SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Interstate Hotels Company
-------------------------
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
--------------------------------------
(Title of Class of Securities)
460886 10 4
-----------
(CUSIP Number)
Thomas J. Saylak
Blackstone Real Estate Associates L.P.
345 Park Avenue, 31st Floor
New York, New York 10154
(212) 935-2626
------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
William E. Curbow, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
(212) 455-2000
June 25, 1996
------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this statement because of Rule 13d-1(b)(3) or (4), check the following
box: / /
Check the following box if a fee is being paid with the
statement: / /
------------------------------------
<PAGE>
- ----------------------------------------------------------------------
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Partners Two L.P.
I.R.S. Identification No. - 13-3787414
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
00 (See Item 3)
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 68,351
:
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : None
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: 68,351
: (10) SHARED DISPOSITIVE POWER
:
: None
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
68,351
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
.3%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Partners IV L.P.
I.R.S. Identification No. - 13-3787416
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
00 (see item 3)
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 20,505
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : None
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: 20,505
: (10) SHARED DISPOSITIVE POWER
:
: None
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
20,505
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES / /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
.08%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone RE Capital Partners II L.P.
I.R.S. Identification No. - 13-3794148
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
00 (see item 3)
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 12,918
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : None
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: 12,918
: (10) SHARED DISPOSITIVE POWER
:
: None
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
12,918
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
.05%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BRE/Interstone L.L.C.
I.R.S. Identification No. - 13-3895284
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
00 (see item 3)
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: 2,426,797
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : None
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: 2,426,797
: (10) SHARED DISPOSITIVE POWER
:
: None
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
CO
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Associates L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,528,571
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,528,571
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,528,571
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.3%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Peter G. Peterson
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,528,571
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,528,571
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,528,571
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.3%
(14) TYPE OF REPORTING PERSON
IN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Stephen A. Schwarzman
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
Delaware
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,528,571
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,528,571
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,528,571
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.3%
(14) TYPE OF REPORTING PERSON
IN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
John G. Schreiber
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : None
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,528,571
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,528,571
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.3%
(14) TYPE OF REPORTING PERSON
IN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Holdings L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,426,797
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,426,797
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Partners I L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,426,797
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,426,797
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone Real Estate Partners III L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,426,797
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,426,797
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone RE Capital Partners L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,426,797
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,426,797
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Blackstone RE Offshore Capital Partners L.P.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,426,797
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,426,797
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,426,797`
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
(14) TYPE OF REPORTING PERSON
PN
<PAGE>
_________________________________________________________________
CUSIP No. 460886 10 4
(1) NAME OF REPORTING PERSONS
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
BREA L.L.C.
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) / /
(b) / x /
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not Applicable
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
/ /
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
: (7) SOLE VOTING POWER
:
: None
: (8) SHARED VOTING POWER
:
NUMBER OF SHARES BENE- : 2,528,571
FICIALLY OWNED BY EACH : (9) SOLE DISPOSITIVE POWER
REPORTING PERSON WITH :
: None
: (10) SHARED DISPOSITIVE POWER
:
: 2,528,571
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
2,528,571
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES
/ /
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.3%
(14) TYPE OF REPORTING PERSON
CO
<PAGE>
STATEMENT PURSUANT TO RULE 13D-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED
------------------------------------------------
Item 1. Security and Issuer
This Statement on Schedule 13D relates to shares of common stock, par
value $.01 per share (the "Common Stock"), of Interstate Hotels Company, a
Pennsylvania corporation (the "Issuer"). The principal executive offices of
the Issuer are located at Foster Plaza 10, 680 Andersen Drive, Pittsburgh,
Pennsylvania 15220.
Item 2. Identity and Background.
This Schedule 13D is being filed by: Blackstone Real Estate Partners
Two L.P., a Delaware limited partnership, formerly known as Blackstone Real
Estate Partners II L.P. ("BRE II"); Blackstone Real Estate Partners IV L.P., a
Delaware limited partnership ("BRE IV"); Blackstone RE Capital Partners II
L.P., a Delaware limited partnership ("BRECP II"); BRE/Interstone L.L.C., a
Delaware limited liability company ("BI"); BI's members, Blackstone Real Estate
Partners I L.P., a Delaware limited partnership ("BRE I"), Blackstone Real
Estate Partners III L.P., a Delaware limited partnership ("BRE III"),
Blackstone RE Capital Partners L.P., a Delaware limited partnership ("BRECP"),
Blackstone RE Offshore Capital Partners L.P., a Delaware limited partnership
("BOC"), and Blackstone Real Estate Holdings L.P., a Delaware limited
partnership ("BREH"); the general partner of BRE II, BRE IV, BRECP II, BRE I,
BRE III, BRECP and BOC, Blackstone Real Estate Associates L.P., a Delaware
Limited partnership ("BREA"); the general partner of BREH and BREA, BREA L.L.C.,
a Delaware limited liability company ("BREA LLC"); Peter G. Peterson
<PAGE>
("Peterson") and Stephen A. Schwarzman ("Schwarzman"), who control BREA LLC; and
John G. Schreiber ("Schreiber"), a limited partner in BREA. The principal
business of BI consists of holding an equity interest in the Issuer and certain
other real estate investment entities. The principal business of BREA consists
of acting as a general partner of BRE II, BRE IV, BRECP II, BRE I, BRE III,
BRECP, BOC and certain other real estate-related investment entities. The
principal business of BRE II, BRE IV, BRECP II, BRE I, BRE III, BRECP, BOC and
BREH consists of making real estate-related investments. The principal business
of BREA LLC consists of acting as a general partner of BREA and BREH. BI, BRE
II, BRE IV, BRECP II, BRE I, BRE III, BRECP, BOC, BREH, BREA, BREA LLC,
Peterson, Schwarzman and Schreiber collectively are referred to herein as the
"Reporting Persons."
The principal business and office address of each of BRE II, BRE IV,
BRECP II, BRE I, BRE III, BRECP, BOC, BREH, BREA and BREA LLC, is 345 Park
Avenue, 31st Floor, New York, New York 10154. The principal business address of
Schreiber is Schreiber Investments, 1115 East Illinois Road, Lake Forest,
Illinois 60045. The principal business address of each of Peterson and
Schwarzman is 345 Park Avenue, 31st Floor, New York, New York 10154.
Peterson and Schwarzman are United States citizens and the sole
members, and serve as the Chairman and President, respectively, of BREA LLC.
Peterson's principal occupation or employment is serving as Chairman of The
Blackstone Group L.P. ("TBG"), an investment banking firm based in New York.
Schwarzman's principal occupation or employment is serving as the President and
CEO of TBG. Peterson and Schwarzman also serve as the founding members of each
of Blackstone Group Holdings L.L.C. ("BGH"), which is the general partner of
Blackstone Group Holdings L.P., a limited partner of TBG, Blackstone Management
Associates II L.L.C. and Blackstone Management Partners L.L.C.
Schreiber is a United States citizen, and his present principal
occupation or employment is making real estate-related investments.
<PAGE>
During the last five years, none of the Reporting Persons has (i)
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or state securities laws or finding any violation with respect to such
laws.
Information with respect to each of the Reporting Persons is given
solely by such Reporting Person and no Reporting Person has responsibility for
the accuracy or completeness of information supplied by another Reporting
Person. Any disclosures made hereunder with respect to persons other than the
Reporting Persons are made on information and belief after making appropriate
inquiry.
Item 3. Source and Amount of Funds or Other Consideration.
The shares of Common Stock acquired by BRE II, BRE IV, BRECP II and BI
(as more fully described in Item 5, the "Shares") were acquired pursuant to (i)
the Option Agreement dated as of October 12, 1995 among Interstate Hotels
Corporation, the Existing Shareholders named therein, BREA and TBG, as amended
by Amendment No. 1 dated as of December 15, 1995 and Amendment No. 2 dated as
of March 29, 1996 (as amended, the "Option Agreement"), filed hereto as Exhibit
1 and (ii) the Contribution Agreement dated as of March 29, 1996 (the
"Contribution Agreement") among the Contributors named therein and Interstate
Hotels Corporation, filed hereto as Exhibit 2.
The source of funds for the purchase by BRE II, BRE IV, BRECP II and
BI was capital contributions by the general and limited partners of BRE II, BRE
IV, BRECP II, BRE I, BRE III, BRECP, BOC and BREH.
