
agreement from Embassy and for which Embassy has been engaged as manager
upon the terms prescribed herein, or (ii) a hotel that, immediately prior
to the acquisition thereof by the Partnership, is an existing Embassy
Suites hotel that is not then managed by Embassy and for which the Lessee
has been granted a franchise license or commitment agreement from Embassy
and for which Embassy has been engaged as manager upon the terms prescribed
herein. The terms under which Embassy will be engaged to manage such
hotels shall be substantially similar to the Existing Management
Agreements, except for the modifications contemplated by subparagraph (c)
below.
(iii) The Lessee shall have offered to Embassy an agreement
between the Lessee and Embassy which shall provide that, notwithstanding
that certain Commitment to Amend Management Agreement dated as of May 19,
1994 between Embassy, the Lessee and others, the form of management
agreement to be entered into between the Lessee and Embassy, effective
beginning with the tenth Embassy Suites hotel for which Embassy is engaged
as manager on behalf of the Lessee and continuing through the next nine
Embassy Suites hotels for which Embassy is engaged as manager on behalf of
Lessee thereafter, shall provide that the incentive management fee payable
to Embassy by Lessee of such hotel shall be equal to the lesser of (i) 3%
of adjusted gross revenues of the hotels, or (ii) 50% of the Lessee's net
income from the managed hotel after percentage lease payments, but before
Lessee's overhead expenses.
(b) The obligations of Embassy to consummate each closing of the
purchase of Units hereunder shall be subject to the following additional
conditions:
(i) To the extent set forth in Section 7 hereof, the
representations and warranties of the Company and the Partnership set forth
herein shall be true and accurate in all material respects as of the date
of such closing; and Embassy shall have received a certificate, in
reasonably satisfactory form, of an officer of the Company, on behalf of
itself and as general partner of the Partnership, to that effect.
(ii) Prior to the date of the first closing, Embassy shall have
received a letter from counsel to the Company and the Partnership entitling
it to rely on the opinion delivered to the underwriters in connection with
the consummation of the Public Offering, as if addressed to it.
-3-
<PAGE>
(iii) On the date of the first closing, Embassy shall have
received an opinion from counsel to the Company and the Partnership to the
effect of paragraphs (b) through (e) of Section 7 hereof, subject to
reasonable and customary assumptions, exceptions, qualifications and
limitations.
(c) The obligations of each of the Company and the Partnership to
consummate each closing of the purchase of Units hereunder shall be subject
to the following additional conditions:
(i) To the extent set forth in Section 6 hereof, the
representations and warranties of Embassy set forth herein shall be true
and accurate in all material respects as of the date of each such closing;
and the Partnership and the Company shall have received a certificate, in
reasonably satisfactory form, of an officer of Embassy to the effect.
4. PURCHASE CLOSINGS.
(a) Each closing of the incremental purchase of Units hereunder shall
be in connection with a closing of the acquisition of a Qualifying Hotel
and shall occur concurrently with the completion of such acquisition
provided that the first such closing shall not occur prior to July 15,
1995. At each such closing, Embassy shall pay to the Partnership, by wire
transfer or by certified or bank cashiers check, (i) on July 15, 1995, the
amount determined by multiplying $5,000,000 by the number of Qualifying
Hotels, if any, theretofore acquired by the Partnership, and (ii) on each
closing of the acquisition of a Qualifying Hotel by the Partnership
occurring subsequent to July 15, 1995, the amount of $5,000,000. At each
closing with Embassy hereunder, the Partnership shall issue to Embassy one
or more certificates representing the whole number of Units equal to the
quotient of (i) $5,000,000, divided by (ii) the Purchase Price per Unit.
The Partnership shall not be required to issue fractional Units in
connection with any such purchase and, in lieu thereof, the Partnership
shall refund to Embassy the cash amount represented by the fractional Unit
based upon the Purchase Price per Unit.
