EXHIBIT 2
PROMUS HOTEL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, dated as of December __, 1997,
is made by and among Promus Hotel Corporation, a Delaware corporation formerly
named Parent Holding Corp. (the "Company"), GE Investment Hotel Partners I,
Limited Partnership, a Delaware limited partnership ("GEHOP"), GE Investment
Management Incorporated, a Delaware corporation ("GEIM"), the Trustees of
General Electric Pension Trust ("GEPT"), MetPark Funding, Inc., a Delaware
corporation ("Met Sub"), The Xxxxxxxxx Family Trust ("Xxxxxxxxx"), The Xxxxxxxxx
Investment Trust ("Investment"), Xx. Xxxxxxx X. Xxxxxx ("Xxxxxx"), Ridge
Partners, L.P., a Delaware limited partnership ("Ridge"), and Red Lion, a
California Limited Partnership (the "RL Partnership").
WHEREAS, the stockholders of the Company who are parties hereto (the
"Parties") were parties to an Incorporation and Registration Rights Agreement
dated as of December 16, 1993, as amended, with Doubletree Corporation, a
Delaware corporation ("Doubletree") (the "Doubletree Registration Rights
Agreement") pursuant to which such Parties had certain registration rights with
respect to shares of common stock of Doubletree held by them; and
WHEREAS, Doubletree and Promus Hotel Corporation, a Delaware
corporation ("Old Promus") have combined their businesses (the "Merger") and
formed the Company as a new holding company pursuant to the terms of the
Agreement and Plan of Merger dated as of September 1, 1997 among Doubletree, Old
Promus and the
Page 42 of 94 Pages
Company; and
WHEREAS, pursuant to the Merger, the outstanding shares of
Doubletree common stock have been converted into shares of common stock, par
value $.01 per share, of the Company ("Common Stock"); and
WHEREAS, the Company has agreed to provide the Parties registration
rights substantially identical to those held by such Parties pursuant to the
Doubletree Registration Rights Agreement;
NOW, THEREFORE, in consideration of the foregoing and intending to
be legally bound, the Parties agree as follows: . As used in this Agreement, the
following terms shall have the following respective meanings:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" means the United States Securities and Exchange
Commission, or any other federal agency administering the Securities Act at the
time.
"ELIGIBLE SECURITIES" means the shares of Common Stock held by the
Parties as of the date hereof, or acquired by them pursuant to (i) the exercise
of options to purchase an aggregate of 20,000 shares of Doubletree Common Stock,
issued on June 30, 1994, to GEHOP (the "GEHOP Options") and (ii) the Warrants to
purchase an aggregate of 262,753 shares of Doubletree Common Stock, issued on
November 8, 1996, to PT Investments Inc. (the "GEPT Warrant"), it being
understood that pursuant to the terms of the Merger Agreement, all obligations
of Doubletree under the GEHOP Options and the GEPT Warrant shall have been
assumed by the Company pursuant to the terms set forth in the Merger Agreement.
Any shares of Common Stock issued pursuant to the GEHOP Options and/or the GEPT
Warrant will be aggregated together with shares of Common
Page 43 of 94 Pages
Stock owned by GEHOP in order to determine the amount of Eligible Securities or
shares of Common Stock owned by GEHOP.
"HOLDER" means the Parties and those successors, assigns and
transferees entitled to the benefits, and bound by the terms of, this Agreement
who are registered holders of outstanding Eligible Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
2. DEMAND REGISTRATION RIGHTS.
(a) At any time after the date of this Agreement, GEHOP, Met Sub or
the RL Partnership may deliver to the Company a written request that the Company
file and use its best efforts to cause to become effective a registration
statement under the Securities Act with respect to such number of the Eligible
Securities (a "Registration Request") owned by such Holder (the "Requesting
Holder"). Promptly following receipt of a Registration Request, the Company
shall deliver to all Holders (other than the Requesting Holder) a notice (the
"Initiation Notice") of such receipt providing the identity of the Requesting
Holder and the number of shares included in such Registration Request. Except as
otherwise provided in Section 2(b)(i)(A) hereof, the Company shall not be
required to file and use its best efforts to cause to become effective, pursuant
to a Registration Request under this Section 2, more than two registration
statements at the demand of GEHOP, more than one registration statement at the
demand of Met Sub, or more than four registration statements at the request of
the RL Partnership.
