Exhibit (c)(5)
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement") is dated as of January 6,
1999, by and among Marriott International, Inc., a Delaware corporation
("Marriott"), MI Subsidiary I, Inc., a Delaware corporation and a direct,
wholly-owned subsidiary of Marriott ("Acquisition") and each of the other
parties signatory hereto (individually, a "Stockholder" and collectively, the
"Stockholders").
WHEREAS, concurrently herewith, Marriott, Acquisition and XxxxxXxxx
Corporation, a Maryland corporation ("ExecuStay"), are entering into a Merger
Agreement, a form of which is appended hereto as Exhibit I (as such agreement
may hereafter be amended from time to time, the "Merger Agreement"), pursuant to
which ExecuStay will be merged with and into Acquisition (the "Merger").
Capitalized terms used and not defined herein have the respective meanings
assigned to them in the Merger Agreement;
WHEREAS, concurrently herewith, certain other stockholders of ExecuStay are
entering into two agreements with Marriott and Acquisition (the "Other
Stockholders Agreements"), concerning certain matters connected with the Merger
and their ExecuStay Shares (defined below);
WHEREAS, each of the Stockholders wishes to make subject to this Agreement
the number of shares, par value $0.01 per share, of common stock (the "Common
Stock") of ExecuStay (the "ExecuStay Shares") set forth opposite such
Stockholder's name on Schedule A hereto (the "Exchange Shares");
WHEREAS, the Merger Agreement contemplates that, in anticipation of
consummation of the Merger, one share of Class B Preferred Stock, par value
$0.01 per share, of ExecuStay ("Class B Shares") will be issued to each
Stockholder in exchange (the "Exchange") for each Exchange Share held by such
Stockholder (as used herein, the term "Shares" refers to the Exchange Shares
prior to the Exchange and the Class B Shares after the Exchange);
WHEREAS, Marriott has agreed that each Stockholder shall receive shares of
Marriott common stock, par value $.01 per share ("Marriott Stock"), in the
Merger, in respect of their Exchange Shares, and each such Stockholder desires
to receive such Marriott Stock; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Marriott has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein, the
parties hereby agree as follows:
1. Agreement to Vote. Each Stockholder hereby agrees that during the
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period commencing on the Tender Offer Purchase Time and continuing until the
first to occur of the Closing and the termination of the Merger Agreement in
accordance with its terms, at any
meeting of the holders of the Shares, however called, or in connection with any
written consent of the holders of Shares, such Stockholder shall vote (or cause
to be voted) the Exchange Shares held of record or Beneficially Owned (as
defined herein) by such Stockholder, whether owned on the date hereof or
hereafter acquired, (a) in favor of approval of the Merger Agreement, all
transactions contemplated thereby, and any actions required in furtherance
thereof and hereof (including election of such directors of ExecuStay as
Marriott is entitled to designate pursuant to the Merger Agreement); (b) against
any action or agreement that is intended, or could reasonably be expected, to
impede, interfere with, or prevent the Merger or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of ExecuStay or any of its subsidiaries under the Merger Agreement,
the Other Stockholders Agreements or this Agreement; and (c) except as
specifically requested in writing in advance by Marriott or Acquisition, against
the following actions (other than the Exchange, the Merger and the transactions
contemplated by the Merger Agreement and this Agreement): (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving ExecuStay or any of its subsidiaries or affiliates; (ii) a
sale, lease, transfer or disposition by ExecuStay or any of its subsidiaries of
any assets outside the ordinary course of business or any assets which in the
aggregate are material to ExecuStay and its subsidiaries taken as a whole, or a
reorganization, recapitalization, dissolution or liquidation of ExecuStay or any
of its subsidiaries or affiliates; (iii)(A) any change in the management of
ExecuStay or in a majority of the persons who constitute the board of directors
of ExecuStay; (B) any change in the present capitalization of ExecuStay or any
amendment of XxxxxXxxx'x charter or By-Laws; (C) any other material change in
XxxxxXxxx'x or any of its subsidiaries' corporate structure or business; or (D)
any other action that, in the case of each of the matters referred to in clauses
(iii)(A), (B) or (C), is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone or materially adversely affect the Exchange, the
Merger or the transactions contemplated by this Agreement, the Other
Stockholders Agreements and the Merger Agreement. No Stockholder shall enter
into any agreement or understanding with any Person (as defined herein) the
effect of which would be inconsistent with or violative of the provisions and
agreements contained in Section 1 or 2 hereof.
