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EXHIBIT 1
REDEMPTION AND STOCK EXCHANGE AGREEMENT
November 15, 1996
THIS REDEMPTION AND STOCK EXCHANGE AGREEMENT (this "Agreement") is
entered into effective as of the 15th day of November, 1996, by and among
CROSSROADS/MEMPHIS PARTNERSHIP, L.P., a Delaware limited partnership (the
"Partnership"), TRUST LEASING, INC., a Tennessee corporation ("Trust Leasing"),
and TRUST MANAGEMENT, INC., a Tennessee corporation ("Trust Management") (Trust
Leasing and Trust Management being herein referred to individually as an
"Offeree" and collectively as the "Offerees").
W I T N E S S E T H:
WHEREAS, the Partnership desires to grant the Offerees the right to
cause the Partnership to redeem, 'and the Offerees desire to grant to the
Partnership the right to redeem, any or all of the Offerees' interests in the
Partnership in exchange for shares of Common Stock (as hereinafter defined),
upon and subject to the terms and conditions hereinafter set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the adequacy and sufficiency 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:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the
relevant time.
"Business Day" means any Day on which the New York Stock Exchange is
open for trading.
"Capital Stock" means the common stock and preferred stock authorized
to be issued by the Company in the Amended and Restated Articles of
Incorporation of the Company.
"Code" means the Internal Revenue Code of 1986, as the same shall be
in effect at the relevant time.
"Common Stock" means the common stock of the Company, as defined in
the Amended and Restated Articles of Incorporation of the Company, par value
$.01 per share.
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"Company" means Interstate Hotels Company, a Pennsylvania corporation,
and its successors and assigns.
"Contribution Agreement" means the Contribution Agreement by and among
the Offerees, Xxxxxxx X. XxXxxxx, Xx., Crossroads/ Memphis Company, L.L.C. and
the Partnership, dated October 4, 1996.
"Day" means each calendar day, including Saturdays, Sundays and legal
holidays; provided, however, that if the Day on which a period of time for
consent or approval or other action ends is not a Business Day, such period
shall end on the next Business Day.
"Determination" is defined in Section 2 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the relevant time.
"Exchange Number of Shares" means, with respect to a tender of
Partnership Units for exchange hereunder, the number of shares of Common Stock
equal to the number of Partnership Units tendered by the applicable Offeree.
The aggregate Exchange Number of Shares, assuming all Partnership Units of the
Offerees are tendered, will not exceed 1,957,894 shares of Common Stock
(assuming the number of shares of Common Stock held by the Partnership does not
change as a result of the circumstances described in Section 1.3(c) of the
Partnership Agreement).
"Fair Market Value of the Partnership Interests" means an amount equal
to $46,500,000, assuming the Offerees contribute to the Partnership all of the
Companies' Assets (as defined in the Contribution Agreement). In the event the
Offerees contribute less than all of the Companies' Assets to the Partnership,
the Fair Market Value of the Partnership Interests shall mean $46,500,000 less
the amount allocated to the Companies' Assets which were not contributed to the
Partnership, as set forth in Sections 1.8 and 6.17 of the Contribution
Agreement.
"HSR" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Letter of Transmittal" means the form of letter attached hereto and
made a part hereof pursuant to which an Offeree may tender its Partnership
Units in exchange for shares of Common Stock.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of Crossroads/Memphis
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Partnership, L.P., dated as of November 15, 1996, as the same may be amended or
supplemented.
"Partnership Interest" means an ownership interest, as a Partner, in
the Partnership, as such term is defined in the Partnership Agreement.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all the partners of the Partnership, as such term is
defined in the Partnership Agreement.
"Person" or "Persons" means an individual, a partnership (general or
limited), corporation, limited liability company, joint venture, business
trust, cooperative, association, or other form of business organization,
whether or not regarded as a legal entity under applicable law, a trust (inter
vivos or testamentary), an estate of a deceased, insane or incompetent person,
a quasi-governmental entity, a government or any agency, authority, political
subdivision, or other instrumentality thereof, or any other entity.
"Registration Rights Agreement" means the Registration Rights and
Shareholders Agreement in the form attached to this Agreement as Exhibit "A",
to be entered into by the Company and the Offerees on or before the first
Settlement Date, as the same may be amended or supplemented.
"SEC" is defined in Section 3 hereof.
"Settlement Date" is defined in Section 3 hereof.
2. Terms of This Agreement. (a) Upon the terms and subject to
the conditions of this Agreement, the Partnership will exchange shares of
Common Stock for outstanding Partnership Units owned by an Offeree which are
properly tendered. Notwithstanding any other provision of this Agreement to
the contrary, this Agreement and the rights of the Offerees to tender their
Partnership Units in exchange for Common Stock shall terminate on that date
which is ten (10) years from the date hereof.
