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EXHIBIT 10.03
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT ("Agreement") is made and entered into as of
the [___] day of [__________], 1994, by and between Xxxx X. Xxxx ("the Officer")
and Rainwater, Inc., a Texas corporation ("RI").
W I T N E S S E T H:
WHEREAS, RI is engaged in a series of transactions involving the formation
of Crescent Real Estate Equities, Inc., a Maryland corporation (together with
its subsidiary corporations and limited partnerships, the "Company"), a public
offering of shares of the Company, and the acquisition of real estate
investments by the Company; and
WHEREAS, the Company will enter into a series of transactions (the
"Formation Transactions") pursuant to which it will acquire substantially all of
the real estate assets owned by real estate investment businesses affiliated
with Xxxxxxx X. Xxxxxxxxx, as well as certain additional real estate assets; and
WHEREAS, the Officer is an executive officer of RI; and
WHEREAS, as a condition precedent to the consummation of the Formation
Transactions, the Company has requested that RI obtain from the Officer for the
benefit of the Company, and that RI thereupon assign to the Company, certain
agreements to, among other things, restrict certain real estate activities of
the Officer in order to avoid potential conflicts of interest between the
Officer and the Company and to protect the business interests of the Company;
and
WHEREAS, the Officer and RI intend by this Agreement to establish such
restrictions, as between themselves; and
WHEREAS, it is their intention that following the execution of this
Agreement, all rights, title and interest of RI herein will be transferred,
assigned and conveyed to the Company, which, following such transfer, will
possess the sole and exclusive right to exercise the rights acquired under this
Agreement, and to which the Officer will be bound for the performance of his
obligations hereunder.
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NOW, THEREFORE, in consideration of the premises and mutual undertakings
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
Officer and the Company agree as follows:
1. Covenant not to Compete. The Officer hereby agrees that, during the term
of this Agreement as set forth in Section 3 hereof (the "Term"), and except as
otherwise provided herein, he shall not, without the express, prior written
consent of the Company, which consent shall be based on the approval of a
majority of the independent directors and may be withheld in the Company's sole
discretion, directly or indirectly engage in real estate acquisition,
management, operating, leasing, development, or redevelopment activities (which
activities hereinafter are described as "Real Estate Activities") other than in
his capacity as an employee, officer, director, or stockholder of the Company.
Notwithstanding the foregoing, RI acknowledges, and the Company by
accepting assignment of this Agreement shall acknowledge, that the Officer has a
broad and varied range of investment interests, and that many companies in which
he has or may acquire an equity interest own and may hereafter acquire real
property. RI also acknowledges, and the Company by accepting assignment of this
Agreement shall acknowledge, that companies in which the Officer has or may
acquire an equity interest engage in Real Estate Activities and that such
activities are not necessarily intended to be prohibited by this Agreement. RI
therefore agrees, and the Company by accepting assignment of this Agreement
shall agree, that the following activities of the Officer are expressly
permitted, notwithstanding any other provision of this Agreement:
a Any Real Estate Activities in which the Officer is engaged, directly
or indirectly, as of the date hereof;
b. Any real estate investments in which the Officer may have an interest
on or after the date hereof, so long as the Officer engages in any
such investments solely as a passive investor, without the actual
power to exercise control over Real Estate Activities related to any
such real estate investments.
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c. Any Real Estate Activities carried out directly or indirectly by the
Officer or any entity in which the Officer has an interest, which Real
Estate Activities are incidental to the conduct of another business of
the Officer or any such entity, and which Real Estate Activities are
entered into for the purpose of furthering business activities of the
Officer or any such entity that are not Real Estate Activities.
2. Investment Opportunities. During the term of this Agreement, the Officer
hereby agrees that he shall offer to the Company any real estate investment
opportunity presented to him or to a controlled affiliate of the Officer,
whether or not the Officer would be permitted to participate in such real estate
investment opportunity pursuant to paragraph 1(b) above. In the event that the
Company elects not to participate in any such investment presented to it by the
Officer, neither the Officer, nor any of his controlled affiliates, shall
participate in the investment without the express prior written consent of a
majority of the Company's independent directors. For purposes of this Agreement,
"controlled affiliate" means any entity over which the Officer has the actual
power to exercise management control.
3. Term. This Agreement shall remain in full force and effect until one
year after the date on which the Officer first ceases to serve as a director or
executive officer of the Company.
4. Reasonable and Necessary Restrictions. The Officer hereby acknowledges
and agrees that the restrictions, prohibitions and other provisions of this
Agreement are reasonable, fair and equitable in scope, term and duration, are
necessary to protect the legitimate business interests of RI and the Company and
are a material inducement to RI and the Company to enter into the transactions
contemplated in the recitals hereto.
5. Specific Performance. The Officer hereby acknowledges and agrees that
the obligations undertaken by him pursuant to this Agreement are unique and that
any remedy at law for a breach or threatened breach of any of his obligations
hereunder would be inadequate. Consequently, the Officer agrees that the right
of RI and the Company to specific performance of the terms of this Agreement is
essential to protect the rights and interests of RI and the Company. The Officer
further agrees that in addition to
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any other remedies that RI and the Company may have at law or in equity, RI and
the Company shall have the right to have all obligations, covenants, agreements
and other provisions of this Agreement specifically performed by the Officer,
and the Company shall have the right to 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 Officer.
6. Controlled Affiliates. The Officer hereby agrees that he will not
authorize or cause any controlled affiliate, as that term is defined in Section
2 hereof, to engage in any activities in which he would be prohibited from
engaging pursuant to this Agreement. Notwithstanding anything to the contrary in
this Agreement, the Officer is not required by the terms of this Agreement to
violate any currently existing fiduciary or contractual duty to any entity.
7. Assignment. This Agreement may be assigned by RI to the Company, which
following such assignment shall have the exclusive right to possess and to
exercise, or to refrain from exercising, all rights of RI arising out of this
Agreement.
8. Miscellaneous.
(a) Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed by the laws
of the State of Maryland.
(b) Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors, assigns, heirs
and personal representatives.
(c) Severability. Every provision of this Agreement is severable, and
the invalidity or unenforceability of any term or provision of this Agreement
shall not affect the validity or enforceability of the remainder of this
Agreement.
(d) Amendment; Waiver. 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 specifically set forth in a writing signed by
the party or parties to be bound thereby and approved by a majority of the
independent directors of the Company. The waiver of any right or remedy with
respect to any occurrence on one occasion shall not
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be deemed a waiver of such right or remedy with respect to such occurrence on
any other occasion.
(e) Entire Agreement. This Agreement (i) constitutes the entire
agreement and supersedes all prior agreements and understandings, 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; (ii) is not intended to confer upon any other person any rights
or remedies hereunder; and (iii) shall not be assigned by operation of law or
otherwise without the express written consent of each of the parties hereto.
(f) Headings. The section and subsection headings of this Agreement are
inserted for convenience of reference of the parties only, and shall not be
deemed a part hereof or affect the construction or interpretation of any
provisions hereof.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, which together shall constitute a single agreement. It shall not
be necessary that each party hereto execute each counterpart hereof, so long as
each such party executes at least one counterpart hereof.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be executed by one of its duly authorized
corporate officers, as of the date first above written.
RAINWATER, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Print Name:
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Title:
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/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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