NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT, is made and effective as of _, 2004 (this
"AGREEMENT"), by and among NorthStar Capital Investment Corp., a Maryland
corporation ("NCIC"), and NorthStar Partnership, L.P., a Delaware limited
partnership of which NCIC is the sole general partner and holds a majority of
the partnership interests ("NPLP"), in favor of NorthStar Realty Finance Corp.,
a Maryland corporation ("NRFC"), and NorthStar Realty Finance Limited
Partnership, a Delaware limited partnership of which NRFC is the sole general
partner ("NRFLP").
WHEREAS, NRFLP has entered into certain Contribution Agreements with NPLP
and certain subsidiaries and affiliates of NPLP (collectively, the
"Contributors"), each dated as of _________, 2004 (the "CONTRIBUTION
AGREEMENTS"), pursuant to which NRFLP has agreed to acquire the Contributed
Assets from the Contributors at the Closing in consideration of the Unit
Distribution and $32,000,000 in cash (capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Contribution Agreements);
and
WHEREAS, NRFC and NRFLP have expressly stated that it is a condition of the
closing of the transactions contemplated by the Contribution Agreements that
NCIC and NPLP execute and deliver this Agreement in favor of NRFC and NRFLP.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
foregoing and the respective representations, warranties, covenants, agreements
and conditions contained in the Contribution Agreements and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree, subject
to the terms and conditions of the Contribution Agreements, as follows:
1. DEFINITIONS.
(a) "AFFILIATE" means any Person directly or indirectly
controlled by, or under direct or indirect common control
with, NCIC or NPLP.
(b) "BOARD" means the board of directors of NCIC or similar
governing body of NPLP, as applicable.
(c) "BUSINESSES" means:
(i) the development of or equity investment in net
leased real property or in sale-leaseback
transactions involving build-to-suit or renovated
commercial, retail, office, industrial or warehouse
facilities ("Net Lease Investments");
(ii) the acquisition and the origination of or investment
in mezzanine and subordinate real estate debt; and
(iii) investments in commercial mortgage-backed
securities, debt issued by real estate investment
trusts, real estate collateralized debt obligations
("CDOs") or residential mortgage-backed securities
to be financed by the issuance of CDOs or other
similar capital structures.
PROVIDED THAT in no event shall the "BUSINESSES" mean or
include:
(1) investments in any non-performing or distressed
properties, loans, businesses or securities;
(2) investments by, through or in any venture or equity
opportunity vehicle or fund whose primary objective
is to achieve growth in asset value rather than
current cash flow;
(3) any existing or future debt or equity investments in
or related to assets of NCIC or NPLP or their
respective Subsidiaries and Affiliates existing as
of the date hereof that are not being contributed
pursuant to the Contribution Agreements;
(4) any debt or equity investments in or related to
hotel properties;
(5) any investment related to or through Xxxx
Development Company and its subsidiaries and any
successor thereto; or
(6) any equity investments in or related to properties
that do not constitute Net Lease Investments.
(d) "CONTINUING DIRECTORS" means any member of the Board on the
date hereof and any other member of the Board who shall be
recommended or elected to succeed or become a Continuing
Director by a majority of the Continuing Directors who are
then members of the Board.
(e) "OFFICER" means any officer of NRFC who, on the date hereof
or at any time during the Term, holds any of the following
titles or positions: (1) President; (2) Chief Financial
Officer; (3) Executive Vice President, or (4) any other
executive officer of NRFC, initially including Xx. Xxxxx
Xxxxxxxx, President, Xx. Xxxx Xxxxxxx, Chief Financial
Officer, and Xx. Xxxx-Xxxxxx Xxxxxxxxxx, an Executive Vice
President.
(f) "PERSON" means any individual, corporation, association,
partnership, limited liability company, joint venture,
unincorporated organization, trust, trustee, executor,
administrator or other legal representative, governmental
entity, or other entity or organization.
