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EXHIBIT 4.1
AMENDMENT NO. 3
INCORPORATION AND
REGISTRATION RIGHTS AGREEMENT
This Third Amendment to Incorporation and Registration Rights Agreement
(this "Third Amendment") dated as of , is made by and among
Doubletree Corporation, a Delaware corporation (the "Company"), GE Investment
Hotel Partners I, Limited Partnership, a Delaware limited partnership ("GEHOP"),
MetPark Funding, Inc., a Delaware corporation ("Met Sub"), The Ueberroth Family
Trust ("Ueberroth"), Ueberroth Investment Trust ("Investment"), Mr. Richard J.
Ferris ("Ferris"), Ridge Partners, L.P., a Delaware limited partnership
("Ridge"), Mr. Robert M. Solmson (the "Representative"), for himself and as
attorney-in-fact for the RFS Shareholders (as defined in the Second Amendment
referred to below), Canadian Pacific Hotels Holdings (U.S.) Inc., a Delaware
corporation ("CPPHUS"), and Red Lion, a California Limited Partnership (the "RL
Partnership").
This Third Amendment amends the Incorporation and Registration Rights
Agreement dated as of December 16, 1993 (the "Original Agreement"), by and among
Doubletree Partners, a Delaware general partnership, GQ Owners, L.P., a Delaware
limited partnership, Canadian Pacific Hotels (U.S.) Inc., a Delaware corporation
("CPHUS"), Met Sub, Ueberroth and Ferris, as first amended by Amendment No. 1 to
Incorporation and Registration Rights Agreement dated as of June 30, 1994 (the
"First Amendment"), by and among the parties to the Original Agreement, the
Company, GEHOP, Investment and Ridge, and as further amended by Amendment No. 2
to Incorporation and Registration Rights Agreement dated as of February 27, 1996
(the "Second Amendment"), by and among CPPHUS, as successor in interest to CPHUS
under the Original Agreement and the First Amendment, and the parties hereto
other than the RL Partnership. Capitalized terms used and not otherwise defined
herein shall have the respective meanings assigned to such terms in the Original
Agreement, as amended by the First Amendment and the Second Amendment (as so
amended, the "Existing Agreement").
BACKGROUND
A. CPPHUS has sold all Eligible Securities beneficially owned by it.
B. The RL Partnership owns of record and beneficially 20,900,000 shares of
common stock, par value $.01 per share, of Red Lion Hotels, Inc., a Delaware
corporation ("Red Lion"). Pursuant to the Agreement and Plan of Merger dated as
of September 12, 1996 (the "Merger Agreement"), by and among the Company, RLH
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the
Company, and Red Lion, at the Effective Time (as defined in the Merger
Agreement), such shares of Red Lion stock will be converted into the right to
receive, among other things, an aggregate of shares (together with any
additional shares issued as a result of any stock split, stock dividend or
subdivision or reclassification of such shares, the "Exchange Shares") of the
Company's Common Stock. In order to induce the RL Partnership, as a majority
stockholder of Red Lion, to vote for approval and adoption of the Merger
Agreement and the Merger (as defined in the Merger Agreement), the Parties wish
to amend the Existing Agreement to include the RL Partnership as a Party and to
specify the relative rights and privileges of the Partnership with respect to
the subject matter thereof.
C. In connection with the Merger, GEHOP will, either directly or indirectly
through an affiliate thereof, purchase from the Company newly-issued
shares of Common Stock (the "New GEI Shares") and warrants to purchase up to
additional shares of Common Stock, subject to adjustment (such
additional shares of Common Stock issuable upon exercise of such warrants, the
"GEI Warrant Shares"). In order to induce GEHOP (or its affiliate) to make such
purchase, the Parties wish to amend the Existing Agreement to include the New
GEI Shares and, upon issuance, the GEI Warrant Shares as Eligible Securities.
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NOW THEREFORE, in consideration of the foregoing and intending to be
legally bound, the Parties agree as follows:
1. The RL Partnership. All references to "Holders" and the "Parties" in
the Existing Agreement shall be deemed to include the RL Partnership, including,
without limitation, references granting to Holders certain "piggyback"
registration rights pursuant to Section 3 of the Original Agreement.
2. Additional Eligible Securities. All references to "Eligible Securities"
in the Existing Agreement shall be deemed to include, without limitation, all
Exchange Shares and all New GEI Shares and, upon issuance, all GEI Warrant
Shares.
3. Demand Rights. (a) Section 2(a) of the Existing Agreement is hereby
amended to provide that in addition to the rights granted therein to GEHOP, Met
Sub and the Representative, the RL Partnership may, at any time after the date
which is 180 days following the date on which the Effective Time occurs, deliver
up to four Registration Requests to the Company, subject to Section 2(b)(i) of
the Existing Agreement as amended hereby. After receipt of a Registration
Request, the Company shall file and use its best efforts to cause to become
effective a registration statement under the Securities Act with respect to the
number of Exchange Shares specified in such request, all within the time and in
the manner specified in Section 2 of the Original Agreement.