(b) Any exchange of Partnership Units hereunder shall
constitute a representation and warranty to the Partnership that:
(i) The Offeree's interest in the Partnership and
the Common Stock to be acquired by such Offeree will be acquired for
the Offeree's own account and not with a view to, or present intention
of, distribution thereof in violation of the Act or any other law,
rule, or regulation of the United States or any state which regulates,
restricts or affects the ownership or the sale, assignment,
disposition or transfer of any security, including, without
limitation, the Act and the Investment Company Act
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(collectively, the "Securities Laws"), and will not be disposed of in
contravention of the Act or any other Securities Laws (without any
limitations of any rights such Offeree may have under the Registration
Rights Agreement);
(ii) The Offeree is sophisticated in financial
matters and is able to evaluate the risks and benefits of its
investment in the Partnership and/or the Company;
(iii) The Offeree has had an opportunity to ask
questions and received answers concerning the terms and conditions of
the acquisition of its interest in the Partnership and the Common
Stock and had full access to such other information concerning the
Company and the Partnership as the Offeree has requested;
(iv) The Offeree is able to bear the economic risk
of its investment in the Partnership and/or the Common Stock for an
indefinite period of time;
(v) The Offeree has such knowledge, skill and
experience in business, financial and investment matters so that it is
capable of evaluating the merits and risks of an investment in the
Partnership and/or the Common Stock (to the extent the Offeree has
deemed it appropriate to do so, the Offeree has retained, and relied
upon, appropriate professional advice regarding the tax, legal and
financial merits and consequences of an investment of the Partnership
and/or the Common Stock;
(vi) The Offeree has made, either alone or
together with advisors (if any), such independent investigation of the
Partnership and the Company, their management and related matters as
the Offeree deems to be, or such advisors (if any) have advised to be,
necessary, desirable or advisable in connection with an investment in
the Partnership and/or the Common Stock, and the Offeree and the
Offeree's advisors (if any) have received all information and data
which the Offeree or such advisors (if any) believe to be necessary to
reach an informed decision as to the advisability of an investment in
the Partnership and/or the Company, and the Offeree is familiar with
the business and financial condition, operation and prospects of the
Partnership and the Company;
(vii) The Offeree has reviewed its financial
condition and commitments, alone and together with the Offeree's
advisors, and that, based on such review, the Offeree is satisfied
that (a) the Offeree has adequate means of providing for its financial
needs and possible contingencies and has assets or sources of income
which taken together, are more than sufficient and the Offeree
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could bear the risk of loss of the Offeree's entire investment in the
Partnership and/or the Company, (b) the Offeree has no present or
contemplated future need to dispose of all or any portion of its
interest in the Partnership or the Common Stock to satisfy any
existing or contemplated undertaking, need or indebtedness, and (c)
the Offeree is capable of bearing the economic risk of an investment
in the Partnership and/or the Common Stock for the indefinite future,
and the Offeree agrees to furnish any additional information requested
by the Company or the Partnership to assure compliance of this
transaction was applicable Federal and State securities laws.
(c) This Agreement is a continuous offer and may not be
withdrawn, changed or modified by the Partnership without the prior written
consent of each of the Offerees; provided, however, that a change or
modification that is for the benefit of, and not adverse to the rights of, the
Offerees may be made unilaterally by the Partnership; provided further,
however, that a change or modification that is only adverse to the rights of
one or more Offeree(s) may be made with the prior written consent of only each
such Offeree(s), but in any case, prompt written notice of such change or
modification shall be given to all Offerees.
(d) The total aggregate number of shares of Common Stock
delivered in exchange for tendered Partnership Units shall be 1,957,894 (as
adjusted to reflect any stock splits, stock dividends or other increases or
decreases in the number of such shares as a result of the same or similar types
of corporate action). All determinations (each, a "Determination") of the
number of shares of Common Stock to be delivered pursuant to a proper tender of
Partnership Units will be made by the general partner of the Partnership in its
sole and absolute discretion but in accordance with the provisions hereof,
which Determination will, in the absence of manifest error, be binding upon
each tendering Offeree.
(e) No tendering Offeree will have any rights as a
shareholder of the Company until such time as that person becomes a holder of
record of shares of Common Stock.
(f) Notwithstanding any other provision of this Agreement
to the contrary, it shall be an express condition precedent to the obligations
of the Partnership to deliver any shares of Common Stock to the Offerees
pursuant to this Agreement on the first Settlement Date for the Offerees to
have entered into the Registration Rights Agreement.
3. Acceptance for Payment and Payment for Partnership Units. (a)
Upon the terms and subject to the conditions of this Agreement, the Partnership
will deliver shares of Common Stock for Partnership Units properly tendered on
that date (the
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"Settlement Date") which is the later of: (i) the expiration of two (2)
Business Days from the date that the Partnership receives the tender of the
Partnership Units in proper form and meeting all of the requirements of this
Agreement, and (ii) the expiration or termination of the waiting period
applicable to each tender, if any, under HSR. The Partnership agrees to use
its best efforts to obtain an early termination of the waiting period
applicable to each tender, if any, under HSR. Furthermore, each tender and the
issuance of Common Stock with respect thereto will be subject to any change in
securities or other applicable law imposing limits or conditions on such tender
or the issuance of Common Stock with respect thereto. In all cases, payment
for the Partnership Units tendered pursuant to this Agreement will be made only
after receipt by the Partnership of a properly completed and duly executed
Letter of Transmittal and any other documents required by the Letter of
Transmittal.