(b) Notwithstanding, subparagraph (a) above, if the proposed
distribution (the "Distribution") by The Promus Companies Incorporated
("Promus"), as described in the proxy statement for the Annual Meeting of
Stockholders of Promus to be held on May 26, 1995, is not completed
substantially in accordance with the terms set forth therein, the dates of
the incremental closings, and the amount of Units to be purchased at each
such
-4-
<PAGE>
closing, shall be as follows: (i) on July 15, 1995, the amount determined
by multiplying $5,000,000 by the number of Qualifying Hotels, if any,
theretofore acquired by the Partnership, up to the maximum amount of
$10,000,000, (ii) on August 1, 1995, the amount determined by multiplying
$5,000,000 by the number of Qualifying Hotels, if any, theretofore acquired
by the Partnership for which incremental closings were not held on July 15,
1995, up to the maximum amount, including all amounts previously purchased,
of $15,000,000, (iii) on August 15, 1995, the amount determined by
multiplying $5,000,000 by the number of Qualifying Hotels, if any,
theretofore acquired by the Partnership for which incremental closings were
not held by August 1, 1995, up to the maximum amount, including all amounts
previously purchased, of $25,000,000, and (iv) if the full amount of
$25,000,000 in Units has not been purchased by August 15, 1995, on each
closing of the acquisition of a Qualifying Hotel by the Partnership
occurring subsequent to August 15, 1995, the amount of $5,000,000.
5. TERM. This Agreement shall terminate when Embassy shall have
completed its subscription obligation hereunder or sooner if the Partnership
shall deliver written notice to Embassy that it has terminated Embassy's
obligations hereunder; provided, however, that this Agreement shall terminate
and be of no further force or effect if the Company has not completed the Public
Offering by September 30, 1995.
6. REPRESENTATIONS AND WARRANTIES OF EMBASSY. Embassy hereby represents
and warrants to the Company and the Partnership as follows:
(a) The execution, delivery and performance of this Agreement by
Embassy has been duly authorized by all necessary corporate action. This
Agreement constitutes a valid and binding obligation of Embassy,
enforceable in accordance with its terms.
(b) It is familiar with the business and financial condition of the
Company and the Partnership, and is not relying upon any representations
made to it by the Company, the Partnership or any of the officers,
employees or agents of either of them that are not contained herein.
(c) It is aware of the risks involved in making an investment in the
Units and in the Common Stock for which such Units are redeemable. It has
had an opportunity to ask questions of, and to receive answers from, the
Partnership and the Company, or a person or persons authorized to act on
their behalf, concerning the terms and conditions of this investment.
Embassy confirms that all documents, records and books pertaining to its
investment in the Partnership
-5-
<PAGE>
that have been requested by it have been made available or delivered to it
prior to the date hereof.
(d) It understands that neither the Units nor the shares of Common
Stock for which the Units may be redeemed have been registered under the
Securities Act of 1933, as amended, or any state securities acts and are
instead being offered and sold in reliance on an exemption from such
registration requirements. The Units for which Embassy hereby subscribes
are being acquired solely for its own account, for investment, and are not
being purchased with a view to, or for resale in connection with, any
distribution, subdivision or fractionalization thereof, in violation of
such laws and Embassy has no present intention to enter into any contract,
undertaking, agreement or arrangement with respect to any such resale.
(e) It is an accredited investor as that term is defined in Rule 501
and Regulation D of the Securities Act of 1933, as amended.
The foregoing representations and warranties are true and accurate as of
the date hereof and shall be true and accurate as of the date of each purchase
closing and shall survive each such closing. If in any respect such
representations and warranties shall not be true and accurate as of any purchase
closing, Embassy shall give written notice of such fact to the Company and the
Partnership prior to such closing, specifying which representations and
warranties are not true and accurate and the reasons therefor.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PARTNERSHIP.
Each of the Company and the Partnership hereby jointly and severally
represents and warrants to Embassy that the representations and warranties
set forth in EXHIBIT B hereto, shall be true and correct in all material
respects as of the date of the consummation of the Public Offering, and each
of the Company and the Partnership further jointly and severally represents
and warrants to Embassy as follows:
(a) The disclosure to be contained in the registration statement with
respect to the Public Offering, in the form in which it is filed and in the
form in which it becomes effective, and the final prospectus relating to
the Public Offering, shall not be materially different from the disclosure
previously provided to Embassy relating to the Public Offering;
(b) The Company and the Partnership each have full legal right,
powers and authority to enter into this Agreement and the registration
rights agreement referred to in Section 8 hereof and to consummate the
transactions
-6-
<PAGE>
contemplated herein and therein. This Agreement has been, and the
registration rights agreement referred to in Section 8 hereof will be, duly
authorized by all necessary corporate and partnership action and each will
constitute the valid and binding obligation of each of the Company and the
Partnership, enforceable in accordance with their terms. The Partnership
Agreement constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms.