(g) "SUBSIDIARIES" means, when used with reference to any party
hereto, any corporation, partnership, limited liability
company, or other entity, a
majority of the outstanding voting power of which is owned
directly or indirectly by such party or, in the case of NCIC
or NPLP only, of which NCIC or NPLP or one of their
respective Subsidiaries is the sole managing member or sole
general partner; provided, however, that for purposes of
this definition, (i) any corporation, partnership, limited
liability company, or other entity which is controlled,
directly or indirectly, by NRFC or NRFLP shall be deemed a
Subsidiary of NRFC, and (ii) on or after the date hereof,
none of NRFC, NRFLP or any of their Subsidiaries shall be
deemed Subsidiaries of NCIC or NPLP.
(h) "TERM" has the meaning assigned to it in Section 9.
(i) "TERRITORY" means the United States of America.
2. NON-COMPETITION AND NON-SOLICITATION.
(a) For the Term of this Agreement, none of (i) NCIC, (ii) NPLP,
(iii) any Subsidiary of NCIC or NPLP, or (iv) any successor
or assign of NCIC or NPLP or their respective Subsidiaries,
if such successor or assign continues to be a Subsidiary of
NCIC or NPLP or their respective Subsidiaries, respectively,
shall directly or indirectly, engage in any of the
Businesses within the Territory; provided, however, that
nothing contained herein shall prohibit NCIC or NPLP from
(A) owning, directly or indirectly, less than 5% of any
class of voting securities of any company engaged in any of
the Businesses, unless such company would become a
Subsidiary of NCIC or NPLP as a result of the acquisition of
such voting securities, (B) directly or indirectly acquiring
a business which engages in any of the Businesses or in any
portion thereof if the assets of such competing business
constitute 20% or less of the gross assets, on a historical
cost basis, of a larger business so acquired by NCIC or
NPLP, or (C) acquiring a business that engages in any of the
Businesses with the Territory if the assets of such business
constitute more than 20%, but not more than 50% of the gross
assets, on a historical cost basis, of a larger business so
acquired by NCIC or NPLP provided that (1) NCIC or NPLP, as
applicable, disposes of such competitive business within one
(1) year of its acquisition by NCIC or NPLP and (2) NCIC or
NPLP, as applicable, first offers to NRFC in writing the
right to acquire such competitive business before offering
to sell such competitive business to a third party and may
only sell such competitive business to another party if
after thirty days (30) NRFC determines not to acquire such
business, provided that, the terms of the sale to any third
party may not be materially more favorable than the terms
offered to NRFC.
(b) For the Term of this Agreement, NCIC and NPLP shall not and
shall cause any Subsidiary or Affiliate of NCIC or NPLP not
to solicit, raid, entice, induce or contact, or attempt to
solicit, raid, entice, induce or contact, any individual who
currently is or at any time during the Term shall be an
Officer to do anything from which NCIC, NPLP and their
respective Subsidiaries and Affiliates are restricted from
doing by reason of this Agreement, including to terminate
such Officer's employment with NRFC, NFRLP or their
respective Subsidiaries or to become an officer, director or
employee of NCIC, NPLP or their respective Subsidiaries; and
NCIC and NPLP shall not and shall cause any Subsidiary or
Affiliate of NCIC or NPLP not to approach any such Officer
for such purpose or authorize or participate in the taking
of such actions by any other Person or assist or participate
with any such Person in taking such action.
(c) Nothing in this Agreement shall be interpreted as
prohibiting a Person then engaged in any of the Businesses
from (i) merging with NCIC or NPLP or any Subsidiary of NCIC
or NPLP, provided that (1) the holders of NCIC or NPLP's
securities prior to the merger hold, in their capacity as
holders of equity interests of NCIC or NPLP, less than 50%
of the voting power of NCIC or NPLP following the merger or,
if NCIC or NPLP is not the surviving entity, the surviving
entity immediately following the merger, and (2) after the
consummation of such merger, (A) a majority of the Board of
NCIC, NPLP or the surviving entity, as applicable, shall
consist of individuals other than Continuing Directors and
(B) the co-chief executive officers of NCIC as of the date
hereof cease to serve in such capacity and (ii) thereafter,
carrying on its business in competition with NRFC or NRFLP
within the Territory.
