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EXHIBIT 10.2
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
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(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
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Name: XXXX X. XXXXX
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Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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EXCEL LEGACY CORPORATION
By: /s/ XXXX X. XXXXX
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Name: XXXX X. XXXXX
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Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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