2. Other Covenants, Representations and Warranties. Each Stockholder
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hereby severally represents and warrants with respect to himself or itself to
Marriott and Acquisition as of the date hereof and as of the Closing as follows:
(a) Ownership of Exchange Shares. Such Stockholder is the record and
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Beneficial Owner of the number of Exchange Shares set forth opposite such
Stockholder's name on Schedule A hereto. Such Stockholder owns such Exchange
Shares free and clear of all liens, claims, charges, security interests,
mortgages or other encumbrances, and such Exchange Shares are subject to no
rights of first refusal, put rights, other rights to purchase or encumber such
Exchange Shares, or to any agreements other than this Agreement as to the
encumbrance or disposition of such Exchange Shares. Such Stockholder has sole
voting power and sole power to issue instruction with respect to the matters set
forth in Section 1 hereof, sole power of disposition, sole power of conversion,
sole power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to all of the
Exchange Shares set forth opposite such Stockholder's name on Schedule A hereto,
with no limitations, qualifications or restrictions on such rights.
(b) Power; Binding Agreement. Such Stockholder has the legal
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capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any other
agreement to which such Stockholder is a party including, without limitation,
any voting agreement, shareholder agreement or voting trust. This Agreement has
been duly and validly executed and delivered by such Stockholder and constitutes
a valid and binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally, and
except as the availability of equitable remedies may be limited by the
application of general principles of equity (regardless of whether such
equitable principles are applied in a proceeding at law or in equity). There is
no beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Stockholder is trustee who is not a party to this Agreement
and whose consent is required for the execution and delivery of this Agreement
or the consummation by such Stockholder of the transactions contemplated hereby.
(c) No Conflicts. (i) Except for filings, permits, authorizations,
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consents and approvals as may be required under and other applicable
requirements of the HSR Act, no filing with, and no permit, authorization,
consent or approval of , any state or federal public body or authority is
necessary for the execution of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated hereby and
(ii) none of the execution or delivery of this Agreement by such Stockholder,
the consummation by such Stockholder of the transactions contemplated hereby or
compliance by such Stockholder with any of the provisions hereof shall (A)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which such Stockholder is a party or by
which such Stockholder or, to the best of such Stockholder's knowledge, any of
such Stockholder's properties or assets may be bound, or (B) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Stockholder or any of such Stockholder's properties or
assets. This Agreement hereby supersedes all prior agreements to which such
Stockholder is a party with respect to such Stockholder's Shares, including
without limitation any registration rights agreement with respect to any of such
Stockholder's Shares.
(d) No Finder's Fees. No broker, investment banker, financial adviser
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or other person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions contemplated
by the Merger Agreement based upon arrangements made by or on behalf of such
Stockholder.
(e) Other Potential Acquirers. Such Stockholder (i) shall immediately
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cease any existing discussions or negotiations, if any, with any parties
conducted heretofore with respect to any acquisition of all or any material
portion of the assets of, or any equity interest in, ExecuStay or any of its
subsidiaries or any business combination with ExecuStay or any of its
subsidiaries, in his or her capacity as such, and (ii) from and after the date
hereof until termination
of the Merger Agreement, unless and until ExecuStay is permitted to take such
actions under Section 5.4 of the Merger Agreement, shall not, in such capacity,
directly or indirectly, initiate, solicit or knowingly encourage (including by
way of furnishing non-public information or assistance), or take any other
action to facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any such transaction or
acquisition, or agree to or endorse any such transaction or acquisition, or
authorize or permit any of such Stockholder's agents to do so, and such
Stockholder shall promptly notify Marriott or Acquisition of any proposal and
shall provide a copy of any such written proposal and a summary of any oral
proposal to Marriott or Acquisition immediately after receipt thereof (and shall
specify the material terms and conditions of such proposal and identify the
person making such proposal) and thereafter keep Marriott or Acquisition advised
of any development with respect thereto.
