1
Exhibit 1.1
__________ Shares
Doubletree Corporation
Common Stock
UNDERWRITING AGREEMENT
November __, 1996
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXXXX XXXXXXXX & CO. INCORPORATED
c/o MORGAN XXXXXXX & CO. INCORPORATED
0000 Xxxxxxxx
Xxx Xxxx, X.X. 00000
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXXXXXXX SECURITIES
J. XXXXX XXXXXXXX & CO. LIMITED
c/o MORGAN XXXXXXX & CO. INTERNATIONAL LIMITED
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs:
SECTION 1. Introductory. Doubletree Corporation, a Delaware
corporation ("Doubletree"), proposes to sell to the several underwriters (as
defined below) an aggregate of ______ shares (the "Firm Common Shares") of
Doubletree's common stock, $.01 per share ("Common Stock"). It is understood
that, subject to the conditions hereinafter stated, ________ Firm Common Shares
(the "U.S. Firm Common Shares") will be sold to the several U.S. underwriters
named in Schedule A I hereto (the "U.S. Underwriters") in connection with the
offering and sale of such U.S. Firm Common Shares in the United States and
Canada to United States and Canadian Persons (as such
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terms are defined in the Agreement between U.S. and International Underwriters
of even date herewith), and _______ Firm Common Shares (the "International Firm
Common Shares") will be sold to the several International Underwriters named in
Schedule A II hereto (the "International Underwriters") in connection with the
offering and sale of such International Firm Common Shares outside the United
States and Canada to persons other than United States and Canadian persons. The
U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the "Underwriters". In addition, Doubletree proposes
to grant the U.S. Underwriters an option to purchase up to _________ additional
shares of Common Stock (the "Optional Common Shares"), as provided in Section 3
hereof, for the purposes of covering over-allotments in connection with the sale
of the Common Shares. The Firm Common Shares and, to the extent such option is
exercised, the Optional Common Shares are hereinafter collectively referred to
as the "Common Shares."
The Common Shares are being issued and sold in connection with
the acquisition (the "Acquisition") of Red Lion Hotels, Inc., a Delaware
corporation ("Red Lion"), by Doubletree. The Acquisition is being effected
pursuant to an Agreement and Plan of Merger, dated as of September 12, 1996 (the
"Merger Agreement"), by and among Doubletree, RLH Acquisition Corp., a Delaware
corporation and a wholly owned Subsidiary of Doubletree ("Merger Sub"), and Red
Lion. Pursuant to the Merger Agreement, Merger Sub will merge with and into Red
Lion with Red Lion continuing as the surviving corporation, and Doubletree will
acquire all of the issued and outstanding capital stock of Red Lion (the
"Merger"). At the time the Merger is consummated (the "Effective Time"), each
share of common stock, par value $.01 per share, of Red Lion (the "Red Lion
Common Stock") will be converted into the right to receive certain cash
consideration and Common Stock pursuant to the terms of the Merger Agreement. At
or prior to the closing of the Merger (the "Merger Closing"), Doubletree will,
in connection with the financing in part of the Merger, (i) enter into a Credit
Agreement (the "Senior Credit Facility") among Doubletree, Xxxxxx Xxxxxxx Senior
Funding, Inc. as Syndication Agent and Arranger, The Bank of Nova Scotia as
Administrative Agent, and the lenders party thereto, and (ii) issue to General
Electric Pension Trust ("GEPT") or an affiliate thereof (collectively, the "GE
Entity") shares of Common Stock and warrants to purchase shares of Common Stock
(the "GE Warrants") for an aggregate purchase price of $100,000,000 (the "GE
Investment") pursuant to an agreement (the "GE Agreement"), dated September 6,
1996, between Doubletree and General Electric Investment Corporation. The shares
of Common Stock issued to the holders of Red Lion Common Stock pursuant to the
Merger and issued to the GE Entity pursuant to the GE Investment are referred to
herein collectively as the "Merger Shares." The Merger Agreement, the Senior
Credit Facility, the GE Agreement and this Agreement are collectively referred
to herein as the "Transaction Documents." The term "Company" as used herein
means Doubletree after giving effect to the Merger, on a stand-alone basis
excluding any subsidiaries. The term "Subsidiary" means (i) in the case of
Doubletree: each of the
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direct and indirect subsidiaries of Doubletree listed on Schedule D-1 hereto;
(ii) in the case of Red Lion: each of the direct and indirect subsidiaries of
Red Lion listed on Schedule D-2 hereto; and (iii) in the case of the Company:
Red Lion and each of the entities listed on Schedule D-1 and Schedule D-2
hereto, 50% of more of the voting or equity interests of which are owned
directly or indirectly by the Company after giving effect to the Merger.
Doubletree understands that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the Registration Statement hereinafter referred to or as soon
thereafter as in your judgment is advisable. Doubletree hereby confirms that the
U.S. Underwriters and any United States dealers have been authorized to
distribute or cause to be distributed each U.S. Preliminary Prospectus (as
defined below) and are authorized to distribute the U.S. Prospectus (as defined
below), as from time to time amended or supplemented, and that the International
Underwriters and any International dealers have been authorized to distribute or
cause to be distributed each International Prospectus (as defined below), as
from time to time amended or supplemented on the effective date of the
Registration Statement hereinafter referred to or as soon thereafter as in your
judgment is advisable.
Doubletree hereby confirms its agreement with respect to the
purchase of the Common Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of Doubletree.
Doubletree hereby represents and warrants to the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-13161)
with respect to the Common Shares has been prepared by Doubletree in conformity
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. Doubletree has prepared and has filed or
proposes to file prior to the effective date of such registration statement an
amendment or amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared. There have been delivered to
you two signed copies of such registration statement and amendments, together
with two copies of each exhibit filed therewith. Conformed copies of such
registration statement and amendments (but without exhibits) and of the related
Preliminary Prospectus (as defined below) have been delivered to you in such
reasonable quantities as you have requested. Doubletree will next file with the
Commission one of the following: (i) prior to effectiveness of such registration
statement, a further amendment thereto, including the form of final Prospectus
(as defined below), (ii) a final Prospectus in accordance with Rules 430A and
424(b) of the Rules and Regulations or (iii) a term sheet (the "Term Sheet")
as described in and in accordance
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with Rules 434 and 424(b) of the Rules and Regulations. As filed, the final
Prospectus, if one is used, or the Term Sheet and the latest Preliminary
Prospectus sent or given to purchasers of the Common Shares by the
Underwriters prior to or at the same time as the confirmation of such sale,
if a final Prospectus is not used, shall include all Rule 430A Information
(as defined below) and, except to the extent that you shall agree in writing
to a modification, shall be in all substantive respects in the form furnished
to you prior to the date and time that this Agreement was executed and
delivered by the parties hereto, or, to the extent not completed at such date
and time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
Doubletree shall have previously advised you in writing would be included or
made therein.
The term "Registration Statement" shall mean such registration
statement (including exhibits, amendments and supplements thereto) at the time
such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the First Closing
Date (as defined), shall also mean such registration statement as so amended;
provided, however, that such term shall also include all Rule 430A Information
deemed to be included in such registration statement at the time such
registration statement becomes effective as provided by Rule 430A of the Rules
and Regulations. The term "Preliminary Prospectus" shall mean any preliminary
prospectus relating to the Common Shares and delivered to you as well as any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Preliminary
Prospectus" shall refer to both the U.S. preliminary prospectus (the "U.S.
