Exhibit 10.2
November 17, 1997
Xx. Xxxxxx Xxxxxxx
Dear Xxx:
This letter agreement sets forth the understanding between us with
respect to our engagement of you as a consultant to us. You agree to act as our
consultant upon the following terms and conditions:
1. You will use your best reasonable efforts to locate appropriate
joint venture partners for us in connection with the development and operation
of manufacturers outlet shopping centers in Japan. Your initial efforts shall
include, but not be limited to, targeting potential joint venture partners,
locating property and negotiating and structuring joint venture agreements. Our
goal is to have significant economic interests in multiple manufacturers outlet
centers in Japan. In addition, in coordination with Xxxxx X. Xxxxxxxx and Xxxxxx
X. Xxxx (or with such other persons as directed by either of them) you will
identify, and negotiate agreements relating to, new sites to be acquired or
developed by us in Hawaii.
2. In performing your consulting services, you shall coordinate your
efforts with Xxxxx X. Xxxxxxxx and Xxxxxx X. Xxxx or with such other persons as
directed by either of them. Once a joint venture has been organized, you will be
responsible for establishing and maintaining ongoing relations with, and
directing, the joint venture partners and the financial institutions providing
financing to the joint venture. In performing your services hereunder, you shall
make up to ten trips per year to Japan as we determine are needed. You shall
contact appropriate political and financial entities and seek out potential
locations. You shall report regularly to us with respect to your visits and
activities, including advising us of local issues and opportunities.
3. Notwithstanding anything to the contrary contained in this
agreement, we shall retain the full discretion with respect to any joint venture
and we may accept or reject, with or without reason, any joint venture partner
or project proposed by you. We shall not be obligated to provide any funds to
any joint venture.
4. This agreement shall commence on August 1, 1997 and terminate on
December 31, 1999, but shall be automatically extended to December 31, 2001,
unless written notice of termination effective December 31, 1999 is given by
either you to us or by us to you on or prior to June 30, 1999. This agreement
shall also terminate in the event of your disability which prevents you from
performing your services under this agreement or upon your death. In addition,
we may terminate this agreement at any time for cause. Upon any termination of
this agreement, you shall furnish to us a list of projects for which a joint
venture partner and/or site have been identified for the purpose of complying
with our obligations to you in paragraph 6. As used herein, cause shall mean any
of the following actions by you:
(a) failure to comply with any of the material terms of this
agreement, which shall not be cured within 30 days after written notice from us;
(b) engagement in gross misconduct injurious to us;
(c) intentional misappropriation of our property to your own use;
(d) the commission by you of an act of fraud or embezzlement;
(e) your conviction for a felony;
(f) your engaging in any activity that is prohibited pursuant to
paragraphs 7 or 8 of this agreement.
5. For your services, we shall pay you the amount of $10,000 per
month, payable on the first business day of each month. We shall also reimburse
you, on presentation of appropriate supporting evidence, for all travel between
Hawaii and Japan and reasonable and necessary entertainment and other expenses
incurred by you in performing your activities under this agreement in Japan. We
will also reimburse for travel and meal expenses incurred by you in performing
your activities under this agreement in Hawaii; provided, however, that such
expenses relating to Hawaiian assignments shall be applied to, and reduce, the
monthly $10,000 consulting fee; provided, further, however, from to time there
may be expenses incurred with respect to a Hawaiian assignment that will be
reimbursed by us and not deducted from the monthly fee, but only at our sole
discretion and with our prior approval. In connection with travel to Japan, we
shall reimburse you for business class travel, unless there is no business class
on such flights, in which event we shall reimburse you for first class travel.
Reimbursement for hotels shall not exceed 30,000 Yen per night, exclusive of
service and taxes. If pursuant to paragraph 4, we elect to terminate this
agreement effective December 31, 1999, then on January 1, 2000 we shall pay to
you the additional amount of $40,000.
