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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)*
Interstate Hotels Company
-----------------------------
(NAME OF ISSUER)
Common stock, par value $0.01 per share
-------------------------------------------
(TITLE OF CLASS OF SECURITIES)
460886 10 4
---------------
(CUSIP NUMBER)
David J. Fine
Interstate Hotels Company
Foster Plaza 10
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
-----------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
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
schedule 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 [x]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 460886 10 4
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David J. Fine
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP a [ ]
b [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or (e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 SOLE VOTING POWER
6,571,800
NUMBERS OF SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH -0-
REPORTING PERSON
WITH 9 SOLE DISPOSITIVE POWER
6,571,800
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON 6,571,800
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.1%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 460886 10 4
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the
Common Stock, par value $0.01 per share ("Common Stock"), of Interstate Hotels
Company (the "Company"). The principal executive offices of the Company are
located at Foster Plaza 10, 680 Andersen Drive, Pittsburgh, Pennsylvania
15220.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by David J. Fine. Mr. Fine is a citizen
of the United States. His business address is Interstate Hotels Company,
Foster Plaza 10, 680 Andersen Drive, Pittsburgh, Pennsylvania 15220. Mr. Fine
is an attorney.
David J. Fine has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) nor
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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
David J. Fine may be deemed to beneficially own an aggregate of
6,571,800 shares of Common Stock by virtue of his status as trustee of the
Irrevocable Trust dated December 15, 1989 for the benefit of Carolyn Fine
Friedman (which owns of record 1,752,106 shares of Common Stock), the
Irrevocable Trust dated December 15, 1989 for the benefit of Sybil Fine King
(which owns of record 1,752,106 shares of Common Stock), the Irrevocable Trust
dated December 15, 1989 for the benefit of David J. Fine (which owns of record
1,752,106 shares of Common Stock), and the Milton Fine Grantor Annuity Trust
dated March 31, 1996 (which owns of record 1,315,482 shares of Common Stock)
(collectively, the "Trusts"). On June 25, 1996, the Trusts acquired such
shares pursuant to a Formation Agreement among the Company, the Trusts and
certain other parties (the "Formation Agreement") in exchange for the
contribution to the Company of certain interests in entities which owned,
managed or provided services to hotels now owned, managed and/or serviced by
the Company. A copy of the Formation Agreement is attached hereto as EXHIBIT 1
and is incorporated herein by this reference. The Formation Agreement was
entered into in connection with the Company's initial public offering (the
"Company's IPO"). In connection with the Company's IPO, the Trusts entered
into various agreements (the "IPO-Related Agreements"), including a
registration rights and shareholders agreement, a stockholders agreement and an
underwriters' six-month lock-up agreement. Copies of the IPO-Related
Agreements are filed as EXHIBITS 2, 3 and 4 hereto and are incorporated herein
by this reference.
ITEM 4. PURPOSE OF TRANSACTION.
The Trusts acquired the shares described in response to Item 3
pursuant to the Formation Agreement and are holding such shares for investment
purposes. Subject to the IPO-Related Agreements, the Trusts may purchase
additional shares, or sell shares, in the future.
Whether David J. Fine will purchase any additional shares of Common
Stock for his or the Trusts' accounts, or whether Mr. Fine will cause the
Trusts to dispose of any of the shares presently owned by them, will depend
upon Mr. Fine's review of and conclusions regarding various factors, including
without limitation (i) market conditions generally and relating to the Common
Stock in particular, (ii) the attractiveness of alternative investment
opportunities, (iii) developments in the business, financial condition or
results of operations of the Company, and (iv) actions taken or transactions
entered into by the Company.
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CUSIP NO. 460886 10 4
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
David J. Fine beneficially owns 6,571,800 shares of Common Stock,
constituting 24.1% of the outstanding shares of Common Stock. David J. Fine
has sole voting and dispositive power with respect to such shares, but
disclaims beneficial ownership of such shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Copies of the IPO-Related Agreements are filed herewith as EXHIBITS 2,
3 and 4 and are incorporated herein by this reference.
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CUSIP NO. 460886 10 4
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Description
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1 Formation Agreement, dated as of June 25,
1996, among Interstate Hotels Company,
Interstate Hotels Corporation and the
Contributors named therein
2 Registration Rights and Shareholders
Agreement, dated as of June 25, 1996, among
Interstate Hotels Company and the
Shareholders named therein
3 Stockholders Agreement, dated as of June 25,
1996, among Interstate Hotels Company and the
Stockholders named therein
4 Lock-Up Agreements
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CUSIP NO. 460886 10 4
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: July 5, 1996.
/s/ David J. Fine
-------------------------------------
David J. Fine
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EXHIBIT INDEX
Exhibit No. Description Page Number
- - ----------- ----------- -----------
1 Formation Agreement, dated as of June 25, 1996,
among Interstate Hotels Company, Interstate Hotels
Corporation and the Contributors named therein
2 Registration Rights and Shareholders Agreement, dated
as of June 25, 1996, among Interstate Hotels Company
and the Shareholders named therein
3 Stockholders Agreement, dated as of June 25, 1996,
among Interstate Hotels Company and the Stockholders
named therein
4 Lock-Up Agreements
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EXHIBIT 1
================================================================================
FORMATION AGREEMENT
among
INTERSTATE HOTELS COMPANY,
INTERSTATE HOTELS CORPORATION
and
THE CONTRIBUTORS NAMED HEREIN
As of June 25, 1996
================================================================================
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FORMATION AGREEMENT
FORMATION AGREEMENT (this "Agreement"), made as of the 25th
day of June, 1996 by and among each of the Contributors (as defined below),
INTERSTATE HOTELS COMPANY, a Pennsylvania corporation ("Interstate"), and
INTERSTATE HOTELS CORPORATION, a Pennsylvania corporation ("IHC").
BACKGROUND
A. Interstate contemplates the consummation of an
initial public offering of its common stock.
B. The persons listed on SCHEDULE A attached hereto and
made a part hereof (collectively, "Contributors") own interests in the
corporations and partnerships listed opposite their respective names on
Schedule A attached hereto (collectively, the "Assets").
C. The Contributors desire to contribute the Assets to
Interstate in exchange for shares of Interstate's common stock, on the terms
and conditions hereinafter set forth.
D. The Contributors and Interstate intend that the
contribution of the Assets and the issuance of the common stock hereunder, will
be treated as a tax-free transfer within the meaning of Section 351(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
E. Interstate desires to contribute certain of the
Assets to IHC.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties, intending to be legally bound, agree as follows:
1. CONTRIBUTIONS OF ASSETS. On the Closing Date (as
hereinafter defined) and pursuant to the terms and subject to the conditions
set forth in this Agreement, the Contributors shall contribute to Interstate
and Interstate shall accept from the Contributors all of the Contributors'
right, title and interest in and to the Assets, free and clear of any and all
Encumbrances (as hereinafter defined) other than Permitted Exceptions (as
hereinafter defined). Immediately following the foregoing contribution,
Interstate shall contribute the Assets described on SCHEDULE B attached hereto
and made a part hereof to IHC. In addition, on the Closing Date IHC shall
assign its 1% general partner interest (the "GP Interest") in IHC/Pittsburgh
Partnership, L.P., a Delaware limited partnership ("IHC/Pittsburgh") to IHC
Member Corporation, a Delaware
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corporation ("IHC Member"), who shall be admitted as an additional general
partner of IHC/Pittsburgh.
2. CONSIDERATION. In consideration of the contribution
of the Assets by the Contributors, on the Closing Date, Interstate shall
deliver to the Contributors certificates representing shares of the common
stock, par value $.01 per share, of Interstate (the "Stock") with each
Contributor receiving the number of shares of Stock set forth opposite the name
of such Contributor on SCHEDULE A, attached hereto and made a part hereof. The
contribution by Interstate of the Assets described on Schedule B to IHC shall
be treated as a contribution of capital and no additional shares of capital
stock of IHC shall be issued to Interstate. The contribution by IHC of the GP
Interest in IHC/Pittsburgh to IHC Member shall be treated as a contribution of
capital and no additional shares of capital stock of IHC Member shall be issued
to IHC. Interstate, IHC and IHC Member intend that the contribution by
Interstate of the Assets described on Schedule B to IHC and the contribution by
IHC of the GP Interest in IHC/Pittsburgh to IHC Member will be treated as
tax-free transfers within the meaning of Section 351 of the Code.
3. THE CLOSING. (a) The closing of the contribution of
the Assets (the "Closing") shall take place on the date of closing of
Interstate's initial public offering (the "Closing Date"), or such other date
as the parties may mutually determine.
