INTERCOMPANY AGREEMENT
This INTERCOMPANY AGREEMENT (the "Agreement") is made and entered into
as of the 31st day of March, 1998, by and between Excel Realty Trust, Inc., a
Maryland corporation ("Excel"), and Excel Legacy Corporation, a Delaware
corporation ("Legacy").
W I T N E S E T H:
WHEREAS, Excel may in certain circumstances determine that it is
precluded from pursuing, or is limited in the manner in which it pursues,
various business opportunities due to its status as a real estate investment
trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code");
WHEREAS, Legacy is a newly-formed corporation which was organized by
Excel for the purpose of identifying and making opportunistic real estate
investments that are not generally available to REITs; and
WHEREAS, in light of the purpose for which Legacy was formed, Excel
and Legacy desire to enter into this Agreement in order to provide to each other
a right of first opportunity and notification right with respect to certain
investment opportunities.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
1. DEFINITIONS. Except as otherwise may be expressly provided herein,
the following terms shall have the meanings set forth below:
(a) "Change in Control" shall mean a change in ownership or control
of a party effected through either of the following transactions:
(i) any person or related group of persons (other than such
party or a Controlled Affiliate of such party) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of such party's
outstanding securities; or
(ii) there is a change in the composition of such party's Board
of Directors over a period of thirty-six (36) consecutive months (or less)
such that a majority of the Board members (rounded up to the nearest whole
number) ceases, by reason of one or more proxy contests for the election of
Board members, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was approved
by the Board; or
(iii) there is a change in the composition of such party's
senior executive management such that both Xxxx X. Xxxxx and Xxxxxxx X.
Xxxx cease to be employed by such party.
(b) "Controlled Affiliate" shall mean, with respect to a party, any
entity controlled by, controlling or under common control with such party.
(c) "Notice" shall have the meaning set forth in Section 2(a)(i)
hereof.
(d) "REIT Opportunity" shall mean a direct or indirect opportunity to
invest in neighborhood and community shopping centers, power centers, malls or
other conventional retail properties (including without limitation the
opportunity to provide services related to such real estate and to invest in
entities that invest primarily in or have a substantial portion of their assets
in such real estate), but not including office and industrial properties, single
tenant retail properties, entertainment/ retail/mixed-use development projects,
real estate mortgages, real estate derivatives, or entities that invest
primarily in or have a substantial portion of their assets in such real estate
assets. Excel shall have the right from time to time to provide written notice
to Legacy specifying certain criteria for a REIT Opportunity in addition to the
criteria specified above in this definition of REIT Opportunity. Any such
written notice from Excel may be modified or canceled by written notice given by
Excel at any time. This definition of REIT Opportunity shall be modified as
appropriate from time to time in accordance with any such written notices sent
by Excel.
(e) "Ten-Day Period" shall have the meaning set forth in Section
2(a)(i) hereof.
(f) "Withdrawal Date" shall have the meaning set forth in Section
2(a)(ii) hereof.
2. RIGHT OF FIRST OPPORTUNITY; NOTIFICATION RIGHT.
(a) RIGHT OF FIRST OPPORTUNITY.
(i) During the term of this Agreement, if Legacy develops a
REIT Opportunity, or if any REIT Opportunity otherwise becomes available to
Legacy, Legacy shall first offer such REIT Opportunity to Excel. The offer
shall be made by written notice (the "Notice") from Legacy to Excel, which
Notice shall contain a detailed description of the material terms and
conditions of the REIT Opportunity. Excel shall have ten days (the
"Ten-Day Period") from the date of receipt of the Notice to notify Legacy
in writing that it has accepted or rejected the REIT Opportunity. If Excel
does not respond by the end of the Ten-Day Period, Excel shall be deemed to
have rejected the REIT Opportunity. If Excel accepts a REIT Opportunity,
but subsequently decides not to pursue such opportunity or for any other
reason fails to consummate such opportunity, Excel shall immediately
provide written notice that it is no longer pursuing such REIT Opportunity
to Legacy.