<PAGE>
Item 4. Purpose of Transaction.
The Shares were acquired solely for the purpose of investment.
(a) Although they have no present intention to do so, BRE II, BRE
IV, BRECP II and BI (the "Shareholders") reserve the right to make additional
purchases of or otherwise acquire Common Stock either in the open market or in
private transactions, depending on the Shareholders evaluation of the Issuer's
business, prospects and financial condition, the market for the securities for
the Issuer, other opportunities available to the Shareholders, general economic
conditions, money and stock market conditions, regulatory approval and other
future developments. Subject to the provisions of the Shareholders Agreement
(as defined below and described in item 6) and the Lock-Up Agreement (as
defined in item 6), as well as the factors set forth in the preceding sentence,
the Shareholders reserve the right to dispose of all or part of the Shares.
(d) Pursuant to the Stockholders Agreement dated as of June 25,
1996 (the "Shareholders Agreement") among the Shareholders, the Issuer and
Milton Fine and individuals and entities affiliated with Mr. Fine (the "Fine
Family Shareholders"), filed hereto as Exhibit 3 for so long as the
Shareholders owns at least 632,143 shares of Common Stock, the Fine Family
Shareholders will vote their shares of Common Stock and take other necessary
actions from time to time so that the Board of Directors of the Issuer (the
"Board of Directors") includes at least one individual selected by the
Shareholders and who is reasonably acceptable to the Company. The
Shareholders' director designee also has the right to serve on any executive
committee formed by the Board of Directors. The Company and the Fine Family
Shareholders have agreed not to take any action to remove any Shareholder
director designee without cause. The Shareholders will vote all of their
shares of Common Stock for the election of the director-candidates nominated by
the Board of Directors. The description of the Shareholders Agreement set
forth herein is a summary thereof, and is qualified in its entirety by
<PAGE>
reference to the complete text thereof filed as Exhibit 3 hereto, which is
incorporated herein by reference.
(b), (c) and (e) - (j) None of the Reporting Persons presently has
any plans or proposals which relate to or would result in any of the
transactions described in subparagraphs (b), (c) or (e) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer
As of the Reporting Date, BRE II, BRE IV, BRECP II and BI may be
deemed to beneficially own 68,351, 20,505, 12,918 and 2,426,797 shares of Common
Stock, respectively. Such shares of Common Stock represent, in the aggregate,
approximately 9.3% of the total number of shares of Common Stock outstanding,
as reported in the Registration Statement filed by the Issuer on Form S-1 (File
No. 333-3958) (the "Registration Statement") with the Securities and Exchange
Commission, which became effective on June 20, 1996.
As of the Reporting Date, the Shareholders, acting through each of
their respective direct or indirect general partners and members, have the sole
power to vote or direct the vote (subject to the provisions of the Shareholders
Agreement discussed in Item 4(d) above) and to dispose or direct the
disposition (subject to the provisions of the Shareholders Agreement and the
Lock-Up Agreement discussed in Item 6 below) of all 2,528,571 shares of Common
Stock owned by the Shareholders, representing approximately 9.3% of the total
number of shares of Common Stock outstanding, as reported in the Registration
Statement.
By reason of its status as a member of BI, each of BRE I, BRE III,
BRECP, BOC and BREH, has the power to vote or direct the vote and to dispose or
direct the disposition of the Shares (in each case to the extent that BI has
such power) and, accordingly, may be deemed to beneficially own the shares of
Common Stock owned by BI. By reason of its status as the general partner of
BRE II, BRE IV, BRECP II, BRE I, BRE III, BRECP and BOC. BREA has the power to
<PAGE>
vote or direct the vote and to dispose or direct the disposition of the Shares
(in each case to the extent that the Shareholders have such power) and,
accordingly, may be deemed to beneficially own the Shares. By reason of the
requirement that any disposition of an investment (directly or indirectly) by
entities to which BREA serves as general partner requires the approval of
Schreiber, Schreiber has shared power to dispose or direct the disposition of
the Shares that may be deemed to be beneficially owned by BREA (in each case to
the extent that BREA has such power) and, accordingly, may be deemed to
beneficially own the Shares which may be deemed to be beneficially owned by
BREA. By reason of its status as the general partner of BREA and BREH, BREA
LLC has the power to vote or direct the vote and to dispose or direct the
disposition of the Shares (in each case to the extent that the Shareholders
have such power) and, accordingly, may be deemed to beneficially own the
Shares. By reason of their ability to control BREA LLC, Peterson and
Schwarzman share the power to vote or to direct the vote and to dispose or
direct the disposition of the Shares that may be deemed to be beneficially
owned by BREA LLC (in each case to the extent that BREA LLC has such power)
and, accordingly, may be deemed to beneficially own the Shares which may be
deemed to be beneficially owned by BREA LLC.
To the best knowledge of each of the Reporting Persons, none of the
Reporting Persons has beneficial ownership of, or has engaged in any
transaction during the past 60 days in, any shares of Common Stock, except as
disclosed herein.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Reference is made to Item 4(d) above for a discussion of part of the
Shareholders Agreements filed as Exhibit 3 hereto.
<PAGE>
Tag Along Rights. The Shareholders Agreement provides that if any
Fine Family Shareholder seeks to transfer his or its shares of Common Stock,
the Shareholders will have the right to participate in such transfer at the
same price and on the same terms and sell a specified number of its shares of
Common Stock based upon the ratio which the number of shares of Common Stock
owned by the Shareholders bears to the aggregate number of shares of Common
Stock owned by the Shareholders and the selling Fine Family Shareholder. Such
tag along rights do not apply to any transfers made pursuant to a public
offering registered under the Securities Act of 1933 (the "Securities Act"), to
certain permitted transfers, or to any other parties, provided the aggregate
number of shares transferred in reliance on this last exception shall not
exceed 250,000 shares.
Right of First Offer. Under the Shareholders Agreement, each
Shareholder agreed not to transfer any of its shares of Common Stock without
first complying with a right of first offer procedure in favor of the Fine
Family Shareholders pursuant to which they have the first right to offer to
purchase the shares of Common Stock that any Shareholder proposes to sell
("First Offer Shares"). If no purchase offer is received pursuant to such
procedure or if the Shareholders decline a purchase offer made by the Fine
Family Shareholders, the Shareholders will be entitled for a period of 120 days
to sell all, but (subject to certain exceptions) not less than all, of the
First Offer Shares provided that if a purchase offer was submitted by the Fine
Family Shareholders no such transfer may be made at a cash price per share that
is less than the purchase offer price per share. These right of first offer
procedures do not apply to transfers involving a registered public offering or
sales made under Rule 144 under the Securities Act in compliance with the
"manner of sale" requirements of Rule 144(f), or to certain permitted
transfers.
<PAGE>
Registration Rights. The Shareholders Agreement provides that the
Shareholders will have the right to request, up to three times, the Company to
register under the Securities Act shares of Common Stock held by the
Shareholders (a "Demand Registration") and, if the Company proposes to register
shares of Common Stock under the Securities Act (other than a registration on
Form S-8 or S-4), the right to request the Company to include in such
registration shares of Common Stock held by the Shareholders (a "Piggyback
Registration"). Any Demand Registration must be for the registration of at
least 25% of the total number of shares of Common Stock issued to the
Shareholders on the date of execution of the Shareholders Agreement or if less,
all shares of Common Stock owned by it. The Company has agreed to pay
substantially all expenses in connection with any Demand Registration or
Piggyback Registration. In any underwritten Demand Registration or Piggyback
Registration, the managing underwriters will have the right, subject to certain
limitations, to limit the number of shares of Common Stock included in such
registration. The Company has agreed to indemnify the Shareholders against
certain liabilities, including liabilities under the Securities Act, incident
to any Demand Registration or Piggyback Registration.
Termination. The Shareholders Agreement provides that the tag-along
rights, right of first offer and registration rights provisions of the
Shareholders Agreement terminate at the time the Shareholders and its permitted
transfers own less than 10% of the shares of Common Stock issued to the
Shareholders on the date of the Shareholders Agreement. The Board
representation and voting provisions of the Shareholders Agreement will
terminate at the time the Shareholders and their permitted transfers own less
than 25% of the shares of Common Stock issued to the Shareholders on the date
of the Shareholders Agreement, provided that the Shareholders may terminate
these provisions at any time.
