EXHIBIT 10.5
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is dated as of
June 27, 2003, by and among Xxxxxxx Properties, Inc., a Maryland corporation
(the "Company") and Xxxxxx X. Xxxxxxx III (the "Executive").
WHEREAS, the Executive and certain other entities directly or
indirectly owned or controlled by the Executive entered into a Contribution
Agreement, dated as of November 11, 2002 (the "Contribution Agreement"),
pursuant to which the Executive agreed to contribute to the Operating
Partnership, all of his and their right, title and interest, as a partner or
member, in each of the partnerships and limited liability companies which hold
an interest in certain office and other properties located in Southern
California and Texas (the "Contributed Properties"), in exchange for a limited
partnership interest in Xxxxxxx Properties, L.P., a Maryland limited partnership
(the "Operating Partnership"), the general partner of which is the Company;
WHEREAS, concurrently with the execution of this Agreement, the Company
and the Executive have entered into an employment agreement, pursuant to which
the Company has agreed to employ the Executive, and the Executive has agreed to
be employed by the Company, as its Co-Chief Executive Officer ("Co-CEO"), and
the Executive desires to serve on the Company's Board of Directors as Chairman
of the Board ("Chairman") if nominated and elected (the "Employment Agreement");
and
WHEREAS, the Company and the Executive agree that, in connection with
the contribution of the Contributed Properties to the Operating Partnership and
the execution of the Employment Agreement and the Executive's employment, the
Executive will not engage in competition with the Company pursuant to the terms
and conditions hereof.
NOW, THEREFORE, in furtherance of the foregoing and in exchange for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Noncompetition.
(a) For as long as the Executive is employed as Co-CEO by the
Company (or any successor thereto) or serves as Chairman of the Board of
Directors of the Company (or the Board of Directors of any successor to the
Company) and for one year after ceasing to serve in either capacity, whichever
is later, the Executive shall be prohibited from engaging in Competition (as
defined below) with the Company or any of its subsidiaries or affiliates.
(b) The term "Competition" for purposes of this Agreement
shall mean the taking of any of the following actions by the Executive: (i) the
conduct, directly or indirectly, of any business involving real property
development, acquisition, sale or management, whether such business is conducted
by the Executive individually or as principal, partner, officer, director,
consultant, employee, stockholder or manager of any person, partnership,
corporation, limited liability company or any other entity; and (ii) ownership
of interests in real property which are competitive, directly or indirectly,
with any business carried on by the Company (or any successor thereto) or its
subsidiaries or affiliates; provided, however, that the term "Competition" shall
be deemed to exclude (A) the Executive's ownership, entitlement, development,
financing, management, leasing, marketing, entitlement, sale, transfer or
exchange of any of the Executive's interests in any of the properties listed on
Schedule A hereto, so long as the Company or any of its subsidiaries or
affiliates has the exclusive right to develop, manage or lease such properties
(other than the Water's Edge project), (B) the Executive's ownership,
entitlement, development, financing, management, leasing, marketing,
entitlement, sale, transfer or exchange of any of the Executive's interests in
that certain project in the City of Los Angeles, California located at 740 S.
Olive, (C) direct or indirect passive ownership interests in the properties and
entities listed on Schedule B hereto, (D) the direct or indirect ownership by
the Executive of up to five percent of the outstanding equity interests of any
public company, (E) residential real estate, and (F) during the one year "tail"
period set forth in Section l(a) only, the Executive's conduct of business or
ownership of property in geographical areas other than the geographical areas in
which the Company or any of its subsidiaries or affiliates conducts business.
(c) If the Executive's employment is terminated by the
Company without Cause (as defined in the Employment Agreement), by the
Executive for Good Reason (as defined in the Employment Agreement) at
any time, whether before or after a Change of Control (as defined in
the Employment Agreement), or by the Executive for any reason on or
within 30 days after the one year anniversary of the effective date of
a Change in Control, the prohibitions set forth herein shall lapse on
the earlier to occur of (i) the first anniversary of the date of
termination of the Executive's employment as Co-CEO or Chairman of the
Board, whichever is later, or (ii) the date on which the Executive
ceases to receive any cash severance payments or other material
severance benefits from the Company under the Employment Agreement.
2. Specific Performance. The Executive acknowledges that in the event
of breach by the Executive of the terms of Section 1 hereof, the remedies at law
available to the Company and to the Operating Partnership may be inadequate and
the Company and the Operating Partnership shall be entitled to specific
performance of this Agreement by the Executive and to enjoin the Executive from
any further violation of Section 1 hereof and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law and not otherwise limited by this Agreement. The Executive hereby
acknowledges and agrees that the Company shall not be required to post bond as a
condition to obtaining or exercising such remedies, and the Executive hereby
waives any such requirement or condition.