(ii) If Excel rejects a REIT Opportunity, or accepts such REIT
Opportunity but thereafter provides, or is required by the provisions
hereof to provide, written notice to Legacy that it is no longer pursuing
such REIT Opportunity, Legacy shall, for a period of one year after the
Withdrawal Date (as hereinafter defined), be entitled to acquire the REIT
Opportunity (A) at a price, and on terms and conditions, that are not more
favorable to Legacy
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in any material respect than the price and terms and conditions set forth
in the Notice relating to such REIT Opportunity or (B) if Excel, at any
time after the Notice, negotiated a different price, terms or conditions
with the seller, then at a price, and on terms and conditions, that are not
more favorable to Legacy in any material respect than the price and terms
and conditions negotiated by Excel with the seller. If Legacy does not
enter into a binding agreement to acquire the REIT Opportunity within such
one-year period, or if the price and terms and conditions are more
favorable to Legacy in any material respect than the price and terms and
conditions set forth in the Notice (or, if applicable, than the price and
terms and conditions negotiated by Excel with the seller subsequent to the
Notice), Legacy shall again be required to comply with the procedures set
forth above in Section 2(a)(i) if it desires to acquire such REIT
Opportunity. The "Withdrawal Date" means any one of the following dates,
as applicable: (A) the date that Excel notifies Legacy that it has
rejected the REIT Opportunity, (B) if Excel does not respond to Legacy
regarding the REIT Opportunity, the expiration date of the Ten-Day Period,
or (C) if Excel accepts the REIT Opportunity but subsequently ceases to
pursue the opportunity, the earlier of (1) thirty (30) days after the date
on which Excel ceases to pursue the REIT Opportunity or (2) the date of
receipt by Legacy of written notice from Excel that it is no longer
pursuing the REIT Opportunity.
(b) NOTIFICATION RIGHT. In the event that either party hereto
develops or becomes aware of any investment opportunity during the term of this
Agreement (other than a REIT Opportunity), and such party is not interested in
pursuing such opportunity, or the opportunity is otherwise unavailable to such
party, such party shall immediately notify the other party of such opportunity
and provide to the other party a copy of all written information, and a
description of all material terms not set forth in writing, available to such
party concerning such opportunity.
3. GENERAL TERMS AND CONDITIONS FOR FIRST OPPORTUNITY/NOTIFICATION
RIGHTS.
(a) Unless waived or unless agreed to as part of an investment, each
party hereto shall bear its own expenses with respect to any opportunity to
which this Agreement is applicable, and each party agrees that it shall not be
entitled to any compensation from the other party with respect to any such
opportunity.
(b) A party shall not be required to comply with the right of first
opportunity and notification requirements set forth in this Agreement during any
period in which the other party or any Controlled Affiliate of such other party
is in default of this Agreement or any other agreement entered into by the
parties hereto or any of their Controlled Affiliates, if such default is
material and remains uncured for fifteen (15) days after receipt of notice
thereof.
(c) Any opportunity which is offered to and accepted by Excel under
this Agreement may be entered into by or on behalf of Excel or by any designee
which is a Controlled Affiliate of Excel. Any opportunity which is offered to
and accepted by Legacy under this Agreement may be entered into by or on behalf
of Legacy or by any designee which is a Controlled Affiliate of Legacy.
(d) All first opportunity and notification rights set forth in this
Agreement shall be subordinated to any seller consent and confidentiality
requirements; no party shall be required to comply with the first opportunity
and notification rights set forth in this Agreement to the extent such
compliance would violate any seller consent or confidentiality requirements.
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(e) While it is the intention of the parties to align their
businesses in accordance with the terms of this Agreement, each party shall act
independently in its own best interests, and neither party shall be considered a
partner or agent of the other party or owe any fiduciary or other common law
duties to the other party.
4. SPECIFIC PERFORMANCE. Each party hereto hereby acknowledges that the
obligations undertaken by it pursuant to this Agreement are unique and that the
other party would likely have no adequate remedy at law if such party shall fail
to perform its obligations hereunder, and such party therefor confirms that the
other party's right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the other party. Accordingly,
in addition to any other remedies that a party hereto may have at law or in
equity, such party shall have the right to have all obligations, covenants,
agreements and other provisions of this Agreement specifically performed by the
other party hereto and the right to obtain a temporary restraining order or a
temporary or permanent injunction to secure specific performance and to prevent
a breach or threatened breach of this Agreement by the other party.
