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EXHIBIT 10.5
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER.
Void after 5:00 P.M. __________(1) Warrants to Purchase
(unless previously terminated under Common Stock
the circumstances described herein) Dated: _____________(2)
WARRANT CERTIFICATE REPRESENTING
WARRANTS TO PURCHASE COMMON STOCK OF
DOUBLETREE CORPORATION
FOR VALUE RECEIVED, Doubletree Corporation, a Delaware corporation (the
"Company"), hereby certifies that, _________________ ("Holder"), the holder of
these Warrants (the "Warrants", and each right to purchase a share of Common
Stock, a "Warrant") is entitled, subject to the terms set forth below, at any
time on or after ______________,(3) or from time to time thereafter, but not
later than _______________,(4) to purchase from the Company __________(5) fully
paid and nonassessable shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company. These Warrants and all rights hereunder, to the extent
such rights shall not have
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(1) Insert fifth anniversary of date of original issuance.
(2) Insert date of original issuance.
(3) Insert date of original issuance.
(4) Insert fifth anniversary of original date of issuance.
(5) Insert 10% of the number of Shares issued and sold at the Closing.
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been exercised, shall terminate and become null and void at 5:00 p.m., New
York time, on ___________.(6)
These Warrants shall be subject to the terms set forth in the
Securities Purchase Agreement dated as of October 31, 1996 by and between the
Company and the Trustees of General Electric Pension Trust, pursuant to which
these Warrants are being issued, and to the following terms and conditions:
SECTION 1. EXERCISE OF WARRANTS; EXERCISE PRICE; ADJUSTMENTS RELATIVE
TO EXERCISE OF WARRANTS
1A. Exercise of Warrants. (a) Subject to the conditions of this
Section 1, the holder of any Warrant at the holder's option may exercise such
holder's rights under all or any part of the Warrants to purchase Common Stock
(the "Warrant Shares") at a price equal to $_______(7) (the "Exercise Price") at
any time on or after the date hereof. The Warrant Shares and the Exercise Price
are subject to certain adjustments as set forth in this Section 1 and the terms
Warrant Shares and Exercise Price as used herein shall as of any time be deemed
to include all such adjustments to be given effect as of such time in accordance
with the terms hereof.
1B. Stock Dividends. In case at any time the Company shall
declare a dividend or make any other distribution upon any class or series of
stock of the Company payable in shares of Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), the Exercise Price in effect on the record date for such dividend
or distribution shall be proportionately reduced. In case the Company shall
take a record of the holders of its Common Stock for the purpose of entitling
them to receive a dividend or other distribution payable in shares of Common
Stock or in Convertible Securities, then such record date shall be deemed to be
the date of the issue of the shares of Common Stock deemed to have been issued
as a result of the declaration of such dividend or the making of such other
distribution, as the case may be, unless such dividend or other distribution is
to be measured by the market price of the Common Stock in effect on the date
such dividend or other distribution is made, in which case such date shall be
deemed to be the date of the issue of the shares of Common Stock deemed to have
been so issued. For
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(6) Insert fifth anniversary of the date of original issuance.
(7) Insert final Elected Price.
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purposes of such adjustment, the number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or for the account
of the Company.
1C. Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
1D. Changes in Common Stock. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with another corporation, or sale, transfer or other disposition
of all or substantially all of its properties to another corporation, shall be
effected, then, as a condition of such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, lawful and adequate
provision shall be made whereby each holder of Warrants shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Company immediately theretofore issuable upon exercise of the Warrants, such
shares of stock, securities or properties, if any, as may be issuable or payable
with respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
issuable upon exercise of the Warrants had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of each holder of Warrants to the end that
the provisions hereof (including without limitation provisions for adjustment of
the Exercise Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition, unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing or otherwise acquiring such properties
shall assume, by written instrument executed and mailed or delivered to the
holders of Warrants at the last address of such holders appearing on the books
of the Company, the obligation to deliver to such holders such shares of stock,
securities or properties as, in accordance with the foregoing provisions, such
holders may be entitled to acquire. The above provisions of this subparagraph
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shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers, or other dispositions.
1E. Other Adjustments. In case (i) the Company shall issue or
sell any shares of its Common Stock for a consideration per share less than the
fair market value thereof at the time of such issue or sale, or issue or grant
any rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or Convertible Securities at an exercise price per share of Common
Stock less than the fair market value thereof on the date of such issue or
grant, or issue or sell any Convertible Securities having a conversion or
exchange price per share of Common Stock less than the fair market value thereof
on the date of such issue or sale, or (ii) any other corporate event or
transaction of the Company, outside the ordinary course of business consistent
with past practice, not specified or contemplated by this Section 1 occurs which
equitably requires an anti-dilutive adjustment to the Warrants represented
hereby, then the Board of Directors of the Company shall make such appropriate
adjustments to the Warrants as it may determine in its reasonable business
judgment.
1F. Notice of Adjustment. Upon any adjustment of the Exercise
Price, then and in each such case the Company shall promptly deliver to the
Holder a certificate of the chief financial officer of the Company setting forth
the Exercise Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares of Common Stock issuable upon Exercise of the
Warrant or Warrants held by each holder of Warrants, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
1G. Prohibition of Certain Actions. The Company will not (i)
authorize or issue, or agree to authorize or issue, any shares of its capital
stock of any class preferred as to dividends or as to the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Company unless the rights of the holders thereof shall be limited to a fixed sum
or percentage of par value in respect of participation in dividends and in the
distribution of such assets or (ii) take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all of the Warrants would exceed the
total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.