(b) The Closing shall be held on the Closing Date at 9:00
A.M. at the offices of Jones, Day, Reavis & Pogue, 500 Grant Street, One Mellon
Bank Center, Pittsburgh, Pennsylvania 15219, or at such other location agreed
upon by the parties hereto.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
CONTRIBUTORS. Each Contributor hereby represents, warrants and covenants to
Interstate as of the date hereof and as of the Closing Date, as to itself and
its own actions, severally but not jointly, as follows:
4.1 FORMATION; EXISTENCE. Each Contributor that
is a limited liability company, general or limited partnership
or corporation, as applicable, is duly formed, validly
existing and in good standing under the laws of the
jurisdiction of its organization.
4.2 POWER AND AUTHORITY. It has all requisite
power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement and the consummation of the transactions
provided for in this Agreement have been duly authorized by
all necessary action on its part. This Agreement has been
duly executed and delivered by it and constitutes its legal,
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valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights and by
general principles of equity (whether applied in a proceeding
at law or in equity).
4.3 NO CONSENTS. No consent, license, approval,
order, permit or authorization of, or registration, filing or
declaration with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign, or any other persons is required to be
obtained or made in connection with the execution, delivery
and performance of this Agreement or any of the transactions
required or contemplated hereby other than such as have been
made or obtained prior to the date hereof or will be made or
obtained prior to the Closing Date.
4.4 NO CONFLICTS. The execution, delivery and
performance of this Agreement, and the contribution of the
Assets, will not (a) conflict with or result in any violation
of its organization documents, (b) conflict with or result in
any violation of any provision of any bond, note or other
instrument of indebtedness, indenture, mortgage, deed of
trust, loan agreement, lease or other material agreement or
instrument to which it is a party in its individual capacity
or by which its assets are bound, or (c) violate any existing
term or provision of any order, writ, judgment, injunction,
decree, statute, law, rule or regulation applicable to it or
its assets or properties.
4.5 ASSETS. It is the owner and holder of good
and marketable title of a portion of the Assets and such
Assets are held by it free and clear of any lien, pledge,
option, charge, security interest, encumbrance, title
retention agreement, right of first refusal, adverse claim or
restriction (collectively, "Encumbrances") other than the
liens, encumbrances and exceptions set forth on EXHIBIT A
attached hereto and made a part hereof ("Permitted
Exceptions"). Upon contribution of such Assets by it to
Interstate and upon the issuance of the Stock to the
Contributors, Interstate will receive good and marketable
title to such Assets free and clear of any Encumbrances other
than Permitted Exceptions.
4.6 ACTION BY CONTRIBUTORS. (a) It has not
caused any of the entities whose ownership interests comprise
the Assets (i) to sell or otherwise dispose (or enter into a
contract to sell or dispose) of any of their material assets,
(ii) to place a voluntary lien
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on any of their material assets, or (iii) to enter into,
modify or terminate any of their material contracts, material
leases or other material commitments.
(b) From the date hereof through the Closing
Date, it shall not, without the prior approval of Interstate,
cause any such entities (i) to sell or otherwise dispose of
any of their material assets, (ii) to place a voluntary lien
on any of their material assets, or (iii) to enter into,
modify or terminate any material contracts, material leases or
other material commitments, except, in the case of clause
(iii), in the ordinary course of business.
4.7 GOOD FAITH EFFORTS. It shall use its good
faith efforts to consummate the Closing and fulfill each of
its obligations hereunder.
4.8 INVESTMENT REPRESENTATIONS. It (a) has
received no general solicitation or general advertisement
concerning the Stock, (b) is a sophisticated investor that has
prior experience with investments of a similar nature, and has
sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks
of an investment in the Stock, (c) is accepting the Stock for
investment purposes only, for its own account and not with a
view to or in connection with any resale or distribution
thereof, (d) has no reason to anticipate any change in its
circumstances, financial or otherwise, which may cause or
require resale or distribution by it of all or any part of the
Stock, and (e) confirms that all requested information
pertaining to Interstate and the Stock and Interstate's
business operations has been made available to it, and it also
confirms that it has been given an opportunity to make any
further inquiries of Interstate that it desires to make. It
understands and agrees that (i) the Stock will be "restricted
securities" within the meaning of the Securities Act of 1933,
as amended ("Securities Act"), (ii) in the absence of a
registration statement filed in accordance with the Securities
Act and applicable state securities laws, or an exemption from
the registration requirements of such securities laws, such
Stock may not be offered or sold to any person and (iii) each
certificate representing the Stock will bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF
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EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND THE
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION."
5. REPRESENTATIONS WARRANTIES AND COVENANTS OF
INTERSTATE. Interstate hereby represents, warrants and covenants to the
Contributors as of the date hereof and as of the Closing Date as follows:
5.1 FORMATION; EXISTENCE. Interstate is a
corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania.
5.2 POWER; AUTHORITY. Interstate has all
requisite power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement, the acquisition of the Assets
and the consummation of the transactions provided for herein
have been duly authorized by all necessary action on the part
of Interstate. This Agreement has been duly executed and
delivered by Interstate and constitutes the legal, valid and
binding obligation of Interstate enforceable against
Interstate in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights and by general principles of equity (whether applied in
a proceeding at law or in equity).
5.3 NO CONSENTS. No consent, license, approval,
order, permit or authorization of, or registration, filing or
declaration with, any court, administrative agency or
commission or other governmental authority or instrumentality,
domestic or foreign, or any other persons is required to be
obtained or made in connection with the execution, delivery
and performance of this Agreement or any of the transactions
required or contemplated hereby other than such as have been
made or obtained or will be made or obtained prior to the
Closing Date.
5.4 NO CONFLICTS. The execution, delivery and
performance of the terms and provisions of this Agreement, and
the acquisition of the Assets, will not (a) conflict with or
result in any violation of its organizational documents, (b)
conflict with or result in any violation of any provision of
any bond, note or other instrument of indebtedness, indenture,
mortgage, deed of trust, loan agreement, lease or other
material agreement or instrument to which it is a party in its
individual capacity, or (c) violate any existing term
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or provision of any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to it or its
assets or properties.
5.5 EXAMINATION. Before entering into this
Agreement, Interstate has made such examination of the Assets
and all other matters affecting or relating to the
transactions contemplated hereunder as Interstate has deemed
necessary. In entering into this Agreement, Interstate has
not been induced by and has not relied upon any written or
oral representations, warranties or statements, whether
express or implied, made by any Contributor, any partner or
affiliate of any Contributor, or any agent, employee, or other
representative of any of the foregoing or by any broker or any
other person representing or purporting to represent any
Contributor, with respect to the Assets or any other matter
affecting or relating to the transactions contemplated hereby,
other than those expressly set forth in this Agreement.
5.6 GOOD FAITH EFFORTS. Interstate shall use its
good faith efforts to consummate the Closing and fulfill each
of its obligations hereunder.
5.7 CONTRIBUTORS. Although the Contributors have
jointly executed this Agreement for administrative efficiency,
Interstate hereby acknowledges and agrees that each
Contributor shall be liable hereunder only for the
representations, warranties and covenants made by such
Contributor with respect to such Contributor and the Assets
owned by such Contributor, and no Contributor shall be liable
for any representations, warranties or covenants made by any
of the other Contributors hereunder.
5.8 INVESTMENT REPRESENTATIONS. Interstate (a)
has received no general solicitation or general advertisement
concerning the Assets, (b) is a sophisticated investor that
has prior experience with investments of a similar nature, and
has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits
and risks of investment in the Assets, (c) is accepting the
Assets for investment purposes only, for its own account and
not with a view to or in connection with any resale or
distribution thereof, (d) has no reason to anticipate any
change in its circumstances, financial or otherwise, which may
cause or require resale or distribution by it of all or any
part of the Assets, and (e) confirms that all requested
information pertaining to the Assets and their business
operations has been made available to Interstate, and
Interstate also confirms that it has been given an opportunity
to
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make any further inquiries of the Assets and the Contributors
that it desires to make. Interstate understands and agrees
that (i) the Assets will be "restricted securities" within the
meaning of the Securities Act, (ii) in the absence of a
registration statement filed in accordance with the Securities
Act and applicable state securities laws, or an exemption from
the registration requirements of such securities laws, such
Assets may not be offered or sold to any person and (iii) each
certificate representing such Assets will bear the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
REQUIREMENTS OF SUCH ACT AND THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION."
