EXHIBIT 2.2
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INTERSTATE HOTELS CORPORATION
STOCKHOLDER VOTING
AND
CONVERSION AGREEMENT
VOTING AND CONVERSION AGREEMENT, dated as of May 1, 2002 (this
"AGREEMENT"), among Meristar Hotels & Resorts, Inc., a Delaware corporation
("MERISTAR") and each of the persons set forth on Schedule A hereto (each, a
"STOCKHOLDER" and, collectively, the "STOCKHOLDERS").
RECITALS:
A. MeriStar and Interstate Hotels Corporation, a Maryland corporation
(the "COMPANY" or "INTERSTATE"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "MERGER AGREEMENT"), pursuant to which
the Company will be merged with and into MeriStar on the terms and subject to
the conditions set forth in the Merger Agreement. MeriStar will be the surviving
corporation in the Merger. Except as otherwise defined herein, capitalized terms
used herein shall have the respective meanings ascribed thereto in the Merger
Agreement.
B. As of the date hereof, except as set forth on Schedule A, each
Stockholder beneficially owns and is entitled to (i) dispose of (or to direct
the disposition of), to vote (or to direct the voting of), and, subject to any
limitations imposed by the terms of such securities, to convert (or to direct
the conversion of) the number of shares of Series B Convertible Preferred Stock
of the Company (the "SERIES B SHARES") set forth opposite such Stockholder's
name on Schedule A hereto (such Series B Shares, together with any other
securities other than Notes (as defined below) issued by the Company, the
beneficial ownership of which is acquired by such Stockholder during the period
from and including the date hereof through and including the date on which this
Agreement is terminated pursuant to Section 5.2 hereof, are collectively
referred to herein as such Stockholder's "SUBJECT SHARES") and/or (ii) dispose
of (or to direct the disposition of) and, subject to any limitations imposed by
the terms of such securities, to convert (or to direct the conversion of) 8.75%
Subordinated Convertible Notes of the Company (the "NOTES") in the principal
amounts set forth opposite such Stockholder's name on Schedule A hereto (such
Notes, together with any other Notes, the beneficial ownership of which is
acquired by such Stockholder during the period from and including the date
hereof through and including the date on which this Agreement is terminated
pursuant to Section 5.2 hereof, are referred to as such Stockholder's "SUBJECT
NOTES"). The Subject Notes and the Subject Shares are collectively referred to
as such Stockholder's "SUBJECT SECURITIES". Set forth on Schedule A to this
Agreement is (i) the "Applicable Conversion Rate" (as defined in the Articles
Supplementary to the Charter of Interstate Designating the Series B Shares) for
the Series B Shares and (ii) the "Conversion Price" (as defined in the Notes)
for the Notes, each as in effect on the date hereof.