Preliminary Prospectus") to be used in connection with the offering and sale of
U.S. Firm Common Shares in the United States and Canada to United States and
Canadian Persons and the international preliminary prospectus (the
"International Preliminary Prospectus") to be used in connection with the
offering and sale of International Firm Common Shares outside the United States
and Canada to persons other than United States and Canadian Persons. The
International Preliminary Prospectus is identical to the U.S. Preliminary
Prospectus except for the outside front cover page. The term "Prospectus" shall
mean: (i) the prospectus relating to the Common Shares in the form in which it
is first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations; (ii) if a Term Sheet is not used and no filing pursuant to Rule
424(b) of the Rules and Regulations is required, the form of final prospectus
included in the Registration Statement at the time it becomes effective; or
(iii) if a Term Sheet is used, the Term Sheet in the form in which it is first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations,
together with the latest Preliminary Prospectus sent or given to purchasers of
the Common Shares by the Underwriters prior to or at the same time as the
confirmation of such sale. The term "Rule 430A Information" shall mean
information with respect to the Common Shares and the offering thereof permitted
to be omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A of the Rules and Regulations. The term
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"Prospectus" shall refer to both the U.S. prospectus (the "U.S. Prospectus") to
be used in connection with the offering and sale of U.S. Firm Common Shares in
the United States and Canada to United States and Canadian Persons and the
international prospectus (the "International Prospectus") to be used in
connection with the offering and sale of International Firm Common Shares
outside the United States and Canada to persons other than United States and
Canadian Persons. The International Prospectus is identical to the U.S.
Prospectus except for the outside front cover page.
Any reference in this Agreement to the Registration Statement,
the Prospectus, or any Preliminary Prospectus previously filed with the
Commission pursuant to Rule 424 shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act which were filed under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Prospectus or any Preliminary Prospectus, as the case may be;
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Prospectus or any Preliminary Prospectus shall be
deemed to refer to and include any documents filed under the Exchange Act after
the date of this Agreement, or the date of the Prospectus or any Preliminary
Prospectus, as the case may be, which are deemed to be incorporated by reference
therein.
(b) Each document, if any, filed or to be filed pursuant to the
Exchange Act, and incorporated by reference in the Prospectus complied or will
comply, in each case when so filed, in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder; the
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus, and each Preliminary Prospectus has conformed in all
material respects to the requirements of the Act and the Rules and Regulations
and, as of its date, has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; at
the time the Registration Statement became effective, and at all times
subsequent thereto up to and including each Closing Date hereinafter mentioned,
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, will contain all material statements and information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and the Registration Statement, when it became effective, did not
and, as amended or supplemented, if applicable, will not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
neither the Prospectus, nor any amendment or supplement thereto, will include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary, in light of the circumstances under
which they were made, to make the
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statements therein not misleading; provided, however, no representation or
warranty contained in this subsection 2(b) shall be applicable to information
contained in or omitted from any Preliminary Prospectus, the Registration
Statement, the Prospectus or any such amendment or supplement that is described
in the "blood letter" to be delivered by the Representatives to Doubletree on
the First Closing Date.
(c) The Company and each of its corporate Subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, and each partnership
Subsidiary is a duly formed general or limited partnership and is validly
existing as a general or limited partnership under the laws of the state of its
organization, each with full power and authority (corporate or partnership and
other) to own and lease its material assets and properties and conduct its
business in all material respects as now being conducted and as described in the
Registration Statement; as of the First Closing Date referred to below, except
as disclosed in the Registration Statement or in the "Parent Disclosure
Schedule" or "Company Disclosure Schedule" referred to in the Merger Agreement
(copies of which have been furnished to Xxxxxx Xxxxxxx & Co. Incorporated on
behalf of the Underwriters), the Company will own all of the outstanding capital
stock, or the general or limited partnership interests, of the Subsidiaries that
are corporations or partnerships, free and clear of all claims, liens, charges
and encumbrances, other than as imposed by applicable law or as disclosed in the
Registration Statement; the Company and each of the Subsidiaries are in
possession of and operating in material compliance with all authorizations,
licenses, permits, consents, certificates and orders material to the conduct of
their respective businesses, all of which are valid and in full force and
effect; the Company and the Subsidiaries that are corporations or partnerships
are duly qualified to do business and in good standing as foreign corporations,
or foreign partnerships, as the case may be, in each jurisdiction in which the
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except for jurisdictions in
which the failure to so qualify would not have a material adverse effect upon
the Company and its Subsidiaries; taken as a whole; and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification. Each of
the subsidiaries and each of the affiliates of Doubletree and of Red Lion which
meets the criteria in the definition of "significant subsidiary" pursuant to
Rule 1-02(w) of Regulation S-X under the Securities Act, after giving effect to
the Merger, is listed on either Schedule D1 or D2 hereof.
(d) Immediately prior to the First Closing Date and the Merger
Closing, the issued and outstanding shares of Common Stock will have been duly
authorized and validly issued, will be fully paid and nonassessable, will have
been issued in compliance with all applicable federal and state securities laws,
will not have been issued in violation of or subject to any preemptive rights or
other rights to subscribe for
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or purchase securities, and will conform in all material respects to the
description thereof contained in the Prospectus. All issued and outstanding
shares of capital stock of each corporate Subsidiary have been duly authorized
and validly issued and are fully paid and nonassessable. Except as disclosed in
or contemplated by the Prospectus and the financial statements of the Company,
Doubletree or Red Lion and the related notes thereto, included in the
Prospectus, or in the "Parent Disclosure Schedule" or "Company Disclosure
Schedule" referred to above, the Company, as of the First Closing Date, will not
have, and no Subsidiary has, outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements (if any), and the
options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(e) Immediately prior to the First Closing Date, the Common
Shares, and immediately prior to the Merger Closing, the Merger Shares, will
have been duly authorized and, when issued, delivered and paid for in the manner
set forth in the applicable Transaction Document, will be validly issued, fully
paid and nonassessable, and will conform to the description thereof contained in
the Prospectus. Immediately prior to the First Closing Date and the Merger
Closing, except as disclosed in the Registration Statement, no preemptive rights
or other rights to subscribe for or purchase will exist with respect to the
issuance and sale of the Common Shares and the Merger Shares, respectively.
Immediately prior to the First Closing Date and the Merger Closing, except for
the former shareholders of RFS, Inc., no stockholder of Doubletree will have any
right which will not have been waived to require Doubletree to register the sale
of any shares owned by such stockholder under the Act in the public offering
contemplated by this Agreement. No further approval or authorization of the
stockholders or the Board of Directors of the Company will be required for the
issuance and sale of the Common Shares or the Merger Shares as contemplated by
the applicable Transaction Document.
(f) Each of Doubletree and Merger Sub has the full right, power
and authority to enter into each of the Transaction Documents to which it is a
party and to perform the transactions contemplated thereby. The Transaction
Documents have been duly authorized, executed and delivered by Doubletree and
constitute valid and binding agreements of Doubletree, and the Merger Agreement
has been duly executed and delivered by Merger Sub and constitutes the valid and
binding obligation of Merger Sub, enforceable against Doubletree and Merger Sub,
as the case may be, in accordance with the terms thereof, except (A) as limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, (B) that the remedy of
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specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought and (C) to the extent that rights to
indemnity or contribution under a Transaction Document may be limited by
federal, state or provincial securities laws or the public policy underlying
such laws. The execution and delivery by Doubletree and Merger Sub of the
Transaction Documents to which it is a party and the consummation by Doubletree
and Merger Sub of the transactions under the Transaction Documents to which it
is a party will not (i) violate any provisions of the certificate or articles of
incorporation or bylaws of any of the Company or any of its Subsidiaries, and
(ii) will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any hotel management agreement or franchise agreement to which the
Company or any of its Subsidiaries is a party or any other agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
that is material to the Company and its Subsidiaries, taken as a whole, and to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties may be bound or
affected, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to any of the Company or any of the Subsidiaries or
any of their respective properties, except in each case for any such violations,
breaches or defaults which would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries, taken as a whole.
No consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body is required for the
execution and delivery by Doubletree or Merger Sub of the Transaction Documents
to which it is a party or the consummation by Doubletree or Merger Sub of the
transactions contemplated by the Transaction Documents to which it is a party,
except for (i) compliance with the Act, the Exchange Act and the Blue Sky laws
applicable to the public offering of the Common Shares by you, (ii) the
clearance of such offering with the National Association of Securities Dealers,
Inc. (the "NASD"), (iii) compliance with statutes, rules or regulations
regulating the consumption, sale or serving of alcoholic beverages, and (iv) in
the case of the Merger Agreement, (A) such as relate to the matters set forth in
Section 5.17 or 5.18 of the Merger Agreement, and (B) where the failure to
obtain any such consent, approval, authorization or order would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries, taken as a whole.
(g) KPMG Peat Marwick, Deloitte & Touche LLP and Xxxxxx Xxxxxxxx
LLP who have expressed their opinion with respect to the financial statements
and schedules filed with the Commission as a part of the Registration Statement
and included in the Prospectus, are independent accountants as required by the
Act and the Rules and Regulations.
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(h) As of the First Closing Date, the consolidated financial
statements and schedules of Doubletree and its subsidiaries, and the related
notes thereto, and the consolidated financial statements and schedules of Red
Lion and its subsidiaries, included in the Registration Statement and the
Prospectus will present fairly in all material respects the consolidated
financial position of Doubletree and its Subsidiaries and of Red Lion and its
Subsidiaries, as the case may be, as of the respective dates of the consolidated
balance sheets included in such financial statements and schedule, and the
consolidated results of operations for the periods indicated in the consolidated
statements of income or operations, cash flows and stockholders' equity or
partners' equity, as the case may be, included in such consolidated financial
statements and the other information purported to be shown therein of Doubletree
and its subsidiaries, or of Red Lion and its subsidiaries, as the case may be.
Such consolidated financial statements, schedule and related notes have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as noted therein) as certified in each case by one of
the independent accountants named in subsection 2(g). The Registration Statement
includes all of the financial statements and schedules required under the Act to
be included in the Registration Statement. Immediately prior to the First
Closing Date, the selected financial data set forth in the Prospectus under the
captions "Summary Consolidated Financial Information of Doubletree,"
"Capitalization," "Selected Consolidated Financial Information of Doubletree"
and "Selected Pro Forma Financial, Historical Financial and Other Data of Red
Lion," will present fairly in all material respects the information set forth
therein on the basis stated in the Registration Statement. The pro forma
financial statements and the related notes thereto included or incorporated by
reference in the Registration Statement and the Prospectus present fairly in all
material respects the information shown therein and have been prepared in
accordance with Article XI of Regulation S-X, and the assumptions used in the
preparation thereof (taken as a whole) are reasonable and, based upon such
assumptions, the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(i) Except as disclosed in the Prospectus, and except as to
breaches, events of default and defaults which individually or in the aggregate
would not have a material adverse effect on the Company and its Subsidiaries
taken as a whole, none of the Company or any of its Subsidiaries is in violation
or default of any provision of its certificate or articles of incorporation or
bylaws, or is in breach of or default with respect to any provision of any
agreement, judgment, decree or order, or any mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which it is a party
or by which it or any of its properties is bound; and there does not exist any
state of facts which constitutes an event of default (as defined in such
documents) on the part of any of the Company or any such Subsidiary or which,
with notice or lapse of time or both, would constitute such an event of default.
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(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which have not
been described or filed as required. The contracts so described in the
Prospectus are in full force and effect on the date hereof; and none of the
Company or any of its Subsidiaries, nor to the best of Doubletree's knowledge,
any other party is in breach of, or default under, any of such contracts, which
breach or default would have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(k) There are no legal or governmental actions, suits or
proceedings pending or, to the best of Doubletree's knowledge, threatened to
which the Company or any of its Subsidiaries is a party or of which property
owned or leased by the Company or any of its Subsidiaries is the subject,
including actions related to environmental or discrimination matters, which
actions, suits or proceedings might reasonably be expected to, individually or
in the aggregate, prevent or materially and adversely affect the transactions
contemplated by this Agreement or by any other Transaction Document or result in
a material adverse change in the condition (financial or otherwise), properties,
business or results of operations of the Company and its Subsidiaries, taken as
a whole; and no labor disturbance by the employees of the Company or any of its
Subsidiaries exists or is imminent which might reasonably be expected to affect
materially and adversely such condition, properties, business or results of
operations. None of the Company or any of its Subsidiaries is a party or subject
to the provisions of any injunction, judgment, decree or order of any court,
regulatory body, administrative agency or other governmental body which would
have such a material adverse effect.
(l) The Company and each of its Subsidiaries has good and valid
title to all the properties and assets reflected as owned in the financial
statements hereinabove described or as described elsewhere in the Prospectus,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in such financial statements or as described
elsewhere in the Prospectus and (ii) those which are not material in amount and
do not materially and adversely affect the use made and proposed to be made of
such property and assets by the Company, the Subsidiaries and Candlewood. The
Company and each of its Subsidiaries holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company and its Subsidiaries, taken as a whole.
Immediately prior to the First Closing Date, except as disclosed in the
Prospectus, the Company and each of its Subsidiaries will own or lease all such
properties as are necessary to their respective operations as now conducted or
as proposed in the Prospectus to be conducted.
(m) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) neither the Company nor any of
its Subsidiaries has
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incurred any material liabilities or obligations, indirect, direct or
contingent, or entered into any material verbal or written agreement or other
transaction which, in the case of Red Lion and its Subsidiaries, is known to
Doubletree and which, in any event, is not in the ordinary course of business
and could reasonably be expected to result in a material reduction in the
future earnings of the Company and its Subsidiaries, taken as a whole; (ii)
neither the Company nor any of its Subsidiaries has sustained any loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance,
which, in the case of Red Lion and its Subsidiaries, is known to Doubletree
and which, in any event, would have a material adverse effect on the Company
and its Subsidiaries, taken as a whole; (iii) the Company has not paid or
declared any dividends or other distributions with respect to its capital
stock and the Company and the Subsidiaries are not in default in the payment
of principal or interest on any outstanding debt obligations; (iv) except as
described in the Prospectus, there has not been any change in the capital
stock (other than upon the sale of the Common Shares hereunder or the Merger
Shares and the GE Warrants under the Transaction Documents) or indebtedness of
the Company or any of the Subsidiaries that is material to the Company and the
Subsidiaries, taken as a whole (other than in the ordinary course of business);
and (v) there has not been any material adverse change, in the condition
(financial or otherwise), business, properties or results of operations
prospects of the Company and the Subsidiaries, taken as a whole.
(n) The Company and the Subsidiaries, together, have sufficient
trademarks, trade names, service marks, patent rights, copyrights, licenses,
know-how and other similar intellectual rights (collectively, "Intangibles") to
conduct their respective businesses as now conducted; and the Company has no
knowledge of any material infringement by it or the Subsidiaries of any
Intangible of others, and there is no claim being made against the Company or
the Subsidiaries regarding any Intangible which could have a material adverse
effect on the condition (financial or otherwise), business or results of
operations of the Company and the Subsidiaries, taken as a whole.