6. CONDITIONS PRECEDENT TO CLOSING.
6.1 CONTRIBUTORS' OBLIGATION. The obligation of
the Contributors to consummate the transfer of the Assets to
Interstate on the Closing Date is subject to the satisfaction
(or waiver by the Contributors) as of the Closing of the
following conditions:
(a) Each of the representations and warranties
made by Interstate in this Agreement shall be true and correct
in all material respects when made and on and as of the
Closing Date as though such representations and warranties
were made on and as of the Closing Date, and Interstate shall
have performed or complied in all material respects with each
obligation and covenant required by this Agreement to be
performed or complied with by Interstate on or before the
Closing.
(b) The Contributors shall have received duly
executed counterparts of each of the following documents,
dated as of the Closing Date:
(i) Assignment and Assumption Agreement
for each of the Assets representing interests in
partnerships;
(ii) amendments to the partnership agreement
(and the execution thereof by Interstate) and any
certificate of limited partnership for each of the
Assets representing partnership interests which
amendments shall reflect the assignment of
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partnership interests and admission of Interstate as
an additional or substitute partner;
(iii) any forms or affidavits required to be
filed with respect to any applicable transfer, stamp,
transfer gains or other similar taxes applicable to
the transfers;
(iv) the Registration Rights Agreement
attached hereto as EXHIBIT B and made a part hereof;
and
(v) such other documents reasonably
required by the Contributors to transfer the Assets
hereunder.
(c) No order or injunction of any court or
administrative agency of competent jurisdiction nor any
statute, rule, regulation or executive order promulgated by
any governmental authority of competent jurisdiction shall be
in effect as of the Closing which restrains or prohibits the
transfer of the applicable Assets or the consummation of any
other transaction contemplated hereby.
(d) No action, suit or other proceeding shall be
pending which shall have been brought by any person or entity
(other than the parties hereto and their affiliates) (i) to
restrain, prohibit or change in any material respect the
contribution and acceptance of the Assets or the consummation
of any other transaction contemplated hereby or (ii) seeking
material damages with respect to such contribution and
acceptance or any other transaction contemplated hereby.
(e) The Contributors shall have received the
Stock of Interstate, in accordance with Section 2 above.
(f) The Contributors shall have obtained all
necessary consents to the transfer of the Assets from any
ground lessors, lenders, franchisors, partners and all other
third parties with approval rights. The Contributors shall
cooperate with Interstate in obtaining any necessary consents
(including reasonably timely execution of any applications or
similar documents).
(g) Interstate shall have paid (or reimbursed the
Contributors, as the case may be) all of the reasonable costs
and expenses incurred by the Contributors and Interstate in
connection with the consummation of the transactions
contemplated hereby, including without limitation any sales,
real estate transfer, stamp,
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recordation, or other similar taxes applicable to or arising
out of the contribution of the Assets.
6.2 INTERSTATE'S OBLIGATION. The obligation of
Interstate to issue the Stock is subject to the satisfaction
(or waiver by Interstate) as of the Closing of the following
conditions:
(a) Each of the representations and warranties
made by the Contributors in this Agreement shall be true and
correct in all material respects when made and on and as of
the Closing Date as though such representations and warranties
were made on and as of Closing Date, and the Contributors
shall have performed or complied in all material respects with
each obligation and covenant required by this Agreement to be
performed or complied with by the Contributors on or before
the Closing.
(b) Interstate shall have received duly executed
counterparts of each of the following documents, dated the
Closing Date:
(i) Assignment and Assumption Agreement
for each of the Assets representing interests in
partnerships;
(ii) amendments to the partnership agreement
and certificate of limited partnership for each of
the Assets representing partnership interests which
amendments shall reflect the assignment of
partnership interests and admission of Interstate as
an additional or substitute partner;
(iii) stock powers reflecting the assignment
of the Assets representing interests in corporations;
(iv) The Stockholders Agreement attached
hereto as EXHIBIT C;
(v) The Registration Rights and
Shareholders Agreement attached hereto as EXHIBIT B
and made a part hereof;
(vi) any forms or affidavits required to
be filed with respect to any applicable transfer,
stamp, transfer gains or other similar taxes
applicable to the transfers; and
(vii) such other documents reasonably
required by Interstate to transfer the Assets
hereunder.
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(c) No order or injunction of any court or
administrative agency of competent jurisdiction nor any
statute, rule, regulation or executive order promulgated by
any governmental authority of competent jurisdiction shall be
in effect as of the Closing which restrains or prohibits the
transfer of the applicable Assets or the consummation of any
other transaction contemplated hereby.
(d) No action, suit or other proceeding shall be
pending which shall have been brought by any person or entity
(other than the parties hereto and their affiliates) (i) to
restrain, prohibit or change in any material respect the
contribution and acceptance of the applicable Assets or the
consummation of any other transaction contemplated hereby or
(ii) seeking material damages with respect to such
contribution and acceptance or any other transaction
contemplated hereby.
7. FURTHER ASSURANCES. From time to time, as
and when requested by any party hereto, the other party shall
execute and deliver, or cause to be executed and delivered,
all such documents and instruments and shall take, or cause to
be taken, all such further or other actions as such other
party may reasonably deem necessary or desirable to consummate
the transactions contemplated by this Agreement.
8. SURVIVAL OF REPRESENTATIONS. The
representations and warranties contained in Section 4.5 of
this Agreement shall survive the Closing without limitation as
to time subject to applicable statutes of limitation. The
remainder of the representations and warranties contained in
this Agreement shall survive the Closing and shall terminate
on the first anniversary of the Closing Date.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY THE CONTRIBUTORS. Each
Contributor shall indemnify and hold Interstate, its
shareholders, officers, directors, employees, agents and
affiliates harmless from and against any and all costs, fees,
expenses, damages, deficiencies, interest and penalties
(including, without limitation, reasonable attorneys' fees and
disbursements) suffered or incurred by any such indemnified
party in connection with any and all losses, liabilities,
claims, damages and expenses ("Losses") arising out of, or in
any way relating to, (i) any breach of any representation or
warranty of such Contributor contained in this Agreement or in
any Schedule, certificate, instrument
- 10 -
<PAGE> 12
or other document delivered pursuant hereto, and (ii) any
breach of any covenant of such Contributor contained in this
Agreement and (iii) any act or omission by such Contributor
arising out of or related to the Assets occurring on or prior
to the Closing, such obligation to survive the Closing subject
to Section 9.3.
9.2 INDEMNIFICATION BY INTERSTATE. Interstate
shall indemnify and hold the Contributors, their partners,
members, shareholders, officers, directors, employees, agents
and affiliates harmless from any and all Losses arising out
of, or in any way relating to, (i) any breach of any
representation or warranty by Interstate contained in this
Agreement or in any Schedule, certificate, instrument or other
document delivered pursuant hereto or in connection herewith,
(ii) any breach of any covenant of Interstate contained in
this Agreement, and (iii) any act or omission arising out of
or related to the Assets occurring after the Closing, such
obligation to survive the Closing or termination of this
Agreement subject to Section 9.3.
9.3 TERMINATION OF INDEMNIFICATION. (a) The
obligations of the Contributors under Section 9.1 shall
terminate on the first anniversary of the Closing Date (or the
first anniversary of the termination of this Agreement) except
with respect to any claims expressly asserted prior to such
termination.
(b) The obligations of Interstate under Section
9.2 shall terminate on the first anniversary of the Closing
Date (or the first anniversary of the termination of this
Agreement) except with respect to any claims expressly
asserted prior to such termination.
10. TAXES; PRORATIONS. (a) All sales and use, stamp,
transfer, documentary or other ad valorem taxes imposed by any governmental
taxing authority or any other taxing authority (excluding, however, taxes on
capital gains or income) as a result of the contribution of the Assets
hereunder shall be paid by Interstate.
(b) Any and all distributions and allocations made with
respect to the Assets for the year in which the contribution contemplated
hereunder occurs shall be prorated between Interstate and the Contributor based
upon the number of days in such year during which the respective Assets were
held by each party.
11. INDEMNIFICATION OF FINE. In consideration of Fine
(as hereinafter defined) granting to IHC the rights described in Sections 12.1
and 12.2 and other good and valuable consideration,
- 11 -
<PAGE> 13
IHC shall indemnify and hold Milton Fine and his heirs, personal and legal
representatives and affiliates (collectively, "Fine Indemnities") harmless from
and against all Losses, including without limitation, any Losses as incurred to
the extent of the aggregate amount paid in investigation, preparation, defense
or settlement of any litigation or proceeding, suffered or incurred by any of
the Fine Indemnities, directly or indirectly, arising out of, or in any way
related to the action styled as STANLEY H. TREZEVANT, JR., V. INTERSTATE HOTELS
CORPORATION, ET AL., United States District Court for the Western District of
Tennessee, Docket Number 94-2709 GBRE, or any related action or the facts or
circumstances giving rise to any such action. The provisions of this section
shall survive Closing.