C. As a condition and inducement to its willingness to enter into the
Merger Agreement, MeriStar has requested that each Stockholder agree, and each
Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
I. VOTING OF SUBJECT SHARES
1.1 AGREEMENT TO VOTE SUBJECT SHARES. From the date hereof until this
Agreement is terminated pursuant to Section 5.2 hereof, at any meeting of the
stockholders of the Company called to consider and vote upon the adoption of the
Merger Agreement (and at any and all postponements and adjournments thereof)
(the "INTERSTATE STOCKHOLDERS MEETING"), and in connection with any action to be
taken in respect of the adoption of the Merger Agreement by written consent of
the stockholders of the Company, each Stockholder will vote or cause to be voted
(including by written consent, if applicable) all of such Stockholder's Subject
Shares which it has the right to vote in favor of the adoption of the Merger
Agreement and in favor of the Interstate Proposals and any other matter
necessary or appropriate for the consummation of the transactions relating to
the Merger contemplated by the Merger Agreement that is considered and voted
upon at any such meeting or made the subject of any such written consent, as
applicable. At any meeting of the stockholders of the Company called to consider
and vote upon any Adverse Proposal (and at any and all postponements and
adjournments thereof), and in connection with any action to be taken in respect
of any Adverse Proposal by written consent of the stockholders of the Company,
each Stockholder will vote or cause to be voted (including by written consent,
if applicable) all of such Stockholder's Subject Shares which it has the right
to vote against the adoption of such Adverse Proposal. For purposes of this
Agreement, the term "ADVERSE PROPOSAL" means any (a) Interstate Acquisition
Proposal that is not a Interstate Superior Proposal, (b) proposal or action that
could reasonably be expected to result in a breach of any covenant, agreement,
representation or warranty of the Company set forth in the Merger Agreement, or
(c) the following actions (other than the Merger, the other transactions
contemplated by the Merger Agreement and any other action the approval of which
has been recommended by the board of directors of the Company): (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or any Interstate Subsidiary; (ii) a
sale, lease or transfer of a material amount of assets of the Company or any
Interstate Subsidiary, or a reorganization, recapitalization, dissolution or
liquidation of the Company or any Interstate Subsidiary; (iii) (1) any change in
a majority of the persons who constitute the board of directors of the Company
as of the date hereof; (2) any change in the present capitalization of the
Company or any amendment of the Company's charter or bylaws, as amended to date;
(3) any other material change in the Company's corporate structure or business;
or (4) any other action that is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, or adversely affect the Merger and the
other transactions contemplated by this Agreement and the Merger Agreement or
increase the likelihood that such transactions will not be consummated.
1.2 IRREVOCABLE PROXY. (a) (a) GRANT OF PROXY. Each Stockholder hereby
appoints MeriStar and any designee of MeriStar, each of them individually, as of
the record date for the Interstate Stockholders Meeting, as such Stockholder's
proxy and attorney-in-fact, with full power of substitution and resubstitution,
to vote or act by written consent with respect to all of such Stockholder's
Subject Shares which it has the right to vote (i) in accordance with Section 1.1
hereof and (ii) to sign its name (as a stockholder) to any consent, certificate
or other document relating to the Company that the law of the State of Maryland
may permit or require in connection with any matter referred to in Section 1.1
hereof. This proxy is given to secure the performance of the duties of such
Stockholder under this Agreement and its existence will not be deemed to relieve
the Stockholders of their obligations under Section 1.1 hereof. Each Stockholder
affirms that this proxy is coupled with an interest and is irrevocable until
termination of this Agreement pursuant to Section 5.2 hereof, whereupon such
proxy and power of attorney shall automatically terminate. Each Stockholder will
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take such further action or execute such other instruments as may be necessary
to effectuate the intent of this proxy. For Subject Shares as to which the
Stockholder is the beneficial but not the record owner, the Stockholder will
cause any record owner of such Subject Shares to grant to MeriStar a proxy to
the same effect as that contained herein.
(b) OTHER PROXIES REVOKED. Each Stockholder represents that any
proxy heretofore given in respect of such Stockholder's Subject Shares is not
irrevocable (or if irrevocable, such Stockholder will have secured the
termination of such proxy on or prior to the record date for the Interstate
Stockholders Meeting), and hereby revokes any and all such proxies, such
revocation to be effective on the record date for the Interstate Stockholders
Meeting.
1.3 CONSENT TO THE MERGER AGREEMENT AND POST-MERGER USE OF PROCEEDS.
Each Stockholder hereby consents to the Merger, the Merger Agreement and the
consummation of the transactions contemplated thereby and by this Agreement.
Each Stockholder hereby acknowledges and agrees that, following the Effective
Time, there shall be no restriction or limitation on the use of the proceeds by
MeriStar and its subsidiaries from the issuances of the Series B Shares or the
Notes.
