EXECUTION COPY
VOTING AND RECAPITALIZATION AGREEMENT
This VOTING AND RECAPITALIZATION AGREEMENT, dated as of
December 8, 2000 (this "Agreement"), is made and entered into among MeriStar
Hotels & Resorts, Inc., a Delaware corporation ("MeriStar"), American Skiing
Company, a Delaware corporation ("ASC"), Oak Hill Capital Partners, L.P., a
Delaware limited partnership ("OCP"), Oak Hill Capital Management Partners,
L.P., a Delaware limited partnership ("OCMP"), Oak Hill Securities Fund, L.P., a
Delaware limited partnership ("OSF"), Oak Hill Securities Fund II, L.P., a
Delaware limited partnership ("OSF2"), OHCP Ski, L.P., a Delaware limited
partnership ("OSLP"), Madeleine LLC, a New York limited liability company
("Madeleine"), Leslie B. Otten ("Otten") and the Albert Otten Trust f/b/o
Mildred Otten, a trust organized under the laws of New Jersey (the "Trust").
OCP, OCMP, OSF, OSF2, OSLP, Madeleine, the Otten and the Trust are referred to
collectively as the "Stockholders" and each as a "Stockholder".
RECITALS:
A. ASC, ASC Merger Sub, Inc., a Delaware corporation ("Merger
Sub"), and MeriStar are, simultaneously with the execution hereof, entering into
an Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which Merger Sub will merge with and into MeriStar (the
"Merger") on the terms and subject to the conditions set forth in the Merger
Agreement and, as a result, MeriStar will become a wholly-owned subsidiary of
ASC. Except as otherwise defined herein, capitalized terms used herein without
definition have the respective meanings ascribed to them in the Merger
Agreement.
B. Under the Merger Agreement, it is a condition precedent to
the obligation of MeriStar to complete the Merger that ASC complete the
recapitalization (the "Recapitalization") in which (i) the Class A common stock,
par value $0.01 per share (the "Class A Common Stock"), of ASC and the 8.5%
Series B Convertible Participating Preferred Stock, liquidation value $1,000 per
share (the "Series B Preferred Stock"), of ASC shall have been converted into
common stock, par value $0.01 per share (the "Common Stock"), of ASC, at or
prior to the Effective Time; (ii) the 10.5% Repriced Convertible Exchangeable
Preferred Stock, liquidation value $1,000 per share (the "Series A Preferred
Stock"), of ASC shall have been converted into shares of Series A Preferred
Stock, par value $0.01 per share (the "New Series A Preferred Stock"), of ASC,
having terms substantially as set forth in Exhibit B hereto and shares of Common
Stock, immediately prior to the Effective Time, as herein provided; (iii) the
warrants (the "Warrants") to purchase 6,000,000 shares of Common Stock at an
exercise price of $2.50 per share shall have been issued to OCP in accordance
with the Securities Purchase Agreement (as amended to date, the "Warrant
Purchase Agreement"), dated July 31, 2000, among ASC, ASC Resort Properties,
Inc. ("Resort Properties") and OCP and OCP shall not own any shares of the
capital stock of Resort Properties; and (iv) the Resorts Credit Facility
Amendment and the Resorts Credit Facility Conversion shall have occurred.
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Collectively, the Class A Common Stock, the Series A Preferred Stock, the Series
B Preferred Stock and the Common Stock, together with all other equity
securities issued by ASC, are referred to herein as the "Securities".
