Exhibit 10.10
RICHARD L. KRAMER
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this
“ Agreement ”) is entered into as of December
20, 2005 by and between Republic Property Trust, a Maryland real
estate investment trust (the “ Company ”) and
Richard L. Kramer, the Chairman (the “ Chairman
”) of the Board of Trustees of the Company (the “
Board ”).
WHEREAS, the Company and Republic
Property Limited Partnership, a Delaware limited partnership and
wholly owned operating partnership subsidiary of the Company (the
“ Operating Partnership ”), are engaging in
various related transactions pursuant to which, among other things,
(i) the Operating Partnership would acquire interests in
various limited liability companies that own real estate
properties, and (ii) the Company would effect an initial
public offering of its common shares of beneficial interest, par
value $0.01 per share, and contribute the proceeds therefrom for a
like number of units of partnership interest in the Operating
Partnership (the “ IPO ”, and together with the
other transactions in connection therewith, the “ IPO
Transactions ”);
WHEREAS, the Chairman is a
co-founder and co-owner of Republic Properties Corporation (“
RPC ”), a private real estate development,
redevelopment and management company founded by the Chairman and
Steven A. Grigg;
WHEREAS, the Company and the
Chairman agree that, as part of the IPO Transactions, the Chairman
will not engage in competition with the Company and will refrain
from taking certain other actions pursuant to the terms and
conditions hereof in an effort to protect the Company’s
legitimate business interests and goodwill and for other business
purposes; and
WHEREAS, RPC has also agreed to
enter an agreement not to engage in competition with the Company on
terms and conditions that are similar to this Agreement.
NOW, THEREFORE, in consideration of
the foregoing and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree as follows:
1.
Noncompetition . The Chairman agrees with the Company
that for the longer of (i) the three-year period beginning on the
date of this Agreement, (ii) the period during which the Chairman
is a member of the Board of the Company (or any successor thereto),
or (iii) in the event that the Chairman is removed as a member of
the Board of the Company for cause, one and one-half (1-1/2) years
thereafter (the “ Restricted Period ”), the
Chairman will not engage in any business involving the development,
construction, acquisition, ownership or operation of institutional
grade office property real estate (the “ Company
Business ”), whether such business is conducted by the
Chairman individually or as a principal, partner, member,
stockholder, director, trustee, officer, employee or independent
contractor of any Person (as defined below); provided,
however , that this Section 1 shall not be deemed to prohibit