Exhibit 99.5
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement, dated as
of August 17, 2004 (this "AGREEMENT"), by and between INTERSTATE HOTELS &
RESORTS, INC., a Delaware corporation (the "COMPANY"), on the one hand, and
LB INTERSTATE GP LLC, a Delaware limited liability company, LB INTERSTATE
LP LLC, a Delaware limited liability company ("LB LP"), and KFP/LB IHR II,
LP, a Delaware limited partnership; KA/LB IHR II, LP, a Delaware limited
partnership; CG Ventures/LB IHR II, LP, a Delaware limited partnership;
SMW/LB IHR II, LP, a Delaware limited partnership; DEL/LB IHR II, LP, a
Delaware limited partnership; and PS/LB IHR II, LP, a Delaware limited
partnership, (each a "SHAREHOLDER" and collectively the "SHAREHOLDERS"), on
the other hand.
W I T N E S S E T H:
WHEREAS, pursuant to a Distribution and Contribution Agreement
dated as of August 17, 2004 (the "DISTRIBUTION AGREEMENT") between LB LP,
LB Interstate GP LLC, MK/CG-GP LLC and MK/CG-LP LLC and KFP/LB IHR II, LP,
a Delaware limited partnership; KA/LB IHR II, LP, a Delaware limited
partnership; CG Ventures/LB IHR II, LP, a Delaware limited partnership;
SMW/LB IHR II, LP, a Delaware limited partnership; DEL/LB IHR II, LP, a
Delaware limited partnership; and PS/LB IHR II, LP, a Delaware limited
partnership, all of the shares of common stock of the Company held by CGLH
Partners I LP and CGLH Partners II LP were distributed to the Shareholders
(the "DISTRIBUTION");
WHEREAS, in connection with the Distribution the parties have
agreed to enter into this Agreement, which amends and restates the
registration rights agreement subsisting between CGLH Partners I LP and
CGLH Partners II LP and the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the Distribution
Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
effective at the Effective Time:
ARTICLE I
Definitions
1.1. Certain Definitions. In this Agreement:
"AGREEMENT" has the meaning given to it in the preamble.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
day on which banks located in New York City are authorized or required to
be closed.
"COMMON STOCK" means the shares of common stock of the Company
issued and outstanding from time to time.
"DEMAND SECURITIES" has the meaning given to it in Section 2.2(a)
of this Agreement.
"DESIGNATED JURISDICTIONS" has the meaning given to it in Section
2.2(a) of this Agreement.
"DISTRIBUTION AGREEMENT" has the meaning given to it in the
recitals of this Agreement.
"ELECTED JURISDICTIONS" has the meaning given to it in Section
2.1(a) of this Agreement.
"ELECTING SHAREHOLDER" has the meaning given to it in Section
2.1(a) of this Agreement
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC promulgated
under such Act.
"EXERCISING SHAREHOLDER" has the meaning given to it in Section
2.2(a) of this Agreement
"INSPECTORS" has the meaning given to it in Section 2.4(h) of
this Agreement.
"OTHER SECURITIES" has the meaning given to it in Section 2.2(b)
of this Agreement.
"REGISTRABLE SECURITIES" means the shares of Common Stock held by
the Shareholders immediately following the consummation of the transactions
contemplated by the Distribution Agreement, and any additional shares of
Common Stock thereafter acquired by a Shareholder whether in connection
with any stock dividend on, or any stock split, reclassification or
reorganization of any of such shares or such additional shares, or
otherwise, in each case, until such Common Stock may be sold by such
Shareholder without restriction under Rule 144(k) under the Securities Act.
"SEC" means the United States Securities and Exchange Commission
or any successor agency.
"SECURITIES ACT" means the United States Securities Act of 1933,
as amended, and the rules and regulations of the SEC promulgated under such
Act.
"SELLING SHAREHOLDER" has the meaning given to it in Section 2.4
of this Agreement
"SHAREHOLDER" has the meaning given to it in the preamble of this
Agreement.
"SPECIFIED SECURITIES" has the meaning given to it in Section
2.1(a) of this Agreement.
"SUBJECT SECURITIES" means shares of Common Stock or other debt
or equity securities of the Company convertible into or exchangeable for
shares of Common Stock.