<PAGE>
The description of the Shareholders Agreement set forth herein is a
summary thereof, and is qualified in its entirety by reference to the complete
text thereof filed as Exhibit 3 hereto, which is incorporated herein by
reference.
The Shareholders have entered into a Lock-Up Agreement dated as of
June 25, 1996 (the "Lock-Up Agreement") with the representatives of the several
underwriters of the Issuer's initial public offering of Common Stock. Pursuant
to the Lock-Up Agreement, the Shareholders have agreed that, without the prior
written consent of Merrill Lynch & Co. on behalf of the underwriters, the
Shareholders will not offer, sell, contract to sell or otherwise dispose of any
ownership interests owned by the Shareholders on or prior to 180 days from the
effective date of the Lock-Up Agreement. The description of the Lock-Up
Agreement set forth herein is a summary thereof, and is qualified in its
entirety by reference to the complete text thereof filed as Exhibit 4 hereto,
which is incorporated herein by reference.
Except as set forth above, to the best knowledge of the undersigned,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) among the Reporting Persons and between such persons and any person
with respect to any securities of the Issuer, including but not limited to
transfer or loaning of any of the securities of the Issuer, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or withholding of proxies,
or a pledge or contingency the occurrence of which would give another person
voting power over the securities of the Issuer.
<PAGE>
Item 7. Material to be filed as Exhibits.
INDEX OF EXHIBITS
Number Description
- ------ -----------
Exhibit 1 Joint Filing Agreement and Power of Attorney dated as of July 5,
1996, among the Reporting Persons relating to the filing of a joint
statement on Schedule 13D.
Exhibit 2 Option Agreement dated as of October 12, 1995 among Interstate
Hotels Corporation, the Existing Shareholders named therein, BREA
and TBG, as amended by Amendment No. 1 dated as of December 15,
1995 and Amendment No. 2 dated as of March 29, 1996, incorporated
by reference to Exhibits 10.1(a), 10.1(b) and 10.1(c) to the Form
S-1.
Exhibit 3 Contribution Agreement dated as of March 29, 1996 among the
Contributors named therein and Interstate Hotels Corporation,
incorporated by reference to Exhibit 10.3 to the Form S-1.
Exhibit 4 Stockholders Agreement dated as of June 25, 1996 among the
Shareholders, the Issuer and the Fine Family Shareholders.
Exhibit 5 Lock-Up Agreement dated as of June 19, 1996 between the
Shareholders and the representatives of the several underwriters
of the Issuer's initial public offering of Common Stock.
Exhibit 6 Schedule of Other Parties to Lock-Up Agreement.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his or its
knowledge and belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: July 5, 1996
BLACKSTONE REAL ESTATE PARTNERS TWO L.P.
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
BLACKSTONE RE CAPITAL PARTNERS II L.P.
BLACKSTONE REAL ESTATE PARTNERS I L.P.
BLACKSTONE REAL ESTATE PARTNERS III L.P.
BLACKSTONE RE CAPITAL PARTNERS L.P.
BLACKSTONE RE OFFSHORE CAPITAL PARTNERS L.P.
By: Blackstone Real Estate Associates L.P.,
general partner
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BRE/INTERSTONE L.L.C.
By: Blackstone Real Estate Partners I L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
<PAGE>
BLACKSTONE REAL ESTATE ASSOCIATES L.P.
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BLACKSTONE REAL ESTATE HOLDINGS L.P.
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BREA L.L.C.
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
/s/ Peter G. Peterson
----------------------------------
Peter G. Peterson
/s/ Stephen A. Schwarzman
----------------------------------
Stephen A. Schwarzman
/s/ John G. Schreiber
----------------------------------
John G. Schreiber
Exhibit 1 to
Schedule 13D
------------
JOINT FILING AGREEMENT AND POWER OF ATTORNEY
--------------------------------------------
We, the signatories of the statement on Schedule 13D to which
this Agreement is attached, hereby agree that such statement is, and any
amendments thereto filed by any of us will be, filed on behalf of each of us.
Each of us hereby constitutes and appoints each of Peter G. Peterson, Stephen
A. Schwarzman, Gary M. Sumers and Thomas J. Saylak as our true and lawful
agent and attorney-in-fact, with full power of substitution and resubstitution,
to prepare, execute and file any such amendments, and any other documents which
any such attorney-in-fact may consider advisable in connection with the
transactions described in this statement on Schedule 13D, on our behalf, and
hereby ratifies any such action by such agent and attorney-in-fact.
Dated as of
July 5, 1996
BLACKSTONE REAL ESTATE PARTNERS TWO L.P.
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
BLACKSTONE RE CAPITAL PARTNERS II L.P.
BLACKSTONE REAL ESTATE PARTNERS I L.P.
BLACKSTONE REAL ESTATE PARTNERS III L.P.
BLACKSTONE RE CAPITAL PARTNERS L.P.
BLACKSTONE RE OFFSHORE CAPITAL
PARTNERS L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
<PAGE>
BRE/INTERSTONE L.L.C.
By: Blackstone Real Estate Partners I L.P.
By: Blackstone Real Estate
Associates L.P.,
general partner
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BLACKSTONE REAL ESTATE ASSOCIATES L.P.
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BLACKSTONE REAL ESTATE HOLDINGS L.P.
By: BREA L.L.C., general partner
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
BREA L.L.C.
By: /s/ Peter G. Peterson
Name: Peter G. Peterson
Title: Member
/s/ Peter G. Peterson
Peter G. Peterson
/s/ Stephen A. Schwarzman
Stephen A. Schwarzman
/s/ John G. Schreiber
John G. Schreiber
Exhibit 4 to
Schedule 13D
------------
=====================================================================
STOCKHOLDERS AGREEMENT
among
THE STOCKHOLDERS NAMED HEREIN
and
INTERSTATE HOTELS COMPANY
Dated as of June 25, 1996
=====================================================================
<PAGE>
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of June
25, 1996, among BLACKSTONE REAL ESTATE PARTNERS II L.P. ("BREPII"), BLACKSTONE
REAL ESTATE PARTNERS IV L.P. ("BREPIV"), BLACKSTONE RE CAPITAL PARTNERS II L.P.
("BRECPII"), each a Delaware limited partnership, BRE/INTERSTONE L.L.C., a
Delaware limited liability company ("BRE"; BRE, BREPII, BREPIV and BRECPII,
collectively, the "Blackstone Entities"), INTERSTATE HOTELS COMPANY, a
Pennsylvania corporation (the "Company"), and the stockholders of the Company
(other than the Blackstone Entities) identified on the signature pages hereof
(the "Fine Family Stockholders").
Background
WHEREAS, Blackstone Real Estate Advisors L.P. ("BREA"),
Interstate Hotels Corporation ("IHC"), and certain other persons are parties to
the Option Agreement, dated as of October 12, 1995 (as amended by Amendment No.
1, dated December 15, 1995, and Amendment No. 2, dated as of March 29, 1996,
the "Option Agreement");
WHEREAS, IHC is a party to a Contribution Agreement, dated as
of March 29, 1996 (the "Contribution Agreement"), with the contributors
referred to therein, including certain affiliates of BREA;
WHEREAS, in accordance with the Contribution Agreement and/or
the Option Agreement, the Company has delivered to the Blackstone Entities,
shares of the Common Stock (as defined below); and
WHEREAS, the parties hereto wish to set forth certain rights
and obligations with respect to the Common Stock owned by such parties (other
than the Company) and the governance and operations of the Company.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the following meanings, whether used in the singular or the
plural:
"Affiliate" means, with respect to any person, any other
person that directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such
first person.
"Blackstone" means The Blackstone Group L.P., a Delaware
limited partnership.
"Charter Documents" means the articles of incorporation and
bylaws (or other constituent documents) of the Company.
"Common Stock" means the common stock, par value $.01 per
share, of the Company and any other shares, units or other equity
interests into which such common stock may be converted or exchanged
in any acquisition, merger, consolidation, reorganization,
reclassification or similar transaction.
<PAGE>
"Control" means, with respect to any person, the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of such person, whether through the
ownership of voting securities, by contract or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fine Family Stockholders Representative" means Milton Fine or
other Individual Fine Family Member designated by the Fine Family
Stockholders.