(b) Within 20 days after the date on which the Company delivers the
Page 44 of 94 Pages
Initiation Notice to all Holders, such date to be determined by the notice
provisions of Section 12(b) of this Agreement, the Company will use its best
efforts to register under the Securities Act, for public sale in accordance with
the method of disposition specified in such Registration Request, the number of
shares of Eligible Securities specified in such Registration Request (and in all
notices received from Holders within 20 days after their receipt of the
applicable Initiation Notice); PROVIDED, HOWEVER, that, in the case of a
Registration Request, the proportion that the number of Eligible Securities
requested for inclusion in the registration statement by any Holder (other than
the Requesting Holder) bears to the total number of Eligible Securities then
owned by such Holder shall not exceed the proportion that the number of Eligible
Securities specified in such Registration Request bears to the total number of
Eligible Securities then owned by the Requesting Holder. The Company will also
be entitled to include in any registration statement filed pursuant to a
Registration Request, for sale in accordance with the method of disposition
specified in such Registration Request, such number of shares of Common Stock as
the Company shall desire to sell for its own account. If the method of sale
designated is an underwritten public offering, the managing underwriter or
underwriters must be reasonably acceptable to both the Requesting Holder (if
any) and the Company, which acceptance shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this paragraph (b), to the extent
that, in the opinion of the managing underwriter or underwriters (if the method
of disposition shall be an underwritten public offering), marketing
considerations require the reduction of the number of shares of Common Stock
covered by any such registration, the number of shares of Common Stock to be
registered and sold pursuant to such registration shall be reduced as follows:
Page 45 of 94 Pages
(i) if the Requesting Holder shall be GEHOP and the
Registration Request is not the last to which GEHOP is entitled under
Section 2(a) and this Section 2(b)(i), or if the Requesting Holder shall
be the RL Partnership and the Registration Request is not the first or
last such request to which the RL Partnership is entitled under Section
2(a) and this Section 2(b)(i):
(A) the number of shares of Eligible Securities to
be registered on behalf of each Holder shall be
reduced (to zero, if necessary) pro rata
according to the number of shares requested to
be registered by each Holder; provided,
however, that in the case of the first
Registration Request made by GEHOP and any
registration request made by the RL Partnership
(other than its first or last such Registration
Request) if the number of shares of Eligible
Securities requested to be registered by GEHOP
or the RL Partnership, as the case may be,
shall be reduced as a result of this Section
2(b)(i) by 20% or more, such Requesting Holder
shall be entitled to request one registration
in addition to (I) in the case of GEHOP, the
two registration requests GEHOP is entitled to
under Section 2(a) of this Agreement and (II)
in the case of the RL Partnership, the four
registration requests the RL Partnership is
entitled to under Section 2(a) of this
Agreement; and
(B) the number of shares of Common Stock to be registered on
Page 46 of 94 Pages
behalf of the Company, if any, shall not be reduced;
(ii) if the Requesting Holder shall be Met
Sub, or if the Requesting Holder shall be GEHOP exercising the last
Registration Request to which it is entitled under Section 2(a) and
Section 2(b)(i) of this Agreement, or if the Requesting Holder shall be
the RL Partnership exercising the first or last Registration Request to
which it is entitled under Section 2(a) and this Section 2(b)(i) of this
Agreement:
(A) the number of Eligible Securities to be registered on
behalf of each Holder (excluding the Requesting Holder)
shall be reduced (to zero, if necessary) pro rata
according to the number of shares requested to be
registered by each Holder (excluding the Requesting
Holder);
(B) if any additional reduction in the number of shares of
Common Stock to be registered shall be necessary, in the
opinion of the managing underwriter or underwriters, the
number of shares of Common Stock to be registered on
behalf of the Company shall be reduced (to zero, if
necessary); and
(C) the number of shares of Eligible Securities to
be registered on behalf of the Requesting
Holder shall not be reduced; and
(c) Notwithstanding the foregoing provisions of this Section 2, the
Company shall not be obligated to file a registration statement at the demand of
any
Page 47 of 94 Pages
Holder pursuant to this Section 2 within 90 days following any underwritten
public offering of Common Stock or of securities of the Company convertible into
or exercisable or exchangeable for Common Stock.
(d) Notwithstanding the foregoing provisions of this Section 2, the
Company may elect, by written notice given to M et Sub within 20 days after the
Company's receipt of a Registration Request from Met Sub, in lieu of filing a
registration statement at the demand of Met Sub, to purchase from Met Sub the
number of Eligible Securities specified in Met Sub's Registration Request for
cash equal to the Net Proceeds thereof. "Net Proceeds" shall mean the estimated
proceeds that Met Sub would have received from a public offering of the number
of Eligible Securities specified in Met Sub's Registration Request, net of all
underwriting discounts and selling commissions applicable to the sale of such
Eligible Securities and the fees and expenses of counsel for Met Sub, determined
pursuant to the following procedure:
(i) Met Sub may reach an agreement with the
Company as to the amount of the Net Proceeds.