(f) Restriction on Transfer, Proxies and Non-Interference. Such
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Stockholder shall not, directly or indirectly: (i) tender his Exchange Shares
in the Offer (as defined in the preamble to the Merger Agreement) or any other
tender offer for ExecuStay Shares; (ii) except as contemplated by this
Agreement, the Other Stockholders Agreements or the Merger Agreement, otherwise
offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of, any or all of
such Stockholder's Exchange Shares or any interest therein; (iii) grant any
proxies or powers of attorney, deposit any Exchange Shares into a voting trust
or enter into a voting agreement with respect to any Exchange Shares; or (iv)
take any action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Stockholder from performing such Stockholder's
obligations under this Agreement.
(g) Investment Intention.
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(i) Such Stockholder confirms that Marriott and Acquisition
have made available to such Stockholder, and his representatives and agents, (A)
information about Marriott, (B) the opportunity to ask questions of the officers
and employees of Marriott and (C) the opportunity to acquire such additional
information about the business and financial condition of Marriott as such
Stockholder has requested, and such information has been received.
(ii) The shares of Marriott Stock to be issued to such
Stockholder in connection with the Merger will be acquired for investment and
not with a view to distribution of such shares within the meaning of Section
2(11) of the Securities Act.
(iii) Such Stockholder does not have in mind the sale or other
disposition of shares of Marriott Stock to be issued to such Stockholder in
connection with the Merger at some fixed time in the future (such as the
expiration of the holding period for capital gains tax treatment) or upon the
occurrence or nonoccurrence of any particular events.
(iv) Except as to the persons listed on Schedule 2(g), such
Stockholder is an "accredited investor" within the meaning of Section 2(a)(15)
of the Securities Act.
(h) Reliance by Marriott and Acquisition. Such Stockholder understands
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and acknowledges that Marriott and Acquisition are relying upon the foregoing
representations by the Stockholder, and on the Stockholder's execution and
delivery of this Agreement (i) in entering into the Merger Agreement and (ii) in
issuing the Marriott Stock in connection with the Merger without registration
under the Securities Act or qualification under any state securities laws
(collectively, "Blue Sky Laws"). Until such time as the Form S-3 (defined below)
is declared effective by the SEC, each Stockholder agrees that the Marriott
Stock to be issued to such Stockholder in connection with the Merger will not be
transferred unless in the opinion of Marriott's legal counsel such transfer will
not violate the registration requirements of the Securities Act or Blue Sky
Laws.
3. Further Assurances; Merger Agreement Compliance. From time to time, at
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Marriott's or Acquisition's request and without further consideration, each
Stockholder agrees to execute and deliver such additional documents and take all
such further lawful action as may be necessary or desirable to consummate and
make effective, and to cause the Company to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement, the Other Stockholders Agreements and the Merger Agreement. Each
Stockholder further agrees not to take any action, or omit to take any action,
which would, or would be reasonably likely to, result in a breach by the Company
of any of the provisions of the Merger Agreement.
4. Stop Transfer; Form of Legend.
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(a) Each Stockholder agrees with, and covenants to, Marriott that such
Stockholder shall not request that ExecuStay register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
such Stockholder's Exchange Shares, unless such transfer is made in compliance
with this Agreement. In the event of a stock dividend or distribution, or any
change in the Common Stock, the Class A Shares or the Class B Shares by reason
of any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged.
(b) All certificates representing any of such Stockholder's Shares to
be issued to such Stockholder in connection with the Merger shall contain the
following legend:
"The securities represented by this certificate are subject to certain
restrictions on transfer and other terms of a Stockholders Agreement,
dated as of January 6, 1999, among Marriott International, Inc., MI
Subsidiary I, Inc. and the parties listed on the signatures pages
thereto, a copy of which is on file in the principal office of Marriott
International, Inc."
5. Stock Issuance and Registration.
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(a) In accordance with the provisions of Section 2.1 of the Merger
Agreement, immediately prior to the Merger, ExecuStay will, in the Exchange,
issue to the Stockholders on a share-for-share basis, Class B Shares in exchange
for the Exchange Shares. In the Merger, each Stockholder shall receive, in
respect of each Class B Share held of record or Beneficially Owned by such
Stockholder, shares of Marriott Stock in an amount determined by the "Class B
Exchange Ratio" as defined in Section 2.9(b) of the Merger Agreement. Neither
of Marriott or Acquisition will modify or amend in any manner the Merger
Agreement in any manner that adversely affects the rights of any Stockholder
(including, without limitation, any modification or amendment of the Class B
Exchange Ratio) without such Stockholder's prior written consent.
