STOCKHOLDERS' AGREEMENT
dated as of
April 28, 1997
by and among
UNITED/XXXXXX HOLDINGS, L.P.,
HOLIDAY CORPORATION,
BASS AMERICA INC.,
BASS PLC
and
BRISTOL HOTEL COMPANY
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions
Section 1.01. Definitions.............................................2
ARTICLE 2
Corporate Governance
Section 2.01. Composition of the Board................................6
Section 2.02. Vacancies...............................................7
Section 2.03. Executive Committee; Management Committee...............7
Section 2.04. Capital Transactions....................................8
Section 2.05. Voting..................................................8
ARTICLE 3
Restrictions on Transfer
Section 3.01. General Restriction.....................................9
Section 3.02. Transfers in Compliance with Law........................9
Section 3.03. Legend..................................................9
Section 3.04. Unauthorized Transfers.................................10
ARTICLE 4
Right of First Refusal; Right to Participate in Sales
Section 4.01. Right of First Refusal.................................10
Section 4.02. Right to Participate in Sales..........................12
Section 4.03. Execution of the Stockholders' Agreement...............14
Section 4.04. Certain Actions by Acquiror............................14
ARTICLE 5
Preemptive rights
Section 5.01. Preemptive Rights......................................14
Section 5.02. Subsequent Offering....................................15
ARTICLE 6
Standstill obligations
Section 6.01. Acquisition of Voting Securities.......................15
Section 6.02. Certain Actions by Stockholders........................16
Section 6.03. Termination............................................16
ARTICLE 7
Miscellaneous
Section 7.01. Entire Agreement.......................................17
Section 7.02. Notices................................................17
Section 7.03. Amendment; Waiver; Termination.........................19
Section 7.04. Expenses...............................................19
Section 7.05. Assignability..........................................19
Section 7.06. Governing law..........................................20
Section 7.07. Counterparts; Effectiveness............................20
Section 7.08. Binding Effect; Benefit................................20
Section 7.09. Headings...............................................20
Section 7.10. Specific Enforcement...................................20
Section 7.11. Consent to Jurisdiction................................20
Section 7.12. After-Acquired Securities..............................21
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT dated April 28, 1997 (the "Agreement")
among United/Xxxxxx Holdings, L.P., a Delaware limited partnership
("Holdings"), Holiday Corporation, a Delaware corporation ("HC"), Bass America
Inc., a Delaware corporation ("BAI"), Bass plc, an English public limited
company, and Bristol Hotel Company, a Delaware corporation (the "Acquiror").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger dated
as of December 15, 1996 (the "Merger Agreement") among the Acquiror, HC and
Holiday Inns, Inc. ("HII"), a Tennessee corporation and wholly owned
subsidiary of HC, HC has acquired 2,391,286 shares of common stock, par
value $.01 per share, of the Acquiror and the Acquiror has acquired the
Retained Business (as defined in the Merger Agreement) through the merger
of HII with and into the Acquiror (the "Merger");
WHEREAS, in a related transaction immediately after the
Merger, the Acquiror satisfied a portion of the amount of HII Intercompany
Debt (as defined in the Merger Agreement) assumed pursuant to the Merger
with 6,981,832 Shares (as defined herein) to BAI and repaid the remaining
portion of such debt in cash;
WHEREAS, pursuant to the Registration Rights Agreement dated
the date hereof (the "Registration Rights Agreement") the Acquiror has
granted the parties hereto certain registration rights with respect to the
Shares of the Acquiror;
WHEREAS, certain employee stockholders of the Acquiror (the
"Management Stockholders") have entered into a separate Management
Stockholders' Agreement dated the date hereof (the "Management
Stockholders' Agreement");
WHEREAS, Bass plc has agreed to be a party to the Agreement
solely with respect to Article 6 hereof; and
WHEREAS, the parties hereto desire to provide, on the terms
and subject to the conditions set forth herein, for certain rights and
obligations of the parties hereto;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions . (a) The following terms, as used
herein, have the following meanings:
"Acquisition Proposal" means any offer or proposal for, or
any indication of interest in, a merger or other business combination
involving the Acquiror or the acquisition of any equity securities
representing more than 50% of Total Voting Power, or all or substantially
all of the assets, of the Acquiror.
"Affiliate" means, with respect to any Person, any other
Person who is directly or indirectly Controlling, Controlled by or under
the common Control with such Person; provided that no Stockholder of the
Acquiror shall be deemed an Affiliate of any other Stockholder of the
Acquiror solely by reason of any investment in the Acquiror or by this
Agreement.
"Associate" means (i) any Person who is a director, officer
or partner or who is, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities of any corporation or entity,
(ii) any Person who has a substantial beneficial interest in or who serves
as a trustee for any trust or other estate, and (iii) any relative or
spouse of a Person, or any relative of such spouse, who has the same home
as such Person.
"Bass Entities" means HC and BAI.