(b) Under no circumstances will interest be paid by the
Company or the Partnership by reason of any delay in making such issuance or
delivery of shares of Common Stock as a result of the conditions set forth in
the preceding paragraph.
(c) The Partnership, effective as of the Settlement Date
with respect to any Partnership Units tendered to and acquired by the
Partnership, assumes all obligations related to the tendered Partnership Units
arising from and after the applicable Settlement Date and will hold the Person
tendering those Partnership Units harmless from any such obligations other than
with respect to any breach of any representation contained in the Letter of
Transmittal to be delivered in connection with the exercise of rights pursuant
to this Agreement.
4. Procedure for Tendering Partnership Units.
(a) Subject to the conditions set forth herein, each
tendering Offeree may tender any or all Partnership Units owned by such Offeree
by delivering to the Partnership, c/o Crossroads/ Memphis Company, L.L.C.,
Xxxxxx Plaza Ten, 000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000; Attn:
Secretary (or such other address as the general partner of the Partnership
shall provide in writing to each Offeree), a completed and duly executed Letter
of Transmittal and any other documents required by the Letter of Transmittal.
(b) Unless an exception applies under applicable law and
regulations, the Partnership will be required to withhold, and will withhold,
31 percent (or such other amount as subsequent law may require) of the gross
proceeds (based upon dollar equivalent of shares of Common Stock) paid to a
tendering Offeree unless the Offeree pursuant to this Agreement provides his
tax identification number (employer identification number or Social Security
Number) and certifies that such number is correct.
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Therefore, unless such an exception exists and is proved in a manner
satisfactory to the Partnership, each tendering Offeree should complete and
sign the main signature form on the Letter of Transmittal and sign the
Substitute Form W-9 included as part of the Letter of Transmittal, so as to
provide the information and certification necessary to avoid backup
withholding.
(c) The tender of Partnership Units pursuant to the
foregoing will constitute a binding agreement between the tendering Offeree and
the Partnership upon the terms and subject to the conditions of this Agreement
and will not be subject to withdrawal or change.
(d) All questions as to the validity and form of any
tender of Partnership Units will be determined in the sole discretion of the
Partnership, which determination shall be final and binding.
5. Rights as a Partner. Until the Settlement Date, each
tendering Offeree shall continue to own its respective tendered Partnership
Units, and will continue to be treated as the holder of such tendered
Partnership Units for all purposes of the Partnership Agreement, including,
without limitation, for purposes of voting, consent, allocations and
distributions (subject only to reasonable accounting conventions adopted by the
Partnership for purposes of determining the partners' varying percentage
interests in the Partnership during the taxable year). Tendered Partnership
Units will be transferred to the Partnership only upon receipt by the tendering
Offeree of Common Stock in payment in full therefor.
6. Cash Options. Notwithstanding any other provision of this
Agreement to the contrary, with regard to any Partnership Units properly
tendered by an Offeree, if such Offeree advises either the Partnership or the
Company that such Offeree intends within 30 days thereafter to exercise any of
its registration rights under the Registration Rights Agreement, then at the
sole and absolute discretion of the Partnership, part or all of such
Partnership Units may be redeemed by the Partnership (or one or more of its
affiliates) in exchange for cash (in amounts as set forth below), otherwise
pursuant to the terms of this Agreement. The amount of cash paid for such
Partnership Units will be equal to the Fair Market Value of the Common Stock
which the Offeree would have received had such Partnership Units been tendered
in exchange for shares of Common Stock.
7. Right to Set Off. Notwithstanding any other provision of this
Agreement, the Contribution Agreement, the Registration Rights Agreement or any
other agreement relating thereto, the Partnership will have the absolute right
to set off against amounts owed to the Offerees (whether cash or shares of
Common
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Stock) for any amounts owed by any of the Offerees to the Partnership, the
Company or to their affiliates.
8. Miscellaneous.
(a) 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 assigns 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 assigns, any legal or equitable
rights hereunder.
(b) Assignment. This Agreement may not be assigned by an
Offeree without the consent of the Partnership. Notwithstanding any such
assignment, the assigning party will continue to remain primarily liable under
this Agreement.
(c) 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 Offeree:
0000 Xxxxxxxxxx #000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. XxXxxxx, Xx.
Facsimile: 000-000-0000
With a copy to:
Bogatin Law Firm
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: 901/767-1234
To the Partnership:
Interstate Hotels Company
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Mr. W. Xxxxxx Xxxxxxxxxx, Xx.
Facsimile: 000-000-0000
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with copies thereof to:
Interstate Hotels Company
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000
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 named above.
Any party may, from time to time, specify as its address for purposes of this
Agreement any other address upon the giving of ten (10) days' notice thereof to
the other parties.
(d) 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.
