Exhibit 99.2
TERMINATION AGREEMENT
This Termination Agreement, dated as of July 31, 2002 (this
"TERMINATION AGREEMENT"), is by and between Interstate Hotels Corporation,
a Maryland corporation (the "COMPANY"), on the one hand, and CGLH Partners
I LP, a Delaware limited partnership and CGLH Partners II LP, a Delaware
limited partnership (together, the "INVESTOR"), on the other hand.
WHEREAS, the Company and the Investor entered into a Securities
Purchase Agreement dated August 31, 2000 (the "PURCHASE AGREEMENT")
pursuant to which the Investor, on October 20, 2000, purchased a
subordinated convertible note having a principal amount of $25,000,000 and
shares of Series B Convertible Preferred Stock, par value $.01 per share,
of the Company having an aggregate stated amount of $5,000,000;
WHEREAS, the Company and the Investor entered into an Investor
Agreement dated October 20, 2000 (the "INVESTOR AGREEMENT") setting forth
certain rights and obligations of the Company and the Investor in relation
to the Purchase Agreement, the transactions contemplated thereby, and the
securities issued thereunder;
WHEREAS, the Company and the Investor entered into a Registration
Rights Agreement dated October 20, 2000 (the "REGISTRATION RIGHTS
AGREEMENT") granting the Investor registration rights in respect of certain
shares of Class A Common Stock, par value $.01 per share, of the Company;
WHEREAS, the Company and MeriStar Hotels & Resorts, Inc., a
Delaware corporation ("MERISTAR"), entered into an Agreement and Plan of
Merger dated as of May 1, 2002 (as amended, 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 (the
"MERGER");
WHEREAS, it is a condition to the closing of the Merger that the
Company and the Investor shall have agreed to terminate the Purchase
Agreement, the Investor Agreement and the Registration Rights Agreement as
of the Effective Time (as such term is defined in the Merger Agreement, the
"EFFECTIVE TIME").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Termination Agreement and intending to be
legally bound hereby, the parties agree as follows, effective as at the
Effective Time:
SECTION 1. Termination of Agreements. As of the Effective Time,
except as specified in Section 2, each of the Purchase Agreement, the
Investor Agreement and the Registration Rights Agreement shall terminate
and shall cease to be of effect (the "Termination").
SECTION 2. Continuing Obligations. Notwithstanding the
Termination:
(a) Section 10 of the Purchase Agreement (Indemnification) shall
survive the Termination; and
(b) Section 1.2 (Representations and Warranties of the Company)
and Section 1.3 (Representations and Warranties of Investor) of the
Investor Agreement shall survive the Termination.
SECTION 3. Representations and Warranties.
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3.1. The Company. The Company represents and warrants to the
Investor that: (i) the Company is duly organized and in good standing under
the laws of the state of its organization, (ii) the execution and delivery
of this Termination Agreement have been duly authorized by all necessary
corporate action on the part of the Company, and (iii) the execution and
delivery of this Termination Agreement by the Company and its performance
by the Company will not (A) violate any provision of the charter documents
or bylaws of the Company, (B) violate or conflict with any restriction of
any kind to which the Company is subject or by which any of its assets may
be bound, or (C) require the consent, authorization, order or approval of,
or filing or registration with, any governmental commission, board, or
other regulatory body.
3.2. The Investor. The Investor represents and warrants to the
Company that: (i) the Investor is duly organized and in good standing under
the laws of the state of its organization, (ii) the execution and delivery
of this Termination Agreement have been duly authorized by all necessary
corporate action on the part of the Investor, and (iii) the execution and
delivery of this Termination Agreement by the Investor and its performance
by the Investor will not (A) violate any provision of the charter documents
or bylaws of the Investor, (B) violate or conflict with any restriction of
any kind to which the Investor is subject or by which any of its assets may
be bound, or (C) require the consent, authorization, order or approval of,
or filing or registration with, any governmental commission, board, or
other regulatory body.
