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Exhibit 10.28
NON-COMPETITION AGREEMENT
Non-Competition Agreement, dated as of August 4, 1997, among Tower
Realty Operating Partnership, L.P., a Delaware limited partnership (the
"Partnership"), and Properties Atlantic, Inc., a Florida corporation
("Properties Atlantic"), Xxxxxxxx Xxxxx ("Xxxxx") and Xxxx Xxxxxx ("Xxxxxx", and
together with Properties Atlantic and Xxxxx, the "Non-Competing Persons").
RECITALS
WHEREAS, the Non-Competing Persons are contributing certain assets
to the Partnership and the Partnership is contemplating retaining the services
of the Non-Competing Persons (collectively, the "Transaction") ; and
WHEREAS, the Partnership desires to consummate the Transaction in
connection with (i) the formation of Tower Realty Trust, Inc., a Maryland
corporation (the "Company"), which intends to qualify as a real estate
investment trust and which is (either directly or through its wholly-owned
subsidiaries) the sole general partner as well as a limited partner of the
Partnership, and (ii) the proposed initial public offering (the "IPO") and
concurrent private placement of shares of the Company's common stock, par value
$0.01 per share ("Common Stock").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party to this Agreement, the
parties hereto agree as follows:
1. COVENANT NOT TO COMPETE. The Non-Competing Persons and all
Affiliates of the Non-Competing Persons (the "Non-Competing Group") acknowledge
and agree with respect to the Non-Competing Persons that the business of the
Non-Competing Persons is conducted throughout the United States of America, its
territories and possessions (including Puerto Rico) (together, the "Territory")
and that the Non-Competing Persons' reputation and goodwill are an integral part
of their business success throughout the Territory. If the Non-Competing Group
deprives the Partnership of any of the Non-Competing Persons' goodwill or in any
manner utilizes their reputation and goodwill in competition with the
Partnership, the Partnership will be deprived of the benefits it has bargained
for pursuant to this Agreement and the Asset Contribution Agreement, dated the
date hereof, among the Partnership and the Non-Competing Persons. Accordingly,
as an inducement for the Partnership to enter into this Agreement, the
Non-Competing Group agrees that for a period of three years after the Closing
Date (the "Non-competition Period") no member of the Non-Competing Group shall,
without the Partnership's prior written consent, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be connected as a director, officer, employee,
partner, consultant or otherwise with, any profit or non-profit business or
organization in the Territory, that, directly or indirectly, competes with, or
is about to compete with, the business of the Non-Competing Persons as it shall
exist immediately prior to the Closing or as contemplated to be developed by the
Partnership or the Non-Competing Persons as of the Closing Date. In addition,
during the Non-competition Period, no member of the Non-Competing Group shall
have an equity interest in any such firm or business other than as a 5% or less
shareholder of a public corporation.
During the Non-competition Period, no member of the Non-Competing
Group shall (a) solicit, raid, entice, induce or contact, or attempt to solicit,
raid, entice, induce or contact, any Person, firm or corporation that is a
customer or distributor of the Non-Competing Persons to become a customer or
distributor of any other Person, firm or corporation for services the same as,
or competitive
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with, those services sold, rented, leased, rendered or otherwise made available
to customers by the Non-Competing Persons as of the Closing Date, as well as
services in any stage of development by the Non-Competing Persons as of the
Closing Date although not yet commercialized or not generally available, or
approach any such Person, firm or corporation for such purpose or authorize the
taking of such actions by any other Person, firm or corporation or assist or
participate with any such Person, firm or corporation in taking such action, or
(b) solicit, raid, entice, induce or contact, or attempt to solicit, raid,
entice, induce or contact, any Person, firm or corporation that currently is or
at any time during the two-year period immediately following the Closing Date
(the "Non-recruit Period") shall be (or, in the case of termination is at the
time of termination), an employee, agent or consultant of or to the
Non-Competing Persons to do anything from which the Non-Competing Group is
restricted by reason of this Agreement, and no member of the Non-Competing Group
shall approach any such employee, agent or consultant for such purpose or
authorize or participate with the taking of such actions by any other Person,
firm or corporation or assist or participate with any such Person, firm or
corporation in taking such action. The term "customer" shall include: (1)
customers of the Non-Competing Persons existing immediately after the Closing;
(2) customers that have used services of the Non-Competing Persons within the
24-month period prior to the Closing Date; and (3) those entities that have
committed to using services of the Non-Competing Persons or that have been
identified by the Non-Competing Persons as potential users of services of the
Non-Competing Persons but for which the Non-Competing Persons have not yet
commenced providing such services.