(o) Doubletree has not been advised, and has no reason to
believe, that any of it, or any Subsidiary is not conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, all applicable local, state and federal
environmental laws and regulations (which are addressed below), except where
failure to be so in compliance would not materially and adversely affect the
condition (financial or otherwise), business, results of operations or prospects
of the Company, and the Subsidiaries, taken as a whole.
(p) The Company and the Subsidiaries have filed all necessary
federal, material state and income foreign tax returns and have paid all taxes
shown as due thereon; and Doubletree has no knowledge of any tax deficiency
which has been or might be asserted or threatened against the Company, the
Subsidiaries or Candlewood which
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could materially and adversely affect the business, operations or properties of
the Company, and the Subsidiaries, taken as a whole.
(q) Doubletree is not and, after giving effect to the offering
and sale of the Common Shares and the application of the proceeds thereof as
described in the Prospectus and to the issuance of the Merger Shares, the
Company will not be an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior
to the First Closing Date any offering material in connection with the offering
and sale of the Common Shares other than any Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials permitted by the
Act.
(s) Except as would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole, the Company and each of the
Subsidiaries maintains insurance of the types and in the amounts generally
deemed adequate for its business, including, but not limited to, insurance
covering real and personal property owned or leased by the Company, the
Subsidiaries and Candlewood against theft, damage, destruction, acts or
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(t) None of Doubletree or its Subsidiaries or, to the knowledge
of Doubletree, Red Lion or its Subsidiaries has at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
(v) To the best knowledge of Doubletree, each of the Company and
its Subsidiaries has obtained all permits, licenses and other authorizations
that are required under all environmental laws, including but not limited to the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), Resource
Conservation & Recovery Act (42 U.S.C. Section 6901 et seq.), Safe Drinking
Water Act (21 U.S.C. Section 349, 42 U.S.C. SectionSection 201, 300f). Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), Clean Air Act (42
U.S.C. Section 7401 et seq.), Comprehensive Environmental Response, Compensation
and Liability
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Act (42 U.S.C. Section 9601 et seq.), other applicable state and other laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes into the environment (including without limitation, ambient air,
surface water, ground water or land), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes, or any other applicable regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder (collectively, the "Environmental Laws"),
except to the extent failure to have any such permit, license or authorization,
individually or in the aggregate, would not have a material adverse effect on
the condition (financial or otherwise), business or results of operations of the
Company and the Subsidiaries, taken as a whole. Except as described in the
Prospectus, the Company and the Subsidiaries are in compliance with all terms
and conditions of any required permits, licenses, authorizations, limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws, except to the
extent failure to comply would not have a material adverse effect on the
condition (financial or otherwise), business or results of operations of the
Company and the Subsidiaries, taken as a whole.
[(w) To the best knowledge of Doubletree, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions or plans relating to the business as presently being conducted by the
Company or any Subsidiary that interfere with or prevent compliance or continued
compliance with the Environmental Laws, or which would be reasonably likely to
give rise to any legal liability (whether statutory or common law) or otherwise
would be reasonably likely to form the basis of any claim, action, demand, suit,
proceeding, hearing, notice of violation, study, investigation, remediation or
cleanup based on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge, release into the workplace, the community or the
environment of any pollutant, contaminant, chemical or industrial, toxic, or
hazardous substance or waste, except for any liabilities or any claims, demands
or other actions specified above that will not individually or in the aggregate
have a material adverse effect on the Company and the Subsidiaries, taken as a
whole.]
(x) The Common Shares have been duly authorized for quotation on
the NASDAQ Stock Market's National Market.
SECTION 3. Purchase, Sale and Delivery of Common Shares. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, Doubletree agrees to issue
and sell to the Underwriters the Common Shares as provided in Section 1. The
Underwriters agree, severally and not jointly, to purchase from Doubletree the
number of Firm Common
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Shares described above. The purchase price per share to be paid by the several
Underwriters to Doubletree shall be $____ per share.
Delivery of certificates for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, X.X. (or such
other place as may be agreed upon by Doubletree and the Underwriters) at 10
A.M., New York City time, on November __, 1996(1), not later than the eighth
full business day following the first date that any of the Common Shares are
released by you for sale to the public (or at such other time and date, not
later than one week after such fourth full business day, as may be agreed upon
by Doubletree and the Underwriters) (the "First Closing Date"); provided,
however, that if the Prospectus is at any time prior to the First Closing Date
recirculated to the public, the First Closing Date shall occur upon the later of
the third full business day following the first date that any of the Common
Shares are released by you for the sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made
by or on behalf of Doubletree to you, for the respective accounts of the
Underwriters, against payment by you, for the accounts of the Underwriters, of
the purchase price therefor by wire transfer payable in same day funds to the
order of Doubletree. The certificates for the Firm Common Shares shall be
registered in such names and denominations as you shall have requested at least
two full business days prior to the First Closing Date, and shall be made
available for checking and packaging on the business day preceding the First
Closing Date at such location in New York, New York, as may be designated by
you. Time shall be of the essence, and delivery at the time and place specified
in this Agreement is a further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, Doubletree hereby grants an option to the U.S. Underwriters to purchase,
severally and not jointly, up to an aggregate of _______ Optional Common Shares
at the purchase price per share to be paid by the U.S. Underwriters for the U.S.
Firm Common Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Common Shares. The option
granted hereunder may be exercised at any time (but not more than once) within
30 days after the first date that any of the Common Shares are released by you
for sale to the public, upon notice by you to the Company setting forth the
aggregate number of Optional Common Shares as to which the U.S. Underwriters are
exercising the option, the names and denominations in which the certificates for
such Optional Common Shares are to be registered and the time and place at which
such
--------
1 Three or four business days after pricing.
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certificates are to be delivered. Such time of delivery (which may not be
earlier than the First Closing Date and being herein referred to as the "Second
Closing Date") shall be determined by you, but if at any time other than the
First Closing Date shall not be earlier than three nor later than ten full
business days after delivery of such notice of exercise. The number of Optional
Common Shares to be purchased by each U.S. Underwriter shall be determined by
multiplying the number of Optional Common Shares to be sold by the Company
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of U.S. Firm Common Shares to be purchased by such U.S. Underwriter as
set forth opposite its name in Schedule A I and the denominator of which is ____
(subject to such adjustments to eliminate any fractional share purchases as you
in your discretion may make). Certificates for the Optional Common Shares being
purchased will be made available for checking and packaging on the business day
preceding the Second Closing Date at such location in New York, New York, as may
be designated by you. The manner of payment for and delivery of such Optional
Common Shares shall be the same as for the Firm Common Shares purchased as
specified in the two preceding paragraphs. At any time before lapse of the
option, you may cancel such option by giving written notice of such cancellation
to the Company. If the option is canceled or expires unexercised in whole or in
part, the Company will deregister under the Act the number of Optional Common
Shares as to which the option has not been exercised.
Subject to the terms and conditions hereof, the Underwriters
propose to make a public offering of their respective portions of the Common
Shares as soon after the effective date of the Registration Statement as in your
judgement is advisable and at the public offering price set forth on the cover
page of and on the terms set forth in the final Prospectus, if one is used, or
on the first page of the Term Sheet, if one is used.
SECTION 4. Covenants of Doubletree. Doubletree covenants and
agrees that:
(a) Doubletree will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
Doubletree will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. Doubletree will promptly advise you in writing (i) of the receipt of any
comments of the Commission, (ii) of any request of the Commission for amendment
of or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective and (iv) of
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the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time,
Doubletree will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Doubletree will not file any amendment or supplement
to the Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus if you have not been furnished with a
copy a reasonable time prior to such filing, if you reasonably object to
Doubletree filing such document or if the document to be filed is not in
compliance with the Act and the Rules and Regulations.
