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EXHIBIT 10.11
NONCOMPETITION AGREEMENT
BETWEEN
XXXXXX LODGING COMPANY
AND
THE XXXXXX PARTIES
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NONCOMPETITION AGREEMENT
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THIS NONCOMPETITION AGREEMENT (the "Agreement") is entered
into as of ____________________, 1996, between Xxxxxx Lodging Company, an
Ohio corporation (the "Company"), and each of the parties listed on Annex A
attached hereto (each, a "Xxxxxx Party," and collectively, the "Xxxxxx
Parties").
W I T N E S S E T H:
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WHEREAS, the Company was formed to own, develop, acquire and
manage hotel properties;
WHEREAS, certain Xxxxxx Parties are selling their hotel
properties to the Company;
WHEREAS, it is a condition to the Company's obligation to
consummate the purchase of those hotel properties that the Xxxxxx Parties enter
into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. COVENANT NOT TO COMPETE.
(a) Each Xxxxxx Party agrees not to directly or
indirectly own, manage, develop or control, or be employed or engaged by or
otherwise affiliated or associated as a consultant, independent contractor or
otherwise with, any corporation, partnership, proprietorship, firm, association
or other business entity engaged in the business of, or otherwise engage in the
business of owning, managing, developing or controlling hotel properties, except
in accordance with Section 3, below, and except that (i) any Xxxxxx Party may
(A) own not more than one percent (1%) of any class of publicly traded
securities of any entity, and own interests in the Company and in Xxxxxx Hotel
Properties, L.P. (the "Partnership"), subject only to any restriction imposed by
any agreement or instrument other than this Agreement, and (B) have such an
interest in, or participation, employment, engagement, affiliation, association
or relationship with, any entity that manages hotel properties, so long as that
entity is not engaged in the business of acquiring, owning or developing hotel
properties; and (ii)
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Xxxxxxx X. Xxxxxx may own and develop a Hampton Inn on real property currently
owned by him in Miami, Florida.
(b) The restrictions on the Xxxxxx Parties set forth in
Section 1(a) will terminate as follows: (i) with respect to Xxxxxx Management
Company Limited Liability Company ("BMCL") and its Affiliates (as defined in
Section 4), on the later of: (A) the second anniversary of the first day on
which Xxxxxx X. Xxxxxx is neither a director nor an officer of the Company and
(B) the first day on which no entity identified in this clause (i) is a lessee
of any hotel owned by the Partnership, and (ii) with respect to each Xxxxxx
Party other than those identified in clause (i) of this subsection, on the
second anniversary of the first day on which Xxxxxx X. Xxxxxx is neither a
director nor an officer of the Company.
2. NONDISCLOSURE. No Xxxxxx Party may, during the term of this
Agreement or at any time thereafter, directly or indirectly disclose, divulge,
discuss, copy or otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of, the Company, any confidential
information relating to the Company's operations or properties or otherwise
relating to its particular business or other trade secrets of the Company, it
being acknowledged by each Xxxxxx Party that all such information regarding the
business of the Company compiled or obtained by or furnished to it while it
shall have been affiliated or associated with the Company is confidential
information and the Company's exclusive property; but the foregoing restrictions
do not apply to any such information that: (A) is clearly obtainable in the
public domain, (B) becomes obtainable in the public domain, except by reason of
the breach by any Xxxxxx Party of the terms hereof, (C) was not acquired by any
Xxxxxx Party in connection with its affiliation with the Company, (D) was not
acquired by any Xxxxxx Party from the Company or its representatives, (E) is
required to be disclosed by rule of law or by order of a court or governmental
body or agency, or (F) is being used for purposes of BMCL's performance of its
obligations under any lease between BMCL and the Partnership.
3. HOTEL OPPORTUNITIES. From the date of this Agreement until
(i) with respect to each Xxxxxx Party identified in clause (i) of Section 1(b),
above, the later of (A) the first day on which Xxxxxx X. Xxxxxx is neither a
director nor an officer of the Company and (B) the first day on which no entity
identified in that clause (i) is a lessee of any hotel owned by the Partnership,
and (ii) with respect to each Xxxxxx Party other than those identified in clause
(i) of Section 1(b), above, the first day on which Xxxxxx X. Xxxxxx is neither a
director nor an officer of the Company, that Xxxxxx Party shall provide a notice
disclosing and presenting to the Company any information it acquires in
connection with any opportunity for hotel acquisition, development or ownership,
and shall not pursue that
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opportunity for its own benefit, except that Xxxxxxx X. Xxxxxx may pursue any
such opportunity for his own benefit if (x) the Company gives notice to
Xxxxxxx X. Xxxxxx of the Company's intent not to pursue that opportunity or (y)
the Company fails to give notice to Xxxxxxx X. Xxxxxx of the Company's
intentions with respect to that opportunity within 45 days after the date on
which the Company received notice of that opportunity.
4. AFFILIATE OBLIGATIONS. Each Xxxxxx Party who is an
individual shall cause any person related to him by marriage or lineal descent,
and each other Xxxxxx Party shall cause any entity controlling, controlled by or
under common control with it (each such person or entity, an "Affiliate"), to
comply with the provisions of this Agreement that apply to that Xxxxxx Party
with the same force and effect as if that Affiliate were that Xxxxxx Party and a
signatory to this Agreement.
5. INJUNCTIVE RELIEF. Each Xxxxxx Party agrees and understands
that the remedy at law for any breach by that party of Section 1 or 2 hereof
will be inadequate and that the damages flowing from that breach would not be
readily susceptible to being measured in monetary terms. Accordingly, each
Xxxxxx Party acknowledges that, upon adequate proof of its violation of any
provision of Section 1 or 2 hereof, the Company shall be entitled to immediate
injunctive relief and may obtain an order restraining any threatened or further
breach. Nothing in this Section 4 limits the Company's remedies at law or in
equity for any breach by any Xxxxxx Party of any of the provisions of Section 1
or 2 that may be pursued by the Company.
6. ACKNOWLEDGMENT. Each Xxxxxx Party has carefully considered
the nature and extent of the restrictions upon it and the rights and remedies
conferred upon the Company under this Agreement, and hereby acknowledges and
agrees that the restrictions are reasonable in duration and scope, are designed
to eliminate competition which otherwise would be unfair to the Company, are
fully required to protect the legitimate interests of the Company and do not
confer a benefit on the Company disproportionate to the detriment to that Xxxxxx
Party.
7. SEVERABILITY. The provisions of this Agreement are
severable and if any provision is determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction,
nevertheless shall be binding and enforceable.
8. BINDING EFFECT. The rights and obligations of the Company
under this Agreement shall inure to the benefit of, and shall be binding on, the
Company and its successors and assigns, and the rights and obligations of each
Xxxxxx Party under this Noncompete Agreement shall inure to the benefit of, and
shall be binding on, such Xxxxxx Party and its successors, heirs, personal
representatives and assigns. No party to this Agreement may
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assign this Agreement or any of its rights or obligations under it without the
prior written consent of the other parties.
9. NOTICES. Any notice to be given under this Agreement shall
be in writing, and if directed to the Company, shall be addressed to its
principal place of business, Attention: General Counsel and Independent
Directors, and if directed to a Xxxxxx Party, shall be addressed to the address
set forth on Annex A, or to such other address or addresses as either the
Company or a Xxxxxx Party, as applicable, may hereafter designate in a notice
sent in accordance with this Section 9.
10. WAIVER. The failure of any party to enforce any provision
of this Agreement shall not be construed as a waiver of that provision as to any
future violation thereof, or prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted the parties
herein are cumulative and the waiver of any remedy shall not constitute a waiver
of that party's right to assert all other legal remedies available to it under
the circumstances.
11. AMENDMENTS. This Agreement supersedes all prior agreements
and understandings between the parties concerning the subject matter of this
Agreement and may not be modified or terminated orally. No modification,
termination or waiver of any provision of this Agreement shall be valid unless
in writing and signed by the party against whom it is sought to be enforced.
12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
13. PRONOUNS; GENDER. Where necessary or appropriate to the
meaning hereof, the singular and plural shall be deemed to
include each other, and the masculine, feminine and neuter shall
be deemed to include each other.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
XXXXXX LODGING COMPANY
By:___________________________
Title:________________________
XXXXXX ENTERPRISES, LTD. PURCHASING CONCEPTS, INC.
By:___________________________ By:___________________________
Title:________________________ Title:________________________
XXXXXX MANAGEMENT COMPANY PILGRIM HOTEL CORP.
By:___________________________ By:___________________________
Title:________________________ Title:________________________
XXXXXX MANAGEMENT COMPANY OF THE XXXXXX COMPANY
ILLINOIS, INC.
By:___________________________ By:___________________________
Title:________________________ Title:________________________
XXXXXX MANAGEMENT COMPANY THE XXXXXX GROUP, INC.
LIMITED LIABILITY COMPANY
By:___________________________ By:___________________________
Title:________________________ Title:________________________
BOPA DESIGN COMPANY D/B/A
SPECTRUM SERVICES
By:___________________________ ______________________________
Title:________________________ Xxxx X. Xxxxxx
XXXXXX PACIFIC MANAGEMENT
COMPANY, INC.
By:___________________________ ______________________________
Title:________________________ Xxxxxxx X. Xxxxxx
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ANNEX A
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Xxxxxx Parties
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NAME ADDRESS (for each Xxxxxx Party)
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Xxxxxx Enterprises, Ltd. c/o ________________
Xxxxxx Management Company Terminal Tower, Suite 1500
Xxxxxx Management Company of Xxxxxxxxx, Xxxx 00000-0000
Illinois, Inc.
Xxxxxx Management Company Limited Liability Company
BOPA Design Company d/b/a Spectrum Services
Xxxxxx Pacific Management Company, Inc.
Purchasing Concepts, Inc.
Pilgrim Hotel Corp.
The Xxxxxx Company
The Xxxxxx Group, Inc.
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