"Individual Fine Family Member" means: (i) each of Milton Fine,
David J. Fine, Sybil Fine King and Carolyn Fine Friedman and (ii) each
spouse, child (natural or adopted), grandchild or parent of the
individuals referred to in clause (i); provided, however, no
individual who is less than 21 years of age shall be an Individual
Fine Family Member.
"Permitted Transferee" means: (i) with respect to any Fine
Family Stockholder, (1) any Individual Fine Family Member, (2) any
trust, the beneficiaries of which include only Individual Fine Family
Members and/or any individual who would, but for the proviso to clause
(ii) of the definition of Individual Fine Family Member, be an
Individual Fine Family Member, (3) any corporation or partnership
controlled by any Fine Family Stockholder or any Individual Fine
Family Member, so long as a majority of the economic and voting
interests of such corporation or partnership are owned by Fine Family
Stockholders, Individual Fine Family Members and/or trusts referred to
in clause (2) above and (4) any director, officer or employee of the
Company or its subsidiaries; and (ii) with respect to any Blackstone
Entity, (1) any corporation, partnership or other entity which is an
Affiliate of Blackstone ("Blackstone Affiliate"), (2) any managing
director, general partner, or limited partner, director, officer or
employee of Blackstone or any Blackstone Affiliate ("Blackstone
Associate"), (3) the heirs, executors, administrators, testamentary
trustees, legatees or beneficiaries of any Blackstone Associate, or
(4) any trust, the beneficiaries of which, or corporation or
partnership, the stockholders or general or limited partners of which,
include only Blackstone, Blackstone Affiliates, Blackstone Associates,
their spouses or their lineal descendants.
"person" means any individual, partnership, joint venture,
limited liability company, corporation or other entity, trust,
unincorporated organization or government or department or agency
thereof.
"Public Sale" means any underwritten public distribution
pursuant to a registered public offering under the Securities Act or
any sale pursuant to Rule 144 (if available) or Rule 144A under the
Securities Act (or any similar rule then in force).
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
<PAGE>
"Securities and Exchange Commission" means the Securities and
Exchange Commission and includes any federal governmental body or
agency succeeding to the functions thereof.
"Subsidiary" means, with respect to any person, any
corporation, limited liability company, partnership, joint venture,
trust or estate of which (or in which) more than 50% of: (a) the
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective
of whether or not at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency); (b) the interest in the capital or
profits of such partnership, limited liability company or joint
venture; or (c) the beneficial interest of such trust or estate, is at
the time directly or indirectly (through one or more other
Subsidiaries of such person) owned by such person.
"Transfer" of any shares of Common Stock, means any sale,
transfer, assignment, or other disposition of such shares or any
interest therein for value (but excluding bona-fide pledges and any
transfer upon foreclosure thereof and any transfer by gift or devise),
directly or indirectly (including a transfer by any person of the
capital stock or other interest in a Subsidiary of such person which
is the direct or indirect holder of shares of Common Stock).
2. Tag Along Right.
(a) No Fine Family Stockholder shall Transfer any shares of
Common Stock other than in compliance with this Section 2. Any such attempted
Transfer not in compliance herewith shall be null and void, ab initio, and the
Company shall not give effect to any such attempted Transfer in the stock
transfer ledgers of the Company.
(b) At least 20 days prior to any Transfer by any Fine Family
Stockholder of any shares of Common Stock, such Fine Family Stockholder
proposing to make such Transfer (the "Transferring Fine Family Stockholder")
shall deliver a notice (a "Tag Along Notice") to BREA specifying the identity
of the prospective Transferee(s) and disclosing in reasonable detail the price
and other terms and conditions of the proposed Transfer, and offering to permit
each of the Blackstone Entities to Transfer their shares of Common Stock as
part of such proposed Transfer as provided herein. BREA may on behalf of each
of such Blackstone Entities elect to participate in the proposed Transfer by
delivering written notice of such election to the Transferring Fine Family
Stockholder prior to the expiration of the 20-day period commencing on the date
of receipt by BREA of the Tag Along Notice.
(c) If BREA elects on behalf of the Blackstone Entities to
participate in a Transfer in accordance with this Section 2, each Blackstone
Entity on whose behalf such election has been made will be entitled to sell in
such proposed Transfer, at the same price and on the same terms as the
Transferring Fine Family Stockholder, that number of shares of Common Stock
which is equal to the product of (1) the quotient determined by dividing the
number of the outstanding shares of Common Stock then held by such Blackstone
Entity by the total number of shares of outstanding Common Stock then held by
the Transferring Fine Family Stockholder and such Blackstone Entity and (2) the
total number of shares of Common Stock to be sold in such proposed Transfer.
<PAGE>
(d) The provisions of this Section 2 shall not apply to
Transfers by any Fine Family Stockholder: (i) of Common Stock pursuant to a
Public Sale involving a public offering registered under the Securities Act;
(ii) to a Permitted Transferee of such Fine Family Stockholder (provided that,
in the case of this clause (ii), such Permitted Transferee has agreed in
writing to be bound by the terms and conditions of this Agreement, in form and
substance reasonably satisfactory to BREA, to the same extent and in the same
manner applicable to the Fine Family Stockholder Transferring such shares; and
(iii) to any person (other than persons who or which fall within the definition
of "Permitted Transferee" with respect to such Fine Family Stockholder);
provided that the aggregate number of shares of Common Stock transferred by all
Fine Family Stockholders and their Permitted Transferees in reliance on the
foregoing clause (iii) shall not exceed 238,095 shares (as adjusted from time
to time following the date hereof to give effect to any stock splits,
combinations and other similar events following the date hereof).
3. Board Representation. (a) The Fine Family Stockholders
shall vote all their shares of Common Stock, at any regular or special meeting
of the stockholders of the Company called for the purpose of filling positions
on the Board of Directors of the Company, or, to the extent permitted by the
Charter Documents, in any written consent executed in lieu of such a meeting of
stockholders, and shall take all actions necessary, to ensure that the Board of
Directors of the Company (the "Board of Directors") shall include at least one
individual selected by BREA, for and on behalf of the Blackstone Entities and
their Permitted Transferees (the "BREA Nominee"), such individual to be
reasonably acceptable to the Company (it being agreed that any individual
employed by Blackstone at the level of senior managing director or higher is
acceptable to the Company.)
(b) If, prior to his or her election to the Board of
Directors pursuant to Section 3(a), the BREA Nominee shall be unable or
unwilling to serve as a director of the Company, BREA shall be entitled to
nominate a replacement who shall then be the BREA Nominee for purposes of this
Section 3. If, following election to the Board of Directors pursuant to
Section 3(a), the BREA Nominee shall resign, or be removed, or be unable to
serve for any reason prior to the expiration of his or her term as a director
of the Company, BREA, for and on behalf of the Blackstone Entities and their
Permitted Transferees, shall within 30 days of such event, notify the Board of
Directors in writing of a replacement BREA Nominee, and the Fine Family
Stockholders shall vote all their shares of Common Stock, at any regular or
special meeting called for the purpose of filling positions on the Board of
Directors, or, to the extent permitted by the Charter Documents, in any
written consent executed in lieu of such a meeting of stockholders, and shall
take all actions necessary, to ensure the prompt election to the Board of
Directors of such replacement BREA Nominee to fill the unexpired term of the
BREA Nominee whom such new BREA Nominee is replacing.
(c) Each of the Company and each Fine Family Stockholder
agrees that it shall not take any direct or indirect action to remove any BREA
Nominee without cause.
(d) If and for so long as an executive committee (or other
comparable committee) of the Board of Directors exists, the BREA Nominee shall,
at BREA's option, be a member of such committee.
(e) Each Blackstone Entity shall vote all its shares of
Common Stock, at any regular or special meeting of the stockholders of the
Company called for the purpose of filling positions on the Board of Directors,
<PAGE>
or, to The extent permitted by the Charter Documents, in any written consent
executed in lieu of such a meeting of stockholders, for the election of the
director-candidates nominated by the Board of Directors.
(f) BREA, for and on behalf of the Blackstone Entities and
their Permitted Transferees, shall have the option, upon written notice to the
Company, to terminate the provisions of this Section 3.