(b) Doubletree will prepare and file with the Commission,
promptly upon your request, any amendments or supplements or the Registration
Statement or the Prospectus which in your judgment may be necessary or advisable
to enable the Underwriters to continue the distribution of the Common Shares and
will use its best efforts to cause the same to become effective as promptly as
possible. Doubletree will fully and completely comply with the provisions of
Rule 430A of the Rules and Regulations with respect to information omitted from
the Registration Statement in reliance upon such Rule.
(c) As soon as practicable, but not later than 45 days after the
end of the first quarter ending after the first anniversary of the effective
date of the Registration Statement (as defined in Rule 158(c) of the Rules and
Regulations), Doubletree will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(d) Doubletree shall cooperate with you and your counsel in order
to qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky laws of such jurisdictions as you
designate, will comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required for the
distribution of the Common Shares. Doubletree shall not be required to qualify
as a foreign corporation or to file a general consent to service of process in
any such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. Doubletree will advise you
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, Doubletree, with your cooperation, will use its best
efforts to obtain the withdrawal thereof.
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(e) During the period of five years hereafter, the Company will
furnish to each of the Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants: (ii) as soon as
practicable after the filing thereof, copies of each proxy statement and annual
and other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common Stock.
(f) During the period of 90 days after the date of the
Prospectus, without your prior written consent (which consent may be withheld at
your sole discretion), the Company will not other than (i) in accordance with
the employee benefit plans described in the Prospectus or in any document
incorporated by reference in the Prospectus, (ii) the sale of the Common Shares
hereunder, (iii) the issuance of the Merger Shares pursuant to the Transaction
Documents or (iv) the issuance of Common Stock upon exercise of any GE Warrants,
(A) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (B) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (A) or (B) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise.
(g) Doubletree will apply the net proceeds of the sale of the
Common Shares hereby and the sale of Merger Shares pursuant to the GE Agreement
substantially in accordance with its statements under the caption "Use of
Proceeds" and "the Merger and the Financial Plan" in the Prospectus.
You may, in your sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
SECTION 5. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, Doubletree agrees to pay all costs, fees and expenses incurred in
connection with the performance of the obligations of Doubletree hereunder and
in connection with the transactions contemplated hereby (except as set forth
herein), including without limiting the generality of the foregoing: (i) all
expenses incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees
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and expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other taxes in connection with the issuance and
sale of the Common Shares to the Underwriters, (iv) all fees and expenses of the
Company's counsel and the Company's independent accountants, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement, each Preliminary Prospectus and
the Prospectus (including all exhibits and financial statements) and all
amendments and supplements provided for herein, this Agreement, the preliminary
and the Final Blue Sky Memoranda, (vi) all filing fees, attorneys' fees and
expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all of any part of the Common Shares for offer and sale under
the Canadian provincial securities laws and U.S. state Blue Sky laws, (vii) the
filing fee of the NASD and any fees and expenses relating to inclusion of the
Common Shares on the Nasdaq Stock Market, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants (other than the Underwriters)
engaged in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives (other than
the Underwriters) and officers of the Company and any such consultants, and the
cost of any aircraft chartered by the Company or by the Underwriters on behalf
of the Company in connection with the road show, and (ix) all other fees, costs
and expenses referred to in Item 16 of the Registration Statement. Except as
provided in this Section 5, Section 7 and Section 9 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the securities and Blue Sky laws and the Blue Sky Memoranda
referred to above) and the costs and expenses of the Underwriters relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares (such as fees and expenses of their
consultants, and travel and lodging expenses of the Underwriters and their
representatives).
SECTION 6. Conditions of the Obligations of the Underwriters and
the Company. (i) The obligations of the several Underwriters to purchase and pay
for the Firm Common Shares on the First Closing Date and the Optional Common
Shares on the Second Closing Date shall be subject to the accuracy of the
representations and warranties on the part of Doubletree herein set forth as of
the date hereof and as of the First Closing Date or the Second Closing Date, as
the case may be, to the accuracy of the statements of Doubletree officers made
pursuant to the provisions hereof, to the performance by Doubletree of its
obligations hereunder, and to the following additional conditions:
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(a) The Registration Statement shall have become effective not
later than 10:00 A.M., New York City Time, on the date of this Agreement, or at
such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rule and Regulations, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules and Regulations; and
prior to such Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
Doubletree or you, shall be contemplated by the Commission; and any request of
the Commission for inclusion of additional information in the Registration
Statement, or otherwise, shall have been complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus, (i)
except as set forth in or contemplated by the Registration Statement or the
Prospectus, there shall not have been any change in the capital stock other than
as provided for herein or in accordance with the employee benefit plans
described in the Prospectus or in any document incorporated by reference in the
Prospectus of the Company or any of the Subsidiaries or any material change in
the indebtedness (other than in the ordinary course of business) of the Company
or any of the Subsidiaries, (ii) except as set forth in or contemplated by the
Registration Statement or the Prospectus, no material verbal or written
agreement or other transaction shall have been entered into by the Company or
any of the Subsidiaries, taken as a whole, (iii) no loss or damage (whether or
not insured) to the property of the Company or any of the Subsidiaries shall
have been sustained which materially and adversely affects the condition
(financial or otherwise), business, properties or results of operations of the
Company or the Subsidiaries, taken as a whole, (iv) no legal or governmental
action, suit or proceeding affecting the Company or any of the Subsidiaries
which would have a material adverse effect on the Company or the Subsidiaries,
taken as a whole, or which affects or may affect the material transactions
contemplated by this Agreement shall have been instituted or threatened and (v)
there shall not have been any material adverse change in the condition
(financial or otherwise), business, properties or results of operations of the
Company or the Subsidiaries, taken as a whole, which makes it impractical or
inadvisable in your judgment to proceed with the public offering or purchase the
Common Shares as provided hereby.
(c) There shall have been delivered to you the Firm Common Shares
and, if any Optional Common Shares are then being purchased, such Optional
Common Shares.
(d) The NASD, upon review of the terms of the public offering of
the Common Shares, shall not have objected to the fairness and reasonableness of
the underwriting terms and arrangements as proposed in this Agreement.
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(e) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section
6(f)(iii) shall be true and correct when made and on and as of the First Closing
Date or the Second Closing Date, as the case may be, as if made on such
respective date and the Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required
to be performed or satisfied by it at or before such respective Closing Date.
(f) There shall have been furnished to you on the First Closing
Date and/or the Second Closing Date, as appropriate, in form and substance
reasonably satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Xxxxx Xxxxxxxxxx, special counsel for
Doubletree (or as to paragraphs 1, 2, 3, 4, 6 and 12 of Xxxxx Xxxxxxx,
General Counsel for Doubletree), addressed to the Underwriters and dated
the First Closing Date or the Second Closing Date, as the case may be,
to the effect that:
(1) Doubletree and each of its corporate Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
(2) Doubletree, and each of its Subsidiaries has full corporate,
partnership or limited liability company power and authority to own and
lease its assets and properties and conduct its business as now being
conducted and as described in the Registration Statement.
(3) The authorized, issued and outstanding capital stock of the
Company are as set forth under the caption "Capitalization" in the
Prospectus; all of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in transactions that were registered or
exempt from registration under the Act, and were not issued in violation
of or subject to any preemptive rights contained in any applicable
statute or the Certificate of Incorporation of Doubletree; and the
description thereof contained under the caption "Description of Capital
Stock" in the Prospectus is an accurate summary in all material respects
of the information required therein by Form S-3 under the Act.