(b) Marriott shall, no later than the First Registration Date (as
defined below), file with the SEC and thereafter use its reasonable efforts to
cause to be declared effective, a registration statement on Form S-3 or an
equivalent successor form (the "Form S-3") relating to the offer and sale from
time to time by the Stockholders of shares of Marriott Stock held by them that
are Registrable Securities. As used herein, the "First Registration Date" means
the later of (i) 30 days following the Closing Time, or (ii) April 30, 1999,
provided, however, that if on such date Marriott is not eligible to use Form S-3
for registration of the resale of Registrable Securities as provided herein,
then the First Registration Date shall be the earliest date after April 30, 1999
on which Marriott becomes eligible to use Form S-3 in connection with such
resale registration. Marriott represents and warrants that as of the First
Registration Date, it will be eligible to use Form S-3 for registration of the
resale of the Registrable Securities. Subject to the limitations contained
herein, Marriott shall use its reasonable efforts to keep the Form S-3
continuously effective in order to permit the prospectus forming part thereof to
be usable by the Stockholders for a period of one year from the Closing Time, or
for such shorter period that will terminate when all Registrable Securities
covered by the Form S-3 have been sold pursuant to the Form S-3 or cease to be
outstanding or otherwise to be Registrable Securities.
(c) Marriott further agrees, if necessary, to supplement or amend the
Form S-3, as required by Section 6 below, and to furnish to Stockholders holding
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
(d) Marriott agrees to use its reasonable efforts to ensure that (i)
the Form S-3 and any amendments thereof, at the time each such Form S-3 or
amendment thereof becomes effective, and any prospectus forming a part thereof
and any supplement thereto complies in all material respects with the Securities
Act and the rules and regulations thereunder, (ii) the Form S-3 and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of the Form S-3, and any supplement to such
prospectus (as amended or supplemented from time to time)(each, as of the date
thereof), does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading; provided that clauses
(ii) and (iii) of this paragraph shall not apply to any information provided by
a Stockholder.
(e) No Stockholder may use the Form S-3 until he provides Marriott with
the information required by Section 7 of this Agreement. Notwithstanding any
other provision herein or in the Merger Agreement, (i) Marriott shall have no
obligation under Sections 5(b), (c), (d), (e) or (f) or Section 6 hereof with
respect to any shares of Marriott Stock that are (x) not Registrable Securities
or (y) held of record or Beneficially Owned by a Stockholder who has not
performed his obligations under, or otherwise has breached, violated or is in
default under, the Agreement or the Merger Agreement, and (ii) all obligations
of Marriott under Sections 5 and 6 hereof automatically shall terminate and be
of no further force or effect in the event that the Merger Agreement is
terminated or the Offer or the Merger is not consummated.
(f) Notwithstanding any other provision herein, Marriott may delay
filing the Form S-3, may withhold efforts to cause the Form S-3 to become
effective, and may advise holders of Registrable Securities to suspend use of
the prospectus that is part of the Form S-3, for limited periods of time if and
to the extent that Marriott reasonably determines in good faith that any such
action is necessary in order for Marriott to comply with its disclosure
obligations under Section 5(d) hereof. In the event that Marriott advises the
holders of registered Registrable Securities that Marriott considers it
appropriate to suspend the use of the prospectus, such holders shall suspend any
further sales of their registered securities until Marriott advises them that
the Form S-3 has been amended or that such sales may be resumed.
6. Registration Procedures.
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(a) Marriott shall prepare and file a Form S-3, within the relevant time
period specified in Section 5(a), and use its reasonable efforts to cause such
Form S-3 to become effective and remain effective in accordance with Section 5
hereof.
(b) Marriott shall prepare and file such amendments and post-effective
amendments to the Form S-3 as may be necessary under applicable law to keep such
Form S-3 effective for the applicable period; and cause each prospectus that is
part of the Form S-3 to be supplemented by any required prospectus supplement,
and as so supplemented to be filed with the SEC pursuant to applicable
requirements of the Securities Act and the rules and regulations thereunder.
(c) Marriott shall use its reasonable efforts to register or qualify the
Registrable Securities under all applicable Blue Sky Laws as any Stockholder
holding Registrable Securities covered by the Form S-3 shall reasonably request;
provided, however, that Marriott shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 6(c), or (ii)
take any action which would subject it to general service of process or taxation
in any such jurisdiction where it is not then so subject.
