VOTING AGREEMENT
Exhibit 10.25
Execution Version
This VOTING AGREEMENT (this “Agreement”) is made and entered into as of August 5, 2010
between Summit Hotel OP, LP, a Delaware limited partnership (the “OP”), and The Summit
Group, Inc., a South Dakota corporation (“Member”) that is a member of Summit Hotel
Properties, LLC, a South Dakota limited liability company (the “Company”).
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger, the form of which is attached hereto as
Exhibit A (the “Merger Agreement”) dated as of August 5, 2010 by and between the OP
and the Company, the Company has agreed to merge with and into the OP;
WHEREAS, as a condition to the Merger Agreement, the Company must adopt an amendment to the
Third Amended and Restated Operating Agreement of the Company (“the Operating Agreement”),
which amendment provides that the Class C member, voting separately, and the holders of 51% or more
of the Class A and A-1 members voting together as a group may approve a merger of the LLC into
another entity, in substantially the form attached hereto as Exhibit B (the
“Amendment”); and
WHEREAS, the Company also intends to present to its members at a special meeting to consider
the Merger Agreement and the Amendment, a proposal to adjourn the meeting to a later date if
necessary to solicit additional proxies if there are insufficient votes at the time of the special
meeting to approve the Merger Agreement and the Amendment (the “Adjournment Proposal”);
WHEREAS, as a condition to the willingness of the OP, or its designee, to enter into the
Merger Agreement and as an inducement and in consideration therefor, Member has agreed to enter
into this Agreement; and
WHEREAS, Member is (a) the Company Manager as defined in the Operating Agreement and (b) the
beneficial owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) of such membership interests of the Company as is indicated
on Schedule 1 hereto (the “Membership Interests”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties hereby agree as follows:
1. Defined Terms. The following terms used herein have the meanings set forth below:
1.1 “Closing” means the closing of the transactions contemplated by the Merger
Agreement.
1.2 “Effective Date” means the date of the Merger Agreement.
1.3 “Expiration Date” means the date of the earlier to occur of
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(a) the Closing, or
(b) the date on which the Merger Agreement is terminated.
2. Agreement to Vote Membership Interests and Take Certain Other Actions.
2.1 Subject to the terms and conditions hereof, after the Effective Date and prior to the
Expiration Date, at every meeting of the members of the Company at which any of the following
matters is considered or voted upon, and at every adjournment or postponement thereof, and on every
action or approval by written consent of the members of the Company with respect to any of the
following matters, Member will vote or give written consent (i) in its capacity as Company Manager
and (ii) with respect to the Membership Interests:
(a) in favor of approval of the Amendment;
(b) in favor of adoption and approval of the Merger Agreement;
(c) in favor of the Adjournment Proposal;
(d) against approval of any proposal made in opposition to the Amendment or the Merger
Agreement and consummation of the transactions contemplated thereby;
(e) against any proposal that is intended to, or is reasonably likely to, result in the
conditions of the Company’s obligations under the Merger Agreement not being fulfilled;
(f) against any other action that is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, discourage or materially adversely affect the Merger Agreement or
any of the other transactions contemplated by the Merger Agreement; and
(g) against any dissolution, liquidation or winding up of the Company (other than as may be
contemplated by the Merger Agreement).
2.2 After the Effective Date and prior to the Expiration Date, Member shall be present, in
person or by proxy, at all meetings of members of the Company at which the matters referred to in
Section 2.1 are to be voted upon so that the Company Manager and all Membership Interests are
counted for the purposes of determining the presence of a quorum at such meetings.
2.3 Between the Effective Date and the Expiration Date, Member will not (a) solicit proxies or
become a “participant” in a “solicitation” (as such terms are defined in Rule 14A under the
Exchange Act) with respect to an Opposing Proposal (as defined below), (b) initiate a stockholders’
vote with respect to an Opposing Proposal or (c) become a member of a “group” (as such term is used
in Section 13(d) of the Exchange Act) with respect to any voting securities of Company with respect
to an Opposing Proposal. For purposes of this Agreement, the term “Opposing Proposal”
means any of the actions or proposals described in clauses (d) through (g) of Section 2.1.
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2.4 Notwithstanding the foregoing, nothing in this Agreement shall limit or restrict Member
from voting in Member’s sole discretion on any matter other than the matters referred to in Section
2.1.
3. Irrevocable Proxy. Stockholder has delivered to the OP a duly executed proxy in
the form attached hereto as Exhibit C (the “Proxy”), such Proxy covering the
Company Manager and the Membership Interests at each meeting of the members of the Company
(including, without limitation, each written consent in lieu of a meeting) after the Effective Date
and prior to the Expiration Date. Upon the execution of this Agreement by Member, Member hereby
revokes any and all prior proxies or powers of attorney given by Member with respect to voting by
the Company Manager and of the Membership Interests on the matters referred to in Section 2.1 and
agrees not to grant any subsequent proxies or powers of attorney with respect to the voting of the
Membership Interests on the matters referred to in Section 2.1 until after the Expiration Date.