(4) Except as set forth in the Registration Statement or in the
disclosure schedules delivered in connection with the Merger Agreement,
all of the issued and outstanding shares of the corporate Subsidiaries
of Doubletree have been duly and validly authorized and issued, are
fully paid and nonassessable and are owned directly or indirectly by
Doubletree, free and clear of all liens,
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encumbrances, equities or claims; and, to the knowledge of such counsel,
all of the partnership interests of the partnership Subsidiaries of
Doubletree are owned directly or indirectly by Doubletree, except as set
forth in the Registration Statement or in the disclosure schedules
delivered in connection with the Merger Agreement.
(5) The certificates evidencing the Common Shares to be delivered
hereunder and the Merger Shares to be delivered under the Merger
Agreement and the GE Agreement are in proper form under the Delaware
General Corporation Law (the "DGCL"), have been duly authorized and,
when duly countersigned by Doubletree's transfer agent and registrar and
delivered to you or upon your order or GEPT or its order against payment
of the agreed consideration therefor in accordance with the provisions
of the applicable Transaction Document, the Common Shares and the Merger
Shares represented thereby will be validly issued, fully paid and
nonassessable and will not have been issued in violation of or subject
to any preemptive rights contained in any applicable U.S. federal or New
York state statute or the Certificate of Incorporation of Doubletree.
(6) Except as disclosed in or contemplated by the Prospectus,
there are no outstanding options, warrants or other rights issued by
Doubletree calling for the issuance of, and no commitments, plans or
arrangements of Doubletree to issue, any shares of capital stock of
Doubletree or any security convertible into or exchangeable for capital
stock of Doubletree.
(7) (A) The Registration Statement has become effective under the
Act, and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission; and any
required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b).
(B) Each document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and the
Prospectus (except for financial statements and schedules as to
which such counsel need not express any opinion) complied when so
filed as to form in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission
thereunder.
(C) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material
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respects with the requirements of the Act and the Rules and
Regulations; it being understood, however, that such counsel
expresses no opinion with respect to the financial statements,
schedule and other financial, numerical and statistical data
included in the Registration Statement, the Prospectus and each
amendment or supplement thereto.
(D) To such counsel's knowledge, there are no U.S. federal
or New York state statutes or regulations or franchises, leases,
contracts or agreements of a character required by the Act to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described or filed, as so required.
(E) To such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or threatened
against Doubletree or any of its Subsidiaries which are so
required to be described in the Prospectus which are not
described as required.
(8) Doubletree has the corporate power and authority to enter
into this Agreement and to sell and deliver the Common Shares to be sold
by it to the several Underwriters; this Agreement has been duly
authorized, executed and delivered by Doubletree.
(9) Doubletree and the Merger Sub have the corporate power and
authority to enter into the Merger Agreement and Doubletree has the
corporate power and authority to issue and deliver the Merger Shares to
be issued pursuant to the Merger; Doubletree has the corporate power and
authority to enter into each other Transaction Document; each
Transaction Document has been duly authorized, executed and delivered by
Doubletree and the Merger Agreement has been duly authorized, executed
and delivered by Merger Sub.
(10) No approval, authorization, order, consent, registration,
filing, qualification, license or permit of or with any U.S. federal or
New York state court, regulatory, administrative or other governmental
body that, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement or any other
Transaction Document, is required to be obtained by the Company for the
execution and delivery of any of the Transaction Documents by
Doubletree, or the execution and delivery of Merger Agreement by Merger
Sub, or the sale by Doubletree of the Common Shares to the Underwriters
or the issuance by Doubletree of the Merger Shares, except (i) such as
have been obtained and are in full force and effect under the Act, (ii)
such as may be required under applicable Blue Sky laws in connection
with the purchase and distribution of the Common Shares by the
Underwriters, as to which
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no opinion is rendered, (iii) such as arise under statutes, rules or
regulations regulating the consumption, sale or serving of alcoholic
beverages, as to which no opinion is rendered and (iv) in the case of
the Merger Agreement, (A) such as relate to the matters set forth in
Sections 5.17 or 5.18 of the Merger Agreement, and (B) such as would not
individually or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(11) The execution and delivery by Doubletree of, and the
performance by Doubletree of its obligations under, the Transaction
Documents and the sale by Doubletree of the Common Shares to the several
Underwriters and the issuance by Doubletree of the Merger Shares by
Doubletree will not violate any of the provisions of the Certificate of
Incorporation or bylaws of Doubletree, [or any agreement or other
instrument binding upon Doubletree or any of its Subsidiaries that is
material to the Company and its Subsidiaries, taken as a whole,] or, to
the knowledge of such counsel, cause Doubletree to violate any U.S.
federal or New York State statute, judgment, decree, order, rule or
regulation of any court or governmental body applicable to the Company
except that no opinion shall be rendered as to federal securities laws
or applicable Blue Sky laws or statutes, rules or regulations regulating
the consumption, sale or serving of alcoholic beverages.
(12) To such counsel's knowledge, no holders of Capital Stock of
Doubletree have rights, which have not been waived, to the registration
of shares of Common Stock because of the filing of the Registration
Statement by Doubletree or the offering of Common Shares pursuant
hereto.
(13) Doubletree is not and, after giving effect to the offering
and sale of the Common Shares and the application of the proceeds
thereof as described in the Prospectus and to the issuance of the Merger
Shares, the Company will not be an "investment company" within the
meaning of the Investment Company Act of 1940.
(14) The statements (A) in the Prospectus under the captions
"Certain United States Federal Tax Considerations for Non-U.S. Holders
of Common Stock," "Description of Capital Stock" and "Underwriters" and
(B) in the Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
In rendering such opinion, such counsel may rely on certificates
of officers of Doubletree and its subsidiaries and of governmental officials,
and may limit their opinions to U.S. federal law, the Delaware General
Corporation Law and, in the case of
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Xxxxx Xxxxxxxxxx, New York state law or, in the case of the General Counsel of
Doubletree, California state law. Xxxxx Xxxxxxxxxx shall also include a
statement to the effect that such counsel has participated in conferences with
officers and other representatives of Doubletree, representatives of the
independent public accountants of Doubletree, and the Underwriters and its
representatives, at which the contents of the Registration Statement were
discussed and, although such counsel is not passing upon, and does not assume
any responsibility whatsoever for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, and have
not made any independent check or verification thereof, during the course of
such participation (relying as to materiality to a large extent on the
statements of officers and other representatives of Doubletree), no facts came
to their attention that caused them to believe that the Registration Statement
or the Prospectus, at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contains an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that such counsel expresses no opinion with
respect to the financial statements, schedules and other financial, numerical
and statistical data included in the Registration Statement or the Prospectus.
(ii) An opinion of Xxxxxx & Xxxxxxx, special counsel for Red
Lion, addressed to the Underwriters and dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) Red Lion has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation.
(2) Red Lion and each of its subsidiaries has full
corporate, partnership or limited liability company power and authority
to own and lease its assets and properties and conduct its business as
now being conducted and as described in the Registration Statement.
(3) Red Lion has the corporate power and authority to
enter into the Merger Agreement have been duly authorized, executed and
delivered by Red Lion.
