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EXHIBIT 10.18
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is made and entered into
as of June 11, 1999 by and among SUPERTEL HOSPITALITY, INC., a Delaware
corporation ("STH"), XXXXXXX XXXXXXXXX, XXXXXX X. XXXXXXXXXX, XXXX X. XXXXXXXX,
and XXXXXX X. XXXXX (in their individual capacities and on behalf of their
respective Affiliates listed on Attachment 1 hereto). Each of Messrs. Zwerdling,
Whittemore, Xxxxx and Xx. Xxxxxxxx and their respective Affiliates is
hereinafter referred to individually as a "Shareholder" and collectively as the
"Shareholders."
WHEREAS, the Shareholders desire that Xxxxxxxx Hospitality Trust, Inc.
("HHTI") and STH enter into an Agreement and Plan of Merger dated the date
hereof (as the same may be amended or supplemented, the "Merger Agreement") with
respect to the merger of STH with and into HHTI (the "Merger"); and
WHEREAS, the Shareholders are executing this Agreement as an inducement
to STH to enter into and execute the Merger Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by STH of
the Merger Agreement and the mutual covenants, conditions and agreements
contained herein and therein, the parties agree as follows:
1. Definitions. The following terms as used in this Agreement shall have
the following meanings (applicable in both the singular and plural forms of the
terms defined):
a. "Affiliate" means (i) any person directly or indirectly owning,
controlling, or holding, with power to vote ten percent or more of the
outstanding voting securities of such other person, (ii) any person ten percent
or more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other person, (iii) any person
directly or indirectly controlling, controlled by, or under common control with
such other person, (iv) any executive officer, director, trustee or general
partner of such other person, and (v) any legal entity for which such person
acts as an executive officer, director, trustee or general partner. The term
"person" means and includes any natural person, corporation, partnership,
association, limited liability company or any other legal entity. An indirect
relationship shall include circumstances in which a person's spouse is
associated with a person.
b. Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger Agreement.
2. Representations and Warranties. Each Shareholder represents and
warrants to STH as follows:
a. The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of common stock, $.01 par value, of HHTI
("HHTI Stock")
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set forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of HHTI Stock. This Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
b. Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or bound or to which the Shareholder's
Shares are subject. If the Shareholder is married and the Shareholder's Shares
constitute community property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, the
Shareholder's spouse, enforceable against such person in accordance with its
terms. Consummation by the Shareholder of the transactions contemplated hereby
will not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
c. The Shareholder's Shares and the certificates representing such
Shares are now, and at all times prior to the Merger will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
d. No broker, investment banker, financial adviser 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 hereby based upon
arrangements made by or on behalf of the Shareholder.
e. The Shareholder understands and acknowledges that STH is entering
into the Merger Agreement in reliance upon the Shareholder's execution and
delivery of this Agreement. The Shareholder acknowledges that the irrevocable
proxy set forth in Section 4 is granted in consideration for the execution and
delivery of the Merger Agreement by STH.
3. Voting Agreements. The Shareholder agrees with, and covenants to, STH
as follows:
a. At any meeting of shareholders of HHTI called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval with respect to the
Merger and the Merger Agreement is sought (the "Shareholders Meeting"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of the Merger, the execution and delivery by STH of the Merger Agreement, and
the approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement, including the amendment and restatement of
the Articles of Incorporation and Bylaws of HHTI, as set forth on Exhibits M and
N to the Merger Agreement.
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b. At any meeting of shareholders of HHTI or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by STH or (ii) any amendment of HHTI's Articles of
Incorporation or Bylaws or other proposal or transaction involving HHTI or any
of its subsidiaries which amendment or other proposal or transaction would in
any manner impede, frustrate, prevent or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger Agreement
(each of the foregoing in clause (i) or (ii) above, a "Competing Transaction").