ARTICLE II
REGISTRATION RIGHTS
2.1. Incidental Rights.
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(a) If at any time or from time to time the Company proposes
to file with the SEC a registration statement (whether on Form X-0, X-0, or
S-3, or any equivalent form then in effect) for the registration under the
Securities Act of any Subject Securities for sale, for cash consideration,
to the public by the Company or on behalf of one or more securityholders of
the Company (including in connection with a demand registration exercised
pursuant to Section 2.2 but excluding any sale of securities upon
conversion into or exchange or exercise for shares of Common Stock, and any
shares of Common Stock issuable by the Company upon the exercise of
employee stock options, or to any employee stock ownership plan, or in
connection with any acquisition made by the Company, any securities
exchange offer, any registration of securities originally placed pursuant
to Rule 144A under the Securities Act, dividend reinvestment plan, employee
benefit plan, corporate reorganization, or in connection with any
amalgamation, merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with one or more other corporations if
the Company is the surviving corporation), the Company shall give each
Shareholder (other than an Exercising Shareholder in the event of a
registration pursuant to Section 2.2) at least 20 days' prior written
notice of the proposed filing (or if 20 days' notice is not practicable, a
reasonable shorter period to be not less than 7 days), which notice shall
outline the nature of the proposed distribution and the jurisdictions in
the United States in which the Company proposes to qualify and offer such
securities (the "ELECTED JURISDICTIONS"). On the written request of a
Shareholder (an "ELECTING SHAREHOLDER") received by the Company within 15
days after the date of the Company's delivery to such Shareholder of the
notice of intended registration (which request shall specify the
Registrable Securities sought to be disposed by such Electing Shareholder
and the intended method or methods by which dispositions are intended to be
made), the Company shall, under the terms and subject to the conditions of
this Article II, at its own expense as provided in Section 4.2, include in
the coverage of such registration statement (or in a separate registration
statement concurrently filed) and qualify for sale under the blue sky or
securities laws of the various states in the Elected Jurisdictions the
number of Registrable Securities of the kind being registered (the
"SPECIFIED SECURITIES") held by each such Electing Shareholder or into
which such Registrable Securities are convertible, as the case may be, and
which each such Electing Shareholder has so requested to be registered or
qualified for distribution, to the extent required to permit the
distribution (in accordance with the intended method or methods thereof as
aforesaid) in the Elected Jurisdictions requested by each such Electing
Shareholder of such Registrable Securities.
(b) If the distribution proposed to be effected by the
Company involves an underwritten offering of the securities being so
distributed by or through one or more underwriters, and if the managing
underwriter of such underwritten offering indicates in writing its opinion
that including all or part of the Specified Securities in the coverage of
such registration statement or in the distribution to be effected by such
prospectus will materially and adversely affect the sale of securities
proposed to be sold (which opinion of the managing underwriter shall also
state the maximum number of shares, if any, which can be sold by the
Electing Shareholders under this Section 2.1 without materially adversely
affecting the sale of the securities proposed to be sold), then the number
of Specified Securities which the Electing Shareholders shall have the
right to include in such registration statement shall be reduced on a pro
rata basis among the Electing Shareholders (based on the aggregate number
of Registrable Securities then held by them or on such other basis as they
shall agree) to the maximum number of shares or principal amount, in the
case of debt, specified by the managing underwriter. First priority, after
the absolute priority afforded to the Company, shall be afforded to the
Specified Securities held by the Electing Shareholders and no securities
proposed to be sold by the Electing Shareholders shall be so reduced until
all securities proposed to be sold by all other parties (other than the
Company) have been entirely eliminated.
(c) The Company shall have the sole right to select any
underwriters, including the managing underwriter, of any public offering of
securities made other than as a result of the rights granted in Section
2.2. Nothing in this Section 2.1 shall create any liability on the part of
the Company to any Shareholder if the Company for any reason decides not to
file or to delay or withdraw a registration statement (which the Company
may do in its sole discretion).
(d) Each Electing Shareholder shall have the right to
withdraw its request for inclusion of its Specified Securities in any
registration statement pursuant to this Section 2.1 by giving written
notice to the Company of its request to withdraw; provided, however, that
(i) such request must be made in writing prior to the execution of the
underwriting agreement (or such other similar agreement) with respect to
such registration and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, such Electing Shareholder shall no longer have any
right to include any of its Registrable Securities in the registration as
to which such withdrawal was made.
(e) Each Shareholder may request to have all or any portion
of its Registrable Securities included in an unlimited number of
registrations under this Section 2.1.
2.2. Demand Rights.
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(a) Upon written request of a Shareholder (an "EXERCISING
SHAREHOLDER") made at any time, the Company shall, under the terms and
subject to the conditions set forth in this Section 2.2, and Sections 2.3
and 2.4, file (and use its reasonable efforts to cause to become effective)
a registration statement covering, and use its reasonable efforts to
qualify for sale under the blue sky or securities laws of the various
states of the United States as may be requested by such Exercising
Shareholder (except any such state in which, in the opinion of the managing
underwriter of the offering, the failure to so qualify would not materially
and adversely affect the proposed offering or in which the Company would be
required to submit to general jurisdiction to effect such registration), in
accordance with the intended method or methods of disposition set forth in
that notice, such number of Registrable Securities as may be designated by
such Exercising Shareholder in its request (the "DEMAND SECURITIES"), or
that portion thereof designated in said request for registration in each of
the Designated Jurisdictions (as defined below). A request for registration
under this Section 2.2 shall specify the number of Demand Securities to be
registered, the jurisdictions in the United States in which such
registration is to be effected (the "DESIGNATED JURISDICTIONS") and the
proposed manner of sale, including the name and address of any proposed
underwriter. The principal underwriter or underwriters for any such
offering shall be selected by the Exercising Shareholder, subject to the
Company's approval, which may not be unreasonably withheld or delayed.
