NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made and entered into
as of the _____ day of _______, 1997, by and among Philips International Realty,
L.P. (the "Partnership"), Philips International Realty Corp., a general partner
of the Partnership (the "Corporation" and together with the Partnership, the
"Owner"), Philips International Holding Corp. (the "Managing Company"), Xxxxxx
Xxxxxxxx, the Chairman of the Board of Directors and Chief Executive Officer of
the Corporation and the sole member of the managing general partner of the
Partnership ("Xx. Xxxxxxxx"), and Xxxxxx Xxxxxx, a director and executive
officer of the Corporation ("Xx. Xxxxxx," and together with the Managing Company
and Xx. Xxxxxxxx, the "Managers").
WHEREAS, pursuant to a Management Agreement by and between the Managing
Company and Owner dated as of the date hereof (the "Management Agreement"), the
Managing Company provides certain management services to Owner and the
properties of Owner (the "Owner's Properties") and, in such capacity, is engaged
in, among other things, the acquisition, ownership, management, leasing,
renovation, development and redevelopment of commercial real estate in the
United States.
WHEREAS, the Managing Company acknowledges that its engagement by Owner
creates a relationship of confidence and trust and it will obtain confidential
information with regard to the business of Owner and its affiliates and clients;
WHEREAS, the Managing Company acknowledges that, as a result of its
obtaining confidential information as to Owner and its affiliates and clients,
Owner and its affiliates will suffer substantial damage, which would be
difficult to ascertain if the Managing
Company enters into competition with Owner or any affiliate and that it is
necessary for Owner to be protected by the prohibition against competition and
the confidentiality restrictions set forth herein;
WHEREAS, Xx. Xxxxxxxx and Xx. Xxxxxx acknowledge that their position with
the Corporation creates a relationship of confidence and trust and they will
obtain confidential information with regard to the business of Owner, and its
affiliates and clients;
WHEREAS, Xx. Xxxxxxxx and Xx. Xxxxxx acknowledge that, as a result of their
obtaining confidential information as to Owner and its affiliates and clients,
Owner and its affiliates will suffer substantial damage, which would be
difficult to ascertain, if Xx. Xxxxxxxx or Xx. Xxxxxx enters into competition
with Owner or any affiliate and that it is necessary for Owner to be protected
by the prohibition against competition and the confidentiality restrictions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein set forth, and for other good and valuable consideration, the Managers
and Owner agree as follows:
1. Non-competition.
1(a) Non-competition. Except as expressly provided herein, each of the
Managers agrees that during the period commencing on the date hereof and
terminating on the later of (i) one year after such time as the Management
Agreement is terminated and neither Xx. Xxxxxxxx nor Xx. Xxxxxx is a director or
executive officer of the Corporation, or (ii) the date on which neither Xx.
Xxxxxxxx nor Xx. Xxxxxx beneficially owns more than fifteen (15%) percent of the
outstanding shares of common stock of the Corporation on a fully diluted basis
(including Partnership units redeemable for shares of common stock of the
Corporation (the "Non-
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Competition Period"), neither Xx. Xxxxxxxx, Xx. Xxxxxx, the Managing Company nor
any affiliate of the Managing Company (within the meaning of Rule 12(b)-2 of the
Securities Exchange Act of 1934) (an "Affiliate" and together with Xx. Xxxxxxxx,
Xx. Xxxxxx and the Managing Company, the "Managing Group") shall engage in any
way, directly or indirectly, in the acquisition, ownership, operation,
development, management, renovation or leasing of any retail shopping center
properties (or mixed properties which are primarily known as retail shopping
center properties based upon the relative square footage of each use) or any
improvements thereof located in the United States, except for (i) the Managing
Company in its capacity as a manager of the Owner's Properties, (ii) Xx.
Xxxxxxxx or Xx. Xxxxxx in his or her capacity as a director, officer or employee
of the Managing Company but solely in the Managing Company's capacity as manager
of the Owner's Properties, or (iii) Xx. Xxxxxxxx or Xx. Xxxxxx in his or her
capacity as an employee, director, trustee, officer or equity owner of the
Corporation; provided, however, that this Section 1(a) shall not apply to (i)
the activities of the Managing Group with respect to any property listed in
Exhibit A (the "Excluded Properties") attached hereto; (ii) the expansion of the
Excluded Properties which expansion is contiguous to such property and (a) will
not increase the existing gross leaseable area of the property by more than 10%;
or (b) is the result of the exercise of the fiduciary duty of Xx. Xxxxxxxx or
Xx. Xxxxxx after discussion with their partners or members, as the case may be;
(iii) the acquisition, operation, development, management or leasing of any
retail shopping center property located anywhere in the Continental United
States by the Managing Group provided that the retail shopping center portion of
such property shall not exceed twenty thousand (20,000) square feet; (iv) the
acquisition by Xx. Xxxxxxxx, Xx. Xxxxxx, their spouses and their issue of any
property or any interest in any property by inheritance; (v) Xx. Xxxxxxxx or Xx.