4. Representations, Warranties and Covenants.
4.1 Member hereby represents, warrants and covenants to the OP as follows:
(a) Member is the Company Manager and is the beneficial owner of the Membership Interests and
has sole voting power and the power of disposition with respect to all of the Membership Interests
outstanding on the date hereof, and will maintain sole voting power and the power of disposition
with respect to the Membership Interests through the Expiration Date, and (iii) Member’s principal
residence or place of business is accurately set forth on the signature page hereto.
(b) Member is a corporation duly organized and validly existing under the laws of the State of
South Dakota and has taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly executed and delivered by
Member and constitutes the valid and binding obligation of Member, enforceable against Member in
accordance with its terms, except as may be limited by (i) the effect of bankruptcy, insolvency,
conservatorship, arrangement, moratorium or other laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
4.2 The OP hereby represents, warrants and covenants to Member as follows: The OP is a
limited partnership duly formed and validly existing under the laws of the State of Delaware and
has taken all necessary limited partnership action to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and validly executed and delivered by
the OP and constitutes the valid and binding obligation of the OP, enforceable against the OP in
accordance with its terms, except as may be limited by (i) the effect of bankruptcy, insolvency,
conservatorship, arrangement, moratorium or other laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
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5. Termination. This Agreement and the Proxy delivered in connection herewith and all
obligations of Member hereunder and thereunder, shall automatically terminate and shall have no
further force or effect as of the Expiration Date.
6. Miscellaneous.
6.1 Severability. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally contemplated to the greatest
extent possible.
6.2 Binding Effect and Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in part, by operation
of law or otherwise by any party without the prior written consent of the other party; provided,
however, the OP may, in its sole discretion, assign its rights and obligations hereunder to any
direct or indirect wholly-owned subsidiary of the OP. Any assignment in violation of the preceding
sentence shall be void. 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. Any assignment by the OP shall not relieve the OP of its obligations hereunder.
6.3 Amendment and Modification. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
6.4 Specific Performance; Injunctive Relief. Until the Expiration Date, the parties
hereto acknowledge that the OP will be irreparably harmed and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of Member set forth herein. Therefore,
it is agreed that, as the OP’s sole and exclusive remedy of any violation of Member hereunder,
until the Expiration Date, the OP shall have the right to enforce such covenants and agreements by
specific performance and injunctive relief in equity and Member hereby waives any and all defenses
which could exist in its favor in connection with such enforcement and waives any requirement for
the security or posting of any bond in connection with such enforcement. The OP expressly
acknowledges and agrees that Member shall not be liable to the OP for money damages in the event of
a breach of the terms hereof by Member.
6.5 Notices. All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered personally, via facsimile
(which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to Member, at the address set forth below Member’s signature on the signature page
hereof.
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(b)
|
if to the OP, to: | |
| Summit Hotel OP, LP | ||
| 0000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxx 0 | ||
| Xxxxx Xxxxx, XX 00000 | ||
| Attention: Xxxxxx X. Xxxxxx | ||
| with a copy (which shall not constitute notice) to: | ||
| Hunton & Xxxxxxxx LLP | ||
| 000 X. Xxxx Xxxxxx | ||
| Xxxxxxxx, XX 00000 | ||
| Attention: Xxxxx X. Xxxxxx, Esq. |
or to such other address as any party hereto may designate for itself by notice given as herein
provided.
6.6 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflict of laws thereof.
6.7 No Waiver. The failure of any party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to demand such
compliance.
6.8 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the Proxy (i)
constitute the entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this Agreement and the
Proxy and (ii) are not intended to confer upon any Person other than the parties any rights or
remedies.
6.9 Counterpart. This Agreement may be executed by facsimile signature and in one or
more counterparts, all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties and delivered to
the other parties.
6.10 Effect of Headings. The section headings herein are for convenience only and
shall not affect the construction or interpretation of this Agreement.
6.11 No Ownership Interest. Nothing contained in this Agreement shall be deemed to
vest in the OP or any of its affiliates any direct or indirect ownership or incidence of ownership
of or with respect to any Membership Interests. Except as specifically set forth herein with
respect to the voting on certain express matters, all rights, ownership and economic benefits of or
relating to the Membership Interests shall remain vested in and belong to Member.
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6.12 Disclosures. Each party acknowledges and agrees that the other party may
disclose the terms hereof and may make any and all filings with the Securities and Exchange
Commission or any other body or person as it deems necessary or appropriate in connection with the
matters contemplated hereby.