C. As a condition and inducement to MeriStar's willingness to
enter into the Merger Agreement, MeriStar has requested that each Stockholder
agree, and each Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
VOTING OF SUBJECT SHARES
Section 1.1 Agreement to Vote Subject Shares. At any meeting
(a "Stockholders Meeting") (including any and all postponements and adjournments
thereof) of the stockholders of ASC called to consider and vote upon (i) the
approval of the Merger, the Merger Agreement and the transactions contemplated
thereby, (ii) the issuance of Common Stock to the stockholders of MeriStar
pursuant to the Merger Agreement, (iii) the recapitalization and Common Stock
issuances contemplated by Sections 3.3, 3.4 and 3.5 of this Agreement, (iv) the
transactions contemplated by Section 2.6 of the Merger Agreement, (v) the
election of directors for ASC as provided in Schedule 1.1 to this Agreement and
(vi) the adoption of amendments to the articles of incorporation and bylaws of
ASC in connection with the Merger (the actions referred to in clauses (i)
through (vi) being referred to collectively as the "Proposals"), and in
connection with any action to be taken in respect of the Proposals by written
consent of the stockholders of ASC, each Stockholder shall vote or cause to be
voted (including by written consent, if applicable) all of such Stockholder's
Subject Shares in favor of the approval and adoption of the Proposals and in
favor of any other matter necessary for the consummation of the transactions
contemplated by the Merger Agreement and this Agreement and considered and voted
upon at any such meeting or made the subject of any such written consent, as
applicable. At any meeting (and at any and all postponements and adjournments
thereof) of the stockholders of ASC (an "Adverse Meeting") called to consider
and vote upon any Adverse Proposal (as defined below), and in connection with
any action to be taken in respect of any Adverse Proposal by written consent of
stockholders of ASC, each Stockholder shall vote or cause to be voted (including
by written consent, if applicable) all of such Stockholder's Subject Shares
against such Adverse Proposal. For purposes of this Agreement, the term "Adverse
Proposal" means any (a) proposal or action that would reasonably be expected to
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result in a breach of any covenant, representation or warranty of ASC set forth
in the Merger Agreement or (b) proposal or action that is intended or would
reasonably be expected to impede, interfere with, delay or materially and
adversely affect the Merger or any of the other transactions contemplated by the
Merger Agreement or this Agreement.
Section 1.2 Other Proxies Revoked. Any proxies heretofore
given in respect of such Stockholder's Subject Shares are not irrevocable and
all such proxies are hereby revoked (other than the proxies specified in Item 2
of Schedule 2.1), it being understood that, with respect to the revocation made
concerning the Subject Shares beneficially owned by Otten, ING (U.S.) Capital
LLC ("ING") expressly acknowledges and agrees to such revocation; provided,
that, subject to Article III, such acknowledgment and agreement shall in no way
alter any existing or future rights of ING with respect to the pledge of any
Class A Common Stock or Common Stock pledged to it by Otten.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the
Stockholders. Each Stockholder, severally and not jointly, represents and
warrants, as of the date hereof, the time of each ASC Stockholders Meeting, each
Adverse Meeting and as of the Effective Time, to MeriStar and ASC as follows:
(a) Except as specified on Schedule 2.1 hereto and except for
Subject Shares transferred in accordance with Section 3.1 hereof after the date
hereof, such Stockholder is the sole record and beneficial owner of the number
and type of Securities set forth opposite such Stockholder's name on Annex A
hereto (such Securities, together with any other Securities or other equity or
voting interests in ASC the beneficial ownership of which is hereafter acquired
by such Stockholder and any Securities into which such Securities or other
equity or voting interests are converted, being collectively referred to herein
as such Stockholder's "Subject Shares") and has full, unrestricted and sole
power to dispose of and to vote such Subject Shares. Such Subject Shares are
now, and at all times prior to the Effective Time will be, held by such
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all liens, voting trusts or agreements, powers of attorney,
proxies or any other arrangement or agreement with any person or entity limiting
or affecting such Stockholder's legal power or authority to vote or sell the
Subject Shares, except for those restrictions arising hereunder or set forth
under applicable securities laws and except as specified on Schedule 2.1 hereto.
Except as otherwise specified on Schedule 2.1 hereto, such Stockholder does not
beneficially own or hold any rights to acquire any additional securities of ASC
other than such Subject Shares.