(d) Marriott shall furnish to each Stockholder of Registrable Securities,
without charge, as many copies of each prospectus and any amendment thereof or
supplement thereto as such Stockholder may reasonably request.
(e) Marriott shall cooperate with the selling Stockholders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends.
(f) Marriott shall cause all Registrable Securities covered by the Form S-3
to be listed on the NYSE.
7. Condition Precedent. It shall be a condition precedent to the
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obligations of Marriott to take any action pursuant hereto that the Stockholders
shall furnish to Marriott such information regarding them, the Registrable
Securities held by them and the intended method of disposition of such
Registrable Securities as Marriott shall reasonably request and as shall be
required in connection with the action to be taken by Marriott.
8. Expenses of Registration. All expenses incurred in connection with any
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registrations pursuant to Section 5 hereof, including without limitation all
registration and qualification fees, printers' and accounting fees, reasonable
fees and disbursements of counsel for Marriott, shall be borne by Marriott,
except for (a) fees and disbursements of counsel for the selling Stockholders,
and (b) any underwriting or brokers' discounts or similar transaction fees,
which shall be borne by the selling Stockholders.
9. Indemnification.
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(a) Marriott agrees to indemnify and hold harmless each Stockholder and
each person, if any, who controls such Stockholder within the meaning of the
Securities Act (the "Holder Indemnified Parties"), against any losses, claims,
damages or liabilities, joint or several, to which any Holder Indemnified Party
may become subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based on any Misstatement
(defined below) in the Form S-3 or any amendments thereof or supplements
thereto. Marriott will reimburse each such Holder Indemnified Party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding anything to the contrary contained in this Section 9(a), the
indemnity agreement contained in this Section 9(a) shall not (i) apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Marriott (which consent
shall not be unreasonably withheld); (ii) apply to any such case for any such
loss, claim, damage, liability, or action to the extent that it arises out of or
is based upon a Misstatement made in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder Indemnified Party.
(b) Each Stockholder, severally and not jointly, agrees to indemnify
and hold harmless Marriott, each of its directors, each of its officers who have
signed the Form S-3, and each person, if any, who controls Marriott within the
meaning of the Securities Act, and each agent (the "Marriott Indemnified
Parties") against any losses, claims, damages or liabilities to which any
Marriott Indemnified Party may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) (i) arise out of or are
based upon any Misstatement in the Form S-3 and any amendments thereof or
supplements thereto made in reliance upon and in conformity with written
information furnished expressly for use in connection
with such registration by any such Holder Indemnified Party. Each such
Stockholder will reimburse any legal or other expenses reasonably incurred by
such Marriott Indemnified Party in connection with investigating or defending
any such loss, claim, damage, liability or action. Notwithstanding anything to
the contrary contained in this Section 9(b), the indemnity agreement contained
in this Section 9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of such Stockholder (which consent shall not be unreasonably
withheld).
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under Section 9(a) or Section 9(b) above
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages or liabilities referred to in such Sections, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative benefit and relative fault as well as any
other equitable considerations.. The amount paid or payable by a party as a
result of the losses, claims, damages, or liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Section 9(d), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The relative benefit shall
be determined by the allocation of proceeds from such Form S-3. The relative
fault of the indemnified party on the one hand and of the indemnifying party on
the other shall be determined by reference to, among other things, whether the
Misstatement or alleged Misstatement relates to information supplied by the
indemnified party or the indemnifying party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
Misstatement or alleged Misstatement. Marriott and the Stockholders agree that
it would not be just and equitable if contribution pursuant to this Section 9(c)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
No person guilty of fraudulent misrepresentation (within the meaning of Section
9(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(d) Any person entitled to indemnification hereunder will: (i) give
prompt notice to the indemnifying party of any claim with respect to which it
seeks indemnification; and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). An indemnifying party who is
not entitled or elects not to assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other such indemnified parties with
respect to such claim. The failure to notify an indemnifying party promptly of
the commencement of any such action, if prejudicial to his ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this paragraph, but the omission so to notify the
indemnifying party will not relieve him of any liability that he may have to any
indemnified party otherwise than under this Section.
10. Termination of Marriott's Obligations. Marriott shall have no
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obligations pursuant to Section 6 with respect to Registrable Securities on or
following the date on which such Securities become freely transferable under
Rule 144 of the Securities Act without regard to volume limitations.