3. Attorneys Fees. If any legal action, arbitration or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach or default in connection with any of the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or proceeding, including
any appeal of such action or proceeding, in addition to any other relief to
which that party may be entitled.
4. Severability. Any provision of this Agreement which is deemed
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that any other
provisions of this Agreement invalid, illegal or unenforceable in any other
jurisdiction. Notwithstanding the foregoing, if any provision of this Agreement
should be deemed invalid, illegal or unenforceable because its scope or duration
is considered excessive, such provision shall be modified so that the scope of
the provision is reduced only to the minimum extent necessary to render the
modified provision valid, legal and enforceable.
5. Governing Law. This Agreement shall be governed, construed,
interpreted and enforced in accordance with the laws of the State of California,
without regard to the conflict of laws principles thereof.
6. Entire Agreement. This Agreement, together with the Employment
Agreement, contains the entire agreement and understanding between the Company,
the Operating Partnership and the Executive with respect to the subject matter
hereof, and no representations, promises, agreements or understandings, written
or oral, not herein contained shall be of any force or effect. This Agreement
shall not be changed unless in writing and signed by both the Executive and the
Board of Directors of the Company.
7. Assignment. This Agreement may not be assigned by the Executive, but
may be assigned by the Company and the Operating Partnership to any successor to
its business and will inure to the benefit of and be binding upon any such
successor.
8. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) when personally delivered, (ii) when
transmitted by telecopy, electronic or digital transmission with receipt
confirmed, (iii) one day after delivery to a nationally recognized overnight air
courier guaranteeing next day delivery, or (iv) upon receipt if sent by
certified or registered mail. In each case, notice shall be sent to:
If to the Executive: Xxxxxx X. Xxxxxxx III
c/o Maguire Partners
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Phone: (000)000-0000
Facsimile: (000)000-0000
If to the Company
and to the Operating Partnership: Xxxxxxx Properties, Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Phone: (000)000-0000
Facsimile: (000)000-0000
Attn: Xxxx Lammas
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Executive's Acknowledgment. The Executive acknowledges (a) that he
has had the opportunity to consult with independent counsel of his own choice
concerning this Agreement, and (b) that he has read and understands this
Agreement, is fully aware of its legal effect, and has entered into it freely
based on his own judgment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
Xxxxxxx Properties, Inc.,
a Maryland corporation
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Chief Financial Officer
Xxxxxxx Properties, L.P.,
a Maryland limited partnership
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
Its: General Partner
By: /s/ Xxxxxx Xxxxx
------------------------------------
Xxxxxx Xxxxx
Chief Financial Officer
Xxxxxx X. Xxxxxxx III
/s/ Xxxxxx X. Xxxxxxx III
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SCHEDULE A
TO
NONCOMPETITION AGREEMENT
Properties Excluded from the Noncompetition Agreement
1. That certain parking garage in the City of Los Angeles, California
located at the xxxxx of 00xx Xxxxxx xxx Xxxxx Xxxxxx, commonly referred
to as the 17th & Grand garage or the Grand Avenue garage;
2. That certain office and retail project in the City of Santa Monica,
California, located at 0000 Xxxxx Xxxxxx, commonly referred to as 1733
Ocean;
3. That certain office and retail project in the City of Pasadena,
California, located at 000 Xxxxxxxx Xxxxxxxxx, commonly referred to as
Plaza Las Xxxxxxx Phase II;
4. That certain office and retail campus in Westlake, Texas, commonly
referred to as Solana (including the undeveloped land located adjacent
to the Solana campus, intended for development as subsequent phases of
the existing Solana campus); and
5. That certain office and retail project in the County of Los Angeles,
California located at the xxxxx of Lincoln Boulevard and Jefferson
Boulevard, commonly referred to as Water's Edge.
SCHEDULE B
TO
NONCOMPETITION AGREEMENT
Passive Properties/Interests Excluded from the Noncompetition Agreement
1. That certain office located in Philadelphia, Pennsylvania, commonly
referred to as Commerce Square Phase I;
2. That certain office located in Philadelphia, Pennsylvania, commonly
referred to as Commerce Square Phase II;
3. Playa Capital Company LLC - Promote Interest;
4. Playa Capital Company LLC - Investment Reimbursement;
5. Playa Phase I Commercial Land Company, LLC - Promote Interest;
6. Playa Phase I Commercial Land Company, LLC - Co-Investment Interest;
7. Playa Phase I Commercial Land Company, LLC - Investment Reimbursement;
8. Playa Area C Capital Company, LLC - Promote Interest;
9. Playa Area C Capital Company, LLC - Investment Reimbursement;
10. Marina Vista Company, LLC - Promote Interest;
11. Marina Vista Company, LLC - Investment Reimbursement; and
12. Playa Commercial Debt Company, LLC - Co-Investment Interest.