Notwithstanding any other provision in this Section, an Exercising
Shareholder shall not be permitted to make a demand for registration
pursuant to this Section unless the number of Demand Securities covered by
such demand (together with the aggregate number of Specified Securities to
be included in such registration pursuant to Section 2.1 hereof) is at
least 12,500,000 shares of Common Stock (or securities convertible into
such number of shares of Common Stock) (as such number may be appropriately
adjusted to reflect stock splits, reverse stock splits, dividends and any
other recapitalization or reorganization of the Company) or such lesser
number of shares as would yield gross proceeds of not less than $2 million
based on the average closing price of the Common Stock over the ten trading
day period immediately preceding the date of the written request hereunder.
(b) If the distribution proposed to be effected pursuant to
this Section 2.2 involves an underwritten offering that includes securities
of the Company in addition to the Demand Securities ("OTHER SECURITIES"),
and if the managing underwriter of such underwritten offering indicates in
writing its opinion that including all or part of such securities in the
coverage of such registration statement will materially and adversely
affect the sale of the Demand Securities proposed to be sold, then the
number of Other Securities proposed to be sold shall be reduced to the
maximum number of securities (or principal amount) specified by the
managing underwriter.
(c) The Company may delay the filing of any registration
statement requested under this Section 2.2, or delay its effectiveness, for
a reasonable period (but not longer than 90 days) if, in the sole judgment
of the Company's Board of Directors, (i) a delay is necessary in light of
pending financing transactions, corporate reorganizations or other major
events involving the Company, or (ii) filing at the time requested would
materially and adversely affect the business or prospects of the Company in
view of disclosures that may be thereby required. Once the cause of the
delay is eliminated, the Company shall promptly notify the Exercising
Shareholder and, promptly after the Exercising Shareholder notifies the
Company to proceed, the Company shall file a registration statement and
begin performance of its remaining obligations under this Section 2.2.
(d) Provided that in each case the filing of a registration
statement in more than one Designated Jurisdiction in connection with a
concurrent or substantially concurrent distribution shall be deemed for the
purposes of this Agreement to be a single registration:
(i) LB LP shall be entitled to request not more than
three registrations under this Section 2.2;
(ii) KFP/LB IHR II, LP shall be entitled to request not
more than one registration under this Section 2.2;
(iii) KA/LB IHR II, LP and CG Ventures/LB IHR II, LP
shall collectively be entitled to request not more than one
registration under this Section 2.2, but such request may only be made
upon their mutual agreement;
(iv) SMW/LB IHR II, LP and DEL/LB IHR II, LP shall
collectively be entitled to request not more than one registration
under this Section 2.2, but such request may only be made upon their
mutual agreement; and
(v) KFP/LB IHR II, LP, KA/LB IHR II, LP, CG Ventures/LB
IHR II, LP, SMW/LB IHR II, LP, DEL/LB IHR II, LP and PS/LB IHR II, LP
shall collectively be entitled to request not more than one additional
registration under this Section 2.2, which registration may be
requested by any one of them, but only upon the mutual agreement of
Xxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxxxx and Xxxxxxx
Xxxxxx;
provided, that if a Shareholder requests a registration under this Section
2.2 but no registration statement becomes effective with respect to such
Shareholder's Registrable Securities covered by such request, or any
registration statement is withdrawn or prematurely terminated (whether
pursuant to this Section 2.2 or as a result of any stop order, injunction
or other order or requirement of the SEC or any other governmental agency
or court), then such request shall not count as a request for purposes of
determining the number of requests for registration such Shareholder may
make under this Section 2.2.
(e) If there is an effective registration statement
requested by a Shareholder pursuant to this Section 2.2, such Shareholder
may require the Company to delay the filing of any registration statement
relating to convertible securities or shares of Common Stock or delay its
effectiveness, for a reasonable period (but not longer than 90 days) if, in
the sole judgment of such Shareholder, a delay is necessary in order to
avoid materially and adversely affecting the disposition of the Demand
Securities pursuant to the offering by such Shareholder; provided that the
foregoing shall not limit the Company's right to file and have declared
effective registration statements for any other offering.