(e) Waiver. Any party by written notice to the other
parties may (a) extend the time for performance of any of the obligations or
other actions of the other under this Agreement, (b) waive any inaccuracies in
the representations or warranties of the other contained in this Agreement, (c)
waive compliance with any of the conditions or covenants of the other contained
in this Agreement or (d) waive or modify a performance of any of the
obligations of the other under this Agreement; provided however, that no such
party may, without the prior written consent of such other party, make or grant
such extension of time, waiver of inaccuracies or compliance or waiver or
modification of performance with respect to its (or any of its affiliates')
representations, warranties, conditions or covenants hereunder. Except as
provided in the immediately preceding sentence, no action taken pursuant to
this Agreement will be deemed to constitute a waiver of compliance with any
representations, warranties or covenants contained in this Agreement and will
not operate or be construed as a waiver of any subsequent breach, whether of a
similar or dissimilar nature.
(f) 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
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and/or injunctive relief in order to enforce or prevent any violation of the
provisions of this Agreement.
(g) Governing Law. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with the
substantive laws of the Commonwealth of Pennsylvania, without giving effect to
the principles of conflict of laws thereof.
(h) Submission to Jurisdiction. Any action arising out
of this Agreement may be brought in the state or federal courts of
Pennsylvania. The parties hereto do hereby irrevocably submit to the exclusive
jurisdiction of the appropriate state or federal court in Pennsylvania for the
purpose of any suit, action, proceeding or judgment relating to or arising out
of this Agreement. Each Offeree and the Partnership further agrees that
service of 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 has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each Offeree and the Partnership 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 Commonwealth of
Pennsylvania or (b) 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 xxxxxxx.xx any such court has been brought in an inconvenient forum.
The parties hereto unconditionally waive any right to a jury trial for any
action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby.
(i) 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.
(j) 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.
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(k) 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.
(1) Gender. Whenever the context shall so require, all
words herein in any gender shall be deemed to include the masculine, feminine
or neuter gender, and all singular words shall include the plural, and all
plural words shall include the singular.
(m) Further Assurances. From time to time, as and when
requested by any party hereto, the other parties will execute and deliver, or
cause to be executed and delivered, all such documents and instruments as may
be reasonably necessary to consummate the transactions contemplated by this
Agreement.
(n) Certain Interpretive Matters and Definitions. (a)
unless the context otherwise requires, (i) all references to Section, Articles,
Schedules or Exhibits are to Sections, Articles, Schedules or Exhibits of or to
this Agreement, (ii) each term defined in this Agreement has the meaning
assigned to it in this Agreement, (iii) each accounting term not otherwise
defined in this Agreement has the meaning assigned to it in accordance with
generally accepted accounting principles and practices and (iv) the word "or"
is disjunctive but not necessarily exclusive. All references to "$" or dollar
amounts will be to lawful currency of the United States of America.
(b) No provision of this Agreement will be
interpreted in favor of, or against, any of the parties hereto by
reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to
which any such provision is inconsistent with any prior draft hereof
or thereof.
(o) This Agreement. The words "herein," "hereof,"
"hereunder," "hereby," "this Agreement" and other similar references shall be
construed to mean and include this Redemption and Stock Exchange Agreement and
all amendments thereof and supplements thereto, unless the context should
clearly indicate or require otherwise.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
CROSSROADS/MEMPHIS PARTNERSHIP,
L.P., a Delaware limited partnership
By: Crossroads/Memphis Company, L.L.C.,
a Delaware limited liability
company, General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------
Title:
-------------------
TRUST LEASING, INC., a Tennessee corporation
By: /s/ Xxxxxxx X. XxXxxxx, Xx.
---------------------------------------
Name: Xxxxxxx X. XxXxxxx, Xx.
-----------------------------
Title: President
----------------------------
TRUST MANAGEMENT, INC., a Tennessee corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------
Title: President
----------------------------
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LETTER OF TRANSMITTAL
To Tender Partnership Units
Pursuant to the Redemption and Stock Exchange Agreement
Dated as of _________________ __, 1996,
among
Crossroads/Memphis Partnership, L.P.
and
Trust Leasing, Inc.
and
Trust Management, Inc.
TO: Crossroads/Memphis Partnership, X.X.
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx
Attn: General Partner
Description of Partnership Units:
-----------------------------------------------------------------------------
Name and Addresses of Offeree:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Number of Units Tendered:
----------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Gentlemen:
The undersigned hereby tenders to Crossroads/Memphis Partnership,
L.P., a Delaware limited partnership ("Partnership"), the above-described
Partnership Units as defined in the Redemption and Stock Exchange Agreement,
dated as of ___________ __, 1996 (the "Agreement"), in accordance with the
terms and conditions of the Agreement and this Letter of Transmittal (which
together constitutes the "Offer"), receipt of which is hereby acknowledged.
All terms used herein but not defined herein are used as defined in the
Agreement.