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(b) In the case of a Stockholder who is an individual, such
Stockholder is an adult, is a citizen of the United States of America and is
competent to execute and deliver this Agreement, to carry out his or her
obligations hereunder and to consummate the transactions contemplated hereby. In
the case of a Stockholder that is a corporation, trust or other business
organization, such Stockholder has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated hereby have
been duly authorized by all necessary action, if any, on the part of such
Stockholder. This Agreement has been duly executed and delivered by such
Stockholder and, assuming that this Agreement constitutes the valid and binding
obligation of MeriStar, this Agreement constitutes a valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
(c) The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, result in a breach or violation
of or default (with or without notice or lapse of time or both) under, give rise
to a material obligation, a right of termination, cancellation, or acceleration
of any obligation or a loss of a material benefit under, or require notice to or
the consent of any person under (i) in the case of a Stockholder that is a
corporation or other business organization, any organizational documents of such
Stockholder, (ii) in the case of any Stockholder that is a trust, violate or
conflict with any term or provision of the indenture, or other governing or
testamentary instrument relating to such trust or (iii) in the case of any
Stockholder, any Contract, agreement, instrument, undertaking, Law, order,
injunction, determination or award binding on such Stockholder, other than any
such conflicts, breaches, violations, defaults, obligations, rights or losses
that, individually or in the aggregate, would not (i) impair the ability of such
Stockholder to perform such Stockholder's obligations under this Agreement or
(ii) prevent or delay the consummation of any of the transactions contemplated
hereby.
(d) Each Stockholder understands and acknowledges that the
issuance of the Common Stock and the New Series A Preferred Stock in accordance
with Sections 3.3, 3.4, 3.5 and 3.6 of this Agreement is pursuant to one or more
of the exemptions from registration provided for in Section 3(a) or 4(2) of the
Securities Act, including Regulation D promulgated thereunder, and any
applicable state laws, and the offer and sale of the Common Stock and the New
Series A Preferred Stock are thus not registered under the Securities Act. Each
Stockholder further understands and acknowledges that this transaction has not
been reviewed and approved by the SEC or by any state regulatory authority and
represents and warrants that it is an "accredited investor," as defined in Rule
501(a) of Regulation D under the Securities Act.
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Section 2.2 Representations and Warranties of ASC.
(a) ASC represents and warrants, as of the date hereof and as
of the Effective Time, to MeriStar and each of the Stockholders that:
(i) ASC has all requisite power and authority to enter into
this Agreement, and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by ASC and the
consummation by ASC of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of ASC. This
Agreement has been duly executed and delivered by ASC and, assuming
that this Agreement constitutes the valid and binding obligation of the
other parties to this Agreement, this Agreement constitutes a valid and
binding obligation of ASC, enforceable against ASC in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity;
(ii) The execution and delivery of this Agreement by ASC does
not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, result
in a breach or violation of or default (with or without notice or lapse
of time or both) under, give rise to a material obligation, a right of
termination, cancellation, or acceleration of any obligation or a loss
of a material benefit under, or require notice to or the consent of any
person under (i) any organizational documents of ASC or (ii) any
Contract, agreement, instrument, undertaking, Law, judgment, order,
injunction, decree, determination or award binding on ASC, other than
any such conflicts, breaches, violations, defaults, obligations, rights
or losses that, individually or in the aggregate, would not (i) impair
the ability of ASC to perform its obligations under this Agreement or
(ii) prevent or delay the consummation of any of the transactions
contemplated hereby; and
(iii) Assuming that the representations and warranties made by
the Stockholders in Section 2.2(d) are true and correct, the issuance
of the Common Stock and New Series A Preferred Stock in accordance with
Sections 3.3, 3.4, 3.5 and 3.6 hereof will not require registration
under the Securities Act or violate applicable state securities laws.