(c) The Units, when issued, will have been duly and validly
authorized and issued, free of any preemptive or similar rights, and be
fully paid and nonassessable, without any obligation to restore capital
except as required by the Delaware Revised Uniform Limited Partnership Act
(the "Delaware Act"). As a holder thereof, Embassy shall be admitted as a
limited partner of the Partnership entitled to all of the rights and
protections of limited partners under the Delaware Act and the provisions
of the Partnership Agreement, with the same rights, preferences and
privileges as all existing limited partners on a pari passu basis. The
shares of Common Stock for which the Units may be redeemed have been
validly authorized and, when issued, will be duly and validly issued, fully
paid and nonassessable, free of preemptive or similar rights. Authorized
and unissued shares of Common Stock sufficient to permit such redemption
shall at all times be reserved by the Company, and the Company shall take
no action to prevent the redemption of the Units by virtue of Section
7.5(c)(v) of the Partnership Agreement.
(d) Assuming the accuracy of the representations of Embassy set forth
in Section 6 hereof, (i) the Units will have been issued, offered and sold
in compliance with all applicable laws (including, without limitation,
federal and state securities laws), (ii) upon redemption of the Units for
shares of Common Stock, such shares will have been issued, offered and
sold in compliance with all applicable laws (including, without limitation,
federal and state securities laws) and (iii) each consent, approval,
authorization, order, license, certificate, permit, registration,
designation or filing by or with any governmental agency or body necessary
for the valid authorization, issuance, sale and delivery of the Units, the
valid authorization, issuance, sale and delivery of such shares upon
redemption of the Units, the execution, delivery and performance of this
Agreement and the registration rights agreement referred to in Section 8
hereof, and the consummation by the Company and the Partnership of the
transactions contemplated hereby and thereby, has been made or obtained and
is in full force and effect.
-7-
<PAGE>
(e) Neither the issuance, sale and delivery by the Partnership of the
Units, nor the issuance, sale and delivery by the Company of the shares of
Common Stock upon redemption of the Units, nor the execution, delivery and
performance of this Agreement and the registration rights agreement
referred to in Section 8 hereof, nor the consummation of the transactions
contemplated hereby or thereby by the Company or the Partnership as
applicable, will conflict with or result in a breach or violation of any of
the terms and provisions of, or (with or without the giving of notice or
passage of time or both) constitute a default under, any of the Operative
Documents (as defined in Exhibit B hereto), the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, or limited liability company agreement, as the case may be, of
the Company, the Partnership or the Lessee; any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument to
which the Company, the Partnership or the Lessee is a party or to which any
of them, any of their respective properties or other assets or any hotel is
subject; or any applicable statute, judgement, decree, rule or regulation
of any court or governmental agency or body applicable to any of the
foregoing or any of their respective properties; or result in the creation
or imposition of any lien, charge, claim or encumbrance upon any property
or asset of any of the foregoing.
The foregoing representations and warranties are true and accurate as of
the date hereof, or such other date as of which they are deemed to be made, and
shall be true and accurate on the date of the first purchase closing, and shall
survive such closing; and the representations and warranties set forth in
paragraphs (d), (e), (m) and (o) of EXHIBIT B hereto, and paragraphs (a) through
(e) above, shall also be true and accurate on each subsequent purchase closing,
and shall survive each such closing.
8. REGISTRATION RIGHTS. In connection with the first purchase of Units
hereunder, the Company shall enter into with Embassy a registration rights
agreement, providing, among other things, for the following:
(a) On or before one year after the date of first issuance of Units
hereunder, the Company shall file and use its best efforts to cause to
become effective, a registration statement under the Securities Act of
1933, as amended, and necessary qualifications or registrations under the
securities laws covering the issuance of shares of Common Stock necessary
for the redemption of all of the Units issued to Embassy under and pursuant
to this Subscription Agreement, and the resale of such shares by Embassy.
The Company shall use its best efforts to maintain the effectiveness of
such registration statement and such qualifications or registrations
(except during periods when Embassy shall be
-8-
<PAGE>
restricted from selling shares hereunder) until the earlier of (i) such
time as all of the shares of Common Stock issuable upon redemption of the
Units have been issued to and sold by Embassy, (ii) such time as all
remaining shares of Common Stock issuable upon redemption of the Units have
been issued to and may be resold by Embassy without restriction under the
Securities Act of 1933, as amended, and (iii) December 31, 2000.