12. RIGHTS OF FIRST REFUSAL/RIGHTS OF FIRST OPPORTUNITY.
Milton Fine, individually and as trustee under that certain Second Amended and
Restated Trust Agreement for the Milton Fine Revocable Trust dated November 11,
1994 for the benefit of Milton Fine (collectively, "Fine") owns direct and
indirect interests (collectively, "Interests") in the entities set forth on
SCHEDULE C attached hereto (collectively, "Fine Partnerships"). In
consideration of the agreement by IHC to provide the services to Fine described
in Section 12.3 below, Fine shall grant to IHC the rights described in Sections
12.1 and 12.2 below.
12.1 RIGHTS OF FIRST REFUSAL. If Fine shall
receive a bona fide cash offer from a third party to purchase
any one or more of the Interests ("Offered Interests") in the
Fine Partnerships and Fine desires to sell the Offered
Interests pursuant to such offer, Fine shall offer to sell all
of the Offered Interests to IHC, or its designee, for the
price set forth in, and in accordance with the other terms and
conditions of, the bona fide offer by the third party. Fine
shall give to IHC written notice ("Offer Notice") of such
offer stating the Offered Interests, the name and address of
the proposed purchaser (including the names and addresses of
the owners of the equity interests in such prospective
purchaser), the price offered for the Offered Interests and
the other terms and conditions of the offer and shall attach a
photocopy of the bona fide offer by such third party to the
Offer Notice. Fine shall also provide to IHC such other
information regarding the proposed sale as is reasonably
requested by IHC and reasonably available to Fine. Within
fifteen (15) days after receipt of the Offer Notice, IHC or
its designee may accept the offer of Fine to purchase all (but
not less than all) of the Offered Interests and shall provide
Fine with written notice stating whether IHC or its designee
accepts or rejects such offer. If the offer is accepted, IHC
shall deposit in escrow with a bank or other financial
institution selected by Fine as escrowee an earnest
- 12 -
<PAGE> 14
money deposit in cash in an amount equal to 10% of the
purchase price and the parties shall promptly enter into an
agreement of sale consistent with the terms and conditions in
the Offer Notice. A failure by IHC or its designee to notify
Fine of its acceptance of the offer within such fifteen (15)
day period shall constitute a waiver of its rights hereunder.
If IHC fails to close such purchase, then Fine may retain the
escrow deposit and, in addition, may exercise any other rights
or remedies available to him at law or in equity. All
closings of the purchase by IHC under this Section shall be
held at IHC's principal office and shall take place on the
date mutually agreed by IHC and Fine but not later than thirty
(30) days after the date of the notice to Fine exercising the
purchase option. All transfer, stamp and recording taxes
imposed on the transfer and all other closing costs shall be
paid by IHC. If IHC or its designee does not accept the offer
to purchase all of the Offered Interests subject to the Offer
Notice, then at any time within one hundred eighty (180) days
after IHC or its designee notifies Fine of its rejection of
the offer (or is deemed to have rejected the offer pursuant to
the terms of this Section), Fine may sell the Offered
Interests to the third party offeror at a price not less than
90% of the price set forth in the Offer Notice and on other
terms and conditions no less favorable to Fine than those
stated in the Offer Notice. In determining the application of
the 90% as stated herein, only the stated purchase price shall
be relevant and no adjustments thereto shall be made in
respect of the other terms or conditions of a proposed sale.
If such transfer to such third party is not made within such
one hundred eighty (180) day period, Fine shall not transfer
the Offered Interests except by again complying with this
Section.
12.2 RIGHT OF FIRST OFFER. In the event Fine
desires to market or actively solicit the sale of any of the
Interests ("Sale Interests") to a third party, prior to
offering such Sale Interests for sale, Fine shall give IHC
written notice ("Sale Notice") of his intent to sell or market
such Sale Interests, stating Fine's intended cash purchase
price and all other terms and conditions of such proposed sale
together with all other information with respect thereto which
is reasonably required by IHC and reasonably available to
Fine. Within fifteen (15) days of its receipt of such Sale
Notice, IHC, or its designee, may elect, by providing written
notice to Fine, to purchase all (but not less than all) of the
Sale Interests at the same price and upon the same terms and
conditions as those set forth in the Sale Notice. A failure
by IHC or its designee to notify Fine of its acceptance of the
offer
- 13 -
<PAGE> 15
within such fifteen (15) day period shall constitute a waiver
of its rights hereunder. In the event that IHC or its
designee shall have elected to purchase all of the Sale
Interests in accordance with the provisions of the preceding
sentence, IHC shall deposit in escrow with a bank or other
financial institution selected by Fine as escrowee an earnest
money deposit in cash in an amount equal to 10% of the
purchase price and Fine and IHC (or its designee as the case
may be) shall promptly thereafter enter into an agreement for
sale at the price and on the same terms and conditions as set
forth in the Sale Notice. If IHC fails to close such
purchase, then Fine may retain the escrow deposit and, in
addition, may exercise any other rights or remedies available
to him at law or in equity. All closings of the purchase by
IHC under this Section shall be held at IHC's principal office
and shall take place on the date mutually agreed by IHC and
Fine but not later than thirty (30) days after the date of the
notice to Fine exercising the purchase option. All transfer,
stamp and recording taxes imposed on the transfer and all
other closing costs shall be paid by IHC. If IHC elects not to
purchase all of the Sale Interests, then at any time within
one hundred eight (180) days from the date of Fine's Sale
Notice to IHC, Fine may sell the Sale Interests for a purchase
price which is at least 90% of the offer price contained in
the Sale Notice or a greater price and upon other terms and
conditions no less favorable to Fine than those set forth in
the Sale Notice. In determining the application of the 90% as
stated herein, only the stated purchase price shall be
relevant and no adjustments thereto shall be made in respect
of the other terms or conditions of a proposed sale. Should
Fine desire to sell such Sale Interests at a price which is
less than 90% of the original offer price or upon terms which
materially differ from those set forth in the Sale Notice to
IHC, or should the one hundred eight (180) day time period
expire, Fine shall again comply with the requirements set
forth in this Section 12.2 prior to marketing or soliciting
for sale of any such Interests.
12.3 SERVICES. In consideration for Fine granting
to IHC the above described rights, IHC shall continue, at no
cost or expense to Fine, to provide to Fine various
administrative, legal, support and/or accounting services
related to his Interests in the Fine Partnerships so long as
he owns such Interests; provided, that IHC's provision of such
services is limited by the following: (a) these services
shall be consistent with past practices as to the type, scope
and extent of such services; (b) IHC shall not be obligated to
provide any services which it does not otherwise provide nor
will IHC be required to hire
- 14 -
<PAGE> 16
personnel, acquire equipment or other assets or otherwise make
any capital expenditures solely for the purpose of providing
such services; and (c) the provision of such services shall
not unreasonably detract from the normal performance of duties
of the persons providing such services.
13. DEFAULT. In the event any of the parties hereto
shall default in the performance of its obligations hereunder, the
nondefaulting parties shall be entitled to terminate this Agreement with
respect to such party and/or pursue any and all remedies available to it at law
or in equity, including, without limitation, an action for specific
performance.
14. BROKERS. (a) Each Contributor represents and
warrants to Interstate that it has dealt with no broker, salesman, finder or
consultant with respect to this Agreement or the transactions contemplated
hereby. Each Contributor agrees to indemnify, protect, defend and hold
Interstate harmless from and against all claims, losses, damages, liabilities,
costs, expenses (including reasonable attorneys' fees and disbursements) and
charges resulting from such Contributor's breach of the foregoing
representation in this subsection (a). The provisions of this subsection (a)
shall survive the Closing and any termination of this Agreement.
(b) Interstate represents and warrants to the Contributors
that it has dealt with no broker, salesman, finder or consultant with respect
to this Agreement or the transactions contemplated hereby. Interstate agrees
to indemnify, protect, defend and hold the Contributors harmless from and
against all claims, losses, damages, liabilities, costs, expenses (including
reasonable attorneys' fees and disbursements) and charges resulting from
Interstate's breach of the foregoing representations in this subsection (b).
The provisions of this subsection (b) shall survive the Closing and any
termination of this Agreement.
15. 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 permitted successors and assigns (including any successor
entity after a public offering of stock, merger, consolidation, purchase or
other similar transaction involving a party here to) 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 assigns, any legal or equitable
rights hereunder.