(b) ASC represents and warrants, as of the date hereof and as
of the Effective Time:
(i) To Otten, that all shares of Common Stock to be issued
pursuant to Section 3.3 of this Agreement will be, upon issuance on the
terms and conditions specified in this Agreement, duly authorized,
validly issued, fully paid, nonassessable and will not be subject to
preemptive rights;
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(ii) To Madeleine, that all shares of New Series A Preferred
Stock and Common Stock to be issued upon conversion of the Series A
Preferred Stock pursuant to Section 3.4(a) of this Agreement will be,
upon such issuance on the terms and conditions specified in this
Agreement, duly authorized, validly issued, fully paid, nonassessable
and will not be subject to preemptive rights;
(iii) To OCP, OCMP, OSF, OSF2 and OSLP, that all shares of
Common Stock to be issued pursuant to Section 3.4(b) of this Agreement
will be, upon issuance on the terms and conditions specified in this
Agreement, duly authorized, validly issued, fully paid, nonassessable
and will not be subject to preemptive rights; and
(iv) To OCP, that all shares of Common Stock to be issued
pursuant to Section 3.5 of this Agreement will be, upon issuance on the
terms and conditions specified in this Agreement, duly authorized,
validly issued, fully paid, nonassessable and will not be subject to
preemptive rights.
ARTICLE III
CERTAIN COVENANTS
Section 3.1 Restriction on Transfer of Subject Shares; Proxies and
Noninterference. No Stockholder shall, prior to the Effective Time, directly or
indirectly: (A) except pursuant to the terms of this Agreement, offer for sale,
sell, transfer, pledge, tender, 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,
encumbrance, assignment or other disposition of, any or all of such
Stockholder's Subject Shares, unless it receives (i) an irrevocable proxy, in
form and substance substantially similar to Exhibit A hereto, to vote the
transferred Subject Shares as provided therein and (ii) a deed of adherence to
this Agreement (including representations and warranties of the type set forth
in Section 2.1 hereof) reasonably satisfactory to the other parties hereto
executed by the transferee of such Subject Shares; (B) except pursuant to the
terms of this Agreement, grant any proxies or powers of attorney, deposit any of
such Stockholder's Subject Shares into a voting trust or enter into a voting
agreement with respect to any of such Stockholder's Subject Shares; or (C) take
any action that would reasonably be expected to make any representation or
warranty contained herein untrue or incorrect or have the effect of impairing
the ability or preventing or delaying the consummation of any of the
transactions contemplated hereby of such Stockholder to perform such
Stockholder's obligations under this Agreement.
Section 3.2 Reliance by MeriStar; Cooperation. Each Stockholder
understands and acknowledges that MeriStar is entering into the Merger Agreement
in reliance upon the Stockholders' execution and delivery of this Agreement.
Each Stockholder shall cooperate fully with ASC and MeriStar in
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connection with the respective reasonable best efforts of ASC and MeriStar to
fulfill the conditions to the Merger set forth in Article VI of the Merger
Agreement.
Section 3.3 Conversion of Class A Common Stock. Prior to or at the
Effective Time, Otten and ASC shall cause each share of Class A Common Stock to
be converted into one share of Common Stock.
Section 3.4 Recapitalization. Subject to the receipt of the
Requisite ASC Vote in favor of the transactions described in this Section 3.4:
(a) Immediately prior to the Effective Time, Madeleine and
ASC shall cause a recapitalization of ASC in which all of the issued and
outstanding shares of Series A Preferred Stock are converted into (i) such
number of shares of New Series A Preferred Stock equal to the aggregate
liquidation preference for all the shares of Series A Preferred Stock plus
accrued and unpaid dividends on such stock, determined as of the Closing Date
(the "Preferred Value"), divided by $1,000 and (ii) a number of shares of Common
Stock calculated by dividing (x) 20.7% of the Preferred Value by (y) $2.22;
(b) Immediately prior to the Effective Time, OCP, OCMP, OSF,
OSF2, OSLP and ASC shall cause all of the issued and outstanding shares of
Series B Preferred Stock to be converted into a number of shares of Common Stock
calculated by dividing the aggregate Liquidation Price (as defined in the
Certificate of Designation of the Series B Preferred Stock) of such shares as of
October 31, 2000 by $2.22;
(c) Prior to the Effective Time, if no shares of the capital
stock of Resort Properties have been issued to OCP under the Warrant Purchase
Agreement, ASC shall issue the Warrants to OCP in accordance with the terms of
the Warrant Purchase Agreement; and
(d) Prior to the Effective Time, if shares of the capital
stock of Resort Properties have been issued to OCP under the Warrant Purchase
Agreement, OCP shall transfer those shares of the capital stock of Resort
Properties to ASC, and ASC shall issue the Warrants to OCP in accordance with
the terms of the Warrant Purchase Agreement.