(Signature page follows.)
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IN WITNESS WHEREOF, the parties have caused this Voting Agreement to be executed as of
the date first above written.
| THE SUMMIT GROUP, INC. | ||||
By: Summit Hotel Properties, Inc., |
||||
/s/
Xxxxxx X. Xxxxxx
|
/s/ Xxxxx X. Xxxxxxxxxxx | |||
Xxxxxx X. Xxxxxx
|
Xxxxx Xxxxxxxxxxx | |||
President and Chief Executive Officer
|
Sole Shareholder | |||
| Chairman and Chief Executive Officer | ||||
| The Summit Group, Inc. | ||||
| 0000 Xxxxx Xxxxxxxxx Xxxxxx | ||||
| Xxxxx 0 | ||||
| Xxxxx Xxxxx, XX 00000 |
[Signature page to Voting Agreement]
Schedule 1
Membership Interest Ownership
| Member Name | Amount and Class of Membership Interests Held | |
The Summit Group, Inc.
|
100% of the Class C Membership Interests | |
| 57.56% of the Class B Membership Interests |
Schedule 1-1
EXHIBIT A
MERGER AGREEMENT
A-1
EXHIBIT B
AMENDMENT
B-1
EXHIBIT C
IRREVOCABLE PROXY
TO VOTE MEMBERSHIP INTERESTS OF
SUMMIT HOTEL PROPERTIES, LLC
The undersigned member (the “Member”) of Summit Hotel Properties, LLC, a South Dakota limited
liability company (the “Company”), hereby irrevocably appoints each of Xxxxxx X. Xxxxxx and
Xxxxxxxxxxx X. Eng, after the Effective Date and prior to the Expiration Date as the sole and
exclusive attorneys and proxies of the undersigned, with full power of substitution and
resubstitution, to vote and exercise all voting rights (to the full extent that the undersigned is
entitled to do so) with respect to all of the membership interests of the Company that now are
owned of record by the undersigned and are owned as of any record date relevant for a vote
(collectively, the “Membership Interests”) in accordance with the terms of this Irrevocable
Proxy. The Membership Interests beneficially owned by the undersigned member of the Company as of
the date of this Irrevocable Proxy are listed on Schedule 1 to this Irrevocable Proxy. Upon the
undersigned’s execution of this Irrevocable Proxy, any and all prior proxies given by the
undersigned with respect to the voting of any Membership Interests on the matters referred to in
the third full paragraph of this Irrevocable Proxy are hereby revoked and the undersigned agrees
not to grant any subsequent proxies with respect to such matters until after the Expiration Date
(as defined below).
Capitalized terms not otherwise defined herein have the meanings ascribed to those terms in
the Voting Agreement of the Member of even date herewith.
The attorneys and proxies named above, and each of them are, hereby authorized and empowered
by the undersigned, at any time after the Effective Date and prior to the Expiration Date, to act
as the undersigned’s attorney and proxy to vote the Membership Interests, and to exercise all
voting rights of the undersigned with respect to the Membership Interests (including, without
limitation, the power to execute and deliver written consents), at every annual, special or
adjourned meeting of the members of the Company and in every written consent in lieu of such
meeting:
(a) in favor of approval of the Amendment;
(b) in favor of adoption and approval of the Merger Agreement;
(c) in favor of the Adjournment Proposal;
(d) against approval of any proposal made in opposition to the Amendment or the Merger
Agreement and consummation of the transactions contemplated thereby;
C-1
(e) against any proposal that is intended to, or is reasonably likely to, result in the
conditions of Company’s obligations under the Merger Agreement not being fulfilled;
(f) against any other action that is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, discourage or materially adversely affect the Merger Agreement or
any of the other transactions contemplated by the Merger Agreement; and
(g) against any dissolution, liquidation or winding up of Company (other than as may be
contemplated by the Merger Agreement).
The attorneys and proxies named above may not exercise this Irrevocable Proxy on any other
matter except as provided above. The undersigned member may vote the Membership Interests on all
other matters.
Any obligation of the undersigned hereunder shall be binding upon the successors and assigns
of the undersigned.
[Signature page follows.]
C-2
This Irrevocable Proxy is coupled with an interest as aforesaid and is irrevocable.
Dated: August 5, 2010
| The Summit Group, Inc. /s/ Xxxxx X.
Xxxxxxxxxxx |
||||
|
Xxxxx X. Xxxxxxxxxxx Sole Shareholder Chairman and Chief Executive Officer |
||||
[Signature page to Voting Agreement Proxy]
C-3
Schedule 1
Membership Interest Ownership
| Member Name | Amount and Class of Membership Interests Held | |
The Summit Group, Inc.
|
100% of the Class C Membership Interests | |
| 57.56% of the Class B Membership Interests |