"Beneficial ownership", "beneficially own" and "beneficial
owner" shall be determined in accordance with Rules 13d-3 and 13d-5 under
the Exchange Act as in effect on the date hereof.
"Board" means the board of directors of the Acquiror.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"Contribution Agreement" means the Contribution and
Assumption Agreement dated as of April 21, 1997 among the Acquiror, HC, HII
and Holiday Hospitality Corp., a wholly owned subsidiary of HII, pursuant
to which HII, in contemplation of the transactions contemplated by the
Merger Agreement, contributed certain of its assets and liabilities to
Holiday Hospitality Corp.
"Control" (including the terms "Controlling", "Controlled
by" and "under common Control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities,
as trustee or executor, by contract or credit arrangement or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Securities" means (i) options granted to
directors, officers and employees of the Acquiror to purchase capital stock
of the Acquiror, and the securities issued pursuant to such options or
plans under which options may be granted, which have been authorized by the
Board, (ii) capital stock issued or sold upon exercise of warrants, options
or rights, or upon conversion of convertible securities, which warrants,
options, rights or convertible securities were the subject of the
preemptive rights under Article 5 or (iii) any securities which are issued
to all stockholders by means of a distribution, stock dividend or stock
split or reclassification.
"Hotel Properties Agreement" means the Hotel Properties
Agreement dated the date hereof between HC and Acquiror whereby the
Acquiror has granted a certain right of first offer to franchise certain
hotel properties to HC and HC has granted a certain right of first offer on
certain Opportunities (as defined in such agreement) to the Acquiror.
"Initial Ownership" means, with respect to each Stockholder,
the total number of Shares beneficially owned (without duplication) by such
Stockholder as of the date the Acquiror consummates the transactions
contemplated by the Merger Agreement (equitably adjusted to reflect any
stock split, dividend, reclassification or any similar event); provided
that if the Contingency Agreement (as defined in the Merger Agreement) is
executed, "Initial Ownership" means, with respect to the Bass Entities, the
total number of Shares beneficially owned (equitably adjusted to reflect
any stock split, dividend, reclassification or any similar event) by the
Bass Entities six months after the date of the Initial Closing (as defined
in the Contingency Agreement) as a result of the transactions thereunder,
or, if relevant prior to such date, the number of Shares beneficially owned
(equitably adjusted to reflect any stock split, dividend, reclassification
or any similar event) by the Bass Entities at such time.
"Mid-Scale Lodging Facilities" means a full service lodging
facility providing a degree of sophistication and full service amenities
and facilities which (i) is of a type and standard generally consistent
with hotels operated as Holiday Inn hotels in the United States and Canada,
(ii) does not primarily offer suites, (iii) is not designed to accommodate
"extended stays" (generally more than five days) and (iv) does not
generally compete as an "upscale" or "economy" hotel. By way of example
and for the guidance of the parties, the parties acknowledge that as of
this date they would, without dispute, classify the hotel operations listed
on Schedules 2.01(a)(1) and 2.01(a)(2) of the Hotel Properties Agreement as
"upscale" hotels and "economy" hotels, respectively.
"Outside Director" means any director of the Acquiror who is
not an employee, executive officer or Affiliate of the Acquiror, Bass
Entities or Holdings and who is not an Associate of a business primarily
engaged in operating, managing or developing Mid-Scale Lodging Facilities
and who qualifies as an "independent director" within the meaning of the
New York Stock Exchange Listed Company Manual.
"Ownership Percentage" means with respect to each
Stockholder at any time, the percentage derived by dividing (i) the
aggregate number of Shares beneficially owned by such Stockholder as of
such time, by (ii) the total number of Shares outstanding as of such time
(determined on a fully diluted basis but excluding employee and director
options).
"Permitted Transferee" means with respect to each
Stockholder, any Affiliate of such Stockholder; provided that each such
transferee shall execute a copy of this Agreement and be bound by the
provisions herein to be a Permitted Transferee.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Primary Owner" means a Person or group of Affiliated
Persons who is the beneficial owner of a sufficient number of Shares so as
to be one of the two largest beneficial owners of Shares.
"Public Offering" means an underwritten public offering of
Securities of the Acquiror pursuant to an effective registration statement
under the Securities Act.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shares" means shares of common stock, par value $.01 per
share, of the Acquiror outstanding at any given time.
"Stockholder" means each of (i) the Bass Entities and their
Permitted Transferees, as a group, and (ii) Holdings and its Permitted
Transferees, as a group.
"Subsidiary" means, with respect to any Person, any entity
of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned
by such Person.
"Third Party" means a prospective purchaser of Shares in an
arm's-length transaction from a Stockholder where such purchaser is not a
Permitted Transferee of such Stockholder.
"Total Voting Power" means the aggregate number of votes
which may be cast by holders of outstanding Voting Securities.
"Transaction Documents" means this Agreement, the Merger
Agreement, the Contribution Agreement, the Hotel Properties Agreement, the
asset purchase agreements, the franchise agreements, the services
agreements, the Registration Rights Agreement and any other documents
relating to each of the foregoing agreements.
