EXHIBIT 10.12
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT, ("Agreement") is entered into and is
effective on this __ day of September, 1995, by and between Host Funding, Inc.,
a Maryland corporation, (the "Company") and Guy E. and Xxxxxxx Xxxxxxxx
("Xxxxxxxx"), with reference to the following facts:
A. On April 1, 1995, the Company acquired four limited-service hotels
from an affiliate of Xxxxxxxx pursuant to an agreement known as the Contribution
and Assumption Agreement.
B. Late in 1995, the Company will consummate various transactions (the
"Formation Transactions") which will cause the Company to become involved in the
acquisition of hotel properties throughout the United States, with an emphasis
on the limited-service segment of the hotel industry.
C. Xxx X. Xxxxxxxx is a Non-Independent Director of the Company and
Xxxxxxx Xxxxxxxx is the wife of Xxx X. Xxxxxxxx.
X. Xxxxxxxx and/or his affiliates own numerous limited-services hotels
throughout the United States.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
conditions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. PURPOSE
The purpose of this Agreement is to establish guidelines for the
competitive relationship between the Company and Xxxxxxxx and/or his affiliates.
2. NON-COMPETITION
Xxxxxxxx agrees that, for a period of five (5) years from the date of this
Agreement, he shall not:
(A) Enter, directly or indirectly, into the employment of, or
render, directly or indirectly, any services (whether as a
director, officer, agent, representative, independent contractor,
consultant or advisor or any other similar relationship or
capacity),to any Person (such person is referred to as a
"Competitor") which provides those services, or which otherwise
competes with, or carries on a similar business to any business
now carried on by the Company within five (5) miles of the
counties in which the Company carries on a similar business (the
"Territory"), whether such business is carried on by the Company
or by a successor or assign in any of these counties;
(B) Engage, directly or indirectly, in any such business in the
Territory as a Competitor;
(c) Become interested, directly or indirectly, in any such
Competitor as an individual proprietor, franchisee, partner,
joint venturer, stockholder, principal, member, investor, trustee
or any other similar other relationship or capacity;
(D) Directly or indirectly, by sole action or in concert with
others, solicit, induce or influence, or seek to solicit, induce
or influence, any Person who is engaged by the Company as an
employee, agent, independent contractor or otherwise, to leave
the employ of the Company or any successor or assign;
(E) Directly or indirectly, by sole action or in concert with
others, solicit,
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induce or influence, or seek to solicit, induce or influence, any
customer or client of the Company; and
(F) Use, divulge, furnish or make accessible to any Person
(other than at the written request of the Company) any secret,
confidential or proprietary knowledge or information of the
Company including, but not limited to, any trade secrets,
financial information, customer or client lists, marketing
methods, data, properties, specifications, personnel
organization or internal affairs of the Company.
3. SEPARATE COVENANTS
The agreements contained in Section 2 shall be construed as a series of
separate covenants, one for each activity Xxxxxxxx and his affiliates, capacity
in which Xxxxxxxx and his affiliates are prohibited from competing and each part
of the Territory in which the Company is carrying on in such activity.
4. INTENT; SEVERABILITY
The parties to this Agreement recognize that the territorial and time
restrictions set forth herein are reasonable, not burdensome and are properly
required for the adequate protection of the Company and its stockholders. If
such territorial or time restrictions or any other provision contained herein
shall be deemed to be illegal, unenforceable or unreasonable by a court of
competent jurisdiction, Xxxxxxxx agrees to submit to the reduction of such
territorial or time restriction or other provision to such an area or period as
such court shall deem reasonable.
5. INJUNCTIVE RELIEF
Xxxxxxxx acknowledges that (i) the covenants and the restrictions contained
in Section 2 are
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a material factor to his execution of the Agreement and are necessary and
required for the protection of the Company, (ii) such covenants relate to
matters that are of a special, unique and extraordinary character that gives
each of such covenants a special, unique and extraordinary value, and (iii) a
breach of any of such covenants will result in irreparable harm and damages to
the Company in an amount difficult to ascertain and which cannot be adequately
compensated by a monetary award. Accordingly, in addition to any of the relief
to which the Company may be entitled at law or in equity, the Company shall be
entitled to temporary and/or permanent injunctive relief from any breach or
threatened breach by Xxxxxxxx of the provisions of Section 2 without proof of
actual damages that have been or may be caused to the Company by such breach or
threatened breach.
6. EXCEPTION TO COVENANTS
The parties hereby agree that there shall be one (1) exception to the
covenants made by Xxxxxxxx in Section 2 of this Agreement. The terms of the
exception are the following:
(A) Notwithstanding the terms of this Agreement, and more
specifically, the covenants contained in Section 2 of this
Agreement, Xxxxxxxx and/or his affiliates shall have the right to
own, operate, and manage the hotel known as the Xxxxxxxx Inn
located in Sikeston, Missouri.
(B) Additionally, Xxxxxxxx and/or his affiliates are not subject
to the covenants contained in Section 2 of this Agreement with
respect to and only with respect to the Xxxxxxxx Inn located in
Sikeston, Missouri.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Xxxxxxxx as follows:
(A) Host Funding has full power and authority to enter into this
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Agreement.
(B) This Agreement constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms.
8. GENERAL.
(A) The parties hereby confirm and ratify the matters contained
and referred to in the preamble to this Agreement and agree that
the same are expressly incorporated into this Agreement.
(B) This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes all
prior and contemporaneous agreements, understandings and
negotiations, whether oral or written, and there are no other
general or specific warranties, representations or other
agreements except as herein specifically set forth.
(c) Whenever the singular, plural, masculine, feminine or neuter
is used throughout this Agreement the same shall be construed as
meaning the singular, plural, masculine, feminine or neuter
wherever the fact or context so requires.
(D) All of the covenants, warranties and representations
contained in this Agreement shall survive the closing and
completion of this transaction and shall not merge on the closing
of the transaction, but shall continue to be in full force and
effect for the benefit of the parties.
(E) The parties hereto covenant and agree to do such things and
execute such further documents, agreements, instruments or
assurances as may
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reasonably be required by any other party hereto from time to
time in order to carry out the terms of this Agreement in
accordance with their true intent.
(F) This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland. The parties
hereto submit to the jurisdiction of the Courts of the State of
Maryland in connection with any dispute under this Agreement.
(G) Time shall be of the essence of this Agreement.
(H) This Agreement shall be binding upon and inure to the
benefit of the parties and their respective heirs, executors,
administrators, successors and assigns.
(I) This Agreement may be signed or executed in separate
counterparts and the signing or execution of each counterpart
shall have the same effect as the signing or execution of a
single original document.
(J) Representations and warranties of the parties hereto shall
survive the closing of the transaction contemplated herein.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
hereinabove written.
"XXXXXXXX"
____________________________________
Xxx X. Xxxxxxxx
____________________________________
Xxxxxxx Xxxxxxxx
"THE COMPANY"
HOST FUNDING, INC.
a Maryland corporation
____________________________________
By: Xxxxxxx X. XxXxxxx
Its: President
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