6. If at any time during the term of this agreement or within four
years after the termination of this agreement (except if we terminate this
agreement for cause), with respect to any projects you worked on or developed
for us either in Japan or Hawaii, we shall pay to you, within 30 days after the
opening of any such project or the later phases of any such project, a fee equal
to one percent (1%) of the originally budgeted per square foot total hard and
soft development costs of such project or later phases including capitalized
value attributable to land (whether purchased, leased or otherwise such as a
participation in cash flow) multiplied by the gross leasable area ("GLA")
contained in that project or later phases, for all GLA of space at such project
or later phases actually constructed and opened within four years after
termination of this agreement; provided, however, that we shall only pay you
pursuant to this paragraph 6 up to a maximum cumulative amount of five hundred
thousand dollars ($500,000) per project (including all subsequent phases of any
project). The terms "worked on" or "developed" as used in the preceding sentence
shall include any project for which a site has been targeted by Chelsea for
active pursuit, a joint venture agreement has been executed or under active
negotiation or at which construction has commenced. Furthermore, for a period of
four years after termination (except for cause) a one percent (1%) fee will also
be paid on any project (committed to by Chelsea) but not listed pursuant to
paragraph 4, in which a joint venture partner from the aforementioned list
participates.
7. Subject to written approval by us, which approval shall not be
unreasonably withheld, conditioned or delayed, during the term of this agreement
and for a period of three years after termination or expiration of this
agreement, regardless of the reason for such termination, you shall not anywhere
in the world directly or indirectly (a) become engaged in the manufacturers
outlet center business or (b) become employed by, act as a consultant to, or
otherwise render any services to, any person, corporation, partnership or other
entity which is engaged in the manufacturers outlet center business. For
purposes of this agreement (x) a company shall be considered engaged in the
manufacturers outlet center business if 10% or more of its assets or revenues
are derived from such business and (y) the Xxxxx Company shall be deemed to be
engaged in the manufacturers outlet center business. You shall be deemed to be
directly or indirectly engaged in a business if you participate therein as a
director, officer, stockholder, employee, agent, consultant, manager, salesman,
partner or individual proprietor, or as an investor who has made advances or
loans, contributions to capital or expenditures for the purchase of stock, or in
any capacity or manner whatsoever, except for ownership of stock in publicly
traded companies and/or interests in mutual funds. You agree that we shall be
entitled to injunctive relief, in addition to all remedies permitted by law, to
enforce the provisions of paragraphs 7 and 8 hereof. In the event any of the
above territorial or time limits are found to be unreasonable, you agree to
their reduction to such an area or period as a court may determine to be
reasonable.
8. Except as otherwise required by law, you shall not at any time
during this agreement or after the termination hereof directly or indirectly
divulge, furnish, use, publish or make accessible to any person or entity any
Confidential Information (as hereinafter defined). Any records of Confidential
Information prepared by you or which come into your possession during this
agreement are and remain our property and upon termination of this agreement,
all such records and copies thereof shall be either left with or returned to us.
The term "Confidential Information" shall mean information disclosed to you or
known, learned, created or observed by you as a consequence of or through your
consulting for us, not generally known in the relevant trade or industry, about
our business activities, services and processes, including but not limited to
information concerning advertising, sales promotion, publicity, sales data,
research, copy, leasing, other printed matter, artwork, photographs,
reproductions, layout, finances, accounting, methods, processes, business plans,
contractors, sites, development plans, joint venture issues, tenant information,
lessee and supplier lists and records, potential lessee and supplier lists, and
contractor, lessee or supplier billing.
9. Notwithstanding the preceding provisions of this agreement, we
understand and agree that your primary client is Pacific Gas and Electric
Company and its subsidiaries, affiliates and successors from time to time
("PG&E") and nothing contained in this agreement will preempt your time and
responsibilities in carrying out your commitments to your primary client. If any
conflict should arise relative to your time availability between us and PG&E, we
agree that PG&E shall take priority and such use will not be deemed to be a
default under this agreement or grounds for termination of this agreement for
cause; provided, however, if as a result thereof we notify you in writing that
in our reasonable determination you are unable to perform your responsibilities
under this agreement, then we shall have the right to terminate this agreement
not less than 30 days after such notification unless you can demonstrate to us
during such 30 day period your ability to perform under this agreement.
10. This agreement shall be binding upon and inure to the benefit of
our successors (whether by merger or otherwise, including joint ventures) and
assigns, and upon your heirs, executors, administrators and legal
representatives. This agreement shall not be assignable by you, nor shall it be
assignable by us, without your prior written consent.
11. This agreement is to be governed by and construed in accordance
with the laws of the State of New Jersey, without giving effect to principles of
conflicts of law.
If the foregoing correctly sets forth the understanding between you
and us concerning the subject matter, please sign and return the enclosed copy
of this letter, whereupon this shall be a binding agreement between us.
Very truly yours,
Chelsea GCA Realty Partnership, L.P.
By: Chelsea GCA Realty, Inc.,
General Partner
By:___________________________
Agreed to:
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Xxxxxx Xxxxxxx
