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Exhibit 4.1
August 28, 2000
American Stock Transfer and
Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Administration
Re: Amendment No. 1 to Rights Agreement
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Ladies and Gentlemen:
Pursuant to Section 27 of the Shareholder Rights Agreement (the "Rights
Agreement"), dated as of July 8, 1999, between Interstate Hotels Corporation
(the "Company"), and American Stock Transfer and Trust Company, as rights agent,
the Company, by resolution adopted by its Directors, hereby amends the Rights
Agreement as follows:
1. Section 1(a) of the Rights Agreement is hereby amended by adding the
following four paragraphs prior to the last paragraph of Section 1(a):
In addition, notwithstanding the foregoing, the Investor (as defined in
Section 1 (rr)), or any Affiliate or Associate of the Investor, shall
not become an Acquiring Person solely as a result of the approval,
execution or delivery of the Purchase Agreement (as defined in Section
1(xx)) or the Ancillary Documents (as defined in Section 1(oo)) or the
consummation of the transactions contemplated thereby, including
without limitation the conversion of the Notes or Series B Preferred
Stock in accordance with the terms thereof or the acquisition of
Beneficial Ownership of additional shares of Common Stock in compliance
with the provisions of the Investor Agreement (as defined in Section
1(tt)), unless and until such time as (i) the Investor, or any
Affiliate or Associate of the Investor, thereafter becomes the
Beneficial Owner of additional shares of Common Stock other than as a
result of a transfer permitted by the Investor Agreement or as the
result of a stock dividend, stock split or similar transaction effected
by the
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Trust Company
August 28, 2000
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Company in which all holders of Common Stock are treated equally, or
(ii) any other Person who is the Beneficial Owner of Common Stock
representing 1% or more of the then-outstanding shares of Common Stock
thereafter becomes an Affiliate or Associate of the Investor.
In addition, notwithstanding the foregoing, a Related Transferee (as
defined in the Investor Agreement), or any Affiliate or Associate of a
Related Transferee, shall not become an Acquiring Person solely as a
result of an acquisition of Beneficial Ownership of Common Stock in
accordance with Section 4.1(f) of the Investor Agreement, unless and
until such time as (i) such Related Transferee, or any Affiliate or
Associate of such Related Transferee, thereafter becomes the Beneficial
Owner of additional shares of Common Stock other than as a result of a
transfer permitted by the Investor Agreement or as the result of a
stock dividend, stock split or similar transaction effected by the
Company in which all holders of Common Stock are treated equally, or
(ii) any other Person who is the Beneficial Owner of Common Stock
representing 1% or more of the then-outstanding shares of Common Stock
thereafter becomes an Affiliate or Associate of such Related
Transferee.
In addition, notwithstanding the foregoing, any Person that acquires
securities from the Investor or a Related Transferee (each a "Permitted
Transferee"), pursuant to a transfer of securities permitted by Section
4.1 of the Investor Agreement, (such a transfer, an "Exempt Transfer"),
shall not become an Acquiring Person solely as a result of the Exempt
Transfer, so long as such Permitted Transferee's Beneficial Ownership
of the Common Stock does not exceed the Maximum Ownership (as defined
in the Investor Agreement) (except in the case of an acquisition
pursuant to Section 4.1(f), in which case the Maximum Ownership
restriction shall not apply) unless and until such time as (i) such
Permitted Transferee or any Affiliate or Associate of such Permitted
Transferee thereafter becomes the Beneficial Owner of additional shares
of Common Stock other than as a result of an Exempt Transfer after
which such Permitted Transferee's Beneficial Ownership of Common Stock
does not exceed the Maximum Ownership or as the result of a stock
dividend, stock split or similar transaction effected by the Company in
which all holders of Common Stock are treated equally, or (ii) any
other Person who is the Beneficial Owner of Common Stock representing
1% or more of the then-outstanding shares of Common Stock thereafter
becomes an Affiliate or Associate of such Permitted Transferee.
In addition, notwithstanding the foregoing, MK/CG-GP I, LP or any
Affiliate or Associate of MK/CG-GP I, LP, shall not become an Acquiring
Person solely as a result of the Beneficial Ownership of shares of
Common Stock as of the date
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Trust Company
August 28, 2000
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hereof, unless and until such time as (i) MK/CG-GP I, LP, or any
Affiliate or Associate of MK/CG-GP I, LP, thereafter becomes the
Beneficial Owner of additional shares of Common Stock other than as a
result of the Investor or any Affiliate or Associate of the Investor
acquiring Beneficial Ownership of additional shares of Common Stock as
a result of a transfer permitted by the Investor Agreement or as the
result of a stock dividend, stock split or similar transaction effected
by the Company in which all holders of Common Stock are treated
equally, or (ii) any other Person who is the Beneficial Owner of Common
Stock representing 1% or more of the then-outstanding shares of Common
Stock thereafter becomes an Affiliate or Associate of MK/CG-GP I, LP.