"Voting Securities" means all securities of the Acquiror
entitled, in the ordinary course, to vote in the election of directors of
the Acquiror.
"$" means United States dollars.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Acceptance Notice 4.01(b)
Acquiror Recitals
Agreement Recitals
BAI Recitals
Buyer 4.01(c)
Capital Transaction 2.04
Co-Sale Notice 4.02(a)
Co-Selling Stockholder 4.02(a)
Derivatives 3.01
Executive Committee 2.03(a)
Fair Market Value 4.01(b)
Term Section
---- -------
HC Recitals
HII Recitals
Holdings Recitals
Management Committee 2.03(b)
Management Stockholders Recitals
Management Stockholders' Agreement Recitals
Merger Recitals
Merger Agreement Recitals
Nominee 2.02
Non-Offering Stockholder 4.01(b)
Offer Notice 4.01(b)
Offer Price 4.01(b)
Offered Securities 4.01(a)
Offering Stockholder 4.01(a)
Portion 4.02(a)
Pro Rata Number 4.02(a)
Proportionate Amount 5.02
Registration Rights Agreement Recitals
ROFR Acceptance Period 4.01(b)
ROFR Closing 4.01(c)
ROFR Closing Period 4.01(c)
Securities 3.01
Subsequent Offering 5.02
Third-Party Sale 4.01(a)
Transfer 3.01
Unauthorized Transfer 3.04
ARTICLE 2
Corporate Governance
Section 2.01. Composition of the Board. (a) The Board
shall consist of nine directors, consisting of the chief executive officer
and chief operating officer of the Acquiror (so long as such Persons are
entitled to be on the Board pursuant to the Management Stockholders'
Agreement), three directors designated by the Bass Entities (of which one
director must be an Outside Director), three directors designated by
Holdings (of which one director must be an Outside Director), and one
Outside Director designated by the chief executive officer and chief
operating officer of the Acquiror, collectively (so long as such Persons
are entitled to be on the Board pursuant to the Management Stockholders'
Agreement); provided, however, if a Stockholder is not a Primary Owner, it
will be entitled to designate (i) only two directors, neither of whom need
be an Outside Director, if it beneficially owns less than 3,936,710 Shares
and (ii) only one director, who need not be an Outside Director, if it
beneficially owns less than 2,624,473 Shares (in each case equitably
adjusted to reflect any stock split, stock dividend, reclassification or
any similar event).
(b) If a Stockholder fails to designate the maximum number of
Persons for election to the Board that it is entitled to designate under
Section 2.01(a), each directorship in respect of which such Stockholder
fails to make a designation will remain vacant unless that vacancy results
in there being fewer than the minimum number of directors required by law,
in which case that vacancy or vacancies will be filled by a Person or
Persons selected by a majority of the directors of the Acquiror then in
office.
(c) If HC delivers a termination notice pursuant to Section 2.02(b)
of the Hotel Properties Agreement, within the six month period from the
date HC delivers such termination notice, the Bass Entities will cause the
directors on the Board which they designated under Section 2.01(a) who do
not qualify as Outside Directors to resign and designate in their place
Persons who would qualify as Outside Directors.
Section 2.02. Vacancies. If, as a result of death,
disability, retirement, resignation, removal (with or without cause) or
otherwise, there shall exist or occur any vacancy of the Board:
(i) the Person or Persons entitled under Section 2.01(a) to designate
or nominate such director whose death, disability, retirement, resignation
or removal resulted in such vacancy may designate another individual (the
"Nominee") to fill such capacity and serve as a director of the Acquiror;
and
(ii) each Stockholder then entitled to vote for the election of the
Nominee as a director of the Acquiror agrees that it will vote its Voting
Securities, or execute a written consent, as the case may be, in order to
ensure that the Nominee is elected to the Board.
Section 2.03. Executive Committee; Management Committee.
(a) The Acquiror and the Stockholders will take all actions necessary to cause
the Executive Committee of the Board (the "Executive Committee") to consist
of at least (i) either the chief executive officer or the chief operating
officer of the Acquiror (so long as such Persons are entitled to be on the
Board pursuant to the Management Stockholders' Agreement), (ii) a director
designated by the Bass Entities under Section 2.01(a) and (iii) a director
designated by Holdings under Section 2.01(a).
(b) The Acquiror and the Stockholders will take all actions
necessary to cause the Management Committee of the Board (the "Management
Committee") to consist of at least three Persons among the chief executive
officer, chief financial officer, chief operating officer and general
counsel of Acquiror.
Section 2.04. Capital Transactions. The Acquiror and the
Stockholders will take all action necessary to provide that any acquisition,
improvement, disposition or financing transaction (a "Capital Transaction")
will be approved in the following manner:
(i) Capital Transactions, the amount of which is or is
reasonably anticipated to be $25 million or less, shall be authorized
by the Management Committee;
(ii) Capital Transactions, the amount of which is or is
reasonably anticipated to be in excess of $25 million and up to $50
million, shall be approved unanimously by the Executive Committee; and
(iii) Capital Transactions, the amount of which is or is
reasonably anticipated to be in excess of $50 million, shall be
approved by the Board.
