Exhibit 12
April 29, 2005
CONFIDENTIAL
Xx. Xxxx X. Xxxxxxx
300 Xxxx X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Re: Exclusivity Agreement
Dear Xx. Xxxxxxx:
As you know, the Special Committee of the Board of Directors of Xxxx X. Xxxxxxx
Hotels, Inc. (the "Company") has agreed to conduct exclusive negotiations with
the undersigned regarding a potential acquisition transaction (a "Company
Transaction"). As a condition to entering into a definitive agreement with the
Company, we must enter into a definitive agreement with you and your affiliates
regarding the acquisition of your equity interests in the Company and Xxxx X.
Xxxxxxx Hotels. L.P. ("JQH LP") and the related agreements regarding the
provision of a line of credit, management arrangements, and the other matters we
have discussed (collectively, a "Xxxxxxx Transaction").
In light of the significant resources that we have and will continue to devote
to the consummation of the proposed transaction, by signing this letter, you
agree to discontinue immediately any existing solicitation, initiation,
encouragement, activity, discussion or negotiation with any persons conducted
prior to the date hereof by you or any of your affiliates, advisors, agents or
representatives (collectively, the "Representatives"), with respect to any
proposed, potential or contemplated Alternative Transaction (as defined below).
You also agree that, through midnight central daylight time on May , 2005 (the
"Exclusivity Period"), you will not, and will not authorize or permit any of
your affiliates or any of your or your affiliates' Representatives to, directly
or indirectly, (i) solicit or initiate, or encourage the submission of, any
proposal or indication of interest relating to an Alternative Transaction, (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Alternative Transaction or (iii) authorize, approve,
consummate, engage in, or enter into any agreement with respect to, any
Alternative Transaction. In the event that, during the Exclusivity Period, you
receive an offer, proposal or similar communication regarding an Alternative
Transaction, you shall promptly deliver written notice of such communication to
the undersigned, including reasonable detail of the substance thereof.
For purposes of this letter, "Alternative Transaction" means any (i)
reorganization, dissolution, liquidation or recapitalization of the Company, JQH
LP or any of their respective subsidiaries or
Xx. Xxxx X. Xxxxxxx CONFIDENTIAL
April 29, 2005
Page 2
involving the Company, JQH LP or any of their respective subsidiaries, (ii)
merger, consolidation, share exchange or acquisition of the Company, JQH LP or
any of their respective subsidiaries, (iii) sale of any material amount of
assets of the Company, JQH LP or any of their respective subsidiaries, (iv)
direct or indirect acquisition or purchase of any capital stock, partnership
interests or other equity interests of the Company, JQH LP or any of their
respective subsidiaries that you or any of your affiliates beneficially own, (v)
any similar transaction or business combination involving the Company, JQH LP or
any of their respective subsidiaries or their respective businesses, capital
stock, partnership interests, other equity interests or assets or (vi) other
transaction the consummation of which would prevent, impede or delay the
consummation of the transactions contemplated hereby that, in each of the cases
outlined in items (i) through (vi) above, does not involve the undersigned on
terms acceptable to us in our sole discretion.
During the Exclusivity Period, we and our affiliates and you and your affiliates
agree to negotiate in good faith to complete the transactions contemplated
herein.
Except as required by applicable law, you agree that you shall not, and shall
not permit your Representatives to, directly or indirectly, disclose to any
person other than your Representatives (who shall be made aware of this
paragraph) the fact that any discussions or negotiations concerning a possible
Company Transaction or Xxxxxxx Transaction are taking place or the status
thereof.
The Special Committee has authorized us to enter into this exclusivity agreement
with you.
This letter agreement shall not impose upon any party the obligation to actually
consummate a transaction. This letter agreement will automatically terminate and
be of no further force and effect upon the expiration of the Exclusivity Period.
Notwithstanding anything to the contrary contained herein, the termination of
this letter agreement will not affect any rights any party has with respect to
the breach of this letter agreement prior to any such termination.
This letter agreement sets forth the entire understanding of the parties with
respect to the transactions contemplated hereby and this letter agreement shall
not be modified or amended except by a written agreement executed and delivered
by each of the parties hereto.
Xx. Xxxx X. Xxxxxxx CONFIDENTIAL
April 29, 2005
Page 3
If you are in agreement with the terms set forth above and desire to proceed
with the transactions contemplated hereby on that basis, please sign in the
space provided below and return an executed copy to us.
Yours sincerely,
JQH Acquisition LLC
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
Managing Member
ACCEPTED AND AGREED as of
April 29, 2005
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