(b) Section 2(a) of the Existing Agreement is hereby amended to replace the
term "The Partner", which begins the fifth sentence of such Section 2(a), with
the term "The Holder."
(c) The first paragraph of Section 2(b)(i) of the Existing Agreement is
hereby amended and restated to read as follows:
"(i) if the Requesting Holder shall be GEHOP and the Registration
Request is not the last to which such Holder is entitled under Section 2(a)
and this Section 2(b)(i), or if the Requesting Holder shall be the
Representative and the Registration Request is made pursuant to Section
2(c) of Amendment No. 2 to this Agreement, or if the Requesting Holder
shall be the RL Partnership and the Registration Request is made pursuant
to Section 3(a) of Amendment No. 3 to this Agreement and is not the first
or last such request to which the RL Partnership is entitled pursuant to
such Section 3(a):
(A) the number of shares of Eligible Securities to be registered on
behalf of each Holder shall be reduced (to zero, if necesssary) 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 GQ Owners, any Registration Request made by the RL
Partnership pursuant to Section 3(a) of Amendment No. 3 to this
Agreement (other than its first or last such Registration Request) and
the Registration Request made by the Representative pursuant to Section
2(c) of Amendment No. 2 to this Agreement, if the number of shares of
Eligible Securities requested to be registered by GQ Owners, the RL
Partnership or the Representative, 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 GQ Owners, the two registration requests GQ Owners is
entitled to under Section 2(a) of this Agreement, (ii) in the case of
the RL Partnership, the four registration requests the RL Partnership is
entitled to under Section 3(a) of Amendment No. 3 to this Agreement and
(iii) in the case of the Representative, the one registration request
the Representative is entitled to under Section 2(c) of Amendment No. 2
to this Agreement; and"
(d) The first paragraph of Section 2(b)(ii) of the Existing Agreement is
hereby amended and restated to read as follows:
"(ii) 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 the Existing
Agreement, or if the Requesting Holder shall be the RL Partnership
exercising the first or
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last Registration Request to which it is entitled under Section 3(a) of
Amendment No. 3 to this Agreement:"
(e) Section 2(b)(ii)(C) of the Existing Agreement is hereby amended to
replace the term "Common Stock" used therein with the term "Eligible
Securities."
(f) Section 2 of the Existing Agreement is hereby amended to include the
following subsection (e):
"(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 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."
(g) Section 13(a) of the Existing Agreement is hereby amended to provide
that 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, (ii) such transferees have agreed in a writing, in form
and substance reasonably satisfactory to the Company, to be bound by the
Existing Agreement, as amended by this Third Amendment and as amended or
modified hereafter, with the same duties and obligations as a Holder thereunder,
and (iii) the transferee or transferees that so deliver such Registration
Request hold at least a majority of the then outstanding Exchange Shares which
have not been sold pursuant to a registered public offering. In addition,
Section 13(a) is amended so that the references to "permitted assign(s)" or
"permitted transferee" shall mean any assignee or transferee of a Holder.
4. Piggyback Rights. The RL Partnership hereby agrees that in the event
that shares of Eligible Securities requested by the Partnership to be registered
pursuant to Section 3 of the Existing Agreement are unable to be included in a
registration pursuant to market conditions then existing, as provided in the
Existing Agreement, the shares to be registered for the RL Partnership shall be
reduced by a pro rata amount with respect to the number of shares requested to
be registered by the RL Partnership.
5. Notices. Section 13(b) of the Existing Agreement is hereby amended to
add subsection (viii) as follows:
"(viii) if to the RL Partnership to Red Lion, a California Limited
Partnership, c/o Kohlberg Kravis Roberts & Co., 2800 Sand Hill Road,
Suite 200, Menlo Park, California 94025; telephone (415) 233-6560;
telecopier (415) 233-6561.
6. Amendments. The first sentence of Section 13(d) of the Existing
Agreement is hereby amended and restated in its entirety to read as follows:
"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."
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7. Counterparts. This Third Amendment may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have executed this Third Amendment
as of the date first written above.
DOUBLETREE CORPORATION METPARK FUNDING, INC.
By: By:
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Name: Name:
Title: Title:
RIDGE PARTNERS, L.P GE INVESTMENT HOTEL PARTNERS I,
LIMITED PARTNERSHIP
By: Kelrick, Inc., its general partner By: GE Investment Management
Incorporated, its general partner
By:
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Name:
Title:
THE UEBERROTH FAMILY TRUST THE REPRESENTATIVE
By:
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Peter V. Ueberroth Robert M. Solmson
Trustee
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Robert M. Solmson, as
attorney-in-fact for the RFS
Shareholders named below
UEBERROTH INVESTMENT TRUST RED LION, A California
Limited Partnership
By: By:
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Alice J. Saviez RLA-GP Inc., its general partner
Not individually, but
solely as Trustee
By:
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Richard J. Ferris Name:
Title:
CANADIAN PACIFIC HOTELS
HOLDINGS (U.S.) INC.
By:
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Name:
Title:
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