II. CONVERSION OF SECURITIES
2.1 AGREEMENT TO CONVERT SUBJECT SECURITIES. Unless this Agreement is
terminated pursuant to Section 5.2 hereof, each Stockholder will convert or
cause to be converted all of such Stockholder's Subject Securities into
Interstate Class A Common Stock on or prior to the record date for the
Interstate Stockholders' Meeting in a manner consistent with that certain
Conversion Incentive Agreement by and between the Company and CGLH Partners I LP
and CGLH Partners II LP each, a Delaware limited partnership (the "INVESTOR
STOCKHOLDERS"), and the Company shall deliver to the Stockholder certificates
representing the number of validly issued, fully paid and nonassessable shares
of Class A Common Stock equal to (i) in the case of such Stockholder's Subject
Shares, the product obtained by multiplying the Applicable Conversion Rate for
the Series B shares (as such term is defined in Articles Supplementary to the
Charter of Interstate Designating the Series B Shares) by the number of Series B
Shares being converted, and (ii) in the case of such Stockholder's Subject
Notes, the quotient of the principal amount of Subject Notes to be converted
divided by the Conversion Price (as such term is defined in the Notes), provided
that, to the extent that conversion by such Stockholder of all of such
Stockholder's Subject Securities is restricted by the Conversion Restrictions
(as defined in Section 3.1(a)), such Stockholder will convert or cause to be
converted the greatest quantity of such Subject Securities as does not result in
a breach of such restrictions.
2.2 RIGHT NOT TO CONVERT. Notwithstanding anything in Section 2.1 to
the contrary, each Stockholder shall have the right but not the obligation (the
"NON-CONVERSION RIGHT") not to convert such Stockholders' Subject Securities on
or prior to the record date for the Interstate Stockholders Meeting if, on such
record date there shall exist, in the reasonable opinion of a majority of such
Stockholders, a Record Date Failure. As used in this Agreement, the term "RECORD
DATE FAILURE" shall mean the failure to be satisfied of any of the conditions
set forth in Section 6.1(e), Section 6.2(c), or Section 6.3(a), (c) or (f) of
the Merger Agreement, PROVIDED, HOWEVER, that (i) any reference in such
conditions to the "Closing Date" shall be read as a reference to the record date
for the Interstate Stockholders Meeting, and (ii) any requirement for the
receipt by any party of a certificate signed by any party shall be read out of
such condition.
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2.3 CONVERSION FOLLOWING MERGER OF OUTSTANDING SUBJECT SECURITIES. Each
Stockholder agrees that, as contemplated by Section 4.1(d) of the Notes and
Section 7(c) of the Articles Supplementary to the Charter of Interstate
Designating the Series B Shares, (i) each of such Stockholder's Subject
Securities outstanding immediately prior to the Effective Time (other than those
that are Interstate Common Stock) shall be converted, immediately following the
Effective Time, into that number of shares of Surviving Corporation Common
Stock, associated MeriStar Rights and cash lieu of fractional shares, if any, as
such Stockholder would have received upon exchange of such Subject Securities in
the Merger had such Subject Securities been converted in accordance with their
terms into shares of Interstate Common Stock immediately prior to the Merger if
such conversion had been permitted pursuant to the terms of such securities and
(ii) each of such Stockholder's Subject Securities outstanding immediately prior
to the Effective Time that are shares of Interstate Common Stock shall be
exchanged in the Merger as provided for in the Merger Agreement.