Section 2.05. Voting. Each Stockholder entitled to vote
for the election of directors to the Board agrees that it will vote its
Voting Securities or execute written consents, as the case may be, and each
Stockholder and Acquiror will take all other necessary action (including
causing the Acquiror to call a special meeting of stockholders) in order to
ensure that the composition of the Board is as set forth in this Section
2.01. If, at any time, either Stockholder is then entitled to vote for the
removal of directors of the Acquiror, it will not vote any of its Shares in
favor of the removal of any director who shall have been designated or
nominated pursuant to Section 2.01(a), unless such removal shall be for
cause or pursuant to Section 2.01(c) or the Persons entitled to designate
or nominate such director shall have consented to such removal in writing.
ARTICLE 3
Restrictions on Transfer
Section 3.01. General Restriction. No Stockholder may,
directly or indirectly, sell, assign, transfer, grant a participation in,
pledge or otherwise dispose of ("Transfer") any Shares or securities
convertible into, or exchangeable for Shares or rights to purchase Shares
("Derivatives" and collectively with the Shares referred to herein as
"Securities") except (i) to a Permitted Transferee, (ii) in a Public
Offering in accordance with the Registration Rights Agreement, (iii)
pursuant to Article 4 herein, (iv) pursuant to a tender offer or other
transaction that has been approved by the Board and is made to all holders
of Securities that are the subject of the tender offer or other
transaction, (v) any pledge of Securities by a Stockholder made in
connection with a bona fide loan to such Stockholder (provided that the
lender's security interest in the Securities so pledged will be subject to
the right of first refusal granted to the other Stockholder under Section
4.01), (vi) any involuntary Transfer resulting from a lender foreclosing on
any pledge of any Securities which pledge existed on the date hereof or was
made in accordance with this Section 3.01 or (vii) any Transfer made with
the prior written consent of the other Stockholder.
Section 3.02. Transfers in Compliance with Law. No
Stockholder may Transfer any Securities at any time to any Person except in
compliance with applicable federal, state and foreign securities laws.
Section 3.03. Legend. In addition to any other legend
required by applicable law, all certificates representing Securities held
by any Stockholder, or their Permitted Transferees, will bear legend number
(1) to assure the enforceability of this Agreement until the time the
Securities are no longer subject to the provisions of this Agreement and
legend number (2) if the Securities have not been registered under the
Securities Act.
(1) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE PROVISIONS OF A STOCKHOLDERS' AGREEMENT
AND MAY NOT BE TRANSFERRED, SOLD, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED AND
THEN ONLY IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS.
A COPY OF SUCH AGREEMENT IS ON FILE AT THE OFFICES OF
THE COMPANY."
(2) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THAT ACT
OR LAWS AND THE COMPANY MAY REQUIRE AN OPINION OF
COUNSEL WITH RESPECT TO THAT EXEMPTION."
If any Securities cease to be subject to any restrictions on
Transfer set forth in this Agreement, the Acquiror shall, upon the written
request of the holder thereof, issue to such holder a new certificate
evidencing such Securities without legend number (1).
Section 3.04. Unauthorized Transfers. Any purported
Transfer of any Securities in violation of the provisions of this Article 3
(an "Unauthorized Transfer") will be null and void. Acquiror will not
register, recognize or give effect to any Unauthorized Transfer and the
purported transferee of any Securities pursuant to an Unauthorized Transfer
will not thereby acquire any rights in those Securities. Acquiror will,
immediately upon becoming aware of an actual or attempted Unauthorized
Transfer, instruct the transfer agent or registrar for the Securities to
issue an appropriate stop-transfer order with regard to the Unauthorized
Transfer or attempted Unauthorized Transfer.
ARTICLE 4
Right of First Refusal; Right to Participate in Sales
Section 4.01. Right of First Refusal. Each Stockholder
(the "Offering Stockholder") may from time to time sell any or all of the
Securities owned by the Offering Stockholder (the "Offered Securities") to
a Third-Party in a bona fide sale transaction (a "Third-Party Sale"),
provided that the Offering Stockholder shall have complied with the
provisions of Section 4.01(b).