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Subject to, and effective upon, issuance or delivery of shares of Common
Stock for the Partnership Units tendered herewith, the undersigned hereby
assigns and transfers to the Partnership all right, title and interest in and
to all the Partnership Units that are being tendered hereby and irrevocably
constitutes and appoints the Partnership (and its general partner) as its
attorney-in-fact (the "Agent"), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) present such Partnership Units for transfer or redemption on the
Partnership's books (b) except to the extent tendered to the Partnership for
redemption, receive all rights, privileges and benefits, and any and all
obligations and liabilities appertaining thereto and otherwise exercise all
rights of beneficial ownership of such Partnership Units, all in accordance
with the terms of the Offer and (c) execute and enter into on behalf of such
Offeree any and all documents or instruments of conveyance or assignment, and
any amendment to the Partnership Agreement or to the Certificate of Limited
Partnership.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Partnership Units and that upon payment, the Partnership will acquire
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and the same will not be subject to any adverse claim. The
undersigned hereby represents and warrants that all representations and
warranties made by the undersigned in the Agreement are true and correct on the
date of this Letter of Transmittal and will continue to be true and correct on
the Settlement Date (as defined in the Agreement), including specifically,
those representations and warranties contained in Section 2(b) of the
Agreement. The undersigned will, upon request, execute any additional
documents deemed by the Partnership to be reasonably necessary or desirable to
complete the sale, assignment and transfer of the tendered Partnership Units.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the dissolution,
termination or bankruptcy of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators and legal representatives of the undersigned.
The undersigned understands that a tender of Partnership Units pursuant to
the Agreement constitutes a binding agreement between the undersigned and the
Partnership upon the terms and subject to the conditions of the Agreement.
This tender is irrevocable.
The Partnership, effective as of the Settlement Date, will assume all
obligations related to the Partnership Units tendered to the Partnership which
arise from and after the applicable
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Settlement Date and will hold the undersigned harmless from such obligations,
including any liabilities, demands, claims, actions or causes of action,
assessments, losses, fines, penalties, costs, damages and expenses as a result
of or arising out of the ownership of such tendered Partnership Units.
Partnership Units tendered to and acquired by the Partnership will be
cancelled, and the remaining Partnership Units of the Offeree tendering such
Partnership Units, if any, will be unchanged.
The Partnership and the undersigned agree that they will cooperate with
each other and will make, execute, acknowledge, deliver, record and file, or
cause to be made, executed, acknowledged, delivered, recorded and filed, at
such times and places as the other may reasonably deem necessary, all other and
further documents and instruments (including, but not limited to, any and all
documents or instruments of conveyance or assignment, and amendments to the
Partnership Agreement and the Certificate of Limited Partnership), and will
take all other and further actions, as the other may reasonably request from
time to time in order to effectuate the purposes and provisions of the tender
made pursuant to this Letter of Transmittal.
Any notice, delivery or mailing should be made to the applicable party at
the address set forth in the Agreement for such party.
The undersigned understands that, notwithstanding the foregoing, with
regard to any Partnership Units properly tendered by an Offeree, if such
Offeree advises the Partnership or the Company that such Offeree intends within
30 days thereafter to exercise any of its registration rights under the
Registration Rights Agreement, then at the sole and absolute discretion of the
Partnership, part or all of such Partnership Units may be redeemed by the
Partnership in exchange for cash, in an amount equal to the Fair Market Value
of the Common Stock (as defined in the Agreement) of the Common Stock which the
Offeree would have received had such Partnership Units been exchanged for
shares of Common Stock, otherwise pursuant to the terms of the Agreement and
this Letter of Transmittal.
16
Mail certificate(s) for shares of Common Stock to:
Name
------------------------------------------------------------------------
(please print)
Address
---------------------------------------------------------------------
-----------------------------------------------------------------------------
(include Zip Code)
-----------------------------------------------------------------------------
(Tax Identification or Social Security Number)
SIGN HERE
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Signature(s) of holder of Partnership Units)
If signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set-forth full title.
Dated
-----------------------------------------------------------------------
Name(s)
---------------------------------------------------------------------
(please print)
Capacity
--------------------------------------------------------------------
(Full Title)
Address
---------------------------------------------------------------------
-----------------------------------------------------------------------------
(include Zip Code)
Area Code and Tel. No.
------------------------------------------------------
Tax Identification or
Social Security No.
---------------------------------------------------------
(Complete Substitute Form W-9)
17
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Agreement
1. Delivery of Letter of Transmittal. This Letter of Transmittal
is to be completed by the record holder of the applicable Partnership Units. A
properly completed and duly executed Letter of Transmittal, and any other
documents required by this Letter of Transmittal, must be received by the
Partnership. No alternative, conditional or contingent tenders will be
accepted.
2. Inadequate Space. If the space provided herein is inadequate,
the information required should be listed on a separate schedule attached
hereto.
3. Partial Tenders. If fewer than all the Partnership Units are
to be tendered, fill in the Number of Partnership Units represented by the
Partnership Units which are to be tendered in the box entitled Number of
Partnership Units Tendered.
4. Signatures on Letter of Transmittal. The signature must
correspond with the name as written on the signature page of the Partnership
Agreement without any change whatsoever.
5. If this Letter of Transmittal is signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary--or representative capacity, each
person should so indicate when signing, and proper evidence satisfactory to the
Partnership of their authority so to act must be submitted.
6. Waiver of Conditions. The Partnership reserves the right to
waive any of the specified conditions of the Offer in the case of the
Partnership Units tendered.