III. REPRESENTATIONS AND WARRANTIES
3.1 CERTAIN REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder, severally and not jointly, represents and warrants to MeriStar, as
follows:
(a) OWNERSHIP. Such Stockholder is the sole record and beneficial
owner of the number or principal amount, as applicable, of Subject Securities
set forth opposite such Stockholder's name on Schedule A hereto and, except as
set forth on Schedule A, has full and unrestricted power to dispose of, to vote,
to grant a proxy effective on the record date for the Interstate Stockholders
Meeting in respect of and, subject to the restrictions on conversion set forth
in such securities (the "CONVERSION RESTRICTIONS"). The Conversion Restrictions
are the only restrictions on conversion to which the Subject Securities are
subject. As of the record date for the Interstate Stockholders Meeting, except
as set forth on Schedule A, such Stockholder shall have full and unrestricted
power to dispose of, to vote and to grant a proxy effective on the record date
for the Interstate Stockholders Meeting in respect of the Subject Securities and
such Subject Securities are now, and at all times during the term hereof will
be, held by such Stockholder or any Permitted Transferee (as defined in Section
4.1 hereof), or by a nominee or custodian for the benefit of such Stockholder or
Permitted Transferee, free and clear of all Liens and proxies, except for any
Liens or proxies arising hereunder or as set forth on Schedule A. Except
pursuant to the terms of such Subject Securities or as set forth opposite such
Stockholder's name on Schedule A hereto such Stockholder (i) does not
beneficially own any securities issued by the Company on the date hereof; (ii)
does not, directly or indirectly, beneficially own or have any option, warrant
or other right to acquire any securities issued by the Company that are or may
by their terms become entitled to vote on any matter presented to the Company's
stockholders or any securities that are convertible or exchangeable into or
exercisable for any securities issued by the Company that are or may by their
terms become entitled to vote on any matter presented to the Company's
stockholders, nor is the Stockholder subject to any contract, commitment,
arrangement, understanding or relationship (whether or not legally enforceable),
other than this Agreement, that allows or obligates such Stockholders to vote,
dispose of or acquire any securities issued by the Company; (iii) as of the
record date for the Interstate Stockholders Meeting, will hold exclusive power
to give consent with respect to such Stockholder's Subject Securities on any
matter presented to the holders of such Subject Securities in respect of which
such Subject Securities are entitled to vote or give consent and has not granted
a proxy to any other person to vote such Subject Securities, subject to the
limitations set forth in this Agreement. Each Stockholder that is a beneficial
owner of Series B Shares represents and warrants to MeriStar that, as of the
date hereof, the "Applicable Conversion Rate" (as defined in the Articles
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Supplementary to the Charter of Interstate Designating the Series B Shares) for
the Series B Shares is as set forth in Schedule A hereto. Each Stockholder that
is a beneficial owner of Notes represents and warrants to MeriStar that, as of
the date hereof, the "Conversion Price" (as defined in the Notes) for the Notes
is as set forth in Schedule A hereto.
(b) POWER AND AUTHORITY; EXECUTION AND DELIVERY. Such Stockholder
has all requisite partnership or individual, as applicable, power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. This Agreement has been
duly executed and delivered by such Stockholder and constitutes a valid and
binding obligation of the Stockholder, enforceable against such Stockholder in
accordance with its terms. Such Stockholder, if not a natural person, is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware.
(c) NO CONFLICTS. The execution and delivery of this Agreement do
not, and, subject to compliance with the HSR Act and appropriate filings under
securities laws (which such Stockholder agrees to make promptly), to the extent
applicable, the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, result in a
violation or breach of, or constitute a default (or an event that, with notice
or lapse of time or both, would result in a default) or give rise to any right
of termination, amendment, cancellation, notice or acceleration under, (i) if
applicable, such Stockholder's partnership agreement or similar constitutive
documents, (ii) any contract, commitment, agreement, understanding, arrangement
or restriction of any kind to which such Stockholder is a party or by which the
Stockholder is bound, (iii) any injunction, judgment, writ, decree, order or
ruling applicable to such Stockholder or (iv) any law, statute, rule or
regulation applicable to the Stockholder; except in the case of clauses (ii) and
(iii) for conflicts, violations, breaches or defaults that could not reasonably
be expected to (1) impair the ability of such Stockholder to perform its
obligations under this Agreement or (2) prevent or delay the consummation of any
of the transactions contemplated this Agreement or the Merger Agreement.