5. TERM. The term of this Agreement shall commence as of the date of
this Agreement and shall terminate upon the earlier of (a) the tenth (10th)
anniversary of the date of this Agreement, or (b) a Change in Control of either
party hereto. Notwithstanding the foregoing, a party hereto may terminate this
Agreement if the other party or any Controlled Affiliate of such other party is
in default of this Agreement or any other agreement entered into by the parties
hereto or any of their Controlled Affiliates, if such default is material and
remains uncured for fifteen (15) days after receipt of notice thereof.
6. MISCELLANEOUS.
(a) NOTICES. Notices shall be sent to the parties at the following
addresses:
Excel Realty Trust, Inc.
00000 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Excel Legacy Corporation
00000 Xxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
Notices may be hand-delivered or sent by certified mail, return
receipt requested, Federal Express or comparable overnight delivery service, or
facsimile. Notice shall be deemed received at the time delivered by hand, on
the fourth business day following deposit in the U.S. mail, and on the first
business day following deposit with Federal Express or other delivery service,
or transmission by facsimile. Any party to this Agreement may change its
address for notice by giving written notice to the other party at the address
and in accordance with the procedures provided above.
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(b) REASONABLE AND NECESSARY RESTRICTIONS. Each of the parties
hereto hereby acknowledges and agrees that the restrictions, prohibitions and
other provisions of this Agreement are reasonable, fair and equitable in scope,
term and duration, and are necessary to protect the legitimate business
interests of the parties hereto. Each party covenants that it will not xxx to
challenge the enforceability of this Agreement or raise any equitable defense to
its enforcement.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement shall not be assigned without the
express written consent of each of the parties hereto.
(d) AMENDMENTS; WAIVERS. No termination, cancellation, modification,
amendment, deletion, addition or other change in this Agreement, or any
provision hereof, or waiver of any right or remedy herein provided, shall be
effective for any purpose unless such change or waiver is specifically set forth
in a writing signed by the party or parties to be bound thereby. The waiver of
any right or remedy with respect to any occurrence on one occasion shall not be
deemed a waiver of such right or remedy with respect to such occurrence on any
other occasion.
(e) CHOICE OF LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by the laws of the State of California,
without regard to the principles of choice of law thereof.
(f) SEVERABILITY. In the event that one or more of the terms or
provisions of this Agreement or the application thereof to any person(s) or in
any circumstance(s) shall, for any reason and to any extent be found by a court
of competent jurisdiction to be invalid, illegal or unenforceable, such court
shall have the power, and hereby is directed, to substitute for or limit such
invalid term(s), provision(s) or application(s) and to enforce such substituted
or limited terms or provisions, or the application thereof. Subject to the
foregoing, the invalidity, illegality or enforceability of any one or more of
the terms or provisions of this Agreement, as the same may be amended from time
to time, shall not affect the validity, legality or enforceability of any other
term or provision hereof.
(g) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
(i) constitutes the entire agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral, between
the parties hereto with respect to the subject matter hereof, so that no such
external or separate agreement relating to the subject matter of this Agreement
shall have any effect or be binding, unless the same is referred to specifically
in this Agreement or is executed by the parties after the date hereof; and (ii)
is not intended to confer upon any other person any rights or remedies
hereunder, and shall not be enforceable by any party not a signatory to this
Agreement.
(h) HEADINGS. The headings of the sections hereof are inserted for
convenience of reference only and are not intended to be a part of or affect the
meaning or interpretation of this Agreement or of any term or provision hereof.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which together shall be deemed to be an original and all
of which together shall be deemed to constitute one and the same agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by one of its duly authorized officers, as of the date
first written above.
EXCEL REALTY TRUST, INC.
By: /s/ XXXX X. XXXXX
-------------------------------------------
Name: XXXX X. XXXXX
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
EXCEL LEGACY CORPORATION
By: /s/ XXXX X. XXXXX
-------------------------------------------
Name: XXXX X. XXXXX
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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