Section 3.5 Issuance of Common Stock to Tranche C Lenders. Prior
to the Effective Time:
(a) ASC and OCP shall cause the entire $13.0 million
available under Tranche C of the Resorts Credit Facility to be drawn; and
(b) ASC and OCP shall cause the Resorts Credit Facility
Amendment to occur and shall cause Tranche C under the Resorts Credit Facility
to be repaid in the form of an issuance of a number of shares of Common Stock
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calculated by dividing (x) the outstanding aggregate principal amount of such
Tranche C as of the Effective Time plus all accrued and unpaid interest on the
aggregate outstanding principal amount of such Tranche C through October 31,
2000 by (y) $2.22.
Section 3.6 Closing Procedures.
(a) Immediately prior to the Effective Time, upon the filing
of an amended and restated certificate of incorporation of ASC in accordance
with Section 1.6 of the Merger Agreement and a certificate of designations
relating to the New Series A Preferred Stock, substantially in the form attached
to this Agreement as Exhibit B, the Series A Preferred Stock shall automatically
be converted into shares of New Series A Preferred Stock and shares of Common
Stock pursuant to Section 3.4(a) and certificates formerly representing such
shares of Series A Preferred Stock shall, from and after such time, represent
the right to receive that number of shares of New Series A Preferred Stock and
shares of Common Stock provided in Section 3.4(a). Each holder shall surrender
the certificate or certificates formerly representing the Series A Preferred
Stock, duly endorsed, at the offices of Paul, Weiss, Rifkind, Wharton & Garrison
at or prior to the Effective Time (or such other place as ASC shall reasonably
request) and shall give written notice to ASC of the name or names in which the
certificate or certificates for shares of New Series A Preferred Stock and
Common Stock are to be issued. ASC shall, at the Effective Time, issue and
deliver at the offices of Paul, Weiss, Rifkind, Wharton & Garrison to such
holder of Series A Preferred Stock, or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of New Series A
Preferred Stock and Common Stock to which such holder is entitled under Section
3.4(a). Such conversion shall be deemed to have been made as of the Effective
Time, and the person or persons entitled to receive the shares of New Series A
Preferred Stock and Common Stock issuable upon such conversion shall be treated
for all purposes as the record holder or holders of such shares of New Series A
Preferred Stock and Common Stock as of the Effective Time. When issued, the
certificates evidencing such shares of New Series A Preferred Stock and Common
Stock shall not bear legends or other notations relating to restrictions on
transfer, other than as required pursuant to Article Thirteenth of the
Certificate of Incorporation of ASC (as amended as of the Effective Time).
(b) Except as specifically provided in this Agreement, the
conversion of the Series B Preferred Stock into Common Stock shall occur as
provided in Section 9(b) of the Certificate of Designation relating to the
Series B Preferred Stock.
(c) Upon completion of the transactions required by Section
3.5, ASC and OCP shall execute an instrument (in form reasonably satisfactory to
ASC and OCP) evidencing the repayment in full of Tranche C under the Resorts
Credit Facility and the issuance of the shares of Common Stock in repayment
thereof.
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(d) In connection with any of the transactions required by
Sections 3.4 or 3.5, ASC shall not be required to issue fractions of shares of
Common Stock or New Series A Preferred Stock or to distribute certificates which
evidence fractions of such shares. In lieu of fractional shares, ASC shall pay,
at the effective time of any conversion as herein provided, an amount in cash
equal to such fraction multiplied by (i) $2.22, in the case of Common Stock, or
(ii) $1,000, in the case of New Series A Preferred Stock.
Section 3.7 No Further Issuances of Stock. Prior to the Effective
Time, ASC shall not issue any additional shares of Class A Common Stock, Series
A Preferred Stock or Series B Preferred Stock.