(b) Prior to effecting any Third-Party Sale, the Offering
Stockholder will deliver to the other Stockholder (the "Non-Offering
Stockholder") a written notice (an "Offer Notice") specifying (i) the
aggregate amount of cash consideration, the amount of any promissory note
or other debt instrument and the Fair Market Value of any other non-cash
consideration (the "Offer Price"), for which the Offering Stockholder
proposes to sell the Offered Securities in the proposed Third-Party Sale,
(ii) the identity of the purchaser in the proposed Third-Party Sale, (iii)
the date the proposed Third-Party Sale is scheduled to close and (iv) all
other material terms of the proposed Third-Party Sale, including without
limitation any other contract or transaction entered into or proposed to be
entered into in connection with the Third-Party Sale. If the Non-Offering
Stockholder delivers to the Offering Stockholder a written notice (an
"Acceptance Notice") within 20 Business Days following the delivery of the
Offer Notice (the "ROFR Acceptance Period") stating that the Non-Offering
Stockholder is willing to purchase all of the Offered Securities for the
Offer Price and on the other terms set forth in the Offer Notice, the
Offering Stockholder will sell all (but not less than all) of the Offered
Securities to the Non-Offering Stockholder, and the Non-Offering
Stockholder will purchase the Offered Securities from the Offering
Stockholder, on the terms and subject to the conditions set forth in
Section 4.01(c). If the consideration under the Third-Party Sale includes
a promissory note or other debt instrument payable to the Offering
Stockholder, the Non-Offering Stockholder may deliver a similar promissory
note or debt instrument in payment of the Offer Price. As used herein,
"Fair Market Value" means the price agreed upon by a willing buyer and a
willing seller both in possession of reasonable knowledge of all relevant
facts, with neither party being under any compulsion to act or not act;
provided that if the Non-Offering Stockholder, on the one hand, and the
Offering Stockholder, on the other hand, disagree on the calculation of the
Fair Market Value, they shall select an unaffiliated financial advisory
firm to determine the Fair Market Value and such firm's determination shall
be final and binding. All costs relating to the financial advisor shall be
borne equally by the Offering Stockholder on the one hand, and the Non-
Offering Stockholder on the other hand.
(c) The consummation of any purchase and sale pursuant to Section
4.01(b) (the "ROFR Closing") will occur 30 Business Days following the
delivery of the Acceptance Notice or on such other date as may be agreed
upon by the Offering Stockholder and the Non-Offering Stockholder (the
"ROFR Closing Period") at the time and place as may be agreed upon by the
Offering Stockholder and the Non-Offering Stockholder delivering the
Acceptance Notice (the "Buyer"). At the ROFR Closing, (i) the Offering
Stockholder will deliver to the Buyer one or more certificates evidencing
all of the Offered Securities, duly endorsed for Transfer to the Buyer,
together with such other duly executed instruments or documents as may be
required to permit the Buyer to acquire the Offered Securities free and
clear of any and all encumbrances, except for encumbrances under this
Agreement, if applicable, (ii) the Buyer will deliver to the Offering
Stockholder by certified or official bank check or wire transfer to an
account designated by the Offering Stockholder an amount in immediately
available funds equal to the Offer Price and (iii) the Offering Stockholder
will be deemed to represent and warrant to the Buyer that, upon the ROFR
Closing, the Offering Stockholder will convey and the Buyer will acquire
the entire record and beneficial ownership of, and good and valid title to,
the Offered Securities, free and clear of any and all encumbrances, except
for encumbrances under this Agreement, if applicable.
(d) If no Acceptance Notice relating to a proposed Third-Party Sale is
delivered to the Offering Stockholder prior to the expiration of the ROFR
Acceptance Period, or an Acceptance Notice is so delivered to the Offering
Stockholder but the ROFR Closing fails to occur prior to the expiration of the
ROFR Closing Period (unless the Buyer was ready, willing and able prior to the
expiration of the ROFR Closing Period to consummate the transactions to be
consummated by the Buyer at the ROFR Closing or the Buyer was not so ready,
willing and able to consummate the transactions to be consummated by the Buyer
at the ROFR Closing as a result of the Offering Stockholder's failure
reasonably to cooperate in good faith with the efforts of Buyer to consummate
such transactions), the Offering Stockholder may consummate the proposed
Third-Party Sale in accordance with Section 4.01(e).
(e) The Offering Stockholder may consummate the Third-Party Sale to
the Third-Party purchaser identified in the Offer Notice (the "Third-Party
Purchaser") only (i) during the 60 calendar day period immediately
following the expiration of the ROFR Acceptance Period (in the event that
no Acceptance Notice was timely delivered to the Offering Stockholder) or
the 60 calendar day period immediately following the expiration of the ROFR
Closing Period, (ii) at a price at least equal to the Offer Price, and
(iii) upon terms not materially less favorable to the Offering Stockholder
than those set forth in the Offer Notice.
(f) Within 3 Business Days following the foreclosure of a pledge of
Securities permitted under Section 3.01, the Pledgee shall send an Offer
Notice pursuant to Section 4.01(b) and the procedures set forth in Sections
4.01(b) through (e) shall apply to such Offer Notice, except that the Offer
Price shall be the market price on the Business Day immediately preceding
the date of the Offer Notice.
Section 4.02. Right to Participate in Sales. (a) If requested
by the other Stockholder (the "Co-Selling Stockholder") in a written notice
(a "Co-Sale Notice") delivered to the Offering Stockholder during the ROFR
Acceptance Period, the Co-Selling Stockholder will be permitted to sell in
that Third-Party Sale, on the same terms as the Offering Stockholder, up to
the number of Securities held by the Co-Selling Stockholder as is specified
in the Co-Sale Notice; provided that the number of Securities to be sold by
the Co-Selling Stockholder participating in such Third-Party Sale shall in
no event exceed the Portion corresponding to such Co-Selling Stockholder.