(iii) Such opinion or opinions of Xxxxx Xxxx & Xxxxxxxx, counsel
for the Underwriters, dated the First Closing Date or the Second Closing Date,
as the case may be, with respect to the incorporation of the Company, the
sufficiency of all corporate proceedings and other legal matters relating to
this Agreement, the validity of the
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Common Shares, the Registration Statement and the Prospectus and other related
matters as you may reasonably require, and Doubletree shall have furnished to
such counsel such documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of enabling them to pass
upon such matters. In connection with such opinions, such counsel may rely on
representations or certificates of officers of Doubletree and governmental
officials.
With respect to subparagraph (9) of paragraph (ii) above, Xxxxx
Xxxx & Xxxxxxxx may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (other than the documents incorporated
by reference) and review and discussion of the contents thereof (including
documents incorporated by reference), but are without independent check or
verification except as specified.
(iv) A certificate of Doubletree executed by a Co-Chairman of the
Board or the President and the chief financial or accounting officer of
Doubletree, dated the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) The representations and warranties of Doubletree set
forth in Section 2 of this Agreement were true and correct as of the
date of this Agreement and are true and correct in all material respects
as of the First Closing Date or the Second Closing Date, as the case may
be, and Doubletree has complied in all material respects with all the
agreements and satisfied in all material respects all the conditions on
its part to be performed or satisfied on or prior to such Closing Date.
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus filed
as a part of the Registration Statement or any amendment or supplement
thereto; no stop order suspending the effectiveness of the Registration
Statement has been issued; and to the best of the knowledge of the
respective signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Act.
(v) On the date before this Agreement is executed and also on
each Closing Date, a comfort letter addressed to you, as Representatives of the
Underwriters, from each of KPMG Peat Marwick, Deloitte & Touche LLP and Xxxxxx
Xxxxxxxx LLP, independent accountants, the first one to be dated the day before
the date of this Agreement, and the second one to be dated the First Closing
Date and the third one (in the event of a Second Closing hereunder) to be dated
the Second Closing Date, in form and substance reasonably satisfactory to you.
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(vi) On or before the First Closing Date, the "lock-up" letters,
each substantially in the form of Exhibit A hereto, from each of the
stockholders listed on Schedule C hereto and each director and executive officer
of Doubletree delivered to you shall be in full force and effect.
All such opinions, certificates, letters and documents shall be
in compliance with the provisions hereof only if they are reasonably
satisfactory to you and to Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters.
Doubletree shall furnish you with such manually signed or conformed copies of
such opinions, certificates, letters and documents as you request. Any
certificate signed by any officer of Doubletree and delivered to the
Underwriters or to counsel for the Underwriters shall be deemed to be a
representation and warranty by Doubletree to the Underwriters as to the
statements made therein.
(g) Each of the Transaction Documents shall be in full force and
effect on the First Closing Date, and Doubletree shall have no reason to believe
that each of the actions contemplated or required to occur and each of the
conditions contemplated or required to be satisfied at or prior to the Merger
Closing, shall not occur or shall not be satisfied in all material respects, in
each case, as of the time such action or condition is required to occur or be
satisfied, and no waiver, amendment or modification of any provision of any of
the Transaction Documents shall have occurred, other than any such action or
condition or any such waiver, amendment or modification which in the
Underwriters' reasonable judgment does not make it impracticable to market the
Common Shares on the terms and in the manner contemplated in the Prospectus;
and, simultaneous with or prior to, the First Closing Date, the Company shall
have received (A) such proceeds under the Senior Credit Facility as described in
the Prospectus and (B) the proceeds from the GE Investment pursuant to the GE
Agreement.
(h) Simultaneous with or prior to the First Closing Date, the
Merger shall have been consummated pursuant to the Merger Agreement, the Merger
Shares shall have been issued pursuant to the applicable Transaction Document
and such other consideration to be paid to the holders of Red Lion Common Stock
pursuant to the terms of the Merger Agreement shall have been delivered (or
transmitted for delivery) to such holders or the Exchange Agent under the Merger
Agreement.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you to Doubletree
without liability on the part of any Underwriter or Doubletree except for the
expenses to be paid or reimbursed by Doubletree pursuant to Sections 5 and 7
hereof and except to the extent provided in Section 10 hereof.
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(ii) The obligations of Doubletree to issue and sell to the
several Underwriters the Firm Common Shares on the First Closing Date and the
Optional Common Shares on the Second Closing Date shall be subject to the
following condition:
(a) Simultaneous with or prior to the First Closing Date, the
Merger shall have been consummated pursuant to the Merger Agreement, the
Merger Shares shall have been issued pursuant to the applicable
Transaction Document and such other consideration to be paid to the
holders of Red Lion Common Stock pursuant to the terms of the Merger
Agreement shall have been delivered (or transmitted for delivery) to
such holders or the Exchange Agent under the Merger Agreement.
SECTION 7. Reimbursement of Underwriters' Expenses.
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 7 or Section 13 hereof, or if the sale to
the Underwriters of the Firm Common Shares at the First Closing Date is not
consummated because of any refusal, inability or failure on the part of
Doubletree to perform any agreement herein or to comply with any provision
hereof, Doubletree agrees to reimburse the Underwriters upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by them in
connection with the proposed purchase and the sale of the Firm Common Shares,
including but not limited to reasonable fees and disbursements of counsel,
printing expenses, travel expenses, postage and telephone charges relating
directly to the offering contemplated by the Prospectus. Any such termination
shall be without liability of any party to any other party except that the
provisions of this Section and Section 5 and Section 9 hereof shall at all times
be effective and shall apply.
SECTION 8. Effectiveness of Registration Statement.
Doubletree will use its best efforts to cause the Registration Statement to
become effective, to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 9. Indemnification and Contribution.
(a) Doubletree agrees to (i) indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Act against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of Doubletree) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in
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the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary (with respect to the Prospectus or any Preliminary
Prospectus, in light of the circumstances under which they were made) to make
the statements in any of them not misleading; and (ii) reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished in writing by the Representatives to
Doubletree; and provided further that the indemnification provisions contained
in this paragraph (a) with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of any Common Shares by such Underwriter to any
person if a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(b) Each Underwriter agrees to severally indemnify and hold
harmless Doubletree, the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls
Doubletree or the Company within the meaning of the Act against any losses,
claims, damages, liabilities or expenses to which Doubletree or the Company or
any such director, officer or controlling person may become subject, under the
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary (with respect to the Prospectus or any Preliminary Prospectus, in
light of the circumstances under which they were made) to make the statements in
any of them not misleading, in each case to the extent, but only to
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the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with the information furnished in writing by the
Representatives to Doubletree or the Company; and will reimburse Doubletree and
each such director, officer or controlling person for any legal and other
expenses, as such expenses are reasonably incurred by Doubletree or the Company
or any such director, officer or controlling person in connection with
investigating, defending, settling compromising or paying any such loss, claim,
damage, liability, expense or action. This indemnity agreement will be in
addition to any liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under the indemnity agreement contained in this Section or to the extent it is
not prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party. The
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnifying
party, indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the sole expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed in writing to the
retention by the indemnified party of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co.
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Incorporated, in the case of parties indemnified pursuant to paragraph (a) of
this Section, and by the Company, in the case of parties indemnified pursuant to
paragraph (b) of this Section. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes
either (i) an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding or (ii) a conditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding which release is applicable, to the same
manner and extent, to the indemnifying party; provided, however, that the
foregoing shall not apply to settlements in respect of any officer or director
of an indemnifying party which may be effected without the consent of the
indemnified party; provided, further, that nothing herein, including, without
limitation, the failure of an indemnifying party to satisfy any condition to the
settlement, shall limit any rights of an indemnified party as provided
hereunder.