Section 3.8 ING. In the event that ING elects to foreclose on any
Securities pledged to it by Otten or to exercise voting rights with respect to
such Securities, ING shall provide MeriStar, ASC and OCP with reasonable prior
notice of such intent.
Section 3.9 Plan of Reorganization. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date of this Agreement and until the Effective Time, each party to this
Agreement shall use its reasonable best efforts to cause the Recapitalization to
qualify, and shall not, without the prior written consent of the parties to this
Agreement, knowingly take any actions or cause any actions to be taken which
could prevent such recapitalization from qualifying, as a reorganization under
the provisions of Section 368(a) of the Code. Following the Effective Time, and
consistent with any such consent, none of MeriStar, ASC or any of their
affiliates shall knowingly take any action or knowingly cause any action to be
taken which would cause the Recapitalization to fail to so qualify as a
reorganization under Section 368(a) of the Code.
Section 3.10 Restriction on Certain Amendments to the Merger
Agreement. ASC and MeriStar shall not permit an amendment to Section 2.1 or 2.4
of the Merger Agreement without the prior written consent of Madeleine if such
amendment would cause material dilution of Madeleine's holdings in ASC.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Fees and Expenses. Each party hereto shall pay its own
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby, except
that all reasonable expenses, including attorneys' fees, (i) incurred by Oak
Hill (excluding expenses incurred by holders of the Snow Subordinated Notes in
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connection with the Snow Notes Consent) in connection with this Agreement, not
to exceed $100,000, and (ii) incurred by Madeleine, not to exceed $35,000, in
connection with this Agreement shall be paid by ASC.
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Section 4.2 Amendment; Termination. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. This Agreement shall terminate immediately upon the earlier to
occur of (i) the termination of the Merger Agreement in accordance with its
terms and (ii) June 30, 2001. In addition, this Agreement may be terminated by
mutual written consent of MeriStar, ASC and the Stockholders. In the event of
termination of this Agreement pursuant to this Section 4.2, this Agreement shall
become null and void and of no effect with no liability on the part of any party
hereto and all Proxies shall automatically terminate; provided, however, that no
such termination shall relieve any party hereto from any liability for any
breach of this Agreement occurring prior to such termination; and provided,
further, that Article II shall survive the termination of this Agreement.
All covenants and agreements that contemplate performance
after the Effective Time shall survive the Effective Time.
Section 4.3 Extension, Waiver. Any agreement on the part of a
party to waive any provision of this Agreement, or to extend the time for any
performance hereunder, shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
Section 4.4 Entire Agreement; No Third-Party Beneficiaries. This
Agreement constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and is not intended to confer upon any person
other than the parties any rights or remedies.
SECTION 4.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS
OF ANY PRINCIPLES OF CONFLICTS OF LAWS THEREOF THAT MIGHT INDICATE THE
APPLICABILITY OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT WHERE THE LAWS OF
THE STATE OF DELAWARE ARE MANDATORILY APPLICABLE.
Section 4.6 Notices. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, by hand delivery or telecopy (with a
confirmation copy sent for next day delivery via courier service, such as
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Federal Express), or sent by overnight courier, such as Federal Express
(providing proof of delivery). All communications hereunder shall be delivered
to the respective parties at the following addresses:
If to the Stockholders:
to the addresses set forth on Annex A hereto.
If to ASC:
American Skiing Company
One Monument Way
Portland, Maine 04101
Attention: Christopher E. Howard, Esq.
Foster A. Stewart, Jr., Esq.
Telecopy: (207) 791-2607
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10036-6522
Attention: Mark Roppel, Esq.
Telecopy: (212) 848-7179
If to MeriStar:
MeriStar Hotels & Resorts, Inc.
1010 Wisconsin Avenue, NW
Washington, DC 20007
Attention: Christopher L. Bennett, Esq.
Telecopy: (202) 295-1026
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: Richard S. Borisoff, Esq.