3. EQUITABLE REMEDIES. In the event NCIC or NPLP breaches, or threatens to
breach, any term, provision, covenant or condition contained in this Agreement,
NCIC or NPLP agrees that NRFC and NRFLP shall be entitled to both temporary and
permanent injunctive relief against any such actual breach or threatened breach.
The right of NRFC and NRFLP to such relief shall not be construed to prevent
NRFC or NRFLP from pursuing, either consecutively or concurrently, any and all
other legal or equitable remedies available for such breach or threatened
breach, specifically including, without limitation, the recovery of monetary
damages.
4. APPLICABLE LAW AND CHOICE OF FORUM.This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New York
(regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof) as to all matters, including but not limited to
matters of validity, construction, effect, performance and remedies.
5. SEVERABILITY. If any term, provision, covenant or condition of this
Agreement is declared invalid, illegal, unenforceable, ineffective or
inoperative for any reason, such declaration shall not have the effect of
invalidating or voiding the remainder of this Agreement, and the parties hereto
agree that the part or parts of this Agreement so held to be invalid, illegal,
unenforceable, ineffective or inoperative will be deemed to have been stricken
from this Agreement and the remainder hereof will have the same force and effect
as if such part or parts had never been included herein.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall not be
altered, modified or amended, in whole or in part, except by the express written
authorization and consent of the parties. In the event of a conflict between the
terms hereof and those contained in the Contribution Agreements, the terms of
this Agreement shall prevail as to the matters set forth herein.
7. WAIVERS. Any waiver by any party, whether express or implied, of any
breach of any term, provision, covenant or condition of this Agreement shall not
constitute a waiver as to any subsequent breach of the same or of any other
term, provision, covenant or condition hereof. Failure of a party to declare any
breach upon the occurrence thereof, or any delay by any party in taking action
with respect to any breach, shall not waive any such breach.
8. NOTICES. Any and all notices or demands which must or may be given
hereunder or under any other instrument contemplated hereby shall be given in
accordance with the terms and conditions of the Contribution Agreement.
9. TERMINATION. This Agreement and the rights and obligations of the
parties hereunder shall terminate on the earlier to occur of (i) the date
mutually agreed upon by the parties hereunder; (ii) the occurrence of a merger
described in Section 2(c)(i); or (iii) the later to occur of the date three
years from the date hereof or the date Xxxxx Xxxxxxxx is no longer a Chief
Executive Officer, President or other senior executive officer employed by both
NRFC and NCIC (the "Term"). Upon and following the termination of this
Agreement, no Party to this Agreement shall be required by reason of any
provision of this Agreement to abide by any restriction on business activities
provided in this Agreement.
10. PARTIES IN INTEREST. This Agreement and all terms, provisions,
covenants and conditions contained herein shall inure to the benefit of and
shall be binding upon the undersigned parties and their respective successors
and assigns.
11. ASSIGNMENT. This Agreement shall not be assignable by a party without
the prior written consent of the other parties hereto.
12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
WITNESS WHEREOF, the parties hereto have caused this Non-Competition
Agreement to be executed as of the date first written above.
NORTHSTAR CAPITAL INVESTMENT CORP.
By:
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Name:
Title:
NORTHSTAR PARTNERSHIP, L.P.
By:
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Name:
Title:
NORTHSTAR REALTY FINANCE CORP.
By:
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Name:
Title:
NORTHSTAR REALTY FINANCE LIMITED
PARTNERSHIP
By:
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Name:
Title:
