Exhibit 4
JQH ACQUISITION, LLC
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
GIC REAL ESTATE, INC.
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
February 3, 2005
Special Committee of the Board of Directors of
Xxxx X. Xxxxxxx Hotels, Inc.
Xxxx X. Xxxxxxx Hotels, Inc.
300 Xxxx X. Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
RE: EXCLUSIVITY AGREEMENT
Gentlemen:
Reference is made to (i) that certain Proposal (the "PROPOSAL") to Acquire
Xxxx X. Xxxxxxx Hotels, Inc., dated January 31, 2005, from JQH Acquisition, LLC
and GIC Real Estate, Inc. (collectively, "INVESTOR") to the Special Committee
(the "SPECIAL COMMITTEE") of the Board of Directors of Xxxx X. Xxxxxxx Hotels,
Inc. (the "COMPANY"), and (ii) that certain Confidentiality Agreement (the
"CONFIDENTIALITY AGREEMENT") dated as of November 19, 2004 between JD Holdings,
LLC and the Company.
1. REAFFIRMATION OF PROPOSAL. Investor hereby reaffirms its interest in
pursuing the transactions set forth in the Proposal, subject to the terms and
conditions contained therein.
2. EXCLUSIVITY. In consideration of Investor's willingness to continue to
pursue the transactions contemplated by the Proposal and to spend the
significant time and resources related thereto, the Company agrees that it will
immediately discontinue any existing solicitation, initiation, encouragement,
activity, discussion or negotiation with any persons conducted prior to the date
hereof by the Company or any of its affiliates, directors, officers, employees,
advisors, agents or representatives (collectively, the "REPRESENTATIVES"), with
respect to any proposed, potential or contemplated Alternative Transaction (as
defined below). The Company also agrees that through and including midnight,
central standard time on February 28, 2005 (the "EXCLUSIVITY PERIOD"), it will
not, and will not authorize or permit any of its affiliates or any of the
Company's or its 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. The foregoing
provisions shall not apply to solicitations or discussions pursued independently
by Xx. Xxxx X. Xxxxxxx ("XX. XXXXXXX") which have not been directly or
indirectly authorized or encouraged by the Company's Board of Directors or any
committee or Representatives thereof other than Xx. Xxxxxxx or any other person
(other than members of the Special Committee of the Board of Directors and their
Representatives) acting on behalf or at the direction of Xx. Xxxxxxx, it being
understood and agreed that Investor contemplates entering into a separate
agreement providing for exclusivity from Xx. Xxxxxxx. In the event that, during
the Exclusivity Period, the Company receives an offer, proposal or similar
communication regarding an Alternative Transaction, the Company shall promptly
deliver written notice of such communication to Investor, 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,
Xxxx X. Xxxxxxx Hotels, L.P. (the "PARTNERSHIP"), or any of their respective
subsidiaries or affiliates (collectively, the "XXXXXXX ENTITIES") or involving
the Xxxxxxx Entities, (ii) merger, consolidation, share exchange or acquisition
of the Xxxxxxx Entities, (iii) sale of any material amount of assets of the
Xxxxxxx Entities, (iv) direct or indirect acquisition or purchase of any capital
stock, partnership interests or other equity interests of the Xxxxxxx Entities
or any tender officer or exchange offer, that if consummated would result in any
person (other than Xx. Xxxxxxx and entities controlled by him) beneficially
owning 20% or more of any class of equity securities of the Xxxxxxx Entities, or
any of its subsidiaries or any option or right to acquire such securities, (v)
any similar transaction or business combination involving the Xxxxxxx Entities
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
in the Proposal (including, without limitation, a Xxxxxxx Transaction (as
defined therein), that, in each of the cases outlined in items (i) through (vi)
above, does not involve Investor (or one of its designees) on terms acceptable
to it in its sole discretion.
During the Exclusivity Period, the parties shall negotiate in good faith to
complete transactions contemplated in the Proposal.