16. ASSIGNMENT. This Agreement may not be assigned by
either party hereto without the consent of the other party hereto, except to an
entity under the control of, controlling or under common control with the
assigning party, provided that in
- 15 -
<PAGE> 17
each case, the assigning party will continue to remain primarily liable under
this Agreement notwithstanding any such assignment. Interstate may designate
parties to which the Assets will be assigned at the Closing, provided that
Interstate will continue to remain primarily liable under this Agreement
notwithstanding any such designation.
17. 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:
(a) To any Contributor:
to the address set forth opposite such
Contributor's name on the signature
pages hereto.
(b) To Interstate:
c/o Interstate Hotels Corporation
Foster Plaza X
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: Mr. W. Thomas Parrington, Jr.
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: 412-937-3116
and
Jones, Day, Reavis & Pogue
2300 Trammel Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: David Lowery, Esq.
Facsimile: 214-969-5100
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
- 16 -
<PAGE> 18
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.
18. ENTIRE AGREEMENT. This Agreement, along with the
Schedules here to (but specifically excluding any other correspondence between
any of the parties hereto or any of their affiliates), 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.
19. AMENDMENTS. This Agreement may not be amended,
modified, supplemented or terminated, nor may any of the obligations of the
Contributors or Interstate hereunder be waived, except by written agreement
executed by the party or parties to be charged.
20. NO WAIVER. No waiver by either party of any failure
or refusal by another party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or refusal to so comply.
21. GOVERNING LAW. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with, the internal
laws of the Commonwealth of Pennsylvania.
22. SUBMISSION TO JURISDICTION. Each of Interstate and
each Contributor irrevocably submits to the jurisdiction of 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 of Interstate and each Contributor
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 Pennsylvania
with respect to any matters to which it had submitted to jurisdiction as set
forth above in the immediately preceding sentence. Each of Interstate and each
Contributor 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 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.
- 17 -
<PAGE> 19
23. 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.
24. 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.
25. 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.
26. TERMINATION. Effective as of the Closing, that
certain Shareholder Agreement dated May, 1996 among IHC, the Family
Shareholders named therein and the Employee Shareholders named therein shall
terminate and be of no further force or effect.
[Remainder of page intentionally left blank.]
- 18 -
<PAGE> 20
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
INTERSTATE HOTELS COMPANY
By: /s/ W. Thomas Parrington
-------------------------------
Its: President
INTERSTATE HOTELS CORPORATION
By: /s/ W. Thomas Parrington
-------------------------------
Its: President
CONTRIBUTORS:
/s/ Milton Fine
- - ----------------------------------
Milton Fine, Trustee, U/A dated 11/17/89,
as amended, FBO Milton Fine
/s/ David J. Fine
- - ----------------------------------
David J. Fine, Trustee for the Milton Fine
Grantor Annuity Trust U/A dated
March 31, 1996
/s/ David J. Fine
- - ----------------------------------
David J. Fine, Trustee, U/A dated
12/15/89 FBO Sibyl A. Fine King
/s/ David J. Fine
- - ----------------------------------
David J. Fine, Trustee, U/A dated
12/15/89 FBO Carolyn Fine Friedman
- 19 -
<PAGE> 21
/s/ David J. Fine
- - ----------------------------------
David J. Fine, Trustee, U/A dated
12/15/89 FBO David J. Fine
/s/ W. Thomas Parrington
- - ----------------------------------
W. Thomas Parrington
/s/ J. William Richardson
- - ----------------------------------
J. William Richardson
/s/ Robert L. Froman
- - ----------------------------------
Robert L. Froman
/s/ Marvin I. Droz
- - ----------------------------------
Marvin I. Droz
/s/ Marvin I. Droz, POA
- - ----------------------------------
Henry L. Ciaffone
/s/ Marvin I. Droz, POA
- - ----------------------------------
Kevin P. Kilkeary
/s/ Marvin I. Droz, POA
- - ----------------------------------
Jay A. Litt
/s/ Marvin I. Droz, POA
- - ----------------------------------
Gregory W. Ade
/s/ Marvin I. Droz, POA
- - ----------------------------------
Robert D. Cowan
/s/ Marvin I. Droz, POA
- - ----------------------------------
Robert C. Holland
- 20 -
<PAGE> 22
/s/ Marvin I. Droz, POA
- - ----------------------------------
Jay Wold
/s/ Milton Fine
- - ----------------------------------
Milton Fine
IHC ASSOCIATES LIMITED PARTNERSHIP
By: IHC Associates Corporation,
General Partner
By: /s/ Milton Fine
-------------------------------
Title: President
----------------------------
HILLTOP INVESTMENTS PARTNERSHIP, L.P.
By: /s/ Milton Fine
-------------------------------
Milton Fine, Trustee, U/A dated 11/17/89,
as amended, FBO Milton Fine,
General Partner
INTERPRO, LTD.
By: Interstate Hotels Corporation
#1018, General Partner
By: /s/ Milton Fine
-------------------------------
Title: Chairman
----------------------------
- 21 -
<PAGE> 23
SCHEDULE A
ASSETS TO BE CONTRIBUTED TO INTERSTATE HOTELS COMPANY
AND NUMBER OF SHARES OF INTERSTATE HOTELS COMPANY STOCK
TO BE ISSUED TO CONTRIBUTORS IN RETURN THEREFORE
<TABLE>
<CAPTION>
CONTRIBUTOR COMPANY/INTERESTS TO BE CLASS NO. OF SHARES CERT. SHARES OF INTERSTATE
CONTRIBUTED NO. TO BE ISSUED TO
CONTRIBUTORS FOR
CONTRIBUTION
<S> <C> <C> <C> <C> <C>
1. Milton Fine, Trustee Interstate Hotels Corporation A 538.145 22 4,927,919.99459
FBO Milton Fine A 197.438 26
-------
735.583
B 64,344.56352 43
2. David Fine, Trustee Interstate Hotels Corporation A 179-229/600 23 1,642,520.27054
FBO Sibyl F. King A 65-4876/6000 27
--------------
245-1,166/6000
B 9,824.292 23
B 11,622.015 27
----------
21,446.307
3. David Fine, Trustee Interstate Hotels Corporation A 179-229/600 24 1,642,520.27054
FBO Carolyn F. A 65-4876/6000 28
Friedman --------------
245-1,166/6000
B 9,824.292 24
B 11,622.015 28
----------
21,446.307
4. David Fine, Trustee Interstate Hotels Corporation A 179-229/600 25 1,642,520.27054
FBO David Fine A 65-4876/6000 29
--------------
245-1,166/6000
B 9,824.292 25
B 11,622.015 29
----------
21,446.307
5. David Fine, Trustee Interstate Hotels Corporation B 17,383.000 30 1,315,483.42347
Milton Fine Grantor
Annuity Trust
6. Milton, Fine, Trustee Colony Hotels and Resorts B 0.4 1 0
FBO Milton Fine Company ("Colony")
7. David Fine, Trustee Colony B 1.2 2 0
FBO Sibyl F. King
8. David Fine, Trustee Colony B 1.2 3 0
FBO Carolyn F.
Friedman
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
CONTRIBUTOR COMPANY/INTERESTS TO BE CLASS NO. OF SHARES CERT. SHARES OF INTERSTATE
CONTRIBUTED NO. TO BE ISSUED TO
CONTRIBUTORS FOR
CONTRIBUTION
<S> <C> <C> <C> <C> <C>
9. David Fine, Trustee Colony B 1.2 4 0
FBO David Fine
10. Milton Fine, Trustee IHC Member Corporation A 50.00 1 5,591.8726
FBO Milton Fine ("IHC Member")
B 4,950.00 1
B 2,175.00 5
--------
7,125.00
11. David Fine, Trustee IHC Member A 16-2/3 2 1,299.0452
FBO Sibyl F. King
B 1,650.00 2
12. David Fine, Trustee IHC Member A 16-2/3 3 1,299.0452
FBO Carolyn F. B 1,650.00 3
Friedman
13. David Fine, Trustee IHC Member A 16-2/3 4 1,299.0452
FBO David Fine
B 1,650.00 4
14. Milton Fine, Trustee Northridge Insurance Company B 22.73 10B 3,116.66667
FBO Milton Fine ("Northridge")
15. David Fine, Trustee Northridge B 59.09 11B 8,405.55556
FBO Sibyl F. King
16. David Fine, Trustee Northridge B 59.09 12B 8,405.55556
FBO Carolyn F.