(ii) If Met Sub and the Company cannot reach agreement
as to the amount of the Net Proceeds within 30 days after the Company's
receipt of Met Sub's Registration Request, either party may request that
the Net Proceeds be determined according to the procedure set forth below.
(iii) Met Sub and the Company shall select an appraiser
to determine the amount of the Net Proceeds as soon as practicable. The
appraiser shall be an investment banking firm of national reputation
having expertise and experience in public offerings of securities of
companies engaging in businesses
Page 48 of 94 Pages
similar to that of the Company. The appraiser shall not be an affiliate of
any Party. If Met Sub and the Company are unable to agree on such
selection, each of them shall select one appraiser meeting the criteria
set forth in the two immediately preceding sentences, and such appraisers
shall select a third appraiser meeting such criteria who shall determine
the amount of the Net Proceeds as soon as practicable. The fees and
expenses of all appraisers shall be paid by the Company. All other
expenses of such appraisal shall be paid by the Holder incurring the same
or as the Holders shall otherwise agree.
(iv) The Company shall pay the amount of the Net
Proceeds to Met Sub within 30 days after such amount has been determined
by agreement or by appraisal, as the case may be.
(e) A Holder shall be deemed not to have exercised a Registration
Request to which it is entitled under Section 2 if (i) the registration
statement relating to such Registration Request does not become effective, or
after it has become effective, is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
court, in each case by reason of an act or omission by the Company, or (ii) the
conditions to closing specified in the purchase agreement, or underwriting
agreement entered into in connection with such registration statement are not
satisfied, and the offering and sale of Eligible Securities to which such
Registration Request relates is not consummated, because of an act or omission
by the Company (other than a failure of the Company or any of its
representatives to execute or deliver any closing certificate by reason of facts
or circumstances not within the control of the Company or such representatives)
or (iii) at any time after a Party delivers a
Page 49 of 94 Pages
Registration Request and prior to the effectiveness of the registration
statement relating thereto, the preparation of such registration statement is
discontinued or such registration statement is withdrawn or abandoned, in each
case at the request of the Requesting Holder, and such Requesting Holder has
elected to pay and has paid to the Company in full all of the registration
expenses (including, without limitation, Company registration expenses)
referenced in Section 5 in connection with such registration statement.
3. PIGGYBACK REGISTRATION.
(a) If the Company at any time proposes to register Common Stock
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements subject to Section 2 or registration statements on Form
X-0, X-0 or another form not available for registering the Eligible Securities
for sale to the public), each such time it will give written notice to all
Holders of its intention to do so. Upon the written request of any Holder (a
"Piggyback Request"), given within 20 days after the date on which the Company
delivers the notice of proposed registration to all Holders, such date to be
determined by the notice provisions of Section 12(b) of this Agreement, the
Company will use its best efforts to cause the Eligible Securities as to which
registration shall have been so requested to be covered by the registration
statement proposed to be filed by the Company.
(b) In the event that any registration statement described in this
Section 3 shall relate, in whole or in part, to an underwritten public offering
of shares of Common Stock, the Eligible Securities to be registered must be sold
through the same underwriters as have been selected by the Company or any other
person who initiated the filing of the
Page 50 of 94 Pages
registration statement by exercising a right to require the Company to do so (a
"Requesting Non-Party Stockholder"). Otherwise, the method of distribution of
the Eligible Securities to be sold by any Holder making a Piggyback Request
shall be as specified therein. The number of shares of Common Stock to be
included in such registration statement on account of any person (other than the
Company and any Requesting Non-Party Stockholder) may be reduced if and to the
extent that the managing underwriter or underwriters shall be of the opinion
that such inclusion would adversely affect the marketing of the total number of
shares of Common Stock proposed to be sold, and the number of shares to be
registered and sold by each person (other than the Company and any Requesting
Non-Party Stockholder) shall be reduced pro rata according to the number of
shares requested to be registered by such person. Notwithstanding the foregoing
provisions of this Section 3, the Company may withdraw any registration
statement referred to in this Section 3 without thereby incurring any liability
to any requesting Holder.
4. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 2 to effect the registration of any Eligible
Securities under the Securities Act, the Company shall:
(a) prepare and file with the Commission a registration statement
with respect to such securities which will permit the public sale thereof in
accordance with the method of distribution specified in the applicable
Registration Request, and the Company shall use its best efforts (i) to cause
such registration statement to be filed within 60 days of receipt of the same,
(ii) to cause such registration statement to be declared effective as promptly
as practicable and (iii) to maintain the effectiveness of such registration
Page 51 of 94 Pages
statement for a period of not less than 90 days;
(b) promptly prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to effect and maintain the
effectiveness of such registration statement for the period specified in Section
4(a) and as to comply with the provisions of the Securities Act with respect to
the disposition of all Eligible Securities covered by such registration
statement in accordance with the intended method of disposition set forth in
such registration statement for such period, including such amendments or
supplements as are necessary to cure any untrue statement or omission referred
to in Section 4(e)(vi);
(c) provide to the managing underwriter or underwriters and not more
than one counsel for all underwriters and to the Holders of Eligible Securities
to be included in such registration statement and not more than one counsel for
all such Holders (such counsel to be reasonably acceptable to the Company) the
opportunity to participate in the preparation of (i) such registration
statement, (ii) each prospectus relating thereto and included therein or filed
with the Commission and (iii) each amendment or supplement thereto;
(d) make available for inspection by the parties referred to in
Section 4(c) such financial and other information and books and records of the
Company, and cause the officers, directors and employees of the Company, and
counsel and independent certified public accountants of the Company, to respond
to such inquiries, as shall be reasonably necessary, in the judgment of
respective counsel to such Holders and such underwriter or underwriters, to
conduct a reasonable investigation within the meaning of
Page 52 of 94 Pages
the Securities Act; PROVIDED, HOWEVER, that each such person shall be required
to maintain in confidence and not to disclose to any other person any
information or records reasonably designated by the Company in writing as being
confidential until such time as (i) such information becomes a matter of public
record (whether by virtue of its inclusion in such registration statement or
otherwise), (ii) such person shall be required to disclose such information
pursuant to the subpoena or order of any court or other governmental agency or
body having jurisdiction over the matter or (iii) such information is required
to be set forth in such registration statement or the prospectus included
therein or in an amendment to such registration statement or an amendment or
supplement to such prospectus in order that such registration statement,
prospectus, amendment or supplement, as the case may be, shall not contain an
untrue statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and such information has not been so set forth after the request by
a Holder to such effect; and PROVIDED, FURTHER, that the Company need not make
such information available, nor need it cause any officer, director or employee
to respond to such inquiry, unless each such Holder and such counsel, upon the
Company's request, execute and deliver to the Company an undertaking to
substantially the same effect contained in the immediately preceding PROVISO;
(e) immediately notify the persons referred to in Section 4(c) and
(if requested by any such person) confirm such advice in writing, (i) when such
registration statement or any prospectus included therein or any amendment or
supplement thereto has been filed and, with respect to such registration
statement or any such amendment, when the same has become effective, (ii) of any
material comments by the Commission
Page 53 of 94 Pages
with respect thereto or any request by the Commission for amendments or
supplements to such registration statement or prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation of
any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company contemplated by Section 4(l)(i) cease to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any Eligible
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose or (vi) at any time when a prospectus is required to
be delivered under the Securities Act, of the occurrence or failure to occur of
any event, or any other change in law, fact or circumstance, as a result of
which such registration statement, prospectus or any amendment or supplement
thereto, or any document incorporated by reference in any of the foregoing,
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
(f) take reasonable efforts to obtain the withdrawal at the earliest
practicable date of any order suspending the effectiveness of such registration
statement or any post-effective amendment thereto;
(g) if requested by the managing underwriter or underwriters or the
Holders of at least a majority of the Eligible Securities being sold in
connection with an underwritten public offering, promptly incorporate in a
prospectus supplement or post-effective amendment such information as such
managing underwriter or underwriters or such Holders reasonably specify should
be included therein relating to the terms of the
Page 54 of 94 Pages
sale of such Eligible Securities, including, without limitation, information
with respect to the number of Eligible Securities being sold to such
underwriters, the names and descriptions of such Holders, the purchase price
being paid therefor by such underwriters and any other terms of the underwritten
(or best efforts underwritten) offering of the Eligible Securities to be sold in
such offering; and make all required filings of such prospectus supplement or
post-effective amendment promptly after notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(h) furnish to each Holder of Eligible Securities included in such
registration and each managing underwriter, if any, thereof an executed copy of
such registration statement, each such amendment and supplement thereto (in each
case including all exhibits thereto, whether or not such exhibits are
incorporated by reference therein) and such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus) and each amendment or supplement thereto, in
conformity with the requirements of the Securities Act, as such Holder and
managing underwriter, if any, may reasonably request in order to facilitate the
disposition of such Eligible Securities by such Holder or by the participating
underwriters;
(i) use its best efforts to (i) register or qualify the Eligible
Securities to be included in such registration statement under such other