Xxxxxx providing advice or
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financial assistance involving the acquisition, operation, development,
management or leasing of any retail shopping center property located anywhere in
New York City or outside the New York City area provided such property is not
within a two mile radius of property owned by the Corporation or the Partnership
(a "Non-Competitive Property"), to any of their children with regard to projects
that are Non-Competitive Properties initiated by such children, provided that
(x) at the time such child initially approaches such member of the Managing
Group, such member has no knowledge (following appropriate due diligence) that
the Partnership or Corporation is involved in or considering such a project and
(y) if such member of the Managing Group thereafter obtains knowledge that the
Partnership or Corporation is considering such a project, such member of the
Managing Group shall promptly inform the Partnership or Corporation , as the
case may be, of such member's involvement with his child and excuse himself from
any involvement with such project on behalf of the Partnership or Corporation,
as the case may be. In the event five (5) years from the date hereof Xx. Xxxxxx
has ceased being a director and an executive officer of the Corporation for at
least one year and beneficially owns less than five (5%) percent of the
outstanding shares of common stock of the Corporation on a fully diluted basis
(including Partnership units redeemable for shares of common stock of the
Corporation), then notwithstanding anything to the contrary herein, with respect
to Xx. Xxxxxx only, this Agreement shall be deemed terminated and of no further
force or effect.
Nothing contained in this Agreement shall in any way be construed as a
restriction or limitation, now or in the future, on the ability of Xx.
Xxxxxxxx'x father, Xxxx Xxxxxxxx, or brother, Xxxxx Xxxxxxxx, to own, develop,
operate or manage retail shopping centers.
1(b) Reasonable and Necessary Restrictions. Each of the Managers
acknowledges that the restrictions, prohibitions and other provisions of this
Section 1 are
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reasonable, fair and equitable in scope, terms and duration, are necessary to
protect the legitimate business interests of Owner, and are a material
inducement to Owner's engagement of the Managing Company and the Corporation's
retention of Xx. Xxxxxxxx and Xx. Xxxxxx.
1(c) Non-Solicitation. Each of the Managers agrees that during the
Non-Competition Period, none of the members of the Managing Group will directly
or indirectly solicit any of Owner's or its affiliates' non-clerical employees,
agents or independent contractors to end their relationship with Owner or its
affiliates.
1(d) Confidential Information. Each of the members of the Managing Group
shall hold in a fiduciary capacity for the benefit of the Partnership and the
Corporation all trade secrets and confidential information, knowledge or data
relating to Owner and its business and investments, which shall have been
obtained by the Managing Company during its engagement by Owner or Xx. Xxxxxxxx
or Xx. Xxxxxx during his or her service as a director or officer of the
Corporation, and which is not generally available public knowledge (other than
by acts by members of the Managing Group in violation or this Agreement). Each
member of the Managing Group shall not, without the prior written consent of the
Partnership or Corporation or as may otherwise be required by law or any legal
process, or as is necessary in connection with any adversarial proceeding
against the Partnership or Corporation (in which case the members of the
Managing Group shall cooperate with the Partnership and/or Corporation, at the
expense of the Partnership and/or Corporation, in the Partnership and/or
Corporation seeking to obtain a protective order against disclosure by a court
of competent jurisdiction), communicate or divulge any such trade secrets,
information, knowledge or data to anyone other than the Partnership and/or
Corporation in furtherance of its or his business or to perform duties
hereunder.
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1(e) Removal of Documents. All records, files, drawings, documents, models,
equipment, and the like relating to the business of the Partnership or
Corporation which any member of the Managing Group has control over shall not be
removed from the premises of the Partnership or Corporation without the written
consent of the Partnership or Corporation, as the case may be, unless such
removal is in the furtherance of the business of the Partnership or Corporation
and, if so removed, shall be returned to the Partnership or Corporation, as the
case may be, promptly after termination of the employment of Xx. Xxxxxxxx or Xx.
Xxxxxx or engagement of the Managing Company by the Partnership and/or
Corporation, as the case may be, or otherwise promptly after removal if such
removal occurs following termination of employment or engagement. Rolodexes,
telephone directories and similar type items, and furniture, art works and
property owned by members of the Managing Group or otherwise not owned by the
Partnership or Corporation shall not be deemed property of the Partnership or
Corporation and shall not be covered by this Section 1(e). The Partnership
and/or Corporation shall be the owner of all trade secrets and other products
relating to the Partnership's and/or Corporation's business developed by members
of the Managing Group alone or in conjunction with others as part of the
Managing Company serving as manager for Owner.