7. Back-up Withholding. Under the Federal income tax law, a
person surrendering Partnership Units must provide the Partnership with his
correct taxpayer identification number ("TIN") on Substitute Form W-9 below
unless an exemption applies. If the correct TIN is not provided, a $50 penalty
may be imposed by the Internal Revenue Service and payments made in exchange
for the surrendered Partnership Units may be subject to back-up withholding of
that rate provided by the Federal income tax law (such rate being at the date
hereof, 31%). The TIN that must be provided is that of the record holder of
the Partnership Units.
18
IMPORTANT TAX INFORMATION
Under Federal income tax laws, a holder whose tendered Partnership
Units are accepted for payment is required by law to provide the Partnership
(as payer) with its correct taxpayer identification number on Substitute Form
W-9 below. If the Partnership is not provided with the correct taxpayer
identification number, the holder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
holder with respect to Partnership Units purchased pursuant to the Offer may be
subject to back-up withholding.
If back-up withholding applies, the Partnership is required to
withhold that rate provided by the Federal income tax law (such rate being at
the date hereof, 31% of any such payments made to the holder of Partnership
Units). Shares of Common Stock otherwise deliverable hereunder may, at the
expense (and with all risk of loss for the account) of the undersigned, be sold
to pay such amounts. Back-up withholding is not an additional tax. Rather,
the tax liability of persons subject to back-up withholding will be reduced by
the amount of tax withheld. If withholding results in an overpayment of taxes,
a refund may be obtained.
Purpose of Substitute Form W-9
To prevent back-up withholding on payments that are made to a holder
of Partnership Units purchased pursuant to the Offer, the holder is required to
notify the Partnership of its correct taxpayer identification number by
completing the form below certifying that the taxpayer identification number
provided on Substitute Form W-9 is correct.
19
WHAT NUMBER TO GIVE THE PARTNERSHIP
The holder is required to give the Partnership the social security
number or employer identification number of the record owner of the Partnership
units.
PAYOR'S NAME: Crossroads/Memphis Partnership, L.P.
Substitute Form W-9 Part 1 - Please provide your TIN in the box at Social Security
right and certify by signing and dating below Number/Employer
Identification Number
Department of the Certification - Under the penalties of Perjury,
Treasury/ (i) I certify that the information provided on
Internal Revenue this form is true, correct and complete and (ii) I
Service am not subject to backup withholding because: (a)
I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service
(IRS) that I am subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
Signature _________________ Date _______
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP
WITHHOLDING OF THAT RATE PROVIDED BY THE FEDERAL INCOME TAX LAW (SUCH
RATE BEING AT THE DATE HEREOF, 31%) OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE CONTINUING OFFER.
20
Exhibit A to Redemption and
Stock Exchange Agreement
--------------------------------------------------------------------------------
REGISTRATION RIGHTS and SHAREHOLDERS AGREEMENT
among
INTERSTATE HOTELS COMPANY
and
THE SHAREHOLDERS NAMED HEREIN
Dated as of ____________________, 1996
--------------------------------------------------------------------------------
21
REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT
THIS REGISTRATION RIGHTS AND SHAREHOLDERS AGREEMENT (the "Agreement"),
is dated as of the ____ day of __________, 1996 among INTERSTATE HOTELS
COMPANY, a Pennsylvania corporation (the "Company") and the shareholders
signatory hereto (individually, a "Shareholder"; collectively, the
"Shareholders").
WITNESSETH:
WHEREAS, the Shareholders have exchanged a part or all of their
partnership interest in Crossroads/Memphis Partnership, L.P., a Delaware
limited partnership ("Partnership") for restricted shares of Common Stock of
the Company pursuant to that certain Redemption and Stock Exchange Agreement
dated as of ____________, 1996, among the Company, the Partnership, Trust
Leasing, Inc. and Trust Management, Inc. ("Exchange Agreement");
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
shares of Common Stock of the Company which they own and may hereafter acquire
pursuant to the Exchange Agreement; and
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.
"Charter Documents" means the articles of incorporation and
bylaws (or other constituent documents) of the Company.
"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
22
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.
"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 trustee for the benefit of a Shareholder or a
person described in clause (1), (3) any corporation or partnership
controlled b(5) 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 Shareholders, 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.
"Rule 144" shall mean Rule 144 under the Securities Act.
"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.
23
"Transfer" of any shares of Common Stock, means any sale,
transfer, assignment, pledge or other disposition of such shares or
any interest therein for value, 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 during the three (3) year period
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 up to Five
Hundred Thousand ($500,000) 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), 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(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 fifty percent (50%) 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 Xxxxxxx Xxxxx & Co. The Company will be obligated to effect only two (2)
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
24
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 Holder 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 t 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 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 reasonably
necessary to keep such registration statement
25
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 tc. 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 reasonable 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") or the underwriters 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 or the underwriters 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 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 or counsel
for the underwriters (and concurred in by counsel for the Company), is
required under the Securities Act or the rules and regulations
26
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 reasonable 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 the underwriters 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
27
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.
(xiii) Make available to the underwriters such member of
xxxxxx.xxxxxxxxxx of the Company as the underwriters may reasonably
request to assist in drafting and reviewing the registration statement
and prospectus, for underwriters due diligence purposes and to meet
with brokers and investors for "roadshow presentations" in connection
with any underwritten offering.