(b) During any consecutive three month period, Embassy shall be
prohibited, unless the Company shall otherwise consent thereto in writing,
from selling more than 3% of the outstanding shares of Common Stock,
whether pursuant to said registration statement or otherwise, except in an
underwritten public offering in which the managing underwriterg is one
reasonably acceptable to the Company.
(c) All expenses of such registration statement, other than any
underwriting discounts or commissions or transfer taxes, but including the
reasonable fees and expenses of all separate counsel for Embassy, shall be
borne by the Company.
(d) (i) Embassy shall refrain from the sale of any shares for one or
more periods of not more than sixty (60) days following written notice from
the Company that the registration statement is not then current, due to the
existence of material non-public information disclosure of which would
materially adversely affect the business interests of the Company, and
prior to Embassy's receipt from the Company of written notice that such
registration statement is again current, provided that Embassy shall not be
precluded from effecting sales pursuant to this clause (i) for more than 90
days during any 360-day period.
(ii) Following written notice from the Company that it has filed
and caused to become effective a registration statement including an
offering of shares of Common Stock for sale by the Company to the public in
an underwritten public offering, Embassy shall enter into agreements with
the underwriters of such public offering, substantially in the same form as
agreements entered into by the officers and directors of the Company,
precluding the sale of Common Stock by Embassy for a period not to exceed
180 days following such notice, provided that Embassy was given the
opportunity to include its shares for sale in such public offering.
The registration rights agreement shall otherwise be in customary form,
containing, to the extent applicable, provisions consistent with those contained
in the
-9-
<PAGE>
Registration Rights Agreement dated as of July 21, 1994, among the Company and
certain holders named therein.
9. USE OF PROCEEDS. The Company and the Partnership agree with Embassy
that (i) the proceeds of the sale of Units hereunder will be used to acquire
hotels that may be converted to, or are, Embassy Suites hotels, as provided
herein; and (ii) the proceeds of the Public Offering, together with any
borrowings made in conjunction therewith, will be used to acquire such hotels,
renovate or construct additions to hotels currently owned by the Partnership,
repay outstanding indebtedness under the line of credit of the Company and for
working capital purposes.
10. MISCELLANEOUS.
(a) All notices or other communications given or made hereunder shall
be in writing and shall be delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, to Embassy at 6800 Poplar
Ave., Suite 200, Memphis, Tennessee 38138, and to the Company or the
Partnership at 5215 N. O'Connor Blvd., Suite 330, Irving, Texas 75039.
(b) NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY
ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL OF THE
TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS, APPLICABLE TO AGREEMENTS MADE
AND TO BE WHOLLY PERFORMED THEREIN.
(c) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and may be
amended only by an instrument in writing executed by all parties.
Embassy may assign and transfer its rights and obligations hereunder, and
the Units it acquires, to any direct or indirect subsidiary thereof,
including any subsidiary directly or indirectly distributed by Promus in
connection with the Distribution, provided that its obligations shall
only be assigned to a subsidiary which conducts or owns a substantial
portion of the Embassy Suites hotel business and which assumes such
obligations in writing.
(d) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the parties hereto.
-10-
<PAGE>
(e) All terms used herein shall be deemed to include the masculine
and the feminine and the singular and the plural as the context requires.
Captions herein are for convenience of reference only and shall not alter
or affect the meaning or construction of the paragraphs hereof to which
they relate.
(f) The parties hereto agree to take all actions, including the
entering into of any documents, agreements or instruments, or amendments
thereof, as may be necessary or appropriate to effectuate the intents and
purposes hereof and consummate and make effective the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the date first above written.
EMBASSY SUITES, INC.
By: /s/ Stephen Brammell
-------------------------------------
Stephen Brammell, Assistant Secretary
FELCOR SUITE HOTELS, INC.
By: /s/ Thomas J. Corcoran, Jr.
-------------------------------------
Thomas J. Corcoran, Jr., President
FELCOR SUITES LIMITED PARTNERSHIP
By: FelCor Suite Hotels, Inc.,
General Partner
By: /s/ Thomas J. Corcoran, Jr.