1(f) Specific Performance. Each of the Managers acknowledges that the
Partnership and Corporation will have no adequate remedy at law if any of the
Managers shall fail to perform any of its or his obligations hereunder, and each
of the Managers therefore confirms that the right of the Partnership and
Corporation to specific performance of the terms of this Section 1 is essential
to protect the rights and interests of the Partnership and Corporation.
Accordingly, in addition to any other remedies that the Partnership and
Corporation may have at law or in equity, the Partnership and Corporation shall
have the right to have all obligations,
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agreements and other provisions of this Section 1 specifically performed by the
Managers, and the Partnership and Corporation shall have the right to obtain
preliminary injunctive relief to secure specific performance and to prevent a
breach of this Section 1 by the Managers without a requirement to post any bond.
1(g) If, at the time of enforcement of this Section 1, a court shall hold
that the duration, scope, area or other restriction stated herein is
unreasonable, the parties hereto agree that reasonable maximum duration, scope,
area or other restriction may be substituted by such court for the stated
duration, scope, area or other restriction.
2. Miscellaneous.
2(a) Integration; Amendment. This Agreement supersedes and renders of no
force and effect all prior understandings and agreements with respect to the
matters set forth herein. No amendments or additions to this Agreement shall be
binding unless in writing and signed by all of the parties.
2(b) Assignment. No rights or obligations of the Partnership or Corporation
under this Agreement may be assigned or transferred, except in connection with a
merger, consolidation or sale of all or substantially all of the assets of the
Partnership or Corporation, as the case may be, where the successor of the
Partnership or Corporation, as the case may be, expressly assumes and agrees to
perform this Agreement in the same manner and to the same extent that the
Partnership or Corporation, as the case may be, would be required to perform it
if no such succession had taken place; provided that the forgoing shall not
serve as a release of the Partnership or Corporation, as the case may be. None
of the Managers may assign this Agreement or any right or interest therein,
whether by operation of law or otherwise, without the prior written consent of
the Partnership and/or Corporation, as the case may be.
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2(c) Severability. Whenever possible, each provision and term of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, then, subject to the
provisions of Section 1(g) above, such provision or term shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating or
affecting in any manner whatsoever the remainder of such provision or term or
the remaining provisions or terms of this Agreement. In addition, in place of
such invalid or unenforceable provision, there shall automatically be added
hereto a provision as similar to such invalid or unenforceable provision as may
be possible and still be valid and enforceable.
2(d) Waivers.The failure or delay of any party at any time to require
performance by any other party of any provision of this Agreement, even if
known, shall not affect the right of such party to require performance of that
provision or to exercise any right, power, or remedy hereunder, and any waiver
by any party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right, power or remedy
under this Agreement. No notice to or demand on any party in any case shall, of
itself, entitle such party to other or further notice or demand in similar or
the circumstances.
2(e) Burden and Benefit. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
personal and legal representatives, successors and, subject to Section 2(b)
above, assigns.
2(f) Governing Law; Headings. This Agreement and its construction,
performance, and enforceability shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to provisions
of conflict of laws. Headings and titles
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herein are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
2(g) Notices. All notices called for under this Agreement shall be in
writing and shall be deemed to be sufficient if contained in a written
instrument delivered (i) in person, (ii) by first class registered or certified
mail, postage prepaid and return receipt requested, (iii) by overnight delivery
by a recognized courier service providing a receipt, or (iv) by facsimile
transmission confirmed by transmission report, addressed to the intended
recipient at the address set forth on the signature page hereof (or at such
other address for a party as shall be specified by like notice). Any notice
delivered to the party hereto to whom it is addressed shall be deemed to have
been given on the day it was received; provided, however, that if such day is
not a business day, then the notice shall be deemed to have been given and
received on the business day next following such day. If the other party is
aware that the intended recipient is not at the notice location, either
permanently or temporarily, notice also shall be sent to such location as the
notifying party becomes aware (after reasonable inquiry) that the intended
recipient is then located.
2(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
2(i) Number and Gender. When the context in which the words are used in
this Agreement indicates that such is the intent, words in singular number shall
include the plural and vice-versa. All terms and words used in this Agreement,
regardless of the sex or gender in which they are used shall be deemed to
include each other sex and gender unless the context requires otherwise.
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THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as of
the date first above written.
PHILIPS INTERNATIONAL REALTY CORP.
By: _______________________________________
Name:
Title:
Address:
PHILIPS INTERNATIONAL REALTY, L.P.
By: PHILIPS INTERNATIONAL REALTY CORP
a general partner
By: _______________________________________
Name:
Title:
Address:
PHILIPS INTERNATIONAL HOLDING CORP.
By: _______________________________________
Name:
Title:
Address:
_______________________________________
Xxxxxx Xxxxxxxx, individually
Address:
_______________________________________
Xxxxxx Xxxxxx, individually
Address:
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