(d) BROKERS. Except as set forth in Section 3.19 of the Merger
Agreement, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement or the Merger Agreement based upon arrangements
made by or on behalf of such Stockholder that is or will be payable by the
Company or any Interstate Subsidiary.
3.2 REPRESENTATIONS AND WARRANTIES OF MERISTAR. MeriStar hereby
represents and warrants to each Stockholder, that:
(a) ORGANIZATION; AUTHORITY. MeriStar is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation. MeriStar has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.
(b) EXECUTION AND DELIVERY. This Agreement has been duly executed
and delivered by MeriStar and constitutes a valid and binding obligation of
MeriStar enforceable against MeriStar in accordance with its terms.
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(c) NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the performance by MeriStar of its obligations hereunder will
conflict with, result in a violation or breach of, or constitute a default (or
an event that, with notice or lapse of time or both, would result in a default)
or give rise to any right of termination, amendment, cancellation, or
acceleration under, (i) MeriStar's certificate of incorporation, bylaws or
similar constitutive documents, (ii) any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which MeriStar is a
party or by which MeriStar is bound, (iii) any judgment, writ, decree, order or
ruling applicable to MeriStar, or (iv) any law, statute, rule or regulation
applicable to MeriStar; except in the case of clauses (ii) and (iii) for
conflicts, violations, breaches or defaults that could not reasonably be
expected to (1) impair the ability of MeriStar to perform its obligations under
this Agreement or (2) prevent or delay the consummation of any of the
transactions contemplated by this Agreement or the Merger Agreement.
IV. CERTAIN COVENANTS OF STOCKHOLDERS
4.1 RESTRICTION ON TRANSFER OF SUBJECT SECURITIES, PROXIES AND
NONINTERFERENCE. No Stockholder will, directly or indirectly: (a) except
pursuant to the terms of this Agreement, (i) offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, (ii) enter into any
contract, option or other arrangement or understanding with respect to, or (iii)
vote or give consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of such
Stockholder's Subject Securities other than any sale, transfer, assignment or
other action restricted by this clause 4.1(a) to members of such Stockholder's
immediate family, a family trust of such Stockholder, a charitable institution
or Related Transferee of such Stockholder (as such term is defined in that
certain Investor Agreement between the Company and certain of the Stockholders,
dated as of October 20, 2000) (each, a "PERMITTED TRANSFEREE") if, in each case,
the transferee of such Subject Securities agrees in writing to be bound by the
terms hereof and notice of such sale, transfer or assignment, including the name
and address of the purchaser, transferee or assignee, is delivered to MeriStar
pursuant to Section 5.6 hereof; (b) except pursuant to the terms of this
Agreement, grant any proxies or powers of attorney with respect to any Subject
Securities, deposit any Subject Securities into a voting trust or enter into a
voting agreement with respect to any Subject Securities; or (c) take any action
that could reasonably be expected to make any of its representations or
warranties contained herein untrue or incorrect or have the effect of impairing
the ability of such Stockholder to perform such Stockholder's obligations under
this Agreement or preventing or delaying the consummation of any of the
transactions contemplated by this Agreement or the Merger Agreement.
4.2 ADJUSTMENTS. (a) (a) In the event (i) of any stock dividend, stock
split, recapitalization, reclassification, combination or exchange of shares of
capital stock or other securities of the Company on, of or affecting the Subject
Securities or any other similar action that would have the effect of changing a
Stockholder's ownership of Subject Securities or (ii) a Stockholder becomes the
beneficial owner of any additional Subject Securities, then the terms of this
Agreement will apply to the Subject Securities held by such Stockholder
immediately following the effectiveness of the events described in clause (i) or
such Stockholder becoming the beneficial owner thereof, as described in clause
(ii).
(b) Each Stockholder hereby agrees, while this Agreement is in
effect, to promptly notify MeriStar of the number of any new Subject Securities
acquired by such Stockholder, if any, after the date hereof.