Telecopy: (212) 757-3990
Section 4.7 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by any
Stockholder without the prior written consent of MeriStar, or by MeriStar
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without the prior written consent of the Stockholders and any such assignment or
delegation that is not consented to shall be null and void. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns (including, without limitation, any person to whom any Subject Shares
are sold, transferred or assigned).
Section 4.8 Further Assurances. Each Stockholder shall execute and
deliver such other documents and instruments and take such further actions as
may be necessary or appropriate or as may be reasonably requested by MeriStar in
order to ensure that MeriStar receives the full benefit of this Agreement.
Section 4.9 Enforcement. Irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. Accordingly,
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the federal courts of the United States located in the
State of New York, this being in addition to any other remedy to which they are
entitled at law or in equity. Each of the parties hereto (i) shall submit itself
to the jurisdiction of the federal courts of the United States of America
located in the State of New York in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) shall not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, and (iii) shall not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
the federal courts of the United States of America located in the State of New
York.
Section 4.10 Waiver of Trial by Jury. Each party acknowledges and
agrees that any controversy that may arise under this Agreement is likely to
involve complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated by this Agreement.
Each party certifies and acknowledges that (i) no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver, (ii) each such party understands and has considered the implications of
this waiver, (iii) each such party makes this waiver voluntarily, and (iv) each
such party has been induced to enter into this agreement by, among other things,
the mutual waivers and certifications in this Section 4.10.
Section 4.11 Severability. Whenever possible, each provision or
portion of any provision of this Agreement shall 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 shall not affect
<PAGE>
13
any other provision or portion of any provision in such jurisdiction, and this
Agreement shall 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.
Section 4.12 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when one or more counterparts have been
signed by each party and delivered to the other parties.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed as of the day and year first written above.
MERISTAR HOTELS & RESORTS, INC.
By: /s/ Paul Whetsell
--------------------------------------------
Name: Pual Whetsell
Title: Chief Executive Officer
AMERICAN SKIING COMPANY
By: /s/ Leslie B. Otten
----------------------------------------------
Name: Leslie B. Otten
Title: President
/s/ Leslie B. Otten
----------------------
Leslie B. Otten
ALBERT OTTEN TRUST
F/B/O MILDRED OTTEN
By: /s/ Leslie B. Otten
----------------------------------------------
Name: Leslie B. Otten
Title: Trustee
<PAGE>
OAK HILL CAPITAL PARTNERS, L.P.
By: /s/ Kevin G. Levy
----------------------------------------------
Name: Kevin G. Levy
Title: Vice President
OAK HILL CAPITAL MANAGEMENT PARTNERS, L.P.
By: /s/ Kevin G. Levy
----------------------------------------------
Name: Kevin G. Levy
Title: Vice President
OAK HILL SECURITIES FUND, L.P.
By: /s/ Glenn R. August
----------------------------------------------
Name:Glenn R. August
Title: President
OAK HILL SECURITIES FUND II, L.P.
By: /s/ Glenn R. August
----------------------------------------------
Name:Glenn R. August
Title: President
OHCP SKI, L.P.
By: /s/ Kevin G. Levy
----------------------------------------------
Name: Kevin G. Levy
Title: Vice President
MADELEINE LLC
By: /s/ Bob Davenport
----------------------------------------------
Name: Bob Davenport
Title: Attorney-in-Fact
<PAGE>
Accepted and agreed as to
Sections 1.2 and 3.7 hereof:
ING (U.S.) CAPITAL LLC,
AS PLEDGEE OF SHARES
OF CLASS A COMMON
STOCK AND COMMON STOCK
BENEFICIALLY OWNED BY
LESLIE B. OTTEN
By: /s/ William B. Redmond
----------------------------------------------
Name: William B. Redmond
Title: Vice President
<PAGE>
Annex A
<TABLE>
Stockholder Address Type of ASC Security Number
<S> <C> <C> <C>
Madeleine LLC 450 Park Avenue Series A Preferred Stock 36,626
28th Floor
New York, NY 10022
Attention: Robert Davenport
With a copy to:
Robert Loper, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
Oak Hill Capital Partners, L.P. * Series B Preferred Stock 129,870
Oak Hill Capital Management Partners, * Series B Preferred Stock 3,330
L.P.