securities laws or blue sky laws of such jurisdictions as any Holder of such
Eligible Securities and each managing underwriter, if any, thereof shall
reasonably request, (ii) keep such registrations or qualifications in effect for
so long as is necessary to effect the disposition of such Eligible Securities in
the manner contemplated by the registration statement, the prospectus
Page 55 of 94 Pages
included therein and any amendment or supplement thereto and (iii) take any and
all such actions as may be reasonably necessary or advisable to enable such
Holder and any participating underwriter or underwriters to consummate the
disposition in such jurisdictions of such Eligible Securities; PROVIDED,
HOWEVER, that the Company shall not be required for any such purpose to (A)
qualify generally to do business as a foreign corporation or a broker-dealer in
any jurisdiction wherein it would not otherwise be required to qualify but for
the requirements of this Section 4(i), (B) subject itself to taxation in any
such jurisdiction or (C) consent to general service of process in any such
jurisdiction;
(j) cooperate with the Holders of the Eligible Securities included
in such registration and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Eligible Securities
to be sold, which certificates shall be printed, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders and which
shall not bear any restrictive legends; and, in the case of an underwritten
public offering, enable such Eligible Securities to be registered in such names
as the managing underwriter or underwriters may request at least two business
days prior to any sale of such Eligible Securities;
(k) provide not later than the effective date of the registration
statement a CUSIP number for all Eligible Securities;
(l) enter into an underwriting agreement, engagement letter, agency
agreement, "best efforts" underwriting agreement or similar agreement, as
appropriate, and take such other actions in connection therewith as the Holders
of at least a majority of the Eligible Securities to be included in such
registration shall reasonably request in
Page 56 of 94 Pages
order to expedite or facilitate the disposition of such Eligible Securities, and
in connection therewith, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten public offering, (i)
make such representations and warranties to the Holders of such Eligible
Securities included in such registration and the underwriters, if any, in form,
substance and scope as are customarily made in an underwritten public offering;
(ii) obtain an opinion of counsel to the Company in customary form and covering
such matters as are customarily covered by such an opinion as the Holders of at
least a majority of such Eligible Securities and the managing underwriters, if
any, may reasonably request, addressed to each selling Holder and the
underwriters, if any, and dated the effective date of such registration
statement (or, if such registration includes an underwritten public offering,
dated the date of the closing under the underwriting agreement); (iii) obtain a
"cold comfort" letter from the independent certified public accountants of the
Company addressed to the Holders of the Eligible Securities included in such
registration and the underwriters, if any, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, also dated the date of the closing under the underwriting
agreement), such letter to be in customary form and covering such matters as are
customarily covered by such letters; (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of at least a
majority of the Eligible Securities included in such registration and the
managing underwriter or underwriters, if any, to evidence compliance with clause
(i) above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (v) undertake such
obligations relating to expense reimbursement, indemnification and
Page 57 of 94 Pages
contribution as are provided in Sections 5, 6 and 7 hereof;
(m) make available to its security holders, as soon as reasonably
practicable after the sale of Eligible Securities, an earnings statement
covering a period of at least twelve months which shall satisfy the provisions
of Section 11(a) of the Securities Act (including, at the option of the Company,
pursuant to Rule 158 thereunder); and
(n) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
The provisions of subsections (b) through (n) of this Section 4
shall also apply to registrations pursuant to Section 3; PROVIDED, HOWEVER,
that, for the purposes of this paragraph, the time period set forth in Section
4(b) during which the Company must file amendments or supplements to the
registration statement and prospectus to keep such registration effective shall
also be deemed to be 90 days.
Notwithstanding the provisions of Section 4(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become effective, shall be suspended for a period not to exceed 90
days if there exists at the time material non-public information relating to the
Company that, in the reasonable opinion of the Company, should not be disclosed.
In such an event, the Company shall promptly inform all Holders of the Company's
decision to defer filing of a registration statement and shall notify all
Holders promptly (but in any event not later than upon the expiration of the
90-day period specified in the immediately preceding sentence) of the
recommencement of the Company's efforts to file the registration statement and
to cause the registration statement to become effective.
In connection with each registration of Eligible Securities
hereunder, the
Page 58 of 94 Pages
Holders thereof will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with applicable federal and
state securities laws. Each such Holder also agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any other event,
in either case as a result of which any prospectus relating to such registration
contains an untrue statement of a material fact regarding such Holder or the
distribution of such Eligible Securities or omits to state any material fact
regarding such Holder or the distribution of such Eligible Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update such
previously furnished information or required so that such prospectus shall not
contain, with respect to such Holder or the distribution of such Eligible
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Each such Holder
further agrees that upon giving any notice referred to in the immediately
preceding sentence, or upon receipt of any notice from the Company pursuant to
Section 4(e)(vi) hereof, such Holder shall forthwith discontinue the disposition
of Eligible Securities pursuant to the registration statement applicable to such
Eligible Securities until such Holder shall have received copies of an amended
or supplemented registration statement or prospectus, and if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
Page 59 of 94 Pages
the prospectus covering such Eligible Securities at the time of receipt of such
notice.