Friedman
17. David Fine, Trustee Northridge B 59.09 13B 8,405.55556
FBO David Fine
18. Milton Fine IHC/Colorado Springs -- 600 1 2,786.0
Corporation
19. Milton Fine IHC/Lisle Corporation -- 600 1 3,517.0
20. Milton Fine IHC/Huntington Corporation -- 600 1 711.0
21. Milton Fine IHC/Houston Corporation -- 600 1 1,970.0
22. Milton Fine IHC/Denver Corporation -- 600 1 1,569.0
23. Milton Fine, Trustee IHC/Conshohocken Corporation -- 600 1 2,151.0
FBO Milton Fine
24. Milton Fine, Trustee IHC/Atlanta Corporation -- 600 1 2,192.0
FBO Milton Fine
25. Milton Fine, Trustee IHC/CG Portfolio Corporation -- 600 1 11,733.0
FBO Milton Fine
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
CONTRIBUTOR COMPANY/INTERESTS TO BE CLASS NO. OF SHARES CERT. SHARES OF INTERSTATE
CONTRIBUTED NO. TO BE ISSUED TO
CONTRIBUTORS FOR
CONTRIBUTION
<S> <C> <C> <C> <C> <C>
26. Milton Fine IHC/Interstone Corporation -- 600 1 59,332.0
27. Milton Fine IHC/Williamsburg Corporation -- 600 1 764.0
28. IHC Associates 6.7673% limited partner -- -- -- 146,599.0
Limited Partnership interest in IHC/Pittsburgh
Partnership, L.P.
6.7673% limited partner
interest in IHC/Interstone
Partnership, L.P.
6.7673% limited partner
interest in IHC/Interstone
Partnership II, L.P.
29. Hilltop Investments 92.2327% limited partner -- -- -- 1,212,574.0
Partnership, L.P. interest in IHC/Interstone
Partnership, L.P.
30. Interpro, Ltd. Special Interest in -- -- -- 251,208.0
IHC/Interstone Partnership, L.P.
31. W. Thomas Parrington, Interstate Hotels Corporation B 2,935.71714 32 264,034.0
Jr. B 584.75372 44
32. J. William Richardson Interstate Hotels Corporation B 1,547.58986 33 143,286.0
B 362.38538 45
33. Robert L. Froman Interstate Hotels Corporation B 1,650.78567 34 155,579.0
B 422.71910 46
34. Marvin I. Droz Interstate Hotels Corporation B 719.13788 35 75,037.0
B 280.06048 47
35. Henry L. Ciaffone Interstate Hotels Corporation B 287.65248 36 26,520.0
B 65.86784 48
36. Kevin P. Kilkeary Interstate Hotels Corporation B 287.65248 42 26,520.0
B 65.86784 49
37. Jay A. Litt Interstate Hotels Corporation B 287.65248 37 26,520.0
B 65.86784 50
38. Robert C. Holland Interstate Hotels Corporation B 143.83292 38 13,260.0
B 32.92732 51
39. Robert D. Cowan Interstate Hotels Corporation B 143.83292 39 13,260.0
B 32.92732 52
40. Jay Wold Interstate Hotels Corporation B 143.83292 40 13,260.0
B 32.92732 53
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
CONTRIBUTOR COMPANY/INTERESTS TO BE CLASS NO. OF SHARES CERT. SHARES OF INTERSTATE
CONTRIBUTED NO. TO BE ISSUED TO
CONTRIBUTORS FOR
CONTRIBUTION
<S> <C> <C> <C> <C> <C>
41. Gregory W. Ade Interstate Hotels Corporation B 143.83292 41 13,260.0
B 32.92732 54
42. Milton Fine HMG Beverage, Inc. Common 100 2 0
Common 300 3
43. Milton Fine, Trustee IHC Capital Corporation Common 100 1 0
FBO Milton Fine
</TABLE>
<PAGE> 27
SCHEDULE B
Assets to be Contributed
to IHC by Interstate
1. Four (4) shares of Class B stock of Colony Hotels and Resorts Company
2. 100 shares of Class A stock and 12,075 shares of Class B stock of IHC
Member Corporation
3. 200 shares of Class B stock of Northridge Insurance Company
4. 600 shares of common stock of IHC/Colorado Springs Corporation
5. 600 shares of common stock of IHC/Lisle Corporation
6. 600 shares of common stock of IHC/Huntington Corporation
7. 600 shares of common stock of IHC/Houston Corporation
8. 600 shares of common stock in IHC/Williamsburg Corporation
9. 600 shares of common stock of IHC/Denver Corporation
10. 600 shares of common stock of IHC/Conshohocken Corporation
11. 600 shares of common stock of IHC/Atlanta Corporation
12. 600 shares of common stock of IHC/CG Portfolio Corporation
13. 6.7673% limited partner interest in IHC/Interstone Partnership II, L.P.
14. 6.7673% limited partner interest in IHC/Pittsburgh Partnership, L.P.
15. 600 shares of common stock in IHC/Interstone Corporation
16. 92.2327% limited partner interest in IHC/Interstone Partnership, L.P.
17. Special Interest in IHC/Interstone Partnership, L.P.
18. 400 shares of common stock in HMG Beverage, Inc.
19. 6.7673% limited partner interest in IHC/Interstone L.P.
<PAGE> 28
EXHIBIT A
Permitted Exceptions
1. All liens, encumbrances and exceptions set forth in the
articles or certificate of incorporation, bylaws, certificate
of limited partnership, partnership agreement or similar
organizational document of the corporations and partnerships
comprising the Assets.
2. All encumbrances and exceptions set forth in the Stockholder
Agreements attached hereto as EXHIBIT C and D, respectively.
3. Liens for taxes not yet due and payable.
4. Any financing liens that the Assets will be subject to after
Closing including, without limitation, liens that will be
imposed at Closing by Credit Lyonnais.
<PAGE> 29
SCHEDULE C
FINE PARTNERSHIPS
<TABLE>
<CAPTION>
OWNER PROPERTY
----- --------
<S> <C>
(1) Interstate Hotels Partners, L.P. (1) Albany Marriott
(2) Cincinnati Hotel Limited Partnership (2) Cincinnati Marriott
(3) Interstate/Fort Lauderdale Associates Ltd. (3) Ft. Lauderdale Marriott North
(4) Swatara Associates (4) Harrisburg Marriott
(5) Interstate Hotels Partners, L.P. (5) Minneapolis Marriott Southwest
(6) Park West Hotels Associates (6) Pittsburgh Airport Marriott
(7) Green Tree Associates (7) Pittsburgh Greentree Marriott
(8) Host/Interstate Partnership, L.P. (8) Pittsburgh Marriott City Center
(9) Providence Realty Associates, L.P. (9) Providence Marriott
(10) The Key West Reach Limited Partnership (10) Marriott's Reach Resort
(11) Maryville Centre Hotel Joint Venture (11) St. Louis Marriott
(12) Interstate Hotels Partners, L.P. (12) San Diego Marriott
(13) Trumbull Hotel Associates Limited Partnership (13) Trumbull Marriott
</TABLE>
<PAGE> 1
EXHIBIT 2
================================================================================
REGISTRATION RIGHTS and SHAREHOLDERS AGREEMENT
among
INTERSTATE HOTELS COMPANY
and
THE SHAREHOLDERS NAMED HEREIN
Dated as of June 25, 1996
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT
THIS REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT (the "Agreement"), dated
as of the 25th day of June, 1996 among INTERSTATE HOTELS COMPANY, a
Pennsylvania corporation (the "Company") and the shareholders of the Company
identified on the signature pages hereof (individually, a "Shareholder";
collectively, the "Shareholders").
WITNESSETH:
WHEREAS, the Shareholders have contributed to the Company certain assets in
exchange for restricted shares of Common Stock of the Company;
WHEREAS, the parties hereto desire to execute a shareholder agreement
relating to the Transfers of shares of Common Stock; and
WHEREAS, the Company has agreed to grant to the Shareholders certain
registration rights, as more specifically described herein, with respect to
their shares of Common Stock of the Company,
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the adequacy of which are hereby acknowledged and intending to be
legally bound, 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.
"BREA" means the affiliates of Blackstone Real Estate Advisors L.P. who
become parties to that certain Shareholders Agreement among the Company and
the parties hereto.
"Common Stock" means the common stock, par value $0.01 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.
"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
<PAGE> 3
such person, whether through the ownership of voting securities, by contract
or otherwise.