Oak Hill Securities Fund, L.P. * Series B Preferred Stock 7,400
Oak Hill Securities Fund II, L.P. * Series B Preferred Stock 7,400
OHCP Ski, L.P. * Series B Preferred Stock 2,000
Leslie B. Otten c/o American Skiing Company Common Stock 833,333
Sunday River Access Road, Bethel, ME
04217
Class A Common Stock 14,760,530
Albert Otten Trust f/b/o Mildred c/o American Skiing Company Common Stock 30,000
Otten Sunday River Access Road, Bethel, ME
04217
* The address of OCP, OCMP, OSF, OSF2 and OSLP is:
201 Main Street, Suite 2600
Fort Worth, Texas 76102
Attention: Kevin G. Levy
</TABLE>
<PAGE>
Exhibit A
IRREVOCABLE PROXY
The undersigned shareholder of AMERICAN SKIING COMAPANY, a
Delaware corporation ("ASC") hereby appoints MERISTAR HOTELS & RESORTS, INC., a
Delaware corporation ("MeriStar"), as proxy for the undersigned, with full power
of substitution, to attend any annual or special meeting of the shareholders of
ASC (including any and all adjournments and postponements thereof), and in
respect of any written consent in lieu of such meeting, held or made for the
purpose of considering or voting upon the matters described in Section 1.1 of
the Voting and Recapitalization Agreement, dated the date hereof, among MeriStar
and certain shareholders of ASC (the "Agreement"), in accordance with such
Section 1.1, and to cast all votes that the undersigned is entitled to cast at
such a meeting (or in connection with such written consent) with respect to all
of the undersigned's Subject Shares (as defined in the Agreement) with respect
to the matters described in Section 1.1 of the Agreement. The undersigned hereby
revokes any proxy heretofore given with respect to such a meeting (or written
consent in lieu thereof) or with respect to such a vote cast. The undersigned
affirms that this proxy is a power coupled with an interest and shall be
irrevocable. The undersigned shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of this
irrevocable proxy. This proxy shall be automatically revoked upon the
termination of the Agreement.
[Name of Stockholder]
Please sign exactly as name appears on the By
records of ASC and date. When signing as attorney, -----------------------
executor, administrator, trustee, guardian, Name:
officer of a corporation or other entity or in Title:
another representative capacity, please give
the full title under signature(s).
Dated: December __, ____
<PAGE>
Exhibit B
[Form of New Series A Preferred Stock Certificate of Designations]
<PAGE>
<TABLE>
SCHEDULE 1.1
Initial Directors
<S> <C> <C>
Name Class Nominated by
** I Oak Hill
** I Oak Hill
* I Independent
** II Oak Hill
Mr. Steven Jorns II MeriStar
Mr. David Hawkes II Otten
* II Independent Director
Mr. Daniel Doctoroff III Oak Hill
Mr. Paul W. Whetsell III MeriStar
Mr. Leslie B. Otten III Otten
* III Independent
* To be determined reasonably by ASC, MeriStar, Otten, OCP, OCMP, OSF, OSF2 and OSLP.
** To be determined by OCP, OCMP, OSF, OSF2 and OSLP.
</TABLE>
<PAGE>
SCHEDULE 2.1
Beneficial Ownership of Capital Stock of ASC
1. Madeleine holds its Subject Shares on behalf of various funds and
accounts managed by Cerberus Capital Management, L.P. and its affiliates.
2. The Subject Shares of Madeleine, Otten, OCP, OCMP, OSF, OSF2 and OSLP are
subject to a proxy in favor of ASC to vote those Subject Shares at ASC's
annual meeting of stockholders on December 12, 2000 (and all adjournments
and postponements thereof).
3. Otten holds his Subject Shares subject to the pledge granted under the
Pledge Agreement, dated November 10, 1997, between Otten and ING.