-------------------------------------
Thomas J. Corcoran, Jr., President
-11-
<PAGE>
EXHIBIT 10.3
SECOND AMENDMENT TO
SUBSCRIPTION AGREEMENTS
This SECOND AMENDMENT TO SUBSCRIPTION AGREEMENTS (the "Amendment") is
made and entered into as of this 12th day of December, 1995, by and among PROMUS
HOTELS, INC., a Delaware corporation ("Promus"), FELCOR SUITE HOTELS, INC., a
Maryland corporation (the "Company"), and FELCOR SUITES LIMITED PARTNERSHIP, a
Delaware limited partnership (the "Partnership").
RECITALS
A. The parties hereto have entered into that certain Subscription
Agreement, dated as of May 3, 1995 (the "First Subscription Agreement"), with
respect to providing certain acquisition financing for hotels to become Embassy
Suites hotels.
B. The parties hereto have entered into that certain Subscription
Agreement, dated as of October 17, 1995 (the "Second Subscription Agreement,"
and together with the First Subscription Agreement, the "Subscription
Agreements"), with respect to providing certain acquisition financing for
certain hotels currently in the Crown Sterling hotel chain and to become Embassy
Suites hotels.
C. The parties have entered into that certain First Amendment to
Subscription Agreements, dated as of November 16, 1995 (the "First Amendment"),
with respect to certain sums advanced, or contemplated to be advanced, by Promus
for the acquisition of certain hotels, both Crown Sterling hotels and other
hotels, that are to become Embassy Suites hotels.
D. The parties desire to nullify the First Amendment, and to
memorialize their agreement as to the applicability of the Subscription
Agreements to such advances, as well as otherwise to modify the Subscription
Agreements as set forth herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties do hereby
agree as follows:
1. FIRST AMENDMENT. The First Amendment is hereby terminated by the
parties hereto, and the parties further agree that the First Amendment shall
have no force or effect as though the same had never been entered into.
2. DEPOSIT LOAN. Promus has loaned to the Partnership, pursuant to
that certain Promissory Note, dated as of September 22, 1995, the sum of Seven
Million, Five Hundred Thousand Dollars ($7,500,000) (the "Deposit Loan")
representing a
<PAGE>
portion of the deposit made by a subsidiary of the Partnership with respect to
the acquisition of the Crown Sterling hotel chain. The parties hereby agree
that availability under the Crown Sterling Subscription (as defined in the
Second Subscription Agreement) shall be reduced by the principal amount of the
Deposit Loan outstanding from time to time.
3. FIRST SUBSCRIPTION AGREEMENT ADVANCES. Promus has advanced, or
will advance pending certain approvals, to the Partnership the following sums
with respect to the acquisition of the corresponding hotels:
Marlborough $5,000,000
Brunswick 2,500,000
Corpus Christi 2,500,000
Lombard 2,500,000
Cleveland 5,000,000
The parties agree that the foregoing amounts have been advanced, or will be
advanced, pursuant to the First Subscription Agreement.
4. CROWN STERLING FIRST SUBSCRIPTION AGREEMENT ADVANCES. Promus has
advanced to the Partnership the sum of $7,500,000 with respect to the
acquisition of the Crown Sterling hotels in Burlingame, California and
Bloomington, Minnesota. The parties hereto agree that such advance was advanced
pursuant to the First Subscription Agreement.
5. CROWN STERLING SECOND SUBSCRIPTION AGREEMENT ADVANCES. Promus
has advanced to the Partnership (a) the additional sum of $1,142,346 with
respect to the acquisition of the Crown Sterling hotels in Burlingame,
California and Bloomington, Minnesota, and (b) the sum of $3,886,186 for the
acquisition of the Crown Sterling hotels in Minneapolis (Downtown), Minnesota
and St. Paul, Minnesota. The parties hereto agree that such advances were made
to the Partnership pursuant to the Second Subscription Agreement.