(g) The Charter Documents shall contain provisions:
(i) specifying that directors may not be removed without cause; and (ii) (1)
limiting the liability of the directors of the Company and (2) requiring
indemnification by the Company for such directors, all to the fullest extent
permitted by law.
(h) In order to effectuate the provisions of this Agreement,
each of the Blackstone Entities and the Fine Family Stockholders hereby agrees
that when any action or vote is required to be taken by such person pursuant to
this Agreement, such person shall use such person's best efforts to call, or
cause the appropriate officers and directors of the Company to call, a special
or annual meeting of stockholders of the Company, as the case may be, or, to
the extent permitted by the Charter Documents, execute or cause to be executed
a consent in writing in lieu of any such meetings.
(i) The Company shall take appropriate action so that the
policies of the Board of Directors shall require that any transaction between
the Company (or its Subsidiaries) with any Affiliate of the Company (other than
wholly owned Subsidiaries of the Company) be approved in advance by affirmative
action of a majority of the disinterested directors of the Company.
4. Conformity of Charter Documents to Agreement. Each
Blackstone Entity and each of the Fine Family Stockholders shall vote all
shares of Common Stock owned or Controlled by such person, at any regular or
special meeting of stockholders of the Company or, to the extent permitted by
the Charter Documents, in any written consent executed in lieu of such a
meeting of stockholders, and shall take all actions necessary, to ensure that
the Charter Documents do not, at any time, conflict with the provisions of this
Agreement.
5. ROFO.
(a) Each Blackstone Entity agrees that it shall not Transfer
any shares of Common Stock other than in compliance with this Section 5. Any
such attempted Transfer not in compliance herewith shall be null and void, ab
initio, and the Company shall not give effect to any such attempted Transfer in
the stock transfer ledgers of the Company.
(b) If any Blackstone Entity proposes to Transfer any
shares of Common Stock, BREA shall given written notice (the "First Offer
Notice") of such proposal to the Fine Family Stockholders Representative at
least 5 days in advance thereof, setting forth the number of shares which such
Blackstone Entity desires to Transfer (the "First Offer Shares"). The Fine
Family Stockholders Representative, on behalf of the Fine Family Stockholders,
may at any time within 5 days after delivery by BREA of the First Offer Notice
(the "First Offer Period") submit to BREA a written offer to purchase (a
"Purchase Offer") all (but not less than all) of the First Offer Shares covered
by such First Offer Notice at a per share cash price specified by the Fine
<PAGE>
Family Stockholders Representative in the Purchase Offer. The Purchase Offer
shall specify which of the Fine Family Stockholders shall, if such Purchase
Offer is accepted by BREA, purchase the First Offer Shares (including the
number of First Offer Shares to be purchased by each of such Fine Family
Stockholders). The Fine Family Stockholders shall be under no obligation to
submit a Purchase Offer, and BREA shall not be obligated to accept any Purchase
Offer. Upon BREA's acceptance of any Purchase Offer in writing, such Purchase
Offer shall be irrevocable, and the parties shall thereafter promptly (and in
any event within 10 days of the date of such written acceptance) close the
purchase and sale of the First Offer Shares covered by the Purchase Offer. At
such closing, BREA shall (or shall cause the transferring Blackstone Entity to)
deliver the First Offer Shares to the Fine Family Stockholders on whose behalf
the Fine Family Stockholders Representative delivered the Purchase Offer
against a cash payment therefor in full by wire transfer of immediately
available funds to such account or accounts as may be designated by BREA. Such
closing shall take place at such place as the Fine Family Stockholders
Representative and BREA shall mutually agree.
(c) If no Purchase Offer is received by BREA within the
First Offer Period, or if BREA rejects or otherwise declines to accept a
Purchase Offer received by BREA within the First Offer Period, the Blackstone
Entity shall be entitled, for a period of 120 days following the date of
delivery of the First Offer Notice (the "Free Transfer Period"), to Transfer
all (but not less than all, excluding shares covered by a First Offer Notice
which are Transferred during the Free Transfer Period in reliance on the
provisions of Section 5(d) below) of the First Offer Shares on such terms as it
may be willing to accept; provided that, if a Purchase Offer has been submitted
to BREA within the First Offer Period, no Transfer may be made during the Free
Transfer Period at a per share cash price less than the per share price
specified in the Purchase Offer.
(d) The provisions of this Section 5 shall not apply to
Transfers by any of the Blackstone Entities (including Transfers of First Offer
Shares during the Free Transfer Period) (i) of Common Stock pursuant to a
Public Sale (1) involving a public offering registered under the Securities Act
or (2) consistent with the "manner of sale" requirements specified in Rule
144(f) under the Securities Act; or (ii) to a Permitted Transferee of such
Blackstone Entity; provided that, in the case of clause (ii), such Permitted
Transferee has agreed in writing to be bound by the terms and conditions of
this Agreement, in form and substance reasonably satisfactory to the Company,
to the same extent and in the same manner applicable to such Blackstone Entity.
6. Initial Lock-up Period. [Intentionally left blank]
7. Registration Rights. (a) If at any time after the date
hereof the Company intends to file with the Securities and Exchange Commission
a registration statement on any registration form of the Securities and
Exchange Commission (other than Form S-8 or S-4) covering the sale of shares of
Common Stock for cash in a public offering by the Company or any of its
stockholders, the Company shall notify BREA of its intention to file that
registration statement at least 30 days prior to the filing thereof. The
notice shall state the total number of shares of Common Stock proposed to be
registered thereby. If BREA notifies the Company within 10 days after receipt
of such notice from the Company of the desire of any or all of the Blackstone
Entities to have included in that registration statement any of their shares of
Common Stock, then, subject to Section 7(e), the Company shall include those
shares in that registration statement ("Company Registration"). Neither the
<PAGE>
delivery of a notice under this Section 7(a) nor a request by BREA under this
Section 7(a) shall in any way, obligate the Company to file any registration
statement and notwithstanding the filing of such a registration statement, the
Company may, at any time before the effective date thereof, elect to terminate
the entire registration process without any further obligation to BREA or the
Blackstone Entities with respect thereto. A registration request pursuant to
this Section 7(a) shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective for such
period as is described in Section 7(c), (ii) if after it has become effective
such registration is interfered with by any stop order, injunction or other
order or requirement of the Securities and Exchange Commission or other
governmental authority and (iii) unless the amount of shares offered and sold
by the Company as part of such underwritten public offering shall have created
an active trading market for such shares immediately following such offering in
the reasonable judgment of the managing underwriter or underwriters in respect
of such offering. If the registration demanded pursuant to this Section 7(a)
shall not have been deemed to be so effected, BREA shall be entitled to
exercise registration rights as provided herein until the registration demanded
pursuant to this Section 7(a) shall be deemed to be so effected.
(b) BREA may on behalf of any or all of the Blackstone
Entities, subject to the terms and conditions contained in this Section 7,
exercise the demand registration rights contained in this Section 7(b) at any
time and from time to time, subject to the 180-day "lock-up" agreement entered
into by the Blackstone Entities in connection with this Agreement. BREA may
exercise the demand registration rights contained in this Section 7(b) for up
to three Demand Registrations (as defined below). BREA shall have the right to
make a demand on the Company to effect the registration (a "Demand
Registration") for an underwritten public offering involving a secondary
offering of all or a portion of the shares of Common Stock held by the
Blackstone Entities on Form S-1 (or other form available for registration of
sales of securities for cash). BREA shall notify the Company of its desire to
exercise each Demand Registration by delivering to the Company written notice
(a "Demand Notice") specifying the number of shares of Common Stock which BREA
desires to be included in the Demand Registration. Upon receipt of the Demand
Notice, the Company shall promptly give written notice of the Demand
Registration to all holders of shares of Common Stock, if any, that are
entitled to have such shares included in such registration (the "Other
Holders") and otherwise comply with the registration procedures contained
herein. Each of the Other Holders may elect to participate in the Demand
Registration by giving the Company written notice of such Other Holder's
election to include its shares of Common Stock in the Demand Registration
within 15 days from the date on which the notice to Other Holders is given by
the Company, which notice shall specify the number of shares of Common Stock
which such Other Holder desires to be included in the Demand Registration. A
registration demanded pursuant to this Section 7(b) shall not be deemed to have
been effected (i) unless a registration statement with respect thereto has
become effective for such period as is described in Section 7(c) and (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Securities and Exchange
Commission or other governmental authority. If the registration demanded
pursuant to this Section 7(b) shall not have been deemed to be so effected,
such registration shall not be counted against the number of Demand
Registrations permitted by this Section 7(b).