"Employee Shareholder" shall mean any Shareholder other than Milton Fine;
Milton Fine, Trustee, U/A dated 11/17/89 as amended, FBO Milton Fine; David
J. Fine, Trustee for the Milton Fine Grantor Annuity Trust U/A dated March
31, 1996; David J. Fine, Trustee, U/A dated 12/15/89 FBO Sibyl A. Fine King;
David J. Fine, Trustee, U/A dated 12/15/89 FBO Carolyn Fine Friedman; and
David J. Fine, Trustee, U/A dated 12/15/89 FBO David J. Fine; or any of their
Permitted Transferees.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Permitted Transferee" means (1) each spouse, child (natural or adopted),
grandchild or parent of any Shareholder (provided no individual who is less
than 21 years of age shall be a Permitted Transferee), (2) any trust for the
benefit of a Shareholder or a person described in clause (1), (3) any
corporation or partnership controlled by one or more Shareholders or any
persons described in clause (1) so long as a majority of the economic and
voting interests of such corporation or partnership are owned by such
Shareholders, the persons described in clause (1) or the trusts referred to
in clause (2), (4) any director, officer or employee of the Company or its
subsidiaries, or (5) any shareholders, partners or members of a Shareholder
in connection with the dissolution of such Shareholder.
"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.
"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
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<PAGE> 4
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. 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 the Shareholders 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 a Shareholder notifies the Company within 10 days after
receipt of such notice from the Company of the desire of the Shareholder to
have included in that registration statement any of his shares of Common Stock,
then, subject to Section 2(e), the Company shall include those shares in that
registration statement ("Company Registration"). Neither the delivery of a
notice under this Section 2(a) nor a request by a Shareholder under this
Section 2(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 a Shareholder
with respect thereto. A registration request pursuant to this Section 2(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 2(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
- 3 -
<PAGE> 5
of such offering. If the registration demanded pursuant to this Section 2(a)
shall not have been deemed to be so effected, the Shareholder shall be entitled
to exercise his registration rights as provided herein until the registration
demanded pursuant to this Section 2(a) shall be deemed to be so effected.
(b) Shareholders holding not less than forty percent (40%) of the Common
Stock subject to the provisions hereof may, subject to the terms and conditions
contained in this Section 2, exercise the demand registration rights contained
in this Section 2(b) at any time and from time to time following expiration of
the 180 day period contained in that certain Lock-Up Agreement with Merrill
Lynch & Co. The Company will be obligated to effect only three Demand
Registrations (as defined below) pursuant to this Section 2(b). The
Shareholders 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 them on Form S-1 (or other form available for registration of
sales of securities for cash) subject to Section 2(d). Shareholders shall
notify the Company of their 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 they desire 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 other 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 2(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 2(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 2(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 2(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 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
- 4 -
<PAGE> 6
covering the shares of Common Stock requested to be included in the Demand
Registration by a Shareholder 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 the Shareholder.
(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.
- 5 -
<PAGE> 7
(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.
(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 holders.
(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
- 6 -
<PAGE> 8
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
opinion of such accountants the financial statements and other financial data
of the Company included in the registration statement or any amendment or
supplement there to comply in all material respects with the applicable
accounting requirements of the Securities Act.
(d) The obligations of the Company under Section 2(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 2(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 the Shareholders 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 Shareholders are
entitled pursuant to this Section 2.
(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 Shareholders on the date of this Agreement, or, if less, all
shares of Common Stock owned by the Shareholders delivering such Demand
Notice 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 the Shareholders
and the Company.
- 7 -
<PAGE> 9
(e) Notwithstanding the provisions of Section 2(a) and 2(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 Shareholders 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 Shareholders 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 the
Shareholders 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 Shareholders 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 BREA, as one of the other Holders, if any,
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, the
Shareholders and any Other Holders (other than BREA) 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.
3. 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 Shareholders (selected by a majority of the
Shareholders participating in such registration, in the case of any Demand
Registration, and reasonably acceptable to a majority of the Shareholders, 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 (l) 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 3(d) above).
- 8 -
<PAGE> 10
4. BLUE SKY LAWS. In any registration under Sections 2(a) and 2(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 Shareholders under the "blue
sky" laws of such states as may be reasonably requested by the Shareholders 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.
5. INDEMNIFICATION. In connection with any registration pursuant to
Section 2:
(a) The Company hereby agrees to indemnify and hold harmless, to the
fullest extent permitted by law, each Shareholder, and each of their
respective shareholders, partners, members, officers, directors, employees,
heirs, personal or legal representatives and agents, and any Affiliates (as
defined in the Securities 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 each
Shareholder and their respective shareholders, partners, members, officers,
directors, employees, heirs, personal or legal representatives, and any
Affiliates, for any legal or other expenses incurred by 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 a Shareholder 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 information furnished by or on
behalf of such Shareholder specifically for use therein.
(b) Each Shareholder, severally, agrees to indemnify and hold harmless, to
the fullest extent permitted by law, the Company, each of its shareholders,
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
- 9 -
<PAGE> 11
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 such
Shareholder, 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
- 10 -
<PAGE> 12
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 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.
6. RIGHT OF FIRST OFFER.
(a) An Employee Shareholder shall not Transfer any shares of Common Stock
other than in compliance with this Section 6. 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 an Employee Shareholder proposes to Transfer any shares of Common
Stock, he shall give written notice (the "First Offer Notice") of such proposal
to Milton Fine or his representative ("Fine") at least 5 days in advance
thereof, setting forth the number of shares which he desires to Transfer (the
"First Offer Shares"), the cash purchase price therefor and the other terms and
conditions of such proposed Transfer. Fine, on behalf of himself or his
designee, may, in his sole discretion, at any time within 5 days after delivery
by such Employee Shareholder of the First Offer Notice (the "First Offer
Period") elect, pursuant to 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 and upon the terms and conditions set
forth in the First Offer Notice. In the event Fine or his designee elects to
purchase all of the First Offer Shares, 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, the Employee Shareholder shall deliver the First Offer Shares
to Fine or his designee against a cash payment therefor in
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<PAGE> 13
full by wire transfer of immediately available funds to such account or
accounts as may be designated by the Employee Shareholder. Such closing shall
take place at the principal office of the Company.
(c) If no Purchase Offer is received by such Employee Shareholder within
the First Offer Period, such Employee Shareholder 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 6(d) below) of the
First Offer Shares at a per share cash price no less than the 90% of per share
price specified in the First Offer Notice and on terms and conditions
materially similar to those specified in the First Offer Notice.
(d) The provisions of this Section 6 shall not apply to Transfers by
Employee Shareholders (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 an Employee
Shareholder; 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 Employee
Shareholder.
7. LOCK-UP PROVISION. Each Shareholder 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, each Shareholder 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.
8. PARTICIPATION IN REGISTRATIONS The Shareholders may not participate
in any registration of securities of the Company unless such Shareholder:
(a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by the Company and reasonably acceptable
to the Shareholder (in the case of any Demand Registration) which are
customary and which are not in direct contradiction of any rights granted to
the Shareholder under this Agreement; and
- 12 -
<PAGE> 14
(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 the Shareholder under this Agreement.
9. REQUEST TO DEREGISTER. The Company will promptly deregister any of a
Shareholder's shares initially included in a registration statement pursuant to
Section 2 if a Shareholder 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.
10. TERMINATION. The Company's obligation to effect a Company Registration
or Demand Registration shall expire on the fifth anniversary hereof.
11. 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
REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT, DATED AS OF JUNE 25, 1996,
AMONG INTERSTATE HOTELS COMPANY (THE "COMPANY") AND THE STOCKHOLDERS NAMED
THEREIN. 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 the Shareholders no longer own
any Common Stock.
12. SEVERAL OBLIGATIONS. Any and all obligations of the Shareholders
hereunder shall be several as to itself and its own actions and not joint
obligations.
13. 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.
- 13 -
<PAGE> 15
14. ASSIGNMENT. This Agreement may not be assigned by the Company without
the consent of a majority of the Shareholders party hereto and this Agreement
may not be assigned by a Shareholder (except to a Permitted Transferee) without
the consent of the Company. Notwithstanding any such assignment, the assigning
party will continue to remain primarily liable under this Agreement.
15. 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 a Shareholder:
At the address set forth opposite such Shareholder's name on the signature
page hereto.
To the Company:
Interstate Hotels Corporation
Foster Plaza X
680 Andersen Drive
Pittsburgh, Pennsylvania 15220
Attention: Mr. W. Thomas Parrington, Jr.
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
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
- 14 -
<PAGE> 16
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.
16. 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.
17. 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.
18. 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.
19. 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.
20. GOVERNING LAW. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws of the
Commonwealth of Pennsylvania.
21. SUBMISSION TO JURISDICTION. Each Shareholder and the Company
irrevocably submits to the jurisdiction of (a) the Supreme Court of the State
of New York, New York County, (b) the United States District Count 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 Shareholder and the Company 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 New York or Pennsylvania with respect to any
matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each Shareholder and the Company irrevocably
and unconditionally waives trial by jury and irrevocably and unconditionally
waives
- 15 -
<PAGE> 17
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.
22. 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.
23. 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.
24. 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.
25. CHANGES IN SHAREHOLDERS. All Common Stock Transferred to third parties
in conformity with this Agreement shall remain subject to the provisions of
this Agreement and shall bear the legend set forth in Section 11 hereof. In
the event that, in compliance with the other terms and conditions of this
Agreement, shares of Common Stock are Transferred (including, without
limitation, pursuant to a distribution to the partners or members of any
Shareholder) to a person who, or trust which, is not a party to this Agreement,
such person or trust shall, prior to the transfer of such shares and as a
condition precedent to such transfer, become a party to this Agreement by
executing an agreement and consent to join in and be bound by the terms and
conditions of this Agreement, which agreement and consent shall be attached to
and become a part of this Agreement; and thereafter such person or trust shall
be a party to this Agreement for all purposes. Notwithstanding the foregoing,
in the event any such transferee or assignee does not execute such an
agreement, such Common Stock shall remain subject to the provisions of this
Agreement and such person or trust will take such shares of Common Stock
subject to the terms and conditions of this Agreement and by accepting such
shares of Common Stock will be deemed to be a party to this Agreement as if an
original
- 16 -
<PAGE> 18
signatory hereto without further action on the part of such party and/or the
Company.
26. SECONDARY OFFERING. If the closing of a Company Registration or a
Demand Registration of the Company's Common Stock occurs while this Agreement
is still in effect, each Employee Shareholder shall sell in connection with
such secondary public offering the lesser of (i) all of such Employee
Shareholder's shares of Common Stock or (ii) the number of such shares
necessary to provide net sales proceeds to the Employee Shareholder (after the
payment by the Employee Shareholder of all applicable federal, state and local
taxes relating to such sale) equal to the balance due under that certain
Promissory Note, dated as of May ___, 1996, from the Employee Shareholder to
Milton Fine, Trustee, U/A dated 11/17/89 as amended, FBO Milton Fine.
[Remainder of page intentionally left blank.]
- 17 -
<PAGE> 19
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/ W. Thomas Parrington
-----------------------------
Title: President
--------------------------
/s/ Milton Fine
- - ---------------------------------
Milton Fine, Trustee, U/A dated
11/17/89, as amended,
FBO Milton Fine
/s/ David J. Fine
- - ---------------------------------
David J. Fine, Trustee for the
Milton Fine Grantor Annuity
Trust U/A
date March 31, 1996
/s/ David J. Fine
- - ---------------------------------
David J. Fine, Trustee, U/A
dated 12/15/89
FBO Sibyl A. Fine King
/s/ David J. Fine
- - ---------------------------------
David J. Fine, Trustee, U/A
dated 12/15/89
FBO Carolyn Fine Friedman
/s/ David J. Fine
- - ---------------------------------
David J. Fine, Trustee, U/A
dated 12/15/89
FBO David J. Fine
/s/ W. Thomas Parrington
- - ---------------------------------
W. Thomas Parrington
- 18 -
<PAGE> 20
/s/ J. William Richardson
- - ---------------------------------
J. William Richardson
/s/ Robert L. Froman
- - ---------------------------------
Robert L. Froman
/s/ Marvin I. Droz
- - ---------------------------------
Marvin I. Droz
/s/ Marvin I. Droz, POA
- - ---------------------------------
Henry L. Ciaffone
/s/ Marvin I. Droz, POA
- - ---------------------------------
Kevin P. Kilkeary
/s/ Marvin I. Droz, POA
- - ---------------------------------
Jay A. Litt
/s/ Marvin I. Droz, POA
- - ---------------------------------
Gregory W. Ade
/s/ Marvin I. Droz, POA
- - ---------------------------------
Robert D. Cowan
/s/ Marvin I. Droz, POA
- - ---------------------------------
Robert C. Holland
/s/ Marvin I. Droz, POA
- - ---------------------------------
Jay Wold
/s/ Milton Fine
- - ---------------------------------
Milton Fine
- 19 -
<PAGE> 21
IHC ASSOCIATES LIMITED PARTNERSHIP
By: IHC Associates Corporation,
General Partner
By: /s/ Milton Fine
---------------------------------
Title: President
------------------------------
HILLTOP INVESTMENTS PARTNERSHIP, L.P.
By: /s/ Milton Fine
---------------------------------
Milton Fine, Trustee, U/A
dated 11/17/89, as amended,
FBO Milton Fine, General Partner
INTERPRO, LTD.
By: Interstate Hotels Corporation #1018, General Partner
By: /s/ Milton Fine
---------------------------------
Title: Chairman
------------------------------
- 20 -
<PAGE> 1
EXHIBIT 3
================================================================================
STOCKHOLDERS AGREEMENT
among
THE STOCKHOLDERS NAMED HEREIN
and
INTERSTATE HOTELS COMPANY
Dated as of June 25, 1996
================================================================================
<PAGE> 2
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.
<PAGE> 3
2
"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.
"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
<PAGE> 4
3
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.
"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
<PAGE> 5
4
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.
(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
<PAGE> 6
5
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, 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
<PAGE> 7
6
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
<PAGE> 8
7
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 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.
<PAGE> 9
8
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 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
<PAGE> 10
9
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 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.
<PAGE> 11
10
(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.
(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
<PAGE> 12
11
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 opinion of such
<PAGE> 13
12
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
<PAGE> 14
13
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.
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
<PAGE> 15
14
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 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.
<PAGE> 16
15
(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 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
<PAGE> 17
16
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.
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:
<PAGE> 18
17
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
<PAGE> 19
18
Facsimile: 212-754-8726
with copies thereof to:
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
<PAGE> 20
19
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.
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
<PAGE> 21
20
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.
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.
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
<PAGE> 22
21
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.
/s/ David J. Fine
- - --------------------------------
David J. Fine, Trustee for the
Milton Fine Grantor Annuity Trust
dated March 31, 1996.
<PAGE> 23
22
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:
Title:
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:
Title:
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:
Title:
BRE/INTERSTONE L.L.C.
By: /s/ Gary M. Sumers
---------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4
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
<PAGE> 2
Merrill Lynch & Co.
June 19, 1996
Page 2
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
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,
/s/ DAVID J. FINE
-------------------------
David J. Fine
Accepted as of the date hereof:
By: /s/ MICHAEL F. PROFENIUS
-------------------------------------
Merrill Lynch & Co.
As Representative of the Underwriters
<PAGE> 3
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
<PAGE> 4
Merrill Lynch & Co.
June 19, 1996
Page 2
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
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,
IRREVOCABLE TRUST DATED DECEMBER 15, 1989
FBO CAROLYN FINE FRIEDMAN
/s/ David J. Fine
-----------------------------------------
By: DAVID J. FINE, as Trustee
Accepted as of the date hereof:
By: /s/ Michael F. Profenius
-----------------------------------
Merrill Lynch & Co.
As Representative of the Underwriters
<PAGE> 5
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
<PAGE> 6
Merrill Lynch & Co.
June 19, 1996
Page 2
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
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,
IRREVOCABLE TRUST DATED DECEMBER 15, 1989
FBO SYBIL FINE KING
/s/ David J. Fine
--------------------------------------
By: DAVID J. FINE, as Trustee
Accepted as of the date hereof:
By: /s/ Michael F. Profenius
-------------------------------------
Merrill Lynch & Co.
As Representative of the Underwriters
<PAGE> 7
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
<PAGE> 8
Merrill Lynch & Co.
June 19, 1996
Page 2
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
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,
IRREVOCABLE TRUST DATED DECEMBER 15, 1989
FBO DAVID J. FINE
/s/ David J. Fine
----------------------------------------
By: DAVID J. FINE, as Trustee
Accepted as of the date hereof:
By: /s/ Michael F. Profenius
------------------------------------
Merrill Lynch & Co.
As Representative of the Underwriters
<PAGE> 9
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
<PAGE> 10
Merrill Lynch & Co.
June 19, 1996
Page 2
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
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,
MILTON FINE GRANTOR ANNUITY TRUST
DATED MARCH 31, 1996
/s/ David J. Fine
----------------------------------
By: DAVID J. FINE, as Trustee
Accepted as of the date hereof:
By: /s/ Michael F. Profenius
-------------------------------------
Merrill Lynch & Co.
As Representative of the Underwriters
