EXHIBIT 6
United Inns, Inc.
c/o Smith Barney, Inc.
1343 Avenue of The Americas
New York, New York 10007
November 4, 1994
United/Harvey Holdings, L.D.
c/o The Hampstead Group, Inc.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, TX 75201
Attention: Robert Whitman
Harvey Hotel Company, Ltd.
14400 Dallas Parkway
Suite 400
Dallas, TX 75240
Attention: J. Peter Kline
Ladies and Gentlemen:
In connection with your proposal to us dated October 31, 1994, as amended
on the date hereof ("Your Proposal"), we are pleased to advise you that we will
enter into exclusive negotiations with you regarding the definitive terms of a
business combination between the two parties based upon Your Proposal. This
will confirm that we expect to proceed immediately to negotiate the definitive
documentation in order to arrive at definitive documentation acceptable to each
of us.
In order to induce you to commence negotiations to arrive at the
definitive documentation, United agrees to the following:
1. NO SHOP, ETC.
From and after the execution of this letter United shall
immediately cease and cause to be
terminated any existing negotiations, or prior negotiations with any
party previously conducted, with respect to a business combination
or a change in control (a "Change in Control Transaction").
Further, from and after the execution of this letter, United
shall not, and will cause it respective representatives not to,
solicit any offers from any other party relating to a Change of
Control Transaction during the period preceding the signing of a
definitive agreement, but not later than January 31, 1995 (the
"Exclusivity Period").
In addition, except as may otherwise be required by fiduciary
obligations under applicable law, as advised by counsel, in respect
of an Unsolicited Proposal (as defined below), United shall, during
the Exclusivity Period, exclusively negotiate with you in good faith
to reach a definitive agreement and to enter into definitive
documentation relating to a business combination.
Subject to applicable legal requirements including our
obligations under the various State and Federal securities acts and
the Rules of the New York Stock Exchange, the contents of this
letter and the transactions contemplated hereby and all negotiations
related hereto and thereto will be held confidential and not
disclosed by
United without your prior approval (which approval will not be
unreasonably withheld). We call to your attention that, because
United has filed a Registration Statement on Form S-1 with the
Securities and Exchange Commission covering the sale of 60,000
shares of stock, we believe that additional disclosure regarding a
business combination, which may include disclosure of the existence
of, and some terms of, this letter, may be required.
2. UNSOLICITED PROPOSALS.
In the event that, after execution of this agreement and
during the Exclusivity Period, United receives an unsolicited
proposal providing for a Change in Control Transaction from any
person or entity who or which was not given an opportunity prior to
the date hereof to propose a Change in Control Transaction, which
unsolicited proposal is on financial and legal terms more favorable
to United than those in Your Proposal (an "Unsolicited Proposal"),
United will notify you in writing of each such Unsolicited Proposal.
Such notice ("Proposal Notice") will state the terms and conditions
of such Unsolicited Proposal and the identity of the person or
entity making it (together with a copy of such Unsolicited
Proposal), by 5:00 p.m. Eastern Time on the
business day next following the business day on which it receives
the Unsolicited Proposal.
If United, in the exercise of its fiduciary duties under
applicable law, elects to commence negotiations with respect to such
Unsolicited Proposal (which election shall be made promptly after
receipt of the Unsolicited Proposal, and which election shall be
communicated to you by facsimile transmission prior to commencement
of such negotiations), you shall have the option to terminate your
negotiations with United, whereupon you shall be entitled to your
expenses as provided in Section 3 hereof and your applicable
termination fee as provided in Section 4 hereof.
If you elect to terminate negotiations with us, you shall, as
soon as practicable, advise us of such decision by delivery of a
facsimile transmission.
3. REIMBURSEMENT OF EXPENSES IN CERTAIN CIRCUMSTANCES.
If (i) you elect to terminate our negotiations as set forth in
Section 2 or (ii) United enters into an agreement providing for a
Change in Control Transaction with any person other than you (or
your affiliates) prior to January 31, 1995, United agrees to
reimburse you for all your reasonable, out-of-pocket expenses
incurred, from and after October 26, 1994, relating to the matters
contemplated in Your Proposal, but only as they relate to United's
assets and the documentation with United, in an amount not to exceed
$500,000. We contemplate that such expenses will include Phase I
and Phase II Environmental audits and structural engineering audits
of United's assets, accounting and legal fees relating to an
analysis of the Tennessee franchise and excise tax situation and
attorneys' fees arising from the documentation of, and other
reasonable out-of-pocket expenses relating to, any business
combination relating to United only.
4. TERMINATION FEE.
If (i) you elect to terminate our negotiations as set forth in
Section 2 or (ii) United enters into an agreement providing for a
Change in Control Transaction with any person other than you (or
your affiliates) prior to January 31, 1995. United agrees to pay
you a fee, which is in addition to reimbursing you for expenses
under Section 3 above, in the amount of $500,000 if the Proposal
Notice is delivered to you, or such agreement is entered into, on or
before November 10, 1994; in the amount of $1,000,000 if the
Proposal Notice is delivered to you, or such agreement is entered
into, after November 10 and on or before November 20, 1994;
and in the amount of $1,500,000 if the Proposal Notice is delivered
to you, or such agreement is entered into, after November 20, 1994
and during the balance of the Exclusivity Period.
5. INDEMNITY.
United will, upon your request, indemnify and hold you and
your respective affiliates and representatives, harmless for any
loss, cost, damage, expense (including reasonable attorneys' fees
and charges) or liability relating to, resulting from or arising out
of any action, suit or proceeding initiated by any shareholder,
other security holder or lender of United, any employee or former
employee of United or by any other person or entity (including any
other potential bidder and any governmental authority) based upon or
relating to, in whole or in part, facts arising out of our
negotiations during the Exclusivity Period or relating to this
letter agreement.
Sincerely,
UNITED INNS, INC.
By: /s/ Don Wm. Cockroft
--------------------
Don Wm. Cockroft
President
Accepted and agreed to
as of the date first
above written:
UNITED/HARVEY HOLDINGS, L.P.
By: /s/ Donald J. McNamara
-------------------------
Donald J. McNamara
Duly Authorized
HARVEY HOTEL CO., LTD.
By: /s/ J. Peter Kline
--------------------------
J. Peter Kline
Duly Authorized