(c) Upon the Company's receipt of a Demand Notice and the
responses from Other Holders (or the expiration of the 15-day period referred
<PAGE>
to above), the Company shall prepare and file with the Securities and Exchange
Commission, as soon as practicable but no longer than 60 days from the date of
the Company's receipt of the Demand Notice, a registration statement covering
the shares of Common Stock requested to be included in the Demand Registration
by BREA and the Other Holders, and shall use its best efforts to cause such
registration statement to become effective as expeditiously as possible. The
Company shall in no event be required to maintain the effectiveness under the
Securities Act of any registration statement relating to a Demand Registration
for more than 15 months following the date such registration statement became
effective. In connection with the Demand Notice and the filing of such
registration statement, the Company will:
(i) Prepare and file with the Securities and Exchange
Commission such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to
keep such registration statement effective for such period as may be
reasonably necessary to effect the sale of such securities.
(ii) Cause all securities covered by such registration
statement to be listed on each securities exchange, if any, on which
securities of such class, if any, are then listed if requested by
BREA.
(iii) Cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc. (the
"NASD") and the performance of any due diligence investigation by the
underwriters (including any "qualified independent underwriter" that
is required to be retained in accordance with the rules and
regulations of the NASD).
(iv) Use its best efforts to register or qualify the
securities covered by such registration statement for sale under such
other securities or blue sky laws of such jurisdictions as the holders
of the securities covered thereby (hereinafter in this Section
referred to as "such holders") participating in such registration may
reasonably request and do any and all other acts and things which may
be reasonably necessary or desirable to enable such holders to
consummate the disposition in such jurisdictions of the securities
covered thereby owned by such holders.
(v) Furnish to such holders participating in such
registration and to the underwriters of the securities being
registered a reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus, and such other
documents as such holders or underwriters may reasonably request in
order to facilitate the public offering of such securities.
(vi) Notify such holders participating in such
registration, promptly after it shall receive notice thereof, of the
time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration
statement has been filed.
(vii) Notify such holders promptly of any request by the
Securities and Exchange Commission for the amending or supplementing
of such registration statement or prospectus or for additional
information.
<PAGE>
(viii) Prepare and file with the Securities and Exchange
Commission, promptly upon the request of any such holders, any
amendments or supplements to such registration statement or prospectus
which, in the opinion of special counsel for such holders (and
concurred in by counsel for the Company), is required under the
Securities Act or the rules and regulations thereunder in connection
with the distribution of the securities by such holder.
(ix) Prepare and promptly file with the Securities and
Exchange Commission and promptly notify such holders of the filing of
such amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or omissions
if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statement therein, in the light of the circumstances in which they
were made, not misleading.
(x) Advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order
by the Securities and Exchange Commission suspending the effectiveness
of such registration statement or the initiation or threatening of any
proceeding for the purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued.
(xi) As soon as practicable and in no event less than one
day prior to the filing of any amendment or supplement to such
registration statement or prospectus, furnish copies thereof to such
holders and refrain from filing any such amendment or supplement to
which a majority in interest of such holders shall have reasonably
objected on the grounds that such amendment or supplement does not
comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder, unless in the
opinion of counsel for the Company the filing of such amendment or
supplement is reasonably necessary to protect the Company from any
liabilities under any applicable federal or state law and such filing
will not violate applicable law.
(xii) Allow the managing underwriter (and its counsel) to
conduct "due diligence" investigations of the Company and participate
in the preparation of the registration statement, and at the request
of any such holder, enter into an underwriting agreement containing
customary terms, conditions and furnish on the date or dates provided
for in the underwriting agreement: (i) an opinion of counsel
satisfactory to such holder, addressed to the underwriters and to such
holder or holders making such request, opining as to such matters as
such underwriters and holder or holders may reasonably request; and
(ii) a letter or letters from the independent certified public
accountants of the Company, addressed to the underwriter and to such
holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request, in which
letters such accountants shall state (without limiting the generality
of the foregoing) that they are independent certified public
accountants within the meaning of the Securities Act and that in the
<PAGE>
opinion of such accountants the financial statements and other
financial data of the Company included in the registration statement
or any amendment or supplement thereto comply in all material respects
with the applicable accounting requirements of the Securities Act.
(d) The obligations of the Company under Section 7(b) to
comply with requests for Demand Registrations are subject to the following
limitations:
(i) The Company shall be entitled to postpone up to 60
days in any twelve month period the filing of any registration
statement otherwise required to be prepared and filed by it pursuant
to Section 7(b) if, at the time it receives a Demand Notice, the
Company determines, in its reasonable and good faith judgment, that
such registration and sale would materially interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Subsidiaries and
promptly gives BREA written notice of such determination. If the
Company shall so postpone the filing of a registration statement,
the Demand Notice received by the Company shall not be counted for
purposes of determining the number of Demand Registrations to which
BREA is entitled pursuant to this Section 7.
(ii) Any Demand Notice shall be for the registration of
shares of Common Stock representing at least 25% of the total number
of shares of Common Stock issued to the Blackstone Entities on the
date of this Agreement or, if less, all shares of Common Stock owned
by the Blackstone Entities and their Permitted Transferees.
(iii) In the event of a Demand Registration, sales shall be
made through a managing underwriter or underwriters mutually selected
by BREA and the Company.
(e) Notwithstanding the provisions of Section 7(a) and 7(b):
(i) in the event of any Company Registration in which the managing
underwriter(s) notify the Company that the aggregate amount of securities of
the Company proposed to be offered by the Company, the Blackstone Entities and
Other Holders would adversely affect the ability to effect such offering, then
the number of shares of Common Stock proposed to be offered by the Blackstone
Entities and any Other Holders shall be reduced (if need be to zero) to the
aggregate amount determined by the managing-underwriter(s) that can be offered
without adversely affecting the ability to effect such offering, such
reductions to be made pro rata among BREA and such Other Holders in accordance
with the number of shares of Common Stock proposed to be offered by each such
offeror; and (ii) in the event of any Demand Registration in which the managing
underwriter(s) notify the Company that the aggregate amount of securities of
the Company proposed to be offered by the Company, the Blackstone Entities and
any Other Holders would adversely affect the ability to effect such offering,
then the number of shares of Common Stock proposed to be offered by the
Blackstone Entities shall first be included in such registration; then the
shares of Common Stock, if any, proposed to be included in such registration by
the Company and any Other Holders shall be reduced (if need be to zero) to the
aggregate amount determined by the managing-underwriter(s) that can be offered
without adversely affecting the ability to effect such offering, such
reductions to be made pro rata in accordance with the number of shares of
Common Stock proposed to be offered by each such offeror.
<PAGE>
8. Registration Expenses. To the extent permitted by
applicable law, the Company shall pay all expenses in connection with any
Company Registration or Demand Registration, including, without limitation, (a)
all expenses incident to filing with the NASD, (b) registration fees, (c)
printing expenses, (d) accounting and legal fees and expenses of one accounting
firm and one law firm to represent all selling stockholders (selected by BREA,
in the case of any Demand Registration, and reasonably acceptable to BREA, in
the case of any Company Registration), (e) expenses of any special audits
incident to or required by any such registration or qualification, (f) premiums
for insurance in such amount, if any, deemed appropriate by the managing
underwriter, and (g) expenses of complying with the securities or blue sky laws
of any jurisdictions in connection with such registration or qualification;
provided, however, the Company shall not be liable for (1) any discounts or
commissions to any underwriter attributable to shares of Common Stock being
sold by any selling stockholder, (2) any stock transfer taxes incurred in
respect of the shares of Common Stock being sold by any selling stockholder, or
(3) the legal fees of any selling stockholder (other than as set forth in
clause 8(d) above).
9. Blue Sky Laws. In any registration under Sections 7(a)
and 7(b), the Company shall use its best efforts to register, qualify, or
effect an exemption with respect to the shares of Common Stock of the
Blackstone Entities under the "blue sky" laws of such states as may be
reasonably requested by BREA or the managing underwriter(s); provided, however,
that the Company shall not be required to qualify to do business or to file a
general consent to service of process in any such jurisdictions.