4. Grant of Irrevocable Proxy; Appointment of Proxy.
a. The Shareholder hereby irrevocably grants to, and appoints, STH and
Xxxx X. Xxxxxxx, individually and in his capacity as an officer of STH, and any
individual who shall hereafter succeed to such office of STH, the Shareholder's
proxy and attorney-in-fact (with full power of substitution), for and in the
name, place and stead of the Shareholder, to vote the Shareholder's Shares, or
grant a consent or approval in respect of such Shares (i) in favor of the
Merger, the execution and delivery of the Merger Agreement and approval of the
terms thereof and each of the other transactions contemplated by the Merger
Agreement, including the amendment and restatement of the Articles of
Incorporation and Bylaws of HHTI, as set forth on Exhibits M and N to the Merger
Agreement, provided that the terms of the Merger Agreement shall not have been
amended to materially and adversely impair the Shareholder's rights or increase
the Shareholder's obligations thereunder, and (ii) against any Competing
Transaction. The proxy granted pursuant to this Section 4 shall be strictly
limited to the matters set forth herein and the Shareholder shall have the right
to vote the Shareholder's Shares with respect to all other matters.
b. The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
c. The Shareholder hereby affirms that the irrevocable proxy set forth
in this Section 4 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Shareholder under this Agreement. The Shareholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. The Shareholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the laws of the Commonwealth of Virginia.
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5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including without
limitation the Shareholder's successors or assigns. In the event of any stock
split, stock dividend, merger, reorganization, recapitalization or other change
in the capital structure of HHTI affecting the HHTI Stock, or the acquisition of
additional shares of HHTI Stock or other voting securities of HHTI by any
Shareholder, the number of Shares subject to the terms of this Agreement shall
be adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of HHTI Stock or other voting securities of HHTI
issued to or acquired by the Shareholder.
6. Further Assurances. The Shareholder shall, upon request of STH,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by STH to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 in STH and the other irrevocable proxies described
therein at the expense of STH.
7. Termination. This Agreement and all rights and obligations of the
parties hereunder shall terminate upon the first to occur of (x) the Effective
Time of the Merger or (y) the date upon which the Merger Agreement is terminated
in accordance with its terms.
8. Miscellaneous.
a. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally 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): (i) if to STH, to the address provided in
the Merger Agreement; and (ii) if to the Shareholder; to its address shown below
its signature on the last page hereof.
b. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
c. This Agreement may be executed in multiple counterparts, all of
which shall be considered one and the same agreement.
d. This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
e. As to the rights and obligations relating to STH, this Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to its rules of conflicts of laws. As to the rights and
obligations relating to HHTI Stock and the holders thereof, this Agreement shall
be governed by, and construed in accordance with, the laws of the Commonwealth
of Virginia without regard to its rules of conflicts of laws.
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f. 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 of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 5. Any
assignment in violation of the foregoing shall be void.
g. The Shareholder agrees that irreparable damage would occur and that
STH would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that STH
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States located in the
Commonwealth of Virginia or in Virginia state court, this being in addition to
any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the Commonwealth of Virginia or any
Virginia state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the
Commonwealth of Virginia or a Virginia state court.
h. If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
i. No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned parties have executed and
delivered this Shareholders' Agreement as of the day and year first above
written.
SUPERTEL HOSPITALITY, INC.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and Chief Executive Officer
XXXXXXX XXXXXXXXX:
/s/ Xxxxxxx Xxxxxxxxx
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Address:
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Number of HHTI Shares
Beneficially Owned: 22,936
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XXXXXX X. XXXXXXXXXX:
/s/ Xxxxxx X. Xxxxxxxxxx
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Address:
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Number of HHTI Shares
Beneficially Owned: 90,825
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XXXX X. XXXXXXXX:
/s/ Xxxx X. Xxxxxxxx
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Address:
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Number of HHTI Shares
Beneficially Owned: 86,814
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XXXXXX X. XXXXX:
/s/ Xxxxxx X. Xxxxx
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Address:
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Number of HHTI Shares
Beneficially Owned: 90,551
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