Notwithstanding anything to the contrary contained herein, in no
event shall the Company permit any entity to be an underwriter of securities
(including being a member of any underwriting syndicate) in any public offering
in which any Eligible Securities of a Holder are included if such Holder that is
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and such Holder or any affiliate of such Holder, owns 5% or more of
the equity of such entity and the Company shall have been notified of such
relationship and such ERISA status.
5. EXPENSES. The Company shall pay all expenses incurred in
complying with Sections 2 and 3, including without limitation all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws (other than those which by law must be paid by the selling
security holders), fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and stock exchange
listing fees, but excluding all underwriting discounts and selling commissions
applicable to the sale of Eligible Securities and fees and expenses of counsel
for the selling Holders. All expenses of participating sellers other than those
assumed by the Company in this Agreement shall be borne by such sellers in
proportion to the number of shares sold by each seller or as they may otherwise
agree.
6. INDEMNIFICATION.
(a) In the event of a registration of Eligible Securities under the
Securities Act pursuant to Section 2 or 3, the Company shall indemnify and hold
harmless each
Page 60 of 94 Pages
selling Holder, each underwriter of such Eligible Securities thereunder and each
other person, if any, who controls such selling Holder or underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such selling Holder, underwriter or
controlling person may become subject under the Securities Act or otherwise, and
will reimburse each such selling Holder, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, as
such expenses are incurred, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Eligible Securities were registered
under the Securities Act pursuant to Section 2 or 3, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
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 to make the
statements therein not misleading; PROVIDED, HOWEVER, that the Company shall not
be liable to any such selling Holder, underwriter or controlling person in any
such case if and to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in conformity with information furnished by
such selling Holder, underwriter or controlling person in writing specifically
for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Eligible Securities
under the Securities Act pursuant to Section 2 or 3, each selling Holder of such
Eligible Securities,
Page 61 of 94 Pages
severally and not jointly, will indemnify and hold harmless the Company, each
underwriter and each person, if any, who controls the Company or any underwriter
within the meaning of the Securities Act, each officer of the Company who signs
the registration statement, each director of the Company, each other seller of
securities registered by the registration statement covering such Eligible
Securities and each person, if any, who controls such seller, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or any such officer, director, underwriter, other seller or controlling person
may become subject under the Securities Act or otherwise, and shall reimburse
the Company and each such officer, director, underwriter, other seller and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, but only to the extent that any such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information pertaining to such
Holder furnished in writing to the Company by such Holder specifically for use
in the registration statement or prospectus relating to such Eligible
Securities. Notwithstanding the immediately preceding sentence, the liability of
each such Holder hereunder shall not in any event exceed the net proceeds
received by such Holder from the sale of Eligible Securities covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party, if a claim in
respect thereof is to be made against an indemnifying party hereunder, shall
notify such indemnifying party in writing thereof, but the omission so to notify
such indemnifying party shall not relieve
Page 62 of 94 Pages
such indemnifying party from any liability that it may have to any indemnified
party other than under this Section 6 and, unless the failure to so provide
notice materially adversely affects or prejudices such indemnifying party's
defense against any action, shall not relieve such indemnifying party from any
liability that it may have to any indemnified party under this Section 6. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably satisfactory to
such indemnified party, and, after notice from such indemnifying party to such
indemnified party of its election so to assume and undertake the defense
thereof, such indemnifying party shall not be liable to such indemnified party
under this Section 6 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; PROVIDED,
HOWEVER, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it that are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume and undertake the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such defense to be reimbursed by the indemnifying party as
incurred.
(d) No indemnifying party shall be liable for any amounts paid in a
Page 63 of 94 Pages
settlement effected without the consent of such indemnifying party, which
consent shall not be withheld unreasonably. No indemnifying party shall consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to the
indemnified party of a release from all liability in respect of such claim or
litigation.
(e) The reimbursements required by this Section 6 shall be made by
periodic payments during the course of the investigation or defense, as and when
bills are received and expenses incurred.
7. CONTRIBUTION. If for any reason the indemnity set forth in
Section 6 is unavailable or is insufficient to hold harmless an indemnified
party, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by said indemnity
(i) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and such indemnified party on the other
(determined by reference to, among other things, whether the untrue statement of
a material fact or omission to state a material fact relates to information
supplied by the indemnifying party or such indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission), or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or provides a lesser sum
to such indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative fault of the
indemnifying party and such indemnified party but also the relative benefits
received by the indemnifying party
Page 64 of 94 Pages
on the one hand and such indemnified party on the other, as well as any other
relevant equitable considerations.