2.3. Registration Conditions. Notwithstanding any other provision
of this Agreement, the Company shall not be required to effect a
registration of any Registrable Securities held by a Shareholder under this
Article II, or file any post-effective amendment to such a registration
statement relating to such a qualification:
(a) unless, in the case of a request to participate in a
registration under Section 2.1, such Shareholder agrees to sell and
distribute a portion or all of its Registrable Securities in
accordance with the plan or plans of distribution adopted by and
through underwriters, if any, acting for the Company or any such other
sellers of Common Stock;
(b) unless such Shareholder agrees to bear a pro rata share
of underwriter's discounts and commissions;
(c) if, in the case of a request for registration under
Section 2.2, the Company has given prior notice under Section 2.1 of
its intention to file a registration statement under the Securities
Act and has not completed or abandoned the proposed offering (for so
long as the Company continues in good faith to pursue the proposed
offering); and
(d) unless the Company has received from such Shareholder
all information the Company has reasonably requested concerning such
Shareholder and its method of distribution of its respective
Registrable Securities, so as to enable the Company to include in the
registration statement all facts required to be disclosed in it.
2.4. Covenants and Procedures. If the Company becomes obligated
under this Article II to effect a registration of Registrable Securities on
behalf of one or more Shareholders (each a "SELLING SHAREHOLDER"), then (as
applicable to the jurisdictions for which such registration is to be made):
(a) The Company, at its expense as provided in Section 4.2,
shall prepare and file with the SEC a registration statement covering
such securities and such other related documents as may be necessary
or appropriate relating to the proposed distribution, and shall use
reasonable efforts to cause the registration statement to become
effective. The Company will also, with respect to any registration
statement, file such post-effective amendments to the registration
statement (and use reasonable efforts to cause them to become
effective) and such supplements as are necessary so that current
prospectuses are at all times available for a period of at least 180
days after the effective date of the registration statement or for
such longer period, not to exceed 360 days, as may be required under
the plan or plans of distribution set forth in the registration
statement. Each Selling Shareholder shall promptly provide the Company
with such information with respect to such Selling Shareholder's
Registrable Securities to be so registered and, if applicable, the
proposed terms of their offering, as is required for the registration.
If the Registrable Securities to be covered by the registration
statement are not to be sold to or through underwriters acting for the
Company, the Company shall:
(i) deliver to each Selling Shareholder, as promptly as
practicable, as many copies of preliminary prospectuses as such
Selling Shareholder may reasonably request (in which case such
Selling Shareholder shall keep a written record of the
distribution of the preliminary prospectuses and shall refrain
from delivery of the preliminary prospectuses in any manner or
under any circumstances which would violate the Securities Act or
the securities laws of any other jurisdiction, including the
various states of the United States);
(ii) deliver to each Selling Shareholder, as soon as
practicable after the effective date of the registration
statement, and from time to time thereafter during the applicable
period described in Section 2.4, as many copies of the relevant
prospectus as each such Selling Shareholder may reasonably
request; and
(iii) in case of the happening, after the effective
date of the registration statement and during the applicable 180
or 360-day period described in the second sentence of Section
2.4(a), of any event or occurrence as a result of which the
prospectus, as then in effect, would include an untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make any statement therein not
misleading in the light of the circumstances in which it was
made, give each Selling Shareholder written notice of the event
or occurrence and prepare and furnish to each Selling
Shareholder, in such quantities as it may reasonably request,
copies of an amendment of or a supplement to such prospectus as
may be necessary so that the prospectus, as so amended or
supplemented and thereafter delivered to purchasers of the
Registrable Securities covered by such prospectus, will not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which it was made, not misleading.
(b) The Company will notify each Selling Shareholder of any
action by the SEC or any Commission to suspend the effectiveness of any
registration statement filed pursuant hereto or the initiation or
threatened initiation of any proceeding for such purpose or the receipt by
the Company of any notification with respect to the suspension of the
qualification of the securities for sale in any jurisdiction. Immediately
upon receipt of any such notice, each Selling Shareholder shall cease to
offer or sell any Registrable Securities pursuant to the registration
statement or prospectus in the jurisdiction to which such order or
suspension relates. The Company will also notify each Selling Shareholder
promptly of the occurrence of any event or the existence of any state of
facts that, in the judgment of the Company, should be set forth in such
registration statement or prospectus. Immediately upon receipt of such
notice, each Selling Shareholder shall cease to offer or sell any
Registrable Securities pursuant to such registration statement or
prospectus, cease to deliver or use such registration statement or
prospectus and, if so requested by the Company, return to the Company at
the Company's expense all copies of such registration statement or
prospectus. The Company will as promptly as practicable take such action as
may be necessary to amend or supplement such registration statement or
prospectus in order to set forth or reflect such event or state of facts
and provide copies of such proposed amendment or supplement to each Selling
Shareholder.
