EXHIBIT 5
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BFX HOSPITALITY GROUP, INC.
000 Xxxxxx Xxxxxx, Xxxxx 000 * Xxxx Xxxxx, XX 00000
(000) 000-0000 * FAX: (000) 000-0000
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June 22, 1998
Xx. Xxxx Xxxxxxx
Hotels of Distinction
000 Xxxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Dear Xxxx:
It has become apparent that under current and foreseeable market
conditions it is highly unlikely that BFX Hospitality Group, Inc. (the
"Company"), will be able to acquire any hotel properties at acceptable prices;
and there are no prospects for securing any significant management contracts on
hotel properties. In view of the circumstances, the Company and you have agreed
as follows:
1. You agree to, and do hereby, tender your resignation as Chairman
of the Board of the Company, effective as of the Closing Date
(as hereinafter defined);
2. The Employment Agreement between you and the Company, dated as
of April 11, 1997 (the "Employment Agreement"), shall be
terminated without cause, effective as of the Closing Date and
pursuant to the terms of the Employment Agreement, the Company
shall pay to you the sum of $104,166.67 (representing
$100,000.00 severance and one-half month's salary) at the
Closing (as hereinafter defined);
3. Pursuant to the terms of the Employment Agreement, the Company
shall purchase from you the 280,000 shares of the Company's
common stock owned by you, and the Non-Qualified Stock Option
Agreement between the Company and you, dated as of April 11,
1997, shall terminate effective as of the Closing Date, in
consideration of the Company's payment to you at the Closing of
the total aggregate sum of $700,000.00;
4. Pursuant to the terms of the Employment Agreement, your covenant
not to compete shall terminate effective as of the Closing Date.
Thereafter you shall be free to pursue on your own behalf any
hotel prospects you have presented to the Company during your
tenure on the Board of Directors;
5. The Company agrees to transfer to you the tradename "Hotels of
Distinction," at the Closing, by Xxxx of Sale in form and
content mutually agreed upon (the "Bill of Sale"), and the
Company agrees to change the name of its subsidiary Hotels of
Xx. Xxxx Xxxxxxx
Hotels of Distinction
June 22, 1998
Page 2
Distinction, Inc. to a different name as soon as practicable
following the Closing Date;
6. Any press release covering your resignation as Chairman of the
Board and the termination of your employment with the Company
shall be mutually agreed upon prior to its dissemination;
7. Effective July 1, 1998, the Company shall terminate all expenses
relating to the office currently utilized by Hotels of
Distinction, Inc. in Palm Beach, Florida. You agree to assume
all of the Company's obligations under the office lease
beginning July 1, 1998, and take possession and ownership of all
furniture and fixtures located in such office (which shall be
conveyed to you pursuant to the terms of the Bill of Sale);
8. With the exception of the name Hotels of Distinction and the
assets described in paragraph 7 hereof, you acknowledge that the
Company is retaining the corporate entity Hotels of Distinction,
Inc., and all assets owned by it.
9. The Closing of this transaction (the "Closing") shall occur
through the mails, or via facsimile, on or before Friday, June
26, 1998. The actual date of Closing shall be called the
"Closing Date."
10. At the Closing, the Company shall deliver to you a Certified
Corporate Resolution authorizing the transactions contemplated
hereby.
11. At the Closing, the Company and you shall execute and deliver a
Mutual General Release and Indemnification Agreement with
respect to matters arising out of your employment relationship
with the Company and your capacity as Chairman of the Board of
Directors of Company, in a form and content to be mutually
agreed upon.
12. At the Closing, the Company shall cause to be delivered to you a
legal opinion from XxXxxx & Xxxxxxx, a professional corporation,
that the transactions contemplated hereby comply with the
Company's Certificate of Incorporation and Bylaws and that all
authorizations or consents required to consummate the
transactions contemplated hereby have been obtained.
13. At the Closing, you agree to deliver, or cause to be delivered,
the original Stock Certificates covering the 280,000 of the
Company's common stock owned by you, properly endorsed for
transfer, and deliver the original of your Non-Qualified Stock
Option Agreement.
Xx. Xxxx Xxxxxxx
Hotels of Distinction
June 22, 1998
Page 3
14. The Closing of the transactions contemplated by this Letter
Agreement is subject to the prior approval of the Board of
Directors of the Company, and upon receipt thereof, the Company
shall wire transfer to you the sum of $700,000.00, and the
other sums payable to you pursuant to paragraph 2 hereof;
If the above accurately sets forth all of our agreements and
understandings with respect to your resignation as Chairman of the Board of the
Company and the termination of your employment with the Company, please execute
a copy of this Letter Agreement and return it to me.
I greatly appreciate the contributions you have made to the Company, and
sincerely regret that changes to the Company's business plan have resulted in
the discontinuance of our formal relationship.
Sincerely,
BFX HOSPITALITY GROUP, INC.
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx, Chief Executive
Officer
ACCEPTED AND AGREED
this 24th day of June, 1998.
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/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