As used herein, "Portion" means, with respect to the Co-Selling
Stockholder, the number of Securities beneficially owned by such Co-Selling
Stockholder multiplied by a fraction the numerator of which is the number
of Securities to be sold by the Offering Stockholder and its Permitted
Transferees in such Third-Party Sale and the denominator of which is the
aggregate number of Securities beneficially owned by the Offering
Stockholder and its Permitted Transferees, without duplication, immediately
prior to such Third-Party Sale. If a Co-Selling Stockholder requests to
include more Securities than provided under the preceding sentences, the
Offering Stockholder will attempt to cause the Third-Party Purchaser to
acquire those additional Securities, but will have no liability for the
Third-Party Purchaser's refusal to purchase those additional Securities.
To the extent that the Third-Party Purchaser is unwilling to purchase all
of the Securities proposed to be sold by the Offering Stockholder and the
Co-Selling Stockholder, the number of Securities to be sold by each of the
Offering Stockholder and the Co-Selling Stockholder shall be reduced to
their respective Pro Rata Number of Securities. "Pro Rata Number" means,
with respect to the participation of the Offering Stockholder or the Co-
Selling Stockholder in a Third-Party Sale, the product of (i) the total
number of Securities proposed to be sold by such Stockholder and (ii) a
fraction, the numerator of which is the total number of Securities proposed
to be purchased by the Third-Party Purchaser, and the denominator of which
is the total number of Securities proposed to be sold by both the Offering
Stockholder and the Co-Selling Stockholder.
Notwithstanding anything to the contrary herein contained,
(i) the Co-Selling Stockholder may not deliver to the Offering Stockholder
both an Acceptance Notice and a Co-Sale Notice with respect to the same
proposed Third-Party Sale and (ii) the Offering Stockholder will have the
right to elect not to consummate any Third-Party Sale (without liability to
the Co-Selling Stockholder) if it is unable to sell all of the Offered
Securities as initially set forth in the Offer Notice and (iii) may
increase the Securities included in the Offered Securities to accommodate
any Securities proposed to be sold by a Co-Selling Stockholder.
(b) If the Co-Selling Stockholder properly elects to participate in
a Third-Party Sale, the Offering Stockholder will represent the Co-Selling
Stockholder in the sale but will not assume any fiduciary duty to the Co-
Selling Stockholder under this Agreement. The Co-Selling Stockholder will
execute and deliver the documentation providing for the Third-Party Sale as
negotiated by the Offering Stockholder on terms that are reasonably
acceptable to the Co-Selling Stockholder; provided that, at any time prior
to such execution and delivery, the Co-Selling Stockholder may decline to
participate in the Third-Party Sale if the documentation is not reasonably
acceptable to it. If the Co-Selling Stockholder fails to execute and
deliver the documentation or timely to perform its obligations thereunder,
the Offering Stockholder may complete the Third-Party Sale without the
participation of the Co-Selling Stockholder. The Offering Stockholder will
have no responsibility to the Co-Selling Stockholder if it fails to
consummate a Third-Party Sale, and the Offering Stockholder will in all
events be free to abandon any Third-Party Sale at any time prior to its
consummation without any liability to the Co-Selling Stockholder.
Section 4.03. Execution of the Stockholders' Agreement.
(a) Any Third-Party to whom Transfers are made pursuant to this Article 4 who
(i) acquires Securities representing at least 50% of the transferring
Stockholder's Initial Ownership and (ii) is assigned, at the sole discretion of
the transferring Stockholder, all of such transferring Stockholder's rights
and obligations hereunder, shall execute a copy of this Agreement and be
bound by all the provisions herein as the successor-in-interest, in which
event, such transferring Stockholder shall be relieved of all its rights
and obligations hereunder; provided that such transferring Stockholder
shall continue to be bound by the provisions of Article 6 herein.
(b) Any Third-Party to whom Transfers are made pursuant to this
Article 4 who acquires in such Transfer beneficial ownership of Voting
Securities representing at least 5% of the Total Voting Power shall agree
in writing to be bound by the provisions of Article 6 herein.
(c) Any Third-Party to whom Securities are pledged pursuant to
Section 3.01 shall agree in writing to be bound by the provisions of
Section 4.01(f).
Section 4.04. Certain Actions by Acquiror. Acquiror will not take
any action, including without limitation the adoption of a stockholders'
rights plan, which would make it impossible or would otherwise adversely
affect a Stockholder's ability to acquire additional Securities pursuant to
Section 4.01 herein.