(c) On or before the date on which the registration
statement is declared effective, the Company shall use its reasonable
efforts to:
(i) register or qualify (and cooperate with each
Selling Shareholder, the underwriter or underwriters, if any, and
their counsel, in connection with the registration or
qualification of) the securities covered by the registration
statement for offer and sale under the securities or blue sky
laws of each state and other jurisdiction as any Selling
Shareholder or any underwriter reasonably requests;
(ii) keep each such registration or qualification
effective, including through new filings, or amendments or
renewals, during the period the registration statement or
prospectus is required to be kept effective; and
(iii) do any and all other acts or things necessary or
advisable to enable the disposition in all such jurisdictions of
the Registrable Securities covered by the applicable registration
statement, provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is
not then so qualified.
(d) The Company shall use its reasonable efforts to cause
all Registrable Securities of each Selling Shareholder included in the
registration statement to be listed, by the date of the first sale of such
shares pursuant to such registration statement, on the New York Stock
Exchange or such other securities exchange or exchanges on which the Common
Stock is then listed or proposed to be listed, if any, as directed by any
Selling Shareholder (subject to the Company's consent, which consent shall
not be unreasonably withheld or delayed).
(e) The Company shall make available to each Selling
Shareholder and any underwriter participating in the offering conducted
pursuant to the registration statement an earnings statement satisfying
Section 11(a) of the Securities Act no later than 45 days after the end of
the 12-month period beginning with the first day of the Company's first
fiscal quarter commencing after the effective date of the registration
statement. The earnings statement shall cover such 12-month period. This
requirement will be deemed to be satisfied if the Company timely files
complete and accurate information on Forms 10-Q, 10-K, and 8-K under the
Exchange Act, and otherwise complies with Rule 158 under the Securities Act
as soon as feasible.
(f) The Company shall cooperate with each Selling
Shareholder and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be sold
under the registration statement, and to enable such securities to be in
such denominations and registered in such names as the managing underwriter
or underwriters, if any, or any Selling Shareholder, may request, subject
to the underwriters' obligation to return any certificates representing
unsold securities.
(g) The Company shall use its reasonable efforts to cause
Registrable Securities covered by the registration statement to be
registered with or approved by such other governmental agencies or
authorities in the United States (including the registration of Registrable
Securities under the Exchange Act) as may be necessary to enable each
Selling Shareholder or the underwriter or underwriters, if any, to
consummate the disposition of such securities.
(h) The Company shall, during normal business hours and upon
reasonable notice, make available for inspection by any Selling
Shareholder, any underwriter participating in any offering pursuant to the
registration statement, and any attorney, accountant or other agent
retained by any Selling Shareholder or any such underwriter (collectively,
the "INSPECTORS"), all financial and other records, pertinent corporate
documents, and properties of the Company (including non-public
information), as shall be reasonably necessary to enable the Inspectors to
exercise their due diligence responsibilities; provided that any Inspector
receiving non-public information shall have previously entered into an
appropriate confidentiality agreement in mutually satisfactory form and
substance. The Company shall also cause its officers, directors, and
employees to supply all information reasonably requested by any Inspector
in connection with the registration statement.
(i) The Company shall use its reasonable efforts to obtain a
"cold comfort" letter and, as applicable, a "long-form comfort letter" from
the Company's independent public accountants, and an opinion of counsel for
the Company, each in customary form and covering such matters of the type
customarily covered by cold comfort letters and long form comfort letters
and legal opinions in connection with public offerings of securities, as
any Selling Shareholder reasonably request.
(j) The Company shall enter into such customary agreements
(including an underwriting agreement containing such representations and
warranties by the Company and such other terms and provisions, as are
customarily contained in underwriting agreements for comparable offerings
and are reasonably satisfactory to the Company) and take all such other
actions as any Selling Shareholder or underwriter participating in such
offering and sale may reasonably request in order to expedite or facilitate
such offering and sale (other than such actions which are disruptive to the
Company or require significant management availability), including
providing reasonable availability of appropriate members of senior
management of the Company to provide customary due diligence assistance in
connection with any offering and to participate in customary "road show"
presentations in connection with any underwritten offerings in
substantially the same manner as they would in an underwritten primary
registered public offering by the Company of its Common Stock, after taking
into account the reasonable business requirements of the Company in
determining the scheduling and duration of any road show.