(d) The obligations of the Company under Section 2(b) to comply
with requests for Demand Registration are subject to the following limitations:
(i) The Company shall not be required to comply with a Demand
Notice until after June 30, 1997.
(ii) The Company shall be entitled to postpone 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.
(iii) The Company shall not be obligated to file a
registration statement pursuant to Section 2(b) hereof within 120 days
of the filing of a registration statement pursuant to Section 2(a)
hereof.
(iv) Any Demand Notice shall be for the registration Of
shares of Common Stock representing at least 50% of the total number
of shares of Common Stock to be issued to the Shareholders under the
Exchange Agreement, or, if less and provided that the Shareholders
have received all shares of Common Stock to be issued under the
Exchange Agreement, all
28
shares of Common Stock owned by the Shareholders delivering such
Demand Notice and their Permitted Transferees.
(v) In the event of a Demand Registration, sales shall be
made through a managing underwriter or underwriter mutually selected
by the Shareholders and the Company.
(e) Notwithstanding the provisions of Section 2(a) an 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 Shareholder 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 shares of Common Stock, if
any, proposed to be included in such registration 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 in accordance with the numbs of shares of Common Stock proposed to be
offered by each such offeror; provided, however, if the number of shares of
Common Stock which the Shareholders have requested to sell in any Demand
Registration is so reduced by 50% or more, the Shareholders shall be granted an
additional Demand Registration hereunder.
(f) The Company shall cause to be filed as soon as practicable after
June 30, 1997, a registration statement (a "Shelf Registration Statement") on
Form S-3 or any other appropriate form under the Securities Act for an offering
to be made on a delayed or continuous basis pursuant to Rule 415 thereunder or
any similar rule that may be adopted by the Commission (and shall register or
qualify the shares to be sold in such offering under such other securities or
"blue sky" laws as required pursuant to this Section) covering no less than the
aggregate number of shares of Common Stock to be issued to Shareholders
pursuant to the Exchange Agreement so that (i) the shares of Common Stock to be
issued to the Shareholders pursuant to the Exchange Agreement will be included
in an effective registration statement under the Securities Act or (ii) if the
Company is unable to register such shares of Common Stock in the manner
described in clause (i), so that the Shareholders may resell such shares of
Common Stock in ordinary course brokerage
29
or dealer transactions not involving an underwritten public offering. The
Company shall use its reasonable efforts to keep the Shelf Registration
Statement continuously effective (and to register or qualify the shares to be
sold in such off,ring under such other securities or "blue sky" laws as
required pursuant to this Section) for so long as the Shareholders may exchange
any of all of their interest in the Partnership for shares of Common Stock
under the Exchange Agreement or until the Company has caused to be delivered to
the Shareholders an opinion of counsel (which counsel shall be reasonably
acceptable to the Shareholders) stating that the shares of Common Stock issued
pursuant to the Exchange Agreement may be sold by such Shareholders pursuant to
Rule 144 without regard to any volume limitations and that the Company has
satisfied the informational requirements of Rule 144. The Company shall file
any necessary listing applications or amendments to existing applications to
cause the shares of Common Stock issuable pursuant to the Exchange Agreement to
be listed on the primary exchange on which the Common Stock is then listed, if
any. The Company will use reasonable efforts to register or qualify such Common
Stock under such other securities or "blue sky" laws of such jurisdictions a
the Shareholders may reasonably request and do any and all other acts and
things that may be reasonably necessary or advisable to register or qualify for
sale in such jurisdictions the Common Stock owned by such Shareholders;
provided that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified, (ii) subject
itself to taxation in any such jurisdiction, (iii) consent to general service
of process in any such jurisdiction or (iv) provide any undertaking required by
such other securities or "blue sky" laws or make any change in its Charter
Documents that the Board of Directors determine in good faith to be contrary to
the best interest of the Company and its stockholders. Notwithstanding the
foregoing, if the Company shall furnish to such Shareholders a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be
significantly disadvantageous to the Company and its stockholders for the Shelf
Registration Statement to be amended or supplemented, the Company may defer
such amending or supplementing of such Shelf Registration Statement for not
more than sixty (60) days and in such event the Shareholders shall be required
to discontinue disposition of any Common Stock covered by such Shelf
Registration Statement during such period unless the Shareholders may otherwise
dispose of such common Stock in compliance with state and federal securities
laws.
3. Registration Expenses. To the extent permitted by applicable law,
the Company shall pay the expenses in connection with any Company Registration
or Demand Registration or Shelf Registration Statement, including, without
limitation, (a) all expenses incident to filing with the NASD, (b) registration
fees (c) printing expenses, (d) legal fees and expenses of one law
30
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 Shareholders shall be solely responsible for and 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 i 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).
4. Blue Sky Laws. In any registration under Section 2(a), 2(b) and
2(f), the Company shall use its reasonable best efforts to register, qualify,
or effect an exemption with respected 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
31
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, jointly and 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 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 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
32
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 wit 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. 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 xxxxxxx" prospectus for such offering and ending 90 days
following the date of the final prospectus used in such offering
33
7. 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
(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 he Shareholder under this
Agreement.