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4.3 NO SOLICITATION. Subject to Section 5.16, no Stockholder will take,
authorize or permit any of its partners, officers, directors, employees, agents
or representatives (including any investment banker, financial advisor, attorney
or accountant for such Stockholder) ("REPRESENTATIVES") to take, any action that
the Company would be prohibited from taking under the first sentence of Section
5.7(a) of the Merger Agreement (disregarding for purposes of this Section 4.3
the proviso to such sentence). Each Stockholder will, and will cause its
Representatives to, immediately cease all existing discussions or negotiations
with respect to any of the foregoing and promptly (and in any event within one
business day) advise MeriStar in writing of the receipt by such Stockholder of a
request for information or any inquiries or proposals relating to a Interstate
Acquisition Proposal. Notwithstanding any provision of Sections 4.3 or 4.5
hereof the contrary, (a) if any Stockholder is a member of the Board of
Directors of the Company, such member of the Board of Directors of the Company
may take actions in such capacity to the extent permitted by Section 5.7 of the
Merger Agreement, and (b) if any Stockholder is an officer of the Company, such
officer may take actions in such capacity to the extent directed to do so by the
Board of Directors in compliance with Section 5.7 of the Merger Agreement.
4.4 WAIVER OF APPRAISAL RIGHTS. Each Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that such Stockholder
may have.
4.5 COOPERATION. Each Stockholder will cooperate fully with MeriStar
and the Company in connection with their respective reasonable best efforts to
fulfill the conditions to the Merger set forth in Article VI of the Merger
Agreement.
4.6 DISCLOSURE. Each Stockholder hereby authorizes MeriStar to publish
and disclose in any announcement or disclosure required by the SEC and the Proxy
Statement (including all documents and schedules filed with the SEC in
connection with either of the foregoing), its identity and ownership of the
Subject Securities and the nature of its commitments, arrangements and
understandings under this Agreement provided that such Stockholder is provided
with a reasonable opportunity to review and comment on such disclosure.
V. MISCELLANEOUS
5.1 FEES AND EXPENSES. (a) (a) Except as provided in Section 5.1(b),
each party hereto will pay its own expenses incident to preparing for, entering
into and carrying out this Agreement and the consummation of the transactions
contemplated hereby.
(b) MeriStar shall pay and shall reimburse Investor Stockholders,
upon the Closing after receipt of the ▇▇▇▇ therefor, the reasonable documented
fees and related out-of-pocket expenses ("INVESTOR STOCKHOLDER EXPENSES")
incurred by the Investor Stockholders in connection with the Investor
Stockholders' negotiation and preparation of this Agreement, the Merger
Agreement, the Conversion Incentive Agreement and the consummation of the
transactions contemplated hereby and thereby and in connection with any
amendments, waivers or consents under or in respect of any such agreements prior
to the Closing; provided, however, that Investor Stockholder Expenses shall not
exceed the sum of $250,000.
5.2 AMENDMENT; TERMINATION. This Agreement may not be amended except by
an instrument in writing signed on behalf of MeriStar and each of the parties
whose rights or obligations
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are changed by the terms of such amendment. This Agreement will terminate on the
earliest to occur of (a) the Effective Time, (b) the date the Merger Agreement
is terminated in accordance with its terms, or (c) the date on which MeriStar
becomes entitled to terminate the Merger Agreement pursuant to Section 7.1(g) of
the Merger Agreement. This Agreement may be earlier terminated by the mutual
consent of the MeriStar and the Stockholders representing a majority of the
Subject Securities subject to this Agreement. Except as set forth below, in the
event of termination of this Agreement pursuant to this Section 5.2, this
Agreement will become null and void and of no effect with no liability on the
part of any party hereto and all proxies granted hereby will be automatically
revoked; provided, however, that no such termination will relieve any party
hereto from any liability for any breach of this Agreement occurring prior to
such termination.