10. Indemnification. In connection with any registration
pursuant to Section 7:
(a) The Company hereby agrees to indemnify and hold harmless,
to the fullest extent permitted by law, BREA, and each of its partners,
officers, employees and agents, and any Affiliates (as defined in the
Securities Act) of BREA and each person who controls BREA (within the
meaning of the Securities Act or the Exchange Act), against any losses,
costs, expenses, claims, damages, liabilities, actions or judgments,
including reasonable attorneys' fees and disbursements (collectively,
"Damages"), joint or several, to which any of them may become subject
under the Securities Act or otherwise, insofar as such Damages arise
out of or are based upon any untrue or alleged untrue statement of a
material fact contained in a registration statement filed with the
Securities and Exchange Commission by the Company, or preliminary or
final prospectus contained therein, 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 in order to make the statements made therein not
misleading; and will reimburse BREA, and its respective partners,
officers, employees and agents, and any Affiliates or control persons,
for any legal or other expenses incurred by it or any of them in
connection with investigating or defending against any such Damages;
except that the Company will not be liable in any such case to BREA or
any other person or entity to the extent that any Damages arise out of
or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in a registration statement, or
preliminary or final prospectus contained therein, or any amendment or
supplement thereto, in reliance upon and in conformity with written
<PAGE>
information furnished by or on behalf of BREA specifically for use
therein.
(b) BREA agrees to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, each of its directors,
officers, employees, agents, and any Affiliates (as defined in the
Securities Act) of the Company and each person who controls the
Company (within the meaning of the Securities Act or the Exchange
Act), against any Damages, joint or several, to which any of them
may become subject under the Securities Act or otherwise, insofar as
such Damages arise out of or are based upon any untrue or alleged
untrue statement of a material fact contained in a registration
statement filed with the Securities and Exchange Commission by the
Company, or preliminary or final prospectus contained therein 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 to make the statements
therein not misleading, if such untrue or alleged untrue statement or
omission or alleged omission is made in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of BREA, specifically for use therein, and will reimburse the
Company, its directors, officers, agents, and Affiliates or control
persons, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Damages.
(c) Any person entitled to indemnification hereunder
shall give prompt notice to the indemnifying person of any claim with
respect to which it shall seek indemnification and shall permit such
indemnifying person to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified person; provided, that any
person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such
claim, but the fees and expenses of such counsel shall be at the
expense of such person unless (i) the indemnifying person shall have
agreed to pay such fees or expenses, or (ii) the indemnifying person
shall have failed to assume the defense of such claim and employ
counsel reasonably satisfactory to such person, or (iii) in the
opinion of outside counsel to such person there may be one or more
legal defenses available to such person which are different from or in
addition to those available to the indemnifying person with respect to
such claims (in which case, if the person notifies the indemnifying
person in writing that such person elects to employ separate counsel
at the expense of the indemnifying person, the indemnifying person
shall not have the right to assume the defense of such claim on
behalf of such person). If such defense is not assumed by the
indemnifying person, the indemnifying person shall not be subject to
any liability for any settlement made without its consent (but such
consent shall not be unreasonably withheld). No indemnified person
shall be required to consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified person of
a written release in form and substance reasonably satisfactory to
such indemnified person from all liability in respect of such claim or
litigation. An indemnifying person who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay
the fees and expenses of more than one firm of counsel (and, if
necessary, local counsel) for all persons indemnified by such
<PAGE>
indemnifying person with respect to such claim, unless in the written
opinion of outside counsel to an indemnified person a conflict of
interest as to the subject matter exists between such indemnified
person and another indemnified person with respect to such claim, in
which event the indemnifying person shall be obligated to pay the fees
and expenses of additional counsel for such indemnified person.
(d) If for any reason the indemnification
provided for herein is unavailable to an indemnified person or is
insufficient to hold it harmless as contemplated hereby, then the
indemnifying person shall contribute to the amount paid or payable
by the indemnified person as a result of such loss, cost, expense,
claim damage, liability, action or judgment in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified person and the indemnifying person, but also the relative
fault of the indemnified person and the indemnifying person, as well
as any other relevant equitable considerations.
11. Lock-Up Provision. Each Blackstone Entity agrees in
connection with any public offering of the Company's securities following the
date hereof that, upon the request of the managing underwriter(s) in the case
of any underwritten public offering, or the Company in the case of a non-
underwritten public offering, it shall not sell or offer to sell any shares of
Common Stock or any other securities of the Company, other than shares of
Common Stock included in the public offering, during the period commencing on
the distribution of a "red herring" prospectus for such offering and ending 90
days following the date of the final prospectus used in such offering, provided
that all Fine Family Stockholders and all officers and managers of the Company
have agreed to the same lockup terms.
12. Participation in Registrations. Each Blackstone Entity
may not participate in any registration of securities of the Company unless
such Blackstone Entity.
(a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Company and reasonably
acceptable to BREA (in the case of any Demand Registration) which are
customary and which are not in direct contradiction of any rights
granted to BREA or the Blackstone Entities under this Agreement; and
(b) completes and executes all questionnaires, powers of
attorney, custodial agreements, indemnities, underwriting agreements
and other documents required under the terms of such underwriting
arrangements which are customary and which are not in direct
contradiction of any rights granted to BREA or the Blackstone Entities
under this Agreement.
13. Request to Deregister. The Company will promptly
deregister any of the shares of the Blackstone Entities initially included in a
registration statement pursuant to Section 7 if BREA should thereafter desire
to withdraw such shares from the proposed offering, provided that (a) the
registration statement has not been declared effective, or (b) if the
registration statement has been declared effective, it is not current under the
requirement of the Securities Act due to the lapse of time or material changes
in the affairs of the Company. Such deregistration by the Company shall in no
way indicate that the Company or its counsel deem that any such shares meet the
requirements for sale under such rule.
<PAGE>
14. Legend on Stock Certificates. Each certificate
evidencing shares of Common Stock will be stamped or otherwise imprinted with a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE STOCKHOLDERS
AGREEMENT, DATED AS OF JUNE 25, 1996, AMONG
INTERSTATE HOTELS COMPANY (THE "COMPANY") AND
CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY
OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT
CHARGE BY THE COMPANY TO THE HOLDER HEREOF
UPON WRITTEN REQUEST.
The Company will imprint such legends on certificates evidencing shares of
Common Stock outstanding prior to the date hereof. The legend set forth in the
paragraph above shall be removed at such time as BREA and its Permitted
Transferees no longer own any Common Stock.
15. BREA as Representative. For the sake of convenience,
notices and other communications required hereunder to be made to the
Blackstone Entities and their Permitted Transferees, and all notices and other
communications required hereunder to be made by the Blackstone Entities and
their Permitted Transferees to the Company and the Fine Family Stockholders,
shall be made through BREA or such other Blackstone Affiliate as may be
designated by BREA.
16. Successors and Assigns; No Third-Party Beneficiaries.
The stipulations, terms, covenants and agreements contained in this Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto
and their respective successors and Permitted Transferees and nothing herein
expressed or implied shall give or be construed to give to any person or
entity, other than the parties hereto and such successors and Permitted
Transferees, any legal or equitable rights hereunder.
17. Assignment. This Agreement may not be assigned by
any party hereto (other than to Permitted Transferees of such party) without
the consent of the other party hereto. Notwithstanding any such assignment,
the assigning party will continue to remain primarily liable under this
Agreement.
18. Notices. All notices, demands or requests made
pursuant to, under or by virtue of this Agreement must be in writing and shall
be (i) personally delivered, (ii) delivered by express mail, Federal Express or
other comparable overnight courier service, (iii) telecopied or (iv) mailed to
the party to which the notice, demand or request is being made by certified or
registered mail, postage prepaid, return receipt requested, as follows:
To BREA or any Blackstone Entity:
c/o Blackstone Real Estate Advisors L.P.
345 Park Avenue
New York, New York 10154
Attention: Mr. Thomas J. Saylak
Facsimile: 212-754-8726
with copies thereof to:
<PAGE>
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Glenn D. Kesselhaut, Esq.