(d) If the indemnification provided for in this Section 9 is
required by its terms but is for any reason held to be unavailable to hold
harmless an indemnified party under paragraphs (a) or (b) of this Section 9 in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then each applicable indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of any losses, claims,
damages, liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by Doubletree on the one
hand and the Underwriters on the other hand from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
Doubletree on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by
Doubletree and the Underwriters shall be deemed to be in the same proportion, in
the case of Doubletree, as the total price paid to Doubletree for the Common
Shares sold by them to the Underwriters (net of underwriting commissions but
before deducting expenses), and, in the case of the Underwriters, as the
underwriting commissions received by them, in each case bears to the total of
such amounts paid to Doubletree and the amounts received by the Underwriters as
underwriting commissions. The relative fault of Doubletree and the Underwriters
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
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to state a material fact relates to information supplied by Doubletree or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in paragraph (c) of this Section 9, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The provisions set forth in paragraph (c) of this Section 9 with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this paragraph (d); provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under such paragraph (c) for purposes of indemnification.
Doubletree and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined solely by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount of the total
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
SECTION 10. Default of Underwriter. It shall be a condition to
this Agreement and the obligation of Doubletree to sell and deliver the Common
Shares hereunder, and of each Underwriter to purchase the Common Shares in the
manner as described herein, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all the Common
Shares agreed to be purchased by such Underwriter hereunder upon tender to the
Underwriters of such shares in accordance with the terms hereof. If any
Underwriter defaults in its obligation to purchase Common Shares hereunder on
either the First or Second Closing Date, the non-defaulting Underwriter or
Underwriters shall have the right to purchase, or to seek another person or
persons to purchase, all, but shall not be under any obligation to purchase any,
of the Common Shares; and if such non-defaulting Underwriter or Underwriters and
such other person or persons do not purchase all of the Common
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Shares, this Agreement will terminate without liability of the non-defaulting
Underwriter or Underwriters or Doubletree except for the expenses to be paid by
Doubletree pursuant to Section 5 hereof and except to the extent provided in
Section 9 hereof.
If Common Shares to which a default relates are to be purchased
by the non-defaulting Underwriter or Underwriters or by another person or
persons, the non-defaulting Underwriter or Doubletree shall have the right to
postpone the First or Second Closing Date, as the case may be, for not more than
five business days in order that the necessary changes in the Registration
Statement, Prospectus, this Agreement and any other documents, as well as any
other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 11. Effective Date. This Agreement shall become effective
immediately as to Sections 5, 7, 9, and 13 hereof and, as to all other
provisions, (i) if at the time of execution of this Agreement the Registration
Statement has not become effective, at 2:00 P.M., New York time, on the first
full business day following the effectiveness of the Registration Statement, or
(ii) if at the time of execution of this Agreement the Registration Statement
has been declared effective, at 2:00 P.M., New York time, on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time after the
Registration Statement becomes effective as you may determine on and by notice
to the Company or by release of any of the Common Shares for sale to the public.
For the purposes of this Section 11, the Common Shares shall be deemed to have
been so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of notices (i) advising
your sales personnel that the Common Shares are released for public offering, or
(ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
SECTION 12. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by Doubletree or, by you by
notice to the other parties hereto at any time prior to the time this Agreement
shall become effective as to all its provisions, and any such termination shall
be without liability on the part of Doubletree to any Underwriter (except for
the expenses to be paid or reimbursed by Doubletree pursuant to Sections 5 and 7
hereof and except to the extent provided in Section 9 hereof) or of any
Underwriter to Doubletree (except to the extent provided in Section 9 hereof).
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(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to Doubletree (i) if material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over the Nasdaq stock market's national market
by the NASD, or trading in securities generally shall have been suspended on
either such Exchange or in the over the counter market by the NASD, or a general
banking moratorium shall have been established by federal or, New York
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect materially
and adversely the marketability of the Common Shares, (iii) if any adverse event
shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or the Prospectus or which is not reflected in the Registration
Statement or the Prospectus but should be reflected therein in order to make the
statements or information contained therein not misleading in any material
respect or (iv) if there shall be any action, suit or proceeding pending or
threatened, or there shall have been any development or prospective development
involving particularly the business or properties or securities of the Company,
any of the Subsidiaries or Candlewood or the transactions contemplated by this
Agreement, which, in the judgment of the Underwriters, may materially and
adversely affect the Company's business or earnings and makes it impracticable
or inadvisable to offer or sell the Common Shares. Any termination pursuant to
this Section 12(b) shall be without liability on the part of any Underwriter to
the Company or on the part of the Company to any Underwriter (except for
expenses to be paid or reimbursed by the Company pursuant to Sections 5 and 7
hereof and except to the extent provided in Section 9 hereof).
SECTION 13. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and other
statements of Doubletree of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
Doubletree or any of its partners, officers or directors or any controlling
person, as the case may be, and will survive delivery of and payment for the
Common Shares sold hereunder and any termination of this Agreement.
SECTION 14. Notices. All communications hereunder shall be in
writing and, if sent to the Underwriters, shall be mailed, delivered or
telecopied and confirmed to Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx,
Xxx Xxxx, X.X. 00000 Attention: __________, FAX: (000) 000-0000, with a copy to
Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxxx X. Xxxxxxxxx, Xx., Esq., FAX: (000) 000-0000; and if sent to Doubletree
or the Company shall be mailed,
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delivered or telecopied and confirmed to the Company at 000 Xxxxx 00xx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq., FAX: (602)
000-0000, with a copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq. and Xxxxxx X. Mo, Esq.,
FAX: (000) 000-0000. The Company or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 15. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 9 hereof, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
SECTION 16. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 17. Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal laws (and not the laws pertaining
to conflicts of laws) of the State of New York.
SECTION 18. General. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The Section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by Doubletree and you.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement among Doubletree and you, all in accordance with
its terms.
Very truly yours,
DOUBLETREE CORPORATION
By:
----------------------------------------
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted by us in
New York, New York as of the date first above written.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXXXX XXXXXXXX & CO. INCORPORATED
By: XXXXXX XXXXXXX & CO. INCORPORATED
By:
--------------------------------------------
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXXXXXXX SECURITIES
J. XXXXX XXXXXXXX & CO. LIMITED
By: XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
By:
--------------------------------------------
Title:
35
36
A I
Number of Firm Common
Name of Underwriter Shares to be Purchased
------------------- ----------------------
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXXXXX SECURITIES
XXXXXXXX XXXXXXXX & CO. INCORPORATED
TOTAL
A-1
37
A II
Number of Firm Common
Name of Underwriter Shares to be Purchased
------------------- ----------------------
XXXXXX XXXXXXX & CO. LIMITED
XXXXXXXXXX SECURITIES
J. XXXXX XXXXXXXX & CO. LIMITED
TOTAL
A-2
38
SCHEDULE B
FIRM COMMON SHARES SHARES TO BE SOLD
------------------ -----------------
Doubletree Corporation __________
SUBTOTAL __________
OPTIONAL COMMON SHARES
Doubletree Corporation __________
TOTAL
==========
B-1
39
SCHEDULE C
Name of Stockholder to execute "lock-up" agreement
C-1
40
EXHIBIT A
[Form of Lock-Up Letter]
_____________, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
[NAMES OF OTHER CO-MANAGERS]
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Doubletree Corporation, a Delaware
corporation (the "Company"), providing for the public offering (the "Public
Offering") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"Underwriters"), of ___ shares (the "Shares") of the Common Stock, $.01 par
value, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending [90] days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement. In addition,
the undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx
on behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending [90] days after the date
41
of the Prospectus, make any demand for or exercise any right with respect to,
the registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
A-2