ARTICLE 5
Preemptive rights
Section 5.01. Preemptive Rights. Except for the issuance of
Excluded Securities and subject to Section 5.02, the Acquiror shall provide
the Stockholders with written notice of any proposed issuance for cash of any
equity securities or any securities convertible into or exchangeable for, or
any rights or warrants to acquire, any equity securities of the Acquiror no
later than 30 Business Days prior to the proposed issuance thereof. Such
notice shall specify the securities to be issued, the purchase price, the
proposed issuance date and all other material terms of such issuance. Upon
delivery to the Acquiror by any of the Stockholders no later than 20 Business
Days after such notice by the Acquiror of a notice stating that such
Stockholder intends to acquire a portion of the securities to be issued, such
Stockholder shall be entitled, on the terms offered by the Acquiror to other
prospective purchasers of the securities to be issued, to purchase up to an
amount of the securities such that, upon consummation of the proposed
issuance, the Stockholder would hold that Ownership Percentage of the Acquiror
as such Stockholder holds immediately prior to such issuance. Any such notice
from any Stockholder shall indicate the amount of securities it intends to
purchase and shall constitute a binding contract to acquire such securities on
the terms set forth in the notice delivered to such Stockholder by the
Acquiror with respect to such issuance. Notwithstanding anything herein to
the contrary, the Acquiror shall be entitled not to proceed with the proposed
issuance or to alter the terms thereof; provided that, in the event that any
material terms of the proposed issuance are altered, (i) any notice delivered
by a Stockholder to the Acquiror pursuant to this Section 5.01 shall be
revoked automatically and (ii) such Stockholder shall be entitled to
participate in such proposed issuance on the revised terms in accordance with
this Section 5.01.
Section 5.02. Subsequent Offering. Notwithstanding the
provisions of Section 5.01, no Stockholder will have any rights under Section
5.01 with respect to Acquiror's first three Public Offerings of equity
securities after the Merger (the "Subsequent Offering") unless the Stockholder
beneficially owns at least 30 percent of the Shares and the proposed sale
would cause the Stockholder to beneficially own less than 30 percent of the
Shares (after giving effect to the proposed sale of securities). If the
Subsequent Offering would so cause a Stockholder to beneficially own less than
30 percent of the Shares, the Acquiror will offer in accordance with Section
5.01 to each Stockholder the option to purchase in the proposed sale the
Stockholder's Proportionate Amount of the securities. For purposes of this
Section 5.02, the term "Proportionate Amount" for any Stockholder means the
amount of securities, that when added to the number of securities then
beneficially owned by that Stockholder, equals 30 percent of the Shares.
ARTICLE 6
Standstill obligations
Section 6.01. Acquisition of Voting Securities. Each
Stockholder will not, and will not permit its Affiliates to, purchase or
otherwise acquire, or agree or offer to purchase or otherwise acquire,
beneficial ownership of any Voting Securities, if after giving effect
thereto the Stockholder would beneficially own Voting Securities
representing more than 36.5% of the Total Voting Power, without the prior
written consent of (i) the other Stockholder, if the Stockholder would
beneficially own Voting Securities representing less than 45% of the Total
Voting Power, and (ii) the other Stockholder and a majority of the Board,
exclusive of those members of the Board designated by the Stockholder
seeking such consent, if the Stockholder would beneficially own Voting
Securities representing 45% or more of the Total Voting Power; provided
that a Stockholder shall not be deemed to have violated this Section 6.01
if a Stockholder beneficially owns Voting Securities representing more than
36.5% of the Total Voting Power as a result of (i) a recapitalization of
the Acquiror, a repurchase or redemption of securities by the Acquiror or
any other action taken by the Acquiror, (ii) purchases pursuant to Section
4.01 hereof or (iii) inadvertent purchases, if such Stockholder as promptly
as practicable divests itself of beneficial ownership of a sufficient
number of Voting Securities so as to beneficially own Voting Securities
representing no more than 36.5% of the Total Voting Power.
Section 6.02. Certain Actions by Stockholders. Each
Stockholder will not, and will not permit its Affiliates to:
(a) make, or take any action to solicit, initiate or encourage, an
Acquisition Proposal;
(b) "solicit", or become a "participant" in any "solicitation" of, any
"Proxy" (as such terms are defined in Regulation 14A under the Exchange Act)
from any holder of Voting Securities in connection with any vote on any
matter, or agree or announce its intention to vote with any Person undertaking
a "solicitation;"
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any Voting
Securities; or
(d) grant any Proxies with respect to any Voting Securities to any
Person (other than as recommended by the Board of Directors of the
Acquiror) or deposit any Voting Securities in a voting trust or enter into
any other arrangement or agreement with respect to the voting thereof.
Section 6.03. Termination. This Article 6 shall terminate
upon the earlier of (i) the third anniversary of the date hereof and (ii)
the date provided for in Section 7.03(b).
ARTICLE 7
Miscellaneous
Section 7.01. Entire Agreement. This Agreement and the
Transaction Documents constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, with respect to the
subject matter hereof and except as otherwise expressly provided herein and
therein. This Agreement will have no effect on any rights or obligations
the Stockholders or the Acquiror may have under the Registration Rights
Agreement.