3. FEES AND EXPENSES; EFFECT OF ALTERNATIVE TRANSACTION. Except as set
forth below or as may otherwise be mutually agreed upon in any definitive
transaction agreement, each of the Company and Investor will pay its own fees
and expenses (including the fees and expenses of legal counsel, investment
bankers, brokers or other representatives or consultants) in connection with the
transactions contemplated hereby; provided that if the transactions contemplated
hereby are consummated, the Company will bear the reasonable out-of-pocket fees
and expenses of Investor.
In addition, in the event that (i) Investor presents to the Committee definitive
agreements in respect of a Xxxxxxx Transaction which have been fully-negotiated
with Xx. Xxxxxxx; (ii) Xx. Xxxxxxx confirms to the Committee in writing that,
with the Committee's approval, Xx. Xxxxxxx is prepared to execute such
documents; and (iii) thereafter, the transactions contemplated herein are not
consummated and the Company consummates an Alternative
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Transaction within 12 months following termination of negotiations between the
Company and Investor, then the Company shall pay to Investor, immediately upon
such consummation, the sum of $2.5 million in immediately available funds.
4. ACCESS TO INFORMATION; AUTHORIZATION. The Company will, and will cause
the other Xxxxxxx Entities and their respective Representatives to, afford to
Investor and its representative, lawyers, consultants, agents, lenders and
investors full and complete access to the properties, business, personnel
(including outside accountants and lawyers), distributors, financial, legal,
accounting, tax, and other data and information relating to the Company as
requested by any of them or their representatives or agents for purposes of
evaluating the transactions contemplated by the Proposal.
5. COMMUNICATIONS WITH STOCKHOLDERS. Notwithstanding any provision of the
Confidentiality Agreement to the contrary, the Company hereby authorizes
Investor and JD Holdings (who shall be deemed to be an intended third-party
beneficiary of this letter agreement) to keep apprised of our negotiations those
persons who directly or beneficially own or control shares of the Company's
Class A Common Stock and with whom Investor has entered into a Stockholders'
Agreement or has engaged in substantive discussions with respect thereto as of
the date hereof and who have signed confidentiality agreements with either JQH
Acquisition, LLC or JD Holdings, LLC.
6. COUNTERPARTS; GOVERNING LAW; LIMITED BINDING EFFECT; TERMINATION. This
letter agreement may be executed in two or more counterparts (any of which may
be by facsimile signature). This letter agreement shall be governed by the
substantive laws of the State of Delaware, and when signed by each of the
parties listed on the signature page hereto, will be a binding agreement between
the parties hereto. This letter agreement shall not impose upon any party the
obligation to actually consummate a transaction, but is binding upon the parties
hereto with respect to the subject matter hereof. 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 (i)
any rights any party has with respect to the breach of this letter agreement
prior to any such termination, or (ii) the obligations of each party set forth
in Section 3 of this letter agreement, which shall survive the termination of
this letter agreement. The Company acknowledges that if it fails to perform any
of its obligations under this letter agreement during the Exclusivity Period,
immediate and irreparable harm or injury might be caused to Investor for which
money damages would not be an adequate remedy. In such event, the Company agrees
that Investor shall have the right, in addition to any other rights and remedies
it may have, to seek specific performance of this letter agreement (without the
necessity of posting a bond or other security).
7. ENTIRE AGREEMENT. This letter agreement and the Confidentiality
Agreement, set forth the entire understanding of the parties with respect to the
transactions contemplated hereby and thereby, and this letter agreement
supercedes all prior discussions, understandings, agreements and representations
by or between the parties other than as expressly set forth in the
Confidentiality Agreement, and this letter agreement shall not be modified or
amended except by a written agreement executed and delivered by each of the
parties hereto.
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* * * * *
If you are in agreement with the terms set forth above, please sign in the
space provided below and return an executed copy to us.
Sincerely,
JQH ACQUISITION, LLC
/s/ XXXXXXXX X. XXXXXX
------------------------------
By: Xxxxxxxx X. Xxxxxx
Its: Managing Member
GIC REAL ESTATE, INC.
/s/ XXXXXX XXXXXXXX
-----------------------------
By: Xxxxxx Xxxxxxxx
Its: Senior Vice President
ACCEPTED AND AGREED as of
February 3, 2005
Xxxx X. Xxxxxxx Hotels, Inc.
By: /S/ XXXXX XXXXXXXXX
------------------------
Its: President
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