11. Termination. Except as otherwise provided herein, the covenants and
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agreements contained herein with respect to the Exchange Shares shall terminate
upon the earliest of (a) termination of the Merger Agreement in accordance with
its terms, or (b) the Closing Time.
12. Stockholder Capacity. No person executing this Agreement who is or
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becomes during the term hereof a director or executive officer of ExecuStay
makes any agreement or understanding herein in his or her capacity as such
director or executive officer. Each Stockholder signs solely in his or her
capacity as the record and/or beneficial owner of such Stockholder's Exchange
Shares.
13. Waiver of Appraisal and Dissenter's Rights. Each Stockholder hereby
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irrevocably waives any rights of appraisal or rights to dissent from the Merger
that such Stockholder may have.
14. Tax Opinion. The respective obligations of each Stockholder hereunder
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shall be subject to the receipt prior to the Exchange of an opinion of Xxxxxx &
Whitney LLP in substantially the form attached hereto.
15. Several Liability. The obligations of the Stockholders under this
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Agreement are several. No Stockholder shall have any liability for any breach
by any other Stockholder.
16. Miscellaneous.
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(a) Certain Definitions. As used in this Agreement, the following
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capitalized terms shall have the following meanings:
(i) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a "group" as
within the meanings of Section 13(d)(3) of the Exchange Act.
(ii) "Misstatement" means an untrue statement of a material
fact or an omission to state a material fact required to be stated in a publicly
filed document necessary to make the statements in such a document not
misleading; provided, however, that such term shall not apply to any statement
or omission based on information supplied by an indemnified person to an
indemnifying person for inclusion in the publicly-filed document.
(iii) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
(iv) "register," "registered," and "registration" refer to a
registration effected by preparing and filing with the SEC a registration
statement in compliance with the Securities Act and the declaration or ordering
by the SEC of effectiveness of such registration statement.
(v) "Registrable Securities" refers to any and all of the
shares of Marriott Stock held by the Stockholders as of the Closing Time, except
that any such Marriott Stock shall cease to be Registrable Securities when and
to the extent (A) a Form S-3 with respect to the sale of such Marriott Stock has
become effective under the Securities Act and such Marriott Stock has been
disposed of in accordance with such Form S-3; (B) such Marriott Stock has been
sold to the public pursuant to Rule 144 or any successor provision under the
Securities Act; (C) such Marriott Stock shall have been otherwise transferred,
new certificates therefor not bearing a legend restricting further transfer
shall have been delivered by Marriott and subsequent disposition of such
Marriott Stock does not require registration or qualification under the
Securities Act or any similar state law then in force in the opinion of legal
counsel for Marriott; or (D) such Common Stock shall have ceased to be
outstanding.
(vi) "subsidiary" or "subsidiaries" of Marriott, Acquisition,
ExecuStay or any other person means any corporation, partnership, limited
liability company, association, trust, unincorporated association or other legal
entity of which the Marriott, Acquisition, ExecuStay or any such other person,
as the case may be, (either alone or through or together with any other
subsidiary) owns, directly or indirectly, 50% or more of the capital stock the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
(b) Entire Agreement. This Agreement and the Merger Agreement
----------------
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
(c) Certain Events. Each Stockholder agrees that this Agreement,
--------------
the Other Stockholders Agreements and the obligations hereunder shall attach to
such Stockholder's Exchange Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Exchange Shares shall
pass, whether by operation of law or otherwise, including, without limitation,
such Stockholder's heirs, guardians, administrators or successors.
Notwithstanding any transfer of Exchange Shares, the transferor shall remain
liable for the performance of all obligations under this Agreement of the
transferor.
(d) Assignment. This Agreement shall not be assigned by operation
----------
of law or otherwise without the prior written consent of the other party,
provided that Marriott may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
Marriott, but no such assignment shall relieve Marriott of its obligations
hereunder if such assignee does not perform such obligations.
(e) Amendments, Waivers, Etc. This Agreement may not be amended,
------------------------
changed, supplemented, waived or otherwise modified or terminated, with respect
to any one or
more Stockholders, except upon the execution and delivery of a written agreement
executed by the relevant parties hereto; provided that Schedule A hereto may be
--------
supplemented by Marriott by adding the name and other relevant information
concerning any Stockholder of ExecuStay who agrees to be bound by the terms of
this Agreement (by executing a counterpart signature page hereof) without the
agreement of any other party hereto, and thereafter such added stockholder shall
be treated as a "Stockholder" for all purposes of this Agreement.