Facsimile: 212-455-2502
To the Company:
Interstate Hotels Corporation
Foster Plaza X
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: Mr. Milton Fine
Facsimile: 412-937-8053
with copies thereof to:
Interstate Hotels Corporation
Foster Plaza X
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: Marvin I. Droz, Esq.
Facsimile: 412-937-3265
and
Jones, Day, Reavis & Pogue
2300 Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: David Lowery, Esq.
Facsimile: 214-969-5100
To the Fine Family Stockholders:
c/o Interstate Hotels Corporation
Foster Plaza X
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: Marvin I. Droz, Esq.
Facsimile: 412-937-3265
All notices (i) shall be deemed to have been given on the date that the same
shall have been delivered in accordance with the provisions of this Section and
(ii) may be given either by a party or by such party's attorneys. Any party
may, from time to time, specify as its address for purposes of this Agreement
any other address upon the giving of 10 days' notice thereof to the other
parties.
19. Entire Agreement. This Agreement contains all of the
terms agreed upon between the parties hereto with respect to the subject matter
hereof, and all understandings and agreements heretofore had or made among the
parties hereto are merged in this Agreement which alone fully and completely
expresses the agreement of the parties hereto.
<PAGE>
20. Term of Agreement; Termination of Certain Sections.
This Agreement shall become effective upon the execution hereof, and Sections 3
and 4 shall terminate at such time as the Blackstone Entities and their
Permitted Transferees own in the aggregate less than 25% of the shares of
Common Stock issued to the Blackstone Entities on the date of this Agreement.
Sections 2, 5 and 7 shall terminate at such time as the Blackstone Entities and
their Permitted Transferees own in the aggregate less than 10% of the shares of
Common Stock issued to the Blackstone Entities on the date of this Agreement.
21. Amendments. This Agreement may not be amended,
modified, supplemented or terminated, nor may any of the obligations of the
Parties hereto be waived, except by written agreement executed by the party or
parties to be charged.
22. No Waiver. No waiver by any party of any failure or
refusal by the other party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or refusal to so comply.
23. Remedies. The Parties hereto will be entitled to
enforce their rights under this Agreement specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision
of this Agreement and to exercise all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages will not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity or
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions of this Agreement.
24. Governing Law. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with, the laws of
the State of Pennsylvania.
25. Submission to Jurisdiction. Each Fine Family
Stockholder, the Company, BREA and each Blackstone Entity irrevocably submits
to the jurisdiction of (a) the Supreme Court of the State of New York, New York
County, (b) the United States District Court for the Southern District of New
York, and (c) the United States District Court for the Western District of
Pennsylvania for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each Fine Family
Stockholder, the Company, BREA and each Blackstone Entity further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in Delaware or Pennsylvania with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Each Fine Family Stockholder, the
Company, BREA and each Blackstone Entity irrevocably and unconditionally waives
trial by jury and irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in (a) the Supreme Court of the State
of New York, New York County, (b) the United States District Court for the
Southern District of New York, and (c) the United States District Court for the
Western District of Pennsylvania, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
<PAGE>
26. Severability. If any term or provision of this
Agreement or the application thereof to any person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
27. Section Headings. The headings of the various
Sections of this Agreement have been inserted only for purposes of convenience,
are not part of this Agreement and shall not be deemed in any manner to modify,
explain, expand or restrict any of the provisions of this Agreement.
28. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
INTERSTATE HOTELS COMPANY
By: /s/ Milton Fine
-----------------
Milton Fine
Chairman
FINE FAMILY STOCKHOLDERS:
/s/ Milton Fine
----------------
Milton Fine
/s/ Milton Fine
----------------------------------
Milton Fine, Trustee Under the
Second Amended and Restated
Revocable Trust dated November 11,
1994 for the benefit of Milton Fine
/s/ David J. Fine
-----------------------------------
David J. Fine, Trustee Under
the Irrevocable Trust dated
December 15, 1989 for the
benefit of Sibyl Fine King
/s/ David J. Fine
-----------------------------------
David J. Fine, Trustee Under
the Irrevocable Trust dated
December 15, 1989 for the benefit
of Carolyn Fine Friedman
/s/ David J. Fine
-----------------------------------
David J. Fine, Trustee Under the
Irrevocable Trust dated
December 15, 1989 for the benefit
of David J. Fine.
<PAGE>
/s/ David J. Fine
-----------------------------------
David J. Fine, Trustee for the
Milton Fine Grantor Annuity Trust
dated March 31, 1996.
BLACKSTONE ENTITIES:
BLACKSTONE REAL ESTATE PARTNERS II L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general
partner
By: /s/ Gary M. Sumers
Name: Gary M. Sumers
Title: Vice President
BLACKSTONE REAL ESTATE PARTNERS IV L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general partner
By: /s/ Gary M. Sumers
Name: Gary M. Sumers
Title: Vice President
BLACKSTONE RE CAPITAL PARTNERS II L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general partner
By: /s/ Gary M. Sumers
Name: Gary M. Sumers
Title: Vice President
BRE/INTERSTONE L.L.C.
By: /s/ Gary M. Sumers
Name:
Title:
Exhibit 5 to
Schedule 13D
------------
June 19, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MONTGOMERY SECURITIES
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
as Representatives of the several U.S. Underwriters
MERRILL LYNCH INTERNATIONAL
CREDIT LYONNAIS SECURITIES
MONTGOMERY SECURITIES
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
SMITH BARNEY INC.
as Representatives of the several International Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Re: Interstate Hotels Company
-------------------------
Ladies and Gentlemen:
The undersigned understands that Interstate Hotels Company
(the "Company") has entered into a U.S. Purchase Agreement (the "U.S. Purchase
Agreement") with Merrill Lynch & Co. ("Merrill Lynch"), Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Montgomery Securities, Morgan Stanley & Co.
Incorporated, Smith Barney Inc. and Credit Lyonnais Securities (USA) Inc., as
representatives of the several underwriters named in Schedule A to the U.S.
Purchase Agreement (the "U.S. Underwriters"), and an International Purchase
Agreement (the "International Purchase Agreement") with Merrill Lynch
International, Credit Lyonnais Securities, Montgomery Securities, Morgan
Stanley & Co. International Limited and Smith Barney Inc., as representatives
of the several underwriters named in Schedule A to the International Purchase
Agreement (the "International Underwriters" and, together with the U.S.
Underwriters, the "Underwriters") providing for the public offering of shares
of the Company's common stock, par value $.01 per share (the "Common Stock").
In recognition of the benefits that such an offering will confer upon the
undersigned and for other good and valuable consideration, the undersigned
hereby agrees with each of the Underwriters that during the period of 180
calendar days, commencing with the date of this letter, the undersigned will
not, directly or indirectly, without the prior written consent of Merrill
Lynch, sell, offer to sell, transfer, grant any option for the sale of, pledge,
enter into any agreement to sell, or otherwise dispose of any shares of Common
Stock (or securities convertible into, exchangeable or exercisable for Common
<PAGE>
Stock) beneficially owned or owned as of record by the undersigned as of the
date hereof or acquired hereafter (other than any shares of Common Stock
purchased in the public offering or in open-market transactions). The
foregoing restrictions will not apply, however, to: (i) transfers to any family
member or affiliate of the undersigned, including any trust established by the
undersigned, provided that the foregoing restrictions apply thereto, (ii)
transfers to the estate or legal guardian of any other holder of shares of
Common Stock, and (iii) pledges to secure bona fide indebtedness or any
foreclosure of such indebtedness.
The undersigned understands that the Company, the Underwriters
and Merrill Lynch will proceed with the offering of Common Stock in reliance
upon this Agreement.
Sincerely,
BLACKSTONE RE CAPITAL PARTNERS II L.P.
By: Blackstone Real Estate
Associates L.P., general partner
By: BREA L.L.C., general partner
By: /s/ Gary M. Sumers
Name: Gary M. Sumers
Title: Vice President
Accepted as of the date hereof:
By: /s/ Michael F. Profenius
Merrill Lynch & Co.
As Representative of the Underwriters
Exhibit 6 to
Schedule 13D
------------
Schedule of Other Parties to the Lock-Up Agreement
--------------------------------------------------
1. Blackstone Real Estate Partners II L.P.
2. Blackstone Real Estate Partners IV L.P.
3. BRE/Interstone L.L.C.