Notwithstanding anything to the contrary contained in this Agreement,
if this Agreement is terminated for any reason, Sections 3.1(a), 3.1(b), 5.1,
5.5 and 5.15 hereof and the preceding sentence of this Section 5.2 will survive
any termination of this Agreement indefinitely.
5.3 EXTENSION; WAIVER. Any agreement on the part of a party to waive
any provision of this Agreement, or to extend the time for any performance
hereunder, will be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise will not constitute a waiver of
such rights. Any waiver by any party of a breach of any provision of this
Agreement will not operate as or be construed as a waiver of any other breach of
such provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
or one or more sections hereof will not be considered a waiver or deprive that
party of a right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
5.4 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES; SEVERAL
OBLIGATIONS. This Agreement and the Merger Agreement constitute the entire
agreement among the parties hereto with respect to the subject matter hereof,
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to such matters. Neither the Merger Agreement nor
this Agreement is intended to confer upon any Person other than the parties
hereto any rights or remedies. The obligations of, and the representations and
warranties made by, each Stockholder shall be several and not joint and shall
relate only to such Stockholder.
5.5 GOVERNING LAW; WAIVER OF JURY TRIAL. (a) (A) THIS AGREEMENT SHALL
BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) Each party acknowledges and agrees that any controversy which
may arise under this Agreement is likely to involve complicated and difficult
issues, and therefore each such party hereby irrevocably and unconditionally
waives any right such party may have to a trial by jury in respect of any
litigation directly or indirectly arising out of or relating to this Agreement,
or the transactions contemplated by this agreement. Each party certifies and
acknowledges that (i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (ii) each such party
understands and has considered the implications of this waiver, (iii) each such
party makes this waiver voluntarily, and (iv) each such party has been induced
to enter into this agreement by, among
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other things, the mutual waivers and certifications in this Section 5.5(b).
5.6 NOTICES. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:
If to MeriStar:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, J. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇:
Interstate Hotels Corporation
▇▇▇▇▇▇ Plaza Ten
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to either of the Investor Stockholders:
c/▇ ▇▇▇▇▇▇ Brothers Holdings Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
9
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ & Block LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
5.7 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise, by any Stockholder without
the prior written consent of MeriStar or by MeriStar without the consent of the
applicable Stockholder (and then only with respect to such Stockholder), and any
such assignment or delegation that is not consented to will be null and void;
PROVIDED that this Agreement, together with any rights, interests, or
obligations of MeriStar hereunder, may be assigned or delegated, in whole or in
part, by MeriStar to any direct or indirect wholly owned subsidiary of MeriStar
without the consent of or any action by any Stockholder upon notice by MeriStar
to each Stockholder affected thereby as herein provided; PROVIDED FURTHER,
HOWEVER, that any such assignment shall not relieve MeriStar of its obligations
hereunder. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by, the parties and their
respective successors and assigns (including, without limitation, any Person to
whom any Subject Securities are sold, transferred or assigned).
5.8 FURTHER ASSURANCES. Each Stockholder will execute and deliver such
other documents and instruments and take such further actions as may be
necessary or appropriate or as may be reasonably requested by MeriStar in order
to ensure that MeriStar receives the full benefit of this Agreement.
5.9 PUBLICITY. MeriStar and each Stockholder will reasonably consult
with each other party and with the Company before issuing any press release or
otherwise making any public statements with respect to this Agreement and will
not issue any such press release or make any such public statement before such
consultation, except as may be required by Law or applicable stock exchange
10
rules.
5.10 ENFORCEMENT. Irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled at law or in
equity.
5.11 SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions of this Agreement.
If any provision of this Agreement, or the application of that provision to any
person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted for that provision in order to carry
out, so far as may be valid and enforceable, the intent and purpose of the
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of the provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of the provision, or the
application of that provision, in any other jurisdiction.
5.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
5.13 HEADINGS. The descriptive headings contained herein are for
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement.