(f) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be addressed to the
respective parties at the following addresses:
If to any Stockholder: c/o Locke Liddell & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
with a copy to: Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
If to Marriott or Acquisition: MARRIOTT INTERNATIONAL, INC.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: General Counsel,
Dept. 52/923
with a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(g) Severability. Whenever possible, each provision or portion of
------------
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(h) Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(i) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(j) 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.
(k) No Third Party Beneficiaries. This Agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto, other than Section 9 (which is intended to be
for the benefit of the Holder Indemnified Parties and the Marriott Indemnified
Parties). Notwithstanding any provision to the contrary herein or in the Merger
Agreement, the provisions of the Merger Agreement relating to the Exchange and
the Class B Exchange Ratio are also made for the benefit of the Stockholders,
each of whom is intended to be, and hereby is expressly constituted, a third
party beneficiary of such provisions of the Merger Agreement.
(l) Governing Law. This Agreement shall be governed and construed
-------------
in accordance with the laws of the State of New York, without giving effect to
the principles of conflicts and laws thereof.
(m) Descriptive Headings; Gender. The descriptive headings used
----------------------------
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement. References
herein to the masculine gender shall include the feminine and the neuter, as
required.
(n) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, Marriott and Acquisition have caused this Agreement to
be duly executed, and each Stockholder has duly executed this Agreement, as of
the day and year first above written.
MARRIOTT INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President and
General Counsel
MI SUBSIDIARY I, INC.
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
STOCKHOLDER:
XXXXXX X. XXXX
IRREVOCABLE FAMILY BRANCH TRUST
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx
Trustee
STOCKHOLDER:
XXXXXXXX X. XXXX
IRREVOCABLE FAMILY BRANCH TRUST
By: /s/ Xxxxxxxx X. Xxxx
-------------------------------
Xxxxxxxx X. Xxxx
Trustee
STOCKHOLDER:
XXXXXX X. XXXX
IRREVOCABLE FAMILY BRANCH TRUST
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx
Trustee
STOCKHOLDER:
/s/ J. Xxxxxx Xxxxxxxxxxxx
----------------------------------
J. Xxxxxx Xxxxxxxxxxx
STOCKHOLDER:
/s/ Xxxx Xxxxx
----------------------------------
Xxxx Xxxxx
STOCKHOLDER:
/s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
STOCKHOLDER:
/s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx
STOCKHOLDER:
/s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxx, Xx.
STOCKHOLDER:
/s/ Xxxxx X. Xxxx
---------------------------------
Xxxxx X. Xxxx
STOCKHOLDER:
/s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
STOCKHOLDER:
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
STOCKHOLDER:
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
STOCKHOLDER:
/s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxxx
STOCKHOLDER:
/s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx
STOCKHOLDER:
/s/ Xxxxxxx X. Xxxx
----------------------------------
Xxxxxxx X. Xxxx
STOCKHOLDER:
/s/ E. Xxxxx Xxxxxxx
----------------------------------
E. Xxxxx Xxxxxxx
STOCKHOLDER:
/s/ Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
Schedule A
----------
Shareholder Shares
--------------------------------------------------------------------------------
J. Xxxxxx Xxxxxxxxxxx 224,006
--------------------------------------------------------------------------------
Xxxxxx X. Xxxx Irrevocable Family Branch Trust 74,668
--------------------------------------------------------------------------------
Xxxxxxxx X. Xxxx Irrevocable Family Branch Trust 74,668
--------------------------------------------------------------------------------
Xxxxxx X. Xxxx Irrevocable Family Branch Trust 74,668
--------------------------------------------------------------------------------
Xxxx Xxxxx 107,585
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxx 70,820
--------------------------------------------------------------------------------
Xxxxx X. Xxxx 54,179
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 28,509
--------------------------------------------------------------------------------
Xxxxx X. Xxxx 26,703
--------------------------------------------------------------------------------
Xxxx X. Xxxxx 18,962
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx 9,417
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 11,998
--------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxxxx 4,515
--------------------------------------------------------------------------------
E. Xxxxx Xxxxxxx 7,740
--------------------------------------------------------------------------------
Xxxxxx X. Xxxx 4,386
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxx 4,386
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxx 3,225
--------------------------------------------------------------------------------
Total 800,435
--------------------------------------------------------------------------------