8. 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.
9. Termination. The Company's obligation to effect a company
Registration or Demand Registration shall expire on the third anniversary
hereof.
10. 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
___________, 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.
11. Transfer Restrictions. The Shareholders will not Transfer
(except to a Permitted Transferee or pursuant to Section 2(a) hereof) any of
the Common Stock received pursuant to the
34
Exchange Agreement on or before June 30, 1997 and further will not Transfer
(except to a Permitted Transferee or pursuant to Section 2(a) hereof) more than
fifty percent (50%) of the Common Stock which they are entitled to receive
under the Exchange Agreement on or before December 31, 1997.
12. Joint and Several Obligations. Any and all obligations of the
Shareholders hereunder shall be joint and several.
13. Successors and Assigns; No Third-Party Beneficiaries. The
stipulations, terms, covenants and agreement 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.
14. Assignment. 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 c
registered mail, postage prepaid, return receipt requested, as follows:
To a Shareholder:
0000 Xxxxxxxxxx #000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. XxXxxxx, Xx.
Facsimile: 000-000-0000
With a copy to:
Bogatin Law Firm
000 Xxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: G. Xxxxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
35
To the Company:
Interstate Hotels Corporation
Xxxxxx Xxxxx X
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx,Xxxxxxxxxxxx 00000
Attention: Mr. W. Xxxxxx Xxxxxxxxxx, Xx.
Facsimile: 000-000-0000
with copies thereof to:
Interstate Hotels Corporation
Xxxxxx Xxxxx X
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000
All notices (i) shall be deemed to have been given on the date that the same
shall-have been delivered in accordance with the provisions of this Section and
(ii) may be given either by a party or by such party's attorneys. Any party
may, from time to time, specify as its address for purposes of this Agreement
any other address upon the giving of 10 days' notice thereof to the other
parties.
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.
36
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
Commonwealth of Pennsylvania, and (b) the United States District Count 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 Pennsylvania with respect to any matters tc.
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
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 Commonwealth of Pennsylvania, and (b) 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
37
(including, without limitation, pursuant to a distribution to the partners or
members of any Shareholder) to a person who is not a party to this Agreement,
such person 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 shall be a party to this
Agreement for all purposes.
26. Right of First Offer.
(a) A Shareholder shall not Transfer any shares of Common
Stock other than in compliance with this Section 26. 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 a Shareholder proposes to Transfer any shares of
Common Stock, it shall give written notice (the "First Offer Notice")
of such proposal to Xxxxxx Xxxx, his heirs, personal representatives
or his representative ("Fine") at least twenty-four (24) hours in
advance thereof by Personal delivery or facsimile, setting forth the
number of shares which it desires to Transfer (the "First Offer
Shares"), the cash purchase therefor, which in no event shall be
greater than the trailing five (5) day average price for the Common
Stock as quoted on the New York Stock Exchange established as of the
date of the First Offer Notice, 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 twenty-four (24) hours
after delivery by such Shareholder of the First Offer Notice (the
"First Offer Period") elect, pursuant to a written offer given be
personal delivery or facsimile, 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 ten (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 Shareholder shall deliver the First Offer Shares to Fine
or his designee against a cash payment therefor in full by wire
transfer of immediately available funds to such account or accounts as
may be designated by the Shareholder. Such closing shall take place
at the principal office of the Company.
(c) If no Purchase. offer is received by such Shareholder
within the First Offer Period, such Shareholder shall be entitled, for
a period of thirty (30) days
38
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
26(d) below) of the First Offer Shares.
(d) The provisions of this Section 26 shall not apply to
Transfers by Shareholders to a Permitted Transferee of Shareholder;
provided that 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 Shareholder.
27. Representations. The Company hereby represent and warrants to
the Shareholders that all information regarding the Company contained in
reports, registration statements and proxy materials filed by the Company with
the Securities and Exchange Commission is true, accurate and complete in all
material respects and in all material respects accurately presents the business
and financial condition of the Company as of the dates thereof and no material
adverse change in the financial condition of the Company has occurred since the
dates thereof. The Company agrees and acknowledges that the Shareholders have
relied upon the completeness and accuracy of such information in entering into
the Contribution Agreement dated October 4, 1996 by and among the Shareholders,
Xxxxxxx X. XxXxxxx, Xx., the Partnership and Crossroads/Memphis Company,
L.L.C., this Agreement and the other agreements related thereto.
IN WITNESS WHEREOF, the parties hereto have caused Agreement to be
duly executed, all as of the day and year first above written.
INTERSTATE HOTELS COMPANY
By:
----------------------
Title:
------------------
TRUST LEASING, INC.
By:
---------------------
Title:
------------------
TRUST MANAGEMENT, INC.
By:
----------------------
Title:
-------------------
39
The undersigned, intending to be legally bound and for good and
valuable consideration hereby agrees to be bound to the terms and provisions of
Section 26 of the above Agreement.
_________________________
Xxxxxx Xxxx