5.14 REMEDIES NOT EXCLUSIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity will be cumulative and not alternative, and the exercise of any thereof
by either party will not preclude the simultaneous or later exercise of any
other such right, power or remedy by such party.
5.15 JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) (a) Each party
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Chancery or other courts of the
State of Delaware (a "DELAWARE COURT"), and any appellate court from any such
court, in any suit, action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment resulting from any
suit, action or proceeding, and each party hereby irrevocably and
unconditionally agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in a Delaware Court.
(b) It will be a condition precedent to each party's right to
bring any such suit, action or proceeding that such suit, action or proceeding,
in the first instance, be brought in a Delaware Court (unless such suit, action
or proceeding is brought solely to obtain discovery or to enforce a judgment),
and if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from a Delaware Court to another jurisdiction, (ii) consolidate any
such suit, action or proceeding brought in a Delaware Court with a suit, action
or proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in a Delaware Court for the purpose of bringing the same in
another
11
jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, (i) any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a Delaware Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
5.16 FIDUCIARY DUTIES. Each Stockholder is signing this Agreement
solely in such Stockholder's capacity as the beneficial owner of Subject
Securities and, notwithstanding anything herein to the contrary, nothing
contained herein shall limit or affect any actions taken by such Stockholder or
any designee of such Stockholder in his or her capacity, if any, as an officer
or director of the Company or any of its Subsidiaries and none of such actions
in any such capacity shall be deemed to constitute a breach of this Agreement.
5.17 BENEFICIAL OWNERSHIP. For purposes of this Agreement, the term
"beneficial owner" shall have the meaning ascribed to such term under Rule 13d-3
under the Securities Exchange Act of 1934, and the terms "beneficially own" and
"beneficial ownership" shall have correlative meanings therewith.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed as of the day and year first written
above.
MERISTAR HOTELS & RESORTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President, Chief Operating Officer
CGLH PARTNERS I LP
By: MK/CG-GP LLC
General Partner
By: CG Interstate Associates, LLC
a Managing Member
By: Continental Gencom Holdings, LLC
its Sole Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
By: KFP INTERSTATE, LLC
a Managing Member
By: KFP Interstate, Ltd.
its Sole Member
By: ▇▇▇▇▇▇▇▇▇, ▇.▇.
its General
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
By: LB INTERSTATE GP LLC
General Partner
By: PAMI LLC
its Sole Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
CGLH PARTNERS II LP
By: MK/CG-GP LLC
General Partner
By: CG Interstate Associates, LLC
a Managing Member
By: Continental Gencom Holdings, LLC
its Sole Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
By: KFP INTERSTATE, LLC
a Managing Member
By: KFP Interstate, Ltd.
its Sole Member
By: ▇▇▇▇▇▇▇▇▇, ▇.▇.
its General
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
By: LB INTERSTATE GP LLC
General Partner
By: PAMI LLC
its Sole Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
SCHEDULE A
------------------------- ---------------------------- -------------------------
Stockholder Number of Series B Shares1 Principal Value of Notes2
------------------------- ---------------------------- -------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇* 100,000
------------------------- ---------------------------- -------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇* 75,000
------------------------- ---------------------------- -------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇* 50,000
------------------------- ---------------------------- -------------------------
CGLH Partners I LP 500,000
------------------------- ---------------------------- -------------------------
CGLH Partners II LP $25,000,000
------------------------- ---------------------------- -------------------------
--------
1 The Applicable Conversion Rate for the Series B Shares as of the date
of this Agreement is 2.50.
2 The Conversion Price for the Notes as of the date of this Agreement
is $4.00.
* The Series B Shares held by each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, J. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ are subject to an irrevocable proxy
granted pursuant to that certain Stockholders Agreement among CGLH
Partners I LP, CGLH Partners II LP, the Stockholders and others, dated
as of October 20, 2000, which proxy will terminate upon the conversion
of the Series B Shares into Class A Common Stock of the Company.
