Exhibit 99.1
LEVEN AGREEMENT
This Agreement is made as of June 2, 2000, between Meridian Associates,
L.P., an Illinois limited partnership ("MERIDIAN"), and Xxxxxxx X. Xxxxx and
Xxxxxx Xxxxx (the "STOCKHOLDERS").
RECITALS
SDI, Inc., a Nevada corporation, HSA Properties, Inc., a Delaware
corporation and Meridian have entered into a Recapitalization Agreement dated as
of the date hereof with US Franchise Systems, Inc., a Delaware corporation (the
"COMPANY"), contemplating, among other things, an investment by the Investors in
new Preferred Stock of the Company and an offer by the Company to purchase
shares of its Common Stock. The Stockholders are the record and beneficial
owners of an aggregate of 1,555,303 Shares of Common Stock of the Company (the
"SHARES"). The Investor Group has requested that the Stockholders enter into
this Agreement simultaneously with the execution and delivery of the
Recapitalization Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
Section 1. DEFINED TERMS. Capitalized words used in this Agreement as
defined terms shall have the meanings given to them in the Recapitalization
Agreement, unless otherwise defined herein.
Section 2. STANDSTILL.
(a) The Stockholders agree, solely in their capacity as stockholders of
the Company, that for a period of 90 days subject to SECTION 4, the
Stockholders shall not sell or otherwise dispose of or exchange the Shares
for another class of securities except pursuant to a Superior Proposal,
solicit or enter into discussions with anyone else regarding an offer to
purchase or acquire their Shares (or enter into any agreement in advance to
sell or exchange their Shares if such an offer is made), or vote their
Shares in favor of a merger, consolidation, asset sale or similar
transaction relating to the Company, or provide information or take any
other action or make any statement that would reasonably be expected to
adversely affect the transactions contemplated by the Recapitalization
Agreement. The Stockholders will promptly advise Meridian of any proposals
or discussions known to the Stockholders regarding any Acquisition Proposal
or any attempt to acquire any of their Shares.
(b) It is understood and agreed that the undertaking of the Stockholders
in SECTION 2(a) applies to the Stockholders solely in their capacity as
stockholders of the Company and shall not apply to actions, judgments, or
decisions of Xx. Xxxxx in his capacity as a director or officer of the
Company as may be necessary to discharge his fiduciary duties as a director
of the Company.
Section 3. VOTING OF SHARES.
At any meeting of stockholders of the Company called for this purpose, the
Stockholders shall vote their Shares and any other shares of Common Stock of the
Company as to which the Stockholders or either of them have the power to vote,
in person or by proxy, in favor of any resolution authorizing the issuance of
the Preferred Stock and the Class A Common Stock issuable upon conversion of the
B Preferred, the Charter Amendments, and any other matter necessary or advisable
in order to consummate the transactions contemplated by the Recapitalization
Agreement.
Section 4. TERMINATION
The undertakings of the Stockholders in SECTION 2(a) AND SECTION 3 shall
terminate if: (a) the Company's financial adviser advises the board of directors
of the Company or its special committee that it will be unable to render an
opinion, within five days after the date hereof and prior to the Offer, to the
effect that the transactions contemplated by the Recapitalization Agreement are
fair to stockholders of the Company from a financial point of view, unless the
failure to do so results from the failure of the financial adviser to act in
good faith; or (b) the Offer is terminated or withdrawn pursuant to
SECTION 5.3(c) of the Recapitalization Agreement or the Recapitalization
Agreement is earlier terminated in accordance with SECTION 8.4 thereof.
Section 5. AGREEMENT REGARDING TENDER OFFER
The Stockholders shall not tender for purchase pursuant to the Offer more of
their Shares than will result in more than fifty percent (50%) of their Shares
being acquired by the Company pursuant to the Offer. If Shares tendered by the
Stockholders are subject to prorationing in the Offer, the Stockholders will
request that the Company purchase the Stockholders' Class A Common Stock before
purchasing any Class B Common Stock.
Section 6. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against Meridian or the Stockholders unless such modification,
amendment or waiver is approved in writing signed by the party to be bound. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
Section 7. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if 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 shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 8. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document, together with all other agreements to be executed and
delivered by Xx. Xxxxx in connection with the transactions contemplated by the
Recapitalization Agreement, embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
Section 9. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
Meridian and the Stockholders and any subsequent holders of the Shares and the
respective successors and assigns of each of them, except that this Agreement
may not be assigned without the prior written consent of the Company, which is
an intended third party beneficiary of this provision.
Section 10. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 11. REMEDIES. Meridian shall be entitled to enforce its rights
under this Agreement specifically to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that
Meridian may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
Section 12. NOTICES. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to any other recipient at the address indicated on the signature pages
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hereof, or at such address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
Notices will be deemed to have been given hereunder when delivered personally,
three days after deposit in the U.S. mail and one day after deposit with a
reputable overnight courier service.
Section 13. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the internal
law, and not the law of conflicts, of Delaware.
Section 14. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
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SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
MERIDIAN ASSOCIATES, L.P.
By: Meridian Investments, Inc.
By: /s/ X.X. Xxxxxxxxxx
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Name: X.X. Xxxxxxxxxx
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Its: Vice President
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000 Xxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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