During the Non-competition Period, no member of the Non-Competing
Group shall make any statement or other communication that impugns or attacks
the reputation or character of the Partnership or its Affiliates or its or their
Representatives, or damages the goodwill of the Partnership or its Affiliates or
its or their Representatives, take any action that would interfere with any
contractual or customer or distributor relationships of the Partnership or its
Affiliates or its or their Representatives, including but not limited to any
action that would result in a diminution of business, or otherwise take any
action that is detrimental to the best interests of the Partnership or its
Affiliates.
2. EARLY TERMINATION OF NON-COMPETITION PERIOD. It is contemplated that
Xxxxx and Xxxxxx will be employees-at-will of the Partnership or its Affiliate.
In the event that the employment of Xxxxx or Xxxxxx is terminated (i) by the
Partnership (or its Affiliate, as the case may be) for other than Just Cause (as
defined below) or (ii) by Xxxxx or Xxxxxx for Good Reason (as defined below)
then the Non-competition Period applicable to the party no longer in the employ
of the Partnership (or its Affiliate, as the case may be) shall expire on the
earlier of (x) the date which is three (3) years after the Closing Date and (y)
the date which is thirty (30) days after the last date of such party's
employment by the Partnership.
3. CONFIDENTIALITY. The Non-Competing Group acknowledges that the
Confidential Information (as defined below) of the Non-Competing Persons is
valuable and proprietary to the business of the Non-Competing Persons being
acquired by the Partnership pursuant to this Agreement and agrees not to,
directly or indirectly, use, publish, disseminate, describe or otherwise
disclose any Confidential Information or Developments (as defined below) of the
Non-Competing Persons without the prior written consent of the Partnership
and/or its Affiliates. For purposes of this Agreement, "Confidential
Information" shall mean with respect to the Non-Competing Persons all
confidential information of the Non-Competing Persons and/or their Affiliates
existing on or prior to the Closing Date that is not otherwise publicly
disclosed or generally available (other than as a result of a disclosure by the
Non-Competing Group), including information entrusted to the Non-Competing
Persons and/or their Affiliates by others. Without limiting the generality of
the foregoing, Confidential Information
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with respect to the Non-Competing Persons and/or their Affiliates shall include:
(a) customer lists, lists of potential customers and details of agreements with
customers of the Non-Competing Persons and/or their Affiliates; (b) acquisition,
expansion, marketing, financial and other business information, projections and
plans of the Non-Competing Persons and/or their Affiliates; (c) research and
development of the Non-Competing Persons and/or their Affiliates; (d) computer
programs and computer software of the Non-Competing Persons and/or their
Affiliates; (e) identity of specialized consultants and contractors and
Confidential Information developed by them for the Non-Competing Persons and/or
their Affiliates; (f) purchasing, operating and other cost data of the
Non-Competing Persons and/or their Affiliates; (g) special customer and
distributor needs, cost and pricing data of the Non-Competing Persons and/or
their Affiliates; (h) employee information and (i) distribution lists, lists of
potential distributors and details of agreements with distributors of the
Non-Competing Persons and/or their Affiliates. Confidential Information with
respect to the Non-Competing Persons and/or their Affiliates also includes
information recorded in manuals, memoranda, projections, minutes, plans,
drawings, designs, formula books, specifications, computer programs and records
of the Non-Competing Persons and/or their Affiliates, whether or not legended or
otherwise identified as Confidential Information, as well as information that is
the subject of meetings and discussions and not so recorded. For purposes of
this Agreement, "Developments" shall mean with respect to the Non-Competing
Persons all data, concepts, ideas, findings, discoveries, developments,
programs, designs, inventions, improvements, methods, practices and techniques,
whether or not patentable, relating to the present and planned, future
activities and the services of the Non-Competing Persons.