The Company and the Parties agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation 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, liabilities or expenses referred to in such 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 7, a Holder shall not be required to contribute any
amount in excess of the amount by which the net proceeds of the sale of Eligible
Securities sold by such Holder and distributed to the public exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
which is not guilty of such fraudulent misrepresentation.
In the event that any terms of an indemnification or contribution
provision contained in an underwriting agreement executed by or on behalf of the
Company and a Holder differs from a provision in Section 6 or this Section 7,
the provisions in such underwriting agreement shall determine the rights and
obligations of the Company, such Holder and each underwriter that is a party
thereto.
8. UNDERWRITING AGREEMENT. If Eligible Securities are to be sold
pursuant
Page 65 of 94 Pages
to a registration statement in an underwritten offering pursuant to Section 2 or
3, the Company and each selling Holder of Eligible Securities agrees to enter
into a written agreement with the managing underwriter or underwriters selected
in the manner herein provided in such form and containing such provisions as are
reasonably satisfactory to the Company and each such selling Holder and as are
customary in the securities business for such an arrangement among such
underwriter or underwriters, each such selling Holder and companies of the
Company's size and investment stature. No Holder of Eligible Securities may
participate in any underwritten sale of Eligible Securities pursuant to Section
2 or 3 hereof unless such Holder (i) agrees to sell such Holder's securities in
accordance with any underwriting arrangements approved by the persons entitled
hereunder to specify the method of distribution of the securities being
registered and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
9. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. If, subsequent to
the date hereof, the Company grants to any holders or prospective holders of the
Company's securities the right to require that the Company register any
securities of the Company under the Securities Act, such registration rights
shall be granted subject to the rights of the Holders to include all or part of
their Eligible Securities in any such registration on the terms and conditions
set forth in Section 3.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement by the
Page 66 of 94 Pages
Company have been duly authorized by all requisite action and will not violate
any provision of law, any order of any court or other agency of government, the
certificate of incorporation or By-laws of the Company or any provision of any
indenture, agreement or other instrument by which the Company or any of its
properties or assets is bound and will not conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
11. RULE 144. The Company hereby covenants with the Holders of
Eligible Securities that if and to the extent it shall be required to do so
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as the same may be amended and in effect at the time
(the "Exchange Act"), the Company shall timely file the reports required to be
filed by it under the Exchange Act or the Securities Act (including, but not
limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the
Securities Act) and shall take such further action as any Holder of Eligible
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Eligible Securities without registration under the
Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter
Page 67 of 94 Pages
adopted by the Commission. Upon the request of any Holder of Eligible
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements
12. MISCELLANEOUS
(a) All covenants and agreements contained in this Agreement by or
on behalf of any of the signatories shall bind and inure to the benefit of the
respective successors and assigns of the signatories, whether so expressed or
not. If any transferee of any Holder of Eligible Securities shall acquire
Eligible Securities in any manner (other than by way of a registered public
offering), whether by operation of law or otherwise, such Eligible Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Eligible Securities such transferee shall be entitled to receive
the benefits of and be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement. The benefits to which
any such transferee shall be entitled shall include, without limitation, the
rights to register Eligible Securities under Sections 2 and 3 hereof; PROVIDED,
HOWEVER, that any such transferee shall not be entitled to deliver to the
Company a Registration Request pursuant to Section 2 hereof unless such
transferee acquired from its transferor at least a majority of the Eligible
Securities owned by such transferor at the time of the transfer. If the Company
shall so request, any such successor or assign shall agree in writing to acquire
and hold the Eligible Securities subject to all of the terms hereof. One or more
transferees of Eligible Securities owned by the RL Partnership may deliver a
Registration Request pursuant to Section 2 if (i) such transferees have received
such Eligible Securities in compliance with applicable Federal and state
securities laws and (ii) such transferees have agreed in a
Page 68 of 94 Pages
writing, in form and substance reasonably satisfactory to the Company, to be
bound by this Agreement, with the same duties and obligations as a Holder
thereunder and (iii) the transferee or transferees that deliver such
Registration Request hold at least a majority of the then outstanding Eligible
Securities owned by the RL Partnership which have not been sold pursuant to a
registered public offering. This Section 12(a) shall not be deemed to create any
right on the part of any Holder to transfer Eligible Securities in contravention
of any restriction thereon contained in any other agreement to which such Holder
is a party.
(b) All notices, consents and other communications under this
Agreement required or permitted to be transmitted to the parties named below
shall be in writing and shall be deemed to have been duly given when (a)
delivered by hand, (b) sent by telecopier (with receipt confirmed), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate as to itself by notice to the other
parties):
(i) if to the Company, to it at Promus
Hotel Corporation, 000 Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000,
Attention: General Counsel (telecopy: (000) 000-0000;
(ii) if to GEHOP, GEIM or GEPT c/o General
Electric Investment Hotel Partners I, Limited Partnership, c/o
General Electric Investment Corporation, 0000 Xxxxxx Xxxxxx, X.X.
Xxx 0000, Xxxxxxxx XX 00000,
Page 69 of 94 Pages
Attention: Asset Manager-Real Estate (telecopier no. (000) 000-0000),
with a copy to General Electric Investment Corporation,
0000 Xxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxxx XX 00000, Attention:
General Counsel-Real Estate (telecopier no. (000) 000-0000, a copy
to Wolf, Block, Xxxxxx and Xxxxx-Xxxxx, Packard Building, 12th
Floor, S. E. Corner of 00xx xxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, XX
00000, Attention: Xxxxx X. Xxxxxx, Esq. (telecopier no.
(000) 000-0000), and a copy to Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq. (telecopier no. (000) 000-0000);
(iii) if to Met Sub, c/o Metropolitan Life
Insurance Company, Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xx. Xxxx X. Xxxxxxxx, Xx. (telecopier no. (212)
578-3910), with a copy to Law Department, Metropolitan Life
Insurance Company, Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxx X. Xxxxx, Esq. (telecopier no. (000) 000-0000);
(iv) if to Xxxxxx, to Xx. Xxxxxxx X.
Xxxxxx, 00000 Xxxxx Xxxx, Xxxxxxxxxx, XX 00000 (telecopier no.
(000) 000-0000);
(v) if to Ridge, to it c/o Xx. Xxxxxxx X.
Xxxxxx, 0000 Xxxxx Xxxx, Xxxxxxxxxx, XX 00000 (telecopier no.
(000) 000-0000);
(vi) if to Investment, to it c/o Mr. Xxxxx
Xxxxxxxxx, Contrarian Group, Inc., 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 (telecopier no. (714)
720-9123);
(vii) if to the RL Partnership to Red Lion, a California
Limited Partnership, x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co., 0000 Xxxx Xxxx
Xxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000; telephone (000) 000-0000
(telecopier no. (415) 233-
Page 70 of 94 Pages
6561) ; and
(viii) if to Xxxxxxxxx, to Xx. Xxxxx X.
Xxxxxxxxx, Contrarian Group, Inc., 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxx, XX 00000 (telecopier no. (000) 000-0000).
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, except in writing, and such writing shall only be
effective with respect to a Party who has executed such writing; PROVIDED,
HOWEVER that any such amendment, modification or waiver shall only be required
to be so executed by a Party the rights of which under this Agreement would be
adversely affected in any material respect by such amendment, modification or
waiver. The failure of any of the Parties to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of that
term or deprive such Party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The Parties acknowledge that there may be no adequate remedy at
law if any Party fails to perform any of its obligations hereunder and that each
Party may be irreparably harmed by any such failure, and accordingly agree that
each Party, in addition to any other remedy to which it may be entitled in law
or in equity, shall be entitled to compel specific performance of the
obligations of any other Party under this Agreement
Page 71 of 94 Pages
in accordance with the terms and conditions of this Agreement in any court of
the United States or any state thereof having jurisdiction. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the Holders shall be
enforceable to the fullest extent permitted by law.
(h) This Agreement is intended by the parties as a final expression
of their agreement and a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings other
than those set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the Parties with respect to such subject
matter, including without limitation the Doubletree Registration Rights
Agreement.
(i) EXCEPT AS OTHERWISE PROVIDED IN SECTION 12(f) HEREOF, EACH PARTY
IRREVOCABLY AGREES THAT ALL DISPUTES IN ANY WAY, MANNER OR RESPECT ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT SHALL BE RESOLVED BY ARBITRATION IN XXX
XXXX XX XXX XXXX, XXXXX XX XXX XXXX, UNDER THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. The arbitrator to resolve any such dispute shall be selected by the
Parties who are involved in the dispute, shall have expertise and
Page 72 of 94 Pages
experience in the resolution of disputes similar to the dispute to be resolved
and shall not be an affiliate of any Party. If such Parties are unable to agree
on such selection, each such Party select one arbitrator meeting the criteria
set forth in the immediately preceding sentence and such arbitrators shall
select an arbitrator meeting such criteria to resolve such dispute as soon as
practicable. The fees and expenses of any arbitrator selected by a Party shall
be paid by such Party; the fees and expenses of any other arbitrators shall be
shared equally by the Parties who are involved in the dispute. All other
expenses of such arbitration shall be paid by the Party incurring the same.
Page 73 of 94 Pages