Section 7.02. Notices. (a) All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to the Acquiror, to:
Bristol Hotel Company
00000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
if to Holdings, to:
United/Xxxxxx Holdings, L.P.
0000 Xxxxx Xxxxxxxx Xxxxx Xxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
if to the Bass Entities or Bass plc, to:
Holiday Corporation
Xxxxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Senior Vice President, General Counsel
Telecopy: (000) 000-0000
Bass plc
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, X0X 0XX
Xxxxxxx
Attention: Xxxxxxx Xxxxxx
Telecopy: 011-44-171-409-8513
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
(b) Each party hereto may hereafter specify such other address or
telecopy number for the purpose by notice to the other parties hereto.
Each such notice, request or other communication shall be effective (a) if
given by telecopy, when such telecopy is transmitted to the telecopy number
specified in Section 7.02(a) and the appropriate telecopy confirmation is
received or (b) if given by any other means, when delivered at the address
specified in Section 7.02(a).
(c) Any Person who becomes a Stockholder shall provide its address
and telecopy number to the Acquiror, which shall promptly provide such
information to each other Stockholder.
Section 7.03. Amendment; Waiver; Termination. (a) No
provision of this Agreement may be waived except by an instrument in
writing executed by the party against whom the waiver is to be effective.
No provision of Articles 5 and 6 may be amended or otherwise modified
except by an instrument in writing executed by the Acquiror with the
approval of the Board and each Stockholder and no provision of Articles 2,
3 and 4 may be amended or otherwise modified except by an instrument in
writing executed by each Stockholder.
(b) This Agreement shall terminate on the earliest of (i) the
voluntary or involuntary dissolution or liquidation of the Acquiror, (ii)
the mutual agreement of the parties hereto, (iii) the date on which either
Stockholder ceases to beneficially own any Shares and (iv) a merger,
consolidation or other business combination in which the Acquiror is not
the surviving entity (excluding any merger, consolidation or other business
combination in which the Stockholders own a majority of the capital stock
of the surviving corporation).
Section 7.04. Expenses. Except as otherwise provided
herein, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense; provided,
however, that, in any action or proceeding brought to enforce any provision
of this Agreement or where any provision of any this Agreement is validly
asserted as a defense, the successful party will be entitled to recover its
cost and expense (including reasonable attorneys' fees and charges) in
addition to any other available remedy.
Section 7.05. Assignability. Except as otherwise provided
herein, this Agreement shall not be assignable by any party hereto. Any
Person acquiring Shares who is required by the terms of this Agreement to
become a party hereto shall execute and deliver to the Acquiror a copy of
this Agreement and shall thenceforth be a "Stockholder". Any Stockholder
who ceases to own beneficially any Shares shall cease to be bound by the
terms hereof.
Section 7.06. Governing law. This Agreement shall be
construed in accordance with and governed by the laws of the state of
Delaware regardless of the laws that might otherwise govern under the
principles of conflict of laws applicable thereto.
Section 7.07. Counterparts; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the
other parties hereto.
Section 7.08. Binding Effect; Benefit. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, successors, legal representatives and permitted
assigns. Nothing in this Agreement, expressed or implied, shall confer on
any Person other than the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Section 7.09. Headings. The headings contained in this
Agreement are for convenience only and shall not affect the meaning or
interpretation of this Agreement.
Section 7.10. Specific Enforcement. Each party hereto
acknowledges that the remedies at law of the other parties for a breach or
threatened breach of this Agreement would be inadequate and, in recognition
of this fact, any party to this Agreement, without posting any bond, and in
addition to all other remedies which may be available, shall be entitled to
obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
Section 7.11. Consent to Jurisdiction. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in the Court of Chancery in the State of
Delaware, and each of the parties hereby consents to the non-exclusive
jurisdiction of such court (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an inconvenient
forum. Process in any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the jurisdiction of
any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 7.02 shall be
deemed effective service of process on such party.
Section 7.12. After-Acquired Securities. Except as
otherwise expressly provided herein, all of the provisions of this
Agreement will apply to and include all Securities acquired by each
Stockholder on and after the date of this Agreement, including without
limitation such Securities received by each Stockholder as a result of (i)
a stock dividend on or other payment made to holders of Securities, (ii)
any exchange for, or reclassification of, any Securities, (iii) a
reorganization, recapitalization, consolidation or merger, (iv) the
exercise of any Securities or (v) the exercise of any rights under Sections
4.01 and 5.01.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
BRISTOL HOTEL COMPANY
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
UNITED/XXXXXX
HOLDINGS, L.P.
By: Holdings Genpar, L.P. its
General Partner
By: HH Genpar Partners, its General
Partner
By: Holdings Associates, Inc., its
Managing General Partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
HOLIDAY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
BASS AMERICA INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
With respect to Article 6 of this
Agreement, accepted and agreed
as of the day and year first above written.
BASS PLC
By: /s/ Xxxxxxx North
----------------------------------