ARTICLE III
INDEMNIFICATION
3.1. Indemnification by the Company. In the event of any
registration under the Securities Act by any registration statement
pursuant to rights granted in this Agreement of Registrable Securities held
by any Shareholder, the Company will hold harmless each such Shareholder
and each underwriter of such securities and each other person, if any, who
controls any such Shareholder or underwriter within the meaning of the
Securities Act, against any losses, claims, damages, or liabilities
(including legal fees and costs of court), joint or several, to which any
such Shareholder, underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or any actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact (i) contained, on its effective date, in any registration
statement under which such securities were registered under the Securities
Act or any amendment or supplement to any of the foregoing, or which arise
out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) contained in any preliminary
prospectus, if used prior to the effective date of such registration
statement, or in the final prospectus (as amended or supplemented if the
Company shall have filed with the SEC any amendment or supplement to the
final prospectus) if used within the period which the Company is required
to keep the registration to which such registration statement or prospectus
relates current under Section 2.4, or which arise out of or are based upon
the omission or alleged omission (if so used) to state a material fact
required to be stated in such prospectus or necessary to make the
statements in such prospectus not misleading; and will reimburse each such
Shareholder and underwriter and each such controlling person, if any, for
any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, or liability;
provided, however, that the Company shall not be liable to any Shareholder
or its underwriters or controlling persons in any such case to the extent
that any such loss, claim, damage, or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or such amendment or
supplement, in reliance upon and in conformity with information furnished
to the Company through a written instrument duly executed by such
Shareholder or underwriter specifically for use in the preparation thereof;
provided further that the Company shall not be liable to any Shareholder or
its underwriters or controlling persons in any such case with respect to
losses, claims, damages or liabilities (including legal fees and costs of
court) that arise out of or are based on an untrue statement or alleged
untrue statement or omission or alleged omission made in any prospectus
used in connection with any request for registration under Section 2.2, to
the extent that such untrue statement or alleged untrue statement or
omission or alleged omission is corrected in any amendment or supplement to
such prospectus if both (y) the person asserting such loss, claim, damage
or liability purchased securities in reliance on such prospectus but was
not given such amendment or supplement thereto on or prior to the
confirmation of the sale of such securities and such amendment or
supplement was required by law to be delivered on or prior to the
confirmation of such sale and (z) the Company had delivered to such
Shareholder or its underwriters such amendment or supplement thereto
pursuant to Section 2.4(a)(iii) in the requisite quantity and on a timely
basis to permit proper delivery to such person on or prior to the date of
confirmation of the sale of such securities.
3.2. Indemnification by Selling Shareholders. It shall be a
condition precedent to the obligation of the Company to include in any
registration statement any Registrable Securities of any Selling
Shareholder that the Company shall have received from such Selling
Shareholder an undertaking, reasonably satisfactory to the Company and its
counsel, to indemnify and hold harmless, on a several but not joint basis,
(in the same manner and to the same extent as set forth in Section 3.1) the
Company, each director of the Company, each officer of the Company who
shall sign the registration statement, any person who controls the Company
within the meaning of the Securities Act, and each other Selling
Shareholder (i) with respect to any statement or omission from such
registration statement, or any amendment or supplement to it, if such
statement or omission was made in reliance upon and in conformity with
information furnished to the Company through a written instrument duly
executed by such Selling Shareholder specifically for use in the
preparation of such registration statement or amendment or supplement, and
(ii) with respect to compliance by such Selling Shareholder with applicable
laws in effecting the sale or other disposition of the securities covered
by such registration statement.
3.3 Indemnification Procedures. Promptly after receipt by an
indemnified party of notice of the commencement of any action involving a
claim referred to in the preceding Sections of this Article III, the
indemnified party will, if a resulting claim is to be made or may be made
against an indemnifying party, give written notice to the indemnifying
party of the commencement of the action. If any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense of the action with counsel
reasonably satisfactory to the indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume
defense of the action, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses incurred by the latter in
connection with the action's defense. An indemnified party shall have the
right to employ separate counsel in any action or proceeding and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at such indemnified party's expense unless (a) the
employment of such counsel has been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party has not assumed the
defense and employed counsel reasonably satisfactory to the indemnified
party within 30 days after notice of any such action or proceeding, or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include the indemnified party and the indemnifying party
and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to the indemnified party
that are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action or proceeding on behalf of the
indemnified party), it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys
(in addition to all local counsel which is necessary, in the good faith
opinion of both counsel for the indemnifying party and counsel for the
indemnified party in order to adequately represent the indemnified parties)
for the indemnified party and that all such fees and expenses shall be
reimbursed as they are incurred upon written request and presentation of
invoices. Whether or not a defense is assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for any
settlement made without its consent. No indemnifying party will consent to
entry of any judgment or enter into any settlement which does not include
as an unconditional term the giving by the claimant or plaintiff, to the
indemnified party, of a release from all liability in respect of such claim
or litigation.
3.4. Contribution. If the indemnification required by this
Article III from the indemnifying party is unavailable to or insufficient
to hold harmless an indemnified party in respect of any indemnifiable
losses, claims, damages, liabilities, or expenses, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities, or expenses
in such proportion as is appropriate to reflect (i) the relative benefit of
the indemnifying and indemnified parties and (ii) if the allocation in
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect the relative benefit referred to in clause (i) and
also the relative fault of the indemnified and indemnifying parties, in
connection with the actions which resulted in such losses, claims, damages,
liabilities, or expenses, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact, has been made by, or relates to information
supplied by, such indemnifying party or parties, and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damage, liabilities, and expenses referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The Company and each Shareholder agree that it would not be just and
equitable if contribution pursuant to this Section 3.4 were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the prior
provisions of this Section 3.4.