SECTION 4. Miscellaneous
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4.1. Amendment; Termination. This Termination Agreement may not
be amended except by an instrument in writing signed on behalf of the
Company and the Investor. This Termination Agreement will terminate upon a
termination of the Merger Agreement in accordance with its terms, and may
be earlier terminated by the mutual consent of the Company and the
Investor. In the event of termination of this Termination Agreement
pursuant to this Section 4.1, this Termination Agreement will become null
and void and of no effect with no liability on the part of any party
hereto.
4.2. Entire Agreement; No Third-Party Beneficiaries. This
Termination Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to such matters. This Termination Agreement is not intended to
confer upon any person other than the parties hereto any rights or
remedies.
4.3. Governing Law; Waiver Of Jury Trial. This Termination
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. Each
party acknowledges and agrees that any controversy which may arise under
this Termination 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 Termination Agreement, or the transactions contemplated by this
Termination 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 other things, the mutual
waivers and certifications in this Section 4.3.
4.4. 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 THE COMPANY:
Interstate Hotels Corporation
Xxxxxx Plaza Ten
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
With copies to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
IF TO THE INVESTOR:
c/o Lehman Brothers Holdings Inc.
1284 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
With copies to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
and
Xxxxxxx & Block LLP
000 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other persons or addresses as may be designated in writing by
the party to receive such notice as provided above.
4.5. Successors and Assigns. Neither this Termination Agreement
nor any of the rights, interests, or obligations under this Termination
Agreement may be assigned or delegated, in whole or in part, by operation
of law or otherwise, by the Investor without the prior written consent of
the Company or by the Company without the prior written consent of the
Investor, and any such assignment or delegation that is not consented to
will be null and void. This Termination 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 who becomes a party to the Purchase Agreement, the Investor
Agreement or the Registration Rights Agreement as a result of any sale,
transfer or assignment of securities of the Company by the Investor).
4.6. Further Assurances. Each of the Company and the Investor
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 the other party hereto in order to ensure that each party
hereto receives the full benefit of this Termination Agreement.
4.7. Enforcement. Irreparable damage would occur in the event
that any of the provisions of this Termination 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 Termination Agreement and to enforce
specifically the terms and provisions of this Termination Agreement, this
being in addition to any other remedy to which they are entitled at law or
in equity.
4.8. Severability. The provisions of this Termination 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 Termination Agreement. If any provision of this
Termination 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
Termination 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.
4.9. Counterparts. This Termination 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.
4.10. 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 Termination Agreement.
4.11. Remedies Not Exclusive. All rights, powers and remedies
provided under this Termination 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.
4.12. Jurisdiction; Consent to Service of Process.
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(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 Termination 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 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 Termination
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.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Termination Agreement to be signed as of the day and year first written
above.
INTERSTATE HOTELS CORPORATION
By:
--------------------------------
Name:
Title:
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:
---------------------------------
Name:
Title:
By: KFP INTERSTATE ASSOCIATES, LLC
a Managing Member
By: KFP Interstate, LLC.
its Managing Member
By: KFP Holdings, Ltd.
its Sole Member
By: Xxxxxxxxx, X.X.
its General Partner
By:
--------------------------
Name:
Title:
By: LB INTERSTATE GP LLC
General Partner
By: PAMI LLC
its Sole Member
By:
---------------------------
Name:
Title:
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:
-------------------------------
Name:
Title:
By: KFP INTERSTATE ASSOCIATES, LLC
a Managing Member
By: KFP Interstate, LLC.
its Managing Member
By: KFP Holdings, Ltd.
its Sole Member
By: Xxxxxxxxx, X.X.
its General Partner
By:
-------------------------
Name:
Title:
By: LB INTERSTATE GP LLC
General Partner
By: PAMI LLC
its Sole Member
By:
----------------------------
Name:
Title:
