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EXHIBIT 10.4
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
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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 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.
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(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 supercede 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
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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, 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.
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(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.
(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.
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(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 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.
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(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
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
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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 Xxxxx Xxxxxxxxxx, special counsel to the Seller, to the effect
that:
(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
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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 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.
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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
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Chief Financial Officer
(b) If to the Buyer:
General Electric Investment Corporation
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
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.
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Section 5.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State 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.
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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:
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Name:
Title:
TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By:
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Name:
Title: Trustee
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