2. Section 1 (c) of the Rights Agreement shall be amended and restated
in its entirety as follows:
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "Rules") under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement; provided, however, that no Person who is a director or
officer of the Company shall be deemed an Affiliate or an Associate of
any other director or officer of the Company solely as a result of his
or her position as a director or officer of the Company; provided,
further, however, that an Exempt Affiliate (as defined in the Investor
Agreement) shall not be deemed an Affiliate or Associate of the
Investor, and the Investor shall not be deemed an Affiliate or
Associate of an Exempt Affiliate.
3. Section 1 of the Rights Agreement shall be amended by adding the
following Xxxxxxxxxxx (xx), (xx), (xx), (xx), (xx), (xx), (xx), (xx), (ww),
(xx), (yy), (zz), (aaa) and (bbb).
(oo) "Ancillary Documents" means the Registration Rights Agreement, the
Investor Agreement, the Articles Supplementary and all other contracts,
agreements, schedules, certificates and other documents delivered
pursuant to or in connection with the Purchase Agreement by any party
thereto at or prior to the closing of the transactions contemplated
thereby.
(pp) "Articles Supplementary" means the Company's Articles
Supplementary setting forth the rights and preferences of the Series B
Preferred Stock.
(qq) "Exempt Affiliate" has the meaning set forth in the Investor
Agreement.
(rr) "Exempt Transfer" has the meaning set forth in Section 1(a).
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Trust Company
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(ss) "Investor" means CGLH Partners I LP or CGLH Partners II LP.
(tt) "Investor Agreement" means the Investor Agreement by and among the
Company and CGLH Partners I LP and CGLH Partners II LP, to be entered
into pursuant to the Purchase Agreement at the Purchase Closing.
(uu) "Maximum Ownership" has the meaning set forth in the Investor
Agreement.
(vv) "Notes" means the 8.75% Subordinated Convertible Notes to be
issued by the Company to CGLH Partners I LP and CGLH Partners II LP
pursuant to the Purchase Agreement at the Purchase Closing.
(ww) "Permitted Transferee" has the meaning set forth in Section 1(a).
(xx) "Purchase Agreement" means the Securities Purchase Agreement,
dated as of August ____, 2000, by and among the Company and CGLH
Partners I LP and CGLH Partners II LP.
(yy) "Purchase Closing" means the consummation of the transactions
contemplated by the Purchase Agreement.
(zz) "Registration Rights Agreement" means the Registration Rights
Agreement by and among the Company and CGLH Partners I LP and CGLH
Partners II LP, to be entered into pursuant to the Purchase Agreement
at the Purchase Closing.
(aaa) "Related Transferee" has the meaning set forth in the Investor
Agreement.
(bbb) "Series B Preferred Stock" means the Company's Series B
Convertible Preferred Stock, par value $.01 per share.
4. The Rights Agreement shall not otherwise be supplemented or amended
by virtue of this Amendment No. 1 to the Rights Agreement, but shall remain in
full force and effect.
5. Capitalized terms used without other definition in this Amendment
No. 1 to the Rights Agreement shall be used as defined in the Rights Agreement.
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Trust Company
August 28, 2000
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6. This Amendment No. 1 to the Rights Agreement shall be deemed to be a
contract made under the laws of the State of Maryland and for all purposes shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and to be performed entirely within Maryland.
The courts of the State of Maryland and of the United States of America located
in the State of Maryland (the "Maryland Courts") shall have exclusive
jurisdiction over any litigation arising out of or relating to this Amendment
No. 1 and the transactions contemplated hereby, and any Person commencing or
otherwise involved in any such litigation shall waive any objection to the
laying of venue of such litigation in the Maryland Courts and shall not plead or
claim in any Maryland Court that such litigation brought therein has been
brought in an inconvenient forum.
7. This Amendment No. 1 to the Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
8. This Amendment No. 1 to the Rights Agreement shall be effective as
of, and immediately prior to, the execution and delivery of the Purchase
Agreement, and all references to the Rights Agreement shall, from and after such
time, be deemed to be references to the Rights Agreement as amended hereby.
9. Exhibits B and C to the Rights Agreement shall be deemed amended in
a manner consistent with this Amendment No. 1 to the Rights Agreement.
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American Stock Transfer and
Trust Company
August 28, 2000
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Very truly yours,
INTERSTATE HOTELS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Accepted and agreed to as
of the effective time
specified above:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