4. SEVERABILITY OF COVENANTS. The Non-Competing Persons acknowledge and
agree that the restrictions in this Agreement are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the covenants set forth in this Agreement, or any part
thereof, is invalid or unenforceable, the remainder of the covenants set forth
in this Agreement, shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
5. BLUE-PENCILING. In the event this Agreement shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time or over too great a geographical area
or by reason of its being too extensive in any other respect, it shall be
interpreted to extend only over the maximum period of time for which it may be
enforceable and/or over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it
may be enforceable, all as determined by such court in such action.
6. REMEDIES. The Non-Competing Group acknowledges that a breach of the
covenants contained in this Agreement will cause irreparable damage to the
Partnership, the exact amount of which will be difficult to ascertain, and that
the remedies at law for any such breach will be inadequate. Accordingly, the
Non-Competing Group agrees that if any member of the Non-Competing Group
breaches the covenant(s) contained in this Agreement, in addition to any other
remedy that may be available at law or in equity, the Partnership shall be
entitled to specific performance and injunctive relief, without posting bond or
other security.
7. SEVERABILITY. The conditions and provisions set forth in this
Agreement shall be severable, and if any condition or provision or portion
thereof shall be held invalid or unenforceable, then said condition or provision
shall not in any manner affect any other condition or provision and the
remainder of this Agreement, construed without regard to said invalid or
unenforceable condition or provision, shall continue in full force and effect.
The parties hereto agree that if any provision of this
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Agreement is found unenforceable for any reason, this Agreement should be
reformed to contain the maximum restrictions, within the terms hereof, which are
enforceable.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (other than any New York law
respecting conflict-of-laws that would make the laws of any other jurisdiction
applicable).
9. CERTAIN DEFINITIONS.
"Affiliate" of a Person shall mean, with respect to that Person, a
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with that Person.
"Closing" means the closing of the IPO.
"Closing Date" means the date of the Closing.
"Company" has the meaning set forth in the Recitals.
"Confidential Information" has the meaning set forth in Section 3
above.
"Good Reason" means any of the following without the express written
consent of the affected party (i.e., Xxxxx or Xxxxxx, as the case may be): (a)
the Partnership requires him to move his executive office from the Metropolitan
Orlando (Florida) area; (b) his job title or position of responsibility or the
nature of his duties or the scope of his responsibilities is materially modified
without his written consent; or (c) the Partnership or the Company commences the
process of liquidation or dissolution.
"IPO" has the meaning set forth in the Recitals.
"Just Cause" means any of the following: (a) the willful and
continued failure by Xxxxx or Xxxxxx substantially to perform his duties
hereunder; (b) any act of fraud, misappropriation, dishonesty, embezzlement or
similar conduct against the Partnership or any of the Affiliates; or (c) the
conviction of Xxxxx or Xxxxxx for a felony or any crime involving moral
turpitude.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust or unincorporated organization.
"Territory" has the meaning set forth in Section 1 above.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
PARTNERSHIP:
TOWER REALTY OPERATING PARTNERSHIP, L.P.
By: Tower Realty Trust, Inc., general partner
By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx
Title: President
NON-COMPETING PERSONS:
PROPERTIES ATLANTIC, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
/s/ Xxxxxxxx Xxxxx
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XXXXXXXX XXXXX
/s/ Xxxx Xxxxxx
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XXXX XXXXXX
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