1H. Stock to be Reserved. The Company will at all times reserve
and keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of
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Warrants as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants, and the Company
will maintain at all times all other rights and privileges sufficient to enable
it to fulfill all its obligations hereunder. The Company covenants that all
shares of Common Stock which shall be so issuable shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, free from preemptive
or similar rights on the part of the holders of any shares of capital stock or
securities of the Company, and free from all Liens and charges with respect to
the issue thereof; and without limiting the generality of the foregoing, the
Company covenants that it will from time to time take all such action as may be
required to assure that the par value, if any, per share of the Common Stock is
at all times equal to or less than the then effective Exercise Price. The
Company will take all such action as may be necessary to assure that such
shares of Common Stock may be so issued without violation by the Company of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed.
1I. Registration and Listing of Common Stock. If any shares of
Common Stock required to be reserved for purposes of exercise of Warrants
hereunder require registration with or approval of any governmental authority
under any Federal or state law (other than the Securities Act) before such
shares may be issued upon exercise, the Company will, at its expense and as
expeditiously as possible, use its best efforts to cause such shares to be duly
registered or approved, as the case may be. Shares of Common Stock issuable
upon exercise of the Warrants shall be registered by the Company under the
Securities Act or similar statute then in effect if required by paragraph 11 and
subject to the conditions stated in such paragraph. If and so long as the
Common Stock is listed on any national securities exchange, the Company will, at
its expense, obtain promptly and maintain the approval for listing on each such
exchange upon official notice of issuance, of shares of Common Stock issuable
upon exercise of the then outstanding Warrants and maintain the listing of such
shares after their issuance; and the Company will also list on such national
securities exchange, will register under the Securities Exchange Act of 1933, as
amended (the "Exchange Act"), and will maintain such listing of, any other
securities that at any time are issuable upon exercise of the Warrants, if and
at the time that any securities of the same class shall be listed on such
national securities exchange by the Company or shall require registration under
the Exchange Act.
1J. Closing of Books. The Company will at no time close its
transfer books against the transfer of any Warrant or of any shares of Common
Stock issued or issuable upon the
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exercise of any Warrant in any manner which interferes with the timely exercise
of such Warrant.
1K. No Rights or Liabilities as Shareholders. No Warrant shall
entitle any holder thereof to any of the rights of a shareholder of the Company.
No provision of this Warrant, in the absence of the actual exercise of such
Warrant or any part thereof by the holder thereof into Common Stock issuable
upon such exercise, shall give rise to any liability on the part of such holder
as a shareholder of the Company, whether such liability shall be asserted by the
Company or by creditors of the Company.
SECTION 2. METHOD OF EXERCISE OF WARRANTS
The Warrants may be exercised by the surrender of this Certificate,
with the Form of Subscription attached hereto duly executed by the holder, to
the Company at its principal office, accompanied by payment of the Exercise
Price for the number of shares of Common Stock specified. The Warrants may be
exercised for less than the full number of shares of Common Stock called for
hereby by surrender of this Certificate in the manner and at the place provided
above, accompanied by payment for the number of shares of Common Stock being
purchased. If the Warrants should be exercised in part only, the Company shall,
upon surrender of this Warrant Certificate for cancellation, execute and deliver
a new Warrant Certificate evidencing the right of the holder to purchase the
balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant Certificate at the office of the Company, in proper form for
exercise, accompanied by the full Exercise Price in cash or certified or bank
cashier's check, the holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to the
holder.
As soon as practicable after the exercise of these Warrants in whole or
in part and, in any event, within ten days thereafter, the Company at its
expense will cause to be issued in the name of and delivered to the holder a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock (and any new Warrants) to which the holder shall be
entitled upon such exercise. Each certificate for shares of Common Stock so
delivered shall be in such denominations as may be requested by the holder and
shall be registered in the name of the holder or such other name as the holder
may designate.
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SECTION 3. PAYMENT OF TAXES
The issuance of certificates for shares of Common Stock upon exercise
of the Warrants shall be made without charge to the holders of the Warrants
exercised for any issuance tax in respect thereto; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of the Warrant or Warrants exercised.
SECTION 4. MUTILATED OR MISSING WARRANT CERTIFICATES
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant Certificate, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification and upon surrender and cancellation of this Warrant Certificate,
if mutilated, the Company will execute and deliver a new Warrant Certificate of
like tenor and date.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, as of the day and year first above written.
DOUBLETREE CORPORATION
By:
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Name:
Title:
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FORM OF SUBSCRIPTION
DATE: _____________ 19___
TO: DOUBLETREE CORPORATION
The Undersigned, the holder of the within Warrants, hereby irrevocably
elects to exercise all or part of the purchase right represented by such
Warrants for, and to purchase thereunder, _______________ shares of Common
Stock of DOUBLETREE CORPORATION (the "Company") and herewith makes payment of
$___________ to the Company, evidenced by delivery of_________________, and
requests that the certificate of such shares be issued in the name of, and be
delivered to ______ _________, whose address is ______________________________.
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(Name of Holder)
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(Authorized Signatory)
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(Address)