Notwithstanding the provisions of this Section 3.4, no
indemnifying party shall be required to contribute any amount in excess of
the amount by which the total price at which the securities were offered to
the public by the indemnifying party exceeds the amount of any damages
which the indemnifying party has otherwise been required to pay by reason
of an untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such a fraudulent misrepresentation.
ARTICLE IV
OTHER AGREEMENTS
4.1. Other Registration Rights. The Company agrees that it will
not grant to any party registration rights which would allow such party to
limit a Shareholder's priority for the sale or distribution of Registrable
Securities upon the exercise of a demand registration right pursuant to
Section 2.2 or incidental registration rights pursuant to Section 2.1.
4.2. Expenses. All expenses incurred by the Company in connection
with any registration statement covering Registrable Securities offered by
a Selling Shareholder, including, without limitation, all registration and
filing fees (including all expenses incident to filing with the New York
Stock Exchange), printing expenses, reasonable fees and disbursements of
counsel (except for the fees and disbursements of counsel for the Selling
Shareholders) and of the independent certified public accountants,
underwriter's reasonable legal, accounting and out-of-pocket expenses, and
the expense of qualifying such securities under state blue sky laws, shall
be borne by the Company, including such expenses of any registration
delayed by the Company under the fourth paragraph of Section 2.2; provided,
however, that the Company shall not be required to pay for any expenses of
any registration proceeding begun pursuant to Section 2.2 if the
registration request is subsequently withdrawn at the request of the
Exercising Shareholder (in which case the Exercising Shareholder shall bear
its pro rata share of the expenses based on the number of Registrable
Securities such Shareholder intended to include in such registration
compared to the total number of Subject Securities intended to include in
such registration), unless such Exercising Shareholder agrees to forfeit
its right to one demand registration under Section 2.2; provided further,
however, that if at the time of such withdrawal such Exercising Shareholder
has learned of a material adverse change in the condition, business, or
prospects of the Company that was not known to it at the time of its
request, then such Exercising Shareholder shall not be required to pay any
of such expenses and shall retain their rights pursuant to Section 2.2. The
Company's obligations under this Section 4.2 shall apply to each
registration under the Securities Act or state blue sky legislation
pursuant to Section 2.2. The foregoing notwithstanding, all underwriter's
discounts and commissions covering Registrable Securities offered by a
Shareholder shall be borne by such Shareholder.
4.3. Dispositions During Registration. Each Shareholder agrees
that, without the consent of the managing underwriter(s) in an underwritten
offering in respect of Common Stock or other Subject Securities, it will
not effect any sale or distribution of Common Stock or other Subject
Securities (other than Registrable Securities included in such offering),
during the ten (10) day period prior to, and during the ninety (90) day
period beginning on, the effective date of the registration statement filed
by the Company in respect of such underwritten offering, or any shorter
period as may apply to the Company and its affiliates.
4.4. Transfer of Rights. All rights of each Shareholder under
this Agreement shall be transferable by such Shareholder to any party who
acquires Registrable Securities from such Shareholder and who executes an
instrument in form and substance satisfactory to the Company in which it
agrees to be bound by the terms of this Agreement as if an original
signatory hereto, in which case such transferee shall thereafter be a
"Shareholder" for all purposes of this Agreement. In the case of any
assignment, the party or parties who have the rights and benefits of the
assigning Shareholder under this Agreement shall become parties to and be
subject to this Agreement, and shall not, as a group, have the right to
request any greater number of registrations than such Shareholder would
have had if no assignment had occurred. Upon any transfer of the
registration rights or benefits of this Agreement, such assigning
Shareholder shall give the Company written notice prior to or promptly
following such transfer stating the name and address of the transferee and
identifying the securities with respect to which such rights are being
assigned. Such notice shall include or be accompanied by a written
undertaking by the transferee to comply with the obligations imposed
hereunder. Unless otherwise agreed by the assigning Shareholder and the
parties to whom registration rights have been transferred, in the event any
registration rights are transferred in accordance with the terms of this
Agreement, any actions required to be taken by such assigning Shareholder
will be taken with the approval of the holders of such registration rights
who hold a majority of the Registrable Securities, whose actions shall bind
all such holders of such registration rights.
4.5. Best Registration Rights. If the Company grants to any
Person with respect to any security issued by the Company or any of its
Affiliates registration rights (other than as to the number of demand
registrations) that provide for terms that are in any manner more favorable
to the holder of such registration rights than the terms granted to any
Shareholder (or if the Company amends or waives any provision of any
agreement providing registration rights of others or takes any other action
whatsoever to provide for terms that are more favorable to other holders
than the terms provided to any Shareholder other than the number of demand
registrations or the minimum amount of shares required to exercise demand
registration rights), then this Agreement shall immediately be deemed
amended to provide each Shareholder with any (or all) of such more
favorable terms as any Shareholder shall elect to include herein. The
Company shall promptly give notice to each Shareholder of the granting of
any such registration rights to another Person.
ARTICLE V
MISCELLANEOUS
5.1. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telecopier, or air courier
guaranteeing delivery:
(a) If to the Company, to:
Interstate Hotels & Resorts, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other person or address as the Company shall furnish to each
Shareholder in writing;
(b) If to LB LP, to:
LB Interstate LP LLC
c/x Xxxxxx Brothers Holdings Inc.
1284 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Mechanic, Esq.
Fax: (000) 000-0000
(c) If to KFB/LB IHR II, LP, to:
000 X. Xxxx Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
(d) If to KA/LB IHR II, LP, to:
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
(e) If to CG Ventures/LB IHR II, to:
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
(f) If to SMW/LB IHR II, LP, to:
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxx, XX 00000
(g) If to DEL/LB IHR II, to:
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxx, XX 00000
(h) If to PS/LB IHR II, LP, to:
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxx, XX 00000
or to such other person or address as a Shareholder shall furnish to the
Company and each other Shareholder in writing.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time of delivery by hand,
if personally delivered; five (5) Business Days after being deposited in
the mail, postage prepaid, if mailed domestically in the United States (and
seven (7) Business Days if mailed internationally); when receipt
acknowledged, if telecopied; and on the Business Day for which delivery is
guaranteed, if timely delivered to an air courier guaranteeing such
delivery.
5.2. Section Headings. The article and section headings in this
Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement. References in this Agreement to a
designated "Article" or "Section" refer to an Article or Section of this
Agreement unless otherwise specifically indicated.
5.3. Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the law of New York, without
regard to its conflict of laws principles that would indicate the
applicability of the laws of any other jurisdiction.
5.4. Consent to Jurisdiction and Service of Process. Any legal
action or proceeding with respect to this Agreement or any matters arising
out of or in connection with this Agreement and any action for enforcement
of any judgment in respect thereof shall be brought exclusively in the
state or federal courts located in the State of New York, and, by execution
and delivery of this Agreement, the Company and each of the Shareholders
each hereby irrevocably consents to service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service to such party
at its respective address referred to in this Agreement. The Company and
each of the Shareholders each hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and each hereby further irrevocably
waives and agrees, to the extent permitted by applicable law, not to plead
or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing in this
Agreement shall affect the right of any party hereto to serve process in
any other manner permitted by law.
5.5. Amendments. This Agreement may be amended only by an
instrument in writing executed by all of its parties.
5.6. Entire Agreement. This Agreement and the Distribution
Agreement constitute the entire agreement and understanding of the parties
with respect to the transactions contemplated hereby and thereby. This
Agreement may be amended only by a written instrument duly executed by the
parties or their respective successors or assigns; provided, however, that
any amendment or waiver by the Company shall be made only with the prior
approval of a majority of the entire Board of Directors of the Company.
5.7. Severability. The invalidity or unenforceability of any
specific provision of this Agreement shall not invalidate or render
unenforceable any of its other provisions. Any provision of this Agreement
held invalid or unenforceable shall be deemed reformed, if practicable, to
the extent necessary to render it valid and enforceable and to the extent
permitted by law and consistent with the intent of the parties to this
Agreement.
5.8. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
THE SHAREHOLDERS:
LB INTERSTATE GP LLC
By: PAMI LLC,
its Sole Member
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------
Title: Authorized Signatory
------------------------
LB INTERSTATE LP LLC
By: PAMI LLC,
its Sole Member
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------
Title: Authorized Signatory
------------------------
KFP/LB IHR II, LP
By: KFP/LB IHR GP, LLC,
its General Partner
By:/s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: President
KA/LB IHR II, LP
By: KA/LB IHR GP, LLC,
its General Partner
By:/s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Member
CG VENTURES/LB IHR II, LP
By: CG Ventures/LB IHR GP, LLC,
its General Partner
By:/s/ Haider Alibhai Xxxxx
---------------------------
Name: Haider Alibhai Xxxxx
Title: Vice President
SMW/LB IHR II, LP
By: SMW/LB IHR GP, LLC,
its General Partner
By:/s/ Xxxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Member
DEL/LB IHR II, LP
By: DEL/LB IHR GP, Inc.,
its General Partner
By:/s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
PS/LB IHR II, LP
By: PS/LB IHR GP, Inc.,
its General Partner
By:/s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: President
THE COMPANY:
INTERSTATE HOTELS & RESORTS, INC.
By: /s/ J. Xxxxxxx Xxxxxxxxxx
---------------------------
Name: J. Xxxxxxx Xxxxxxxxxx
-------------------------
Title: Chief Financial Officer
------------------------