6. AMENDMENT TO SECOND SUBSCRIPTION AGREEMENT. The Second
Subscription Agreement is hereby amended to delete therefrom the references to
the Promus Offering, as that term is defined therein, and Promus shall have no
rights or obligations with respect to such Promus Offering. In connection
therewith, the amount subscribed for by Promus under the Crown Sterling
Subscription is hereby amended to be increased to Fifty Million Dollars
($50,000,000). The Second Subscription Agreement is hereby further amended as
follows:
(a) Section 1(e) of the Second Subscription Agreement is hereby
amended and restated in its entirety to read as follows:
2
<PAGE>
(e) LIMITATIONS. Promus' agreement herein to purchase
Common Stock and/or Units in the Crown Sterling Subscription, the
proceeds of which are to be used by the Partnership to complete the
acquisition by FelCor pursuant to the Acquisition Documents shall not
exceed at any time the amount (the "Aggregate Subscription Limit")
equal to the Closed Hotel Amount (as defined below). The "Closed
Hotel Amount" shall mean Fifty Million Dollars ($50,000,000) times a
fraction, the numerator of which is the sum of the Allocated Purchase
Price (as set forth on Exhibit A hereto) for all hotels the purchase
of which has been closed pursuant to the Acquisition Documents, and
the denominator of which shall equal Four Hundred Eighty-Five Million
Five Hundred Thirty-Eight Thousand Seven Dollars ($485,538,007).
Following the date on which a minimum of fourteen (14) of the hotels
listed on Exhibit A have been acquired pursuant to the Acquisition
Documents, the difference between the Aggregate Subscription Limit and
Fifty Million Dollars ($50,000,000) shall be available for the
purchases of Qualifying Hotels, as defined in and pursuant to the
terms and conditions of that certain Subscription Agreement, dated as
of May 3, 1995 by and among Embassy Suites, Inc., the Company and the
Partnership (the "Prior Subscription Agreement") as though such terms
and conditions of the Prior Subscription Agreement were set forth
therein, and in no event shall the amount of Common Stock and/or Units
purchased by Promus hereunder exceed Fifty Million Dollars
($50,000,000).
(b) Sections 3(b) and 4 of the Second Subscription Agreement are
hereby amended to delete therefrom the references to the amount "Twenty
Five Million Dollars ($25,000,000)" and to insert in lieu thereof the
amount "Fifty Million Dollars ($50,000,000)."
7. TIMING OF OFFERING. With respect to the advances referenced in
Sections 4 and 5 above, the parties hereto agree that with respect to such
advances such subscription shall be completed and the shares purchased pursuant
thereto owned by Promus prior to the record date with respect to the fourth
quarter of 1995 dividend on such shares, or in lieu thereof, that the Company
shall pay or cause to be paid to Promus a fee for its services equal in amount
to the amount of such fourth quarter dividend with respect to such shares.
8. MISCELLANEOUS
a. RATIFICATION. Except as expressly modified hereby, the
Subscription Agreements are in full force and effect.
3
<PAGE>
b. APPLICABLE LAW. NOTWITHSTANDING THE PLACE WHERE THIS
AMENDMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES
EXPRESSLY AGREE THAT ALL OF THE TERMS AND PROVISIONS HEREOF SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES), APPLICABLE TO AGREEMENTS
MADE AND TO BE WHOLLY PERFORMED THEREIN.
c. REFERENCES. References to either of the Subscription
Agreements herein and in each of the Subscription Agreements shall be
references to the Subscription Agreements as modified hereby.
d. ENTIRE AGREEMENT. The Subscription Agreements, as modified
by this Amendment, constitute the entire agreement among the parties hereto
pertaining to the subject matter contained herein and supersede all prior
agreements, representations and all understanding of the parties.
e. FURTHER ASSURANCES. The parties hereto agree to take all
actions, including the entering into of any documents, agreements or
instruments, or amendments thereof, as may be necessary or appropriate to
effectuate the intents and purposes hereof and consummate and make
effective the transactions contemplated hereby.
f. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together shall constitute one
and the same Amendment.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
PROMUS HOTELS, INC., a Delaware
corporation
By: /s/ Thomas L. Keltner
___________________________
Name: Thomas L. Keltner
________________________
Title: Senior Vice President
________________________
FELCOR SUITE HOTELS, INC., a Maryland
corporation
By: /s/ Nicolas R. Peterson
___________________________
Name: Nicolas R. Peterson
________________________
Title: Sr. Vice President
________________________
FELCOR SUITES LIMITED PARTNERSHIP, a
Delaware limited partnership
By: FELCOR SUITE HOTELS, INC., a
Maryland corporation and its sole
general partner
By: /s/ Nicolas R. Peterson
___________________________
Name: Nicolas R. Peterson
________________________
Title: Sr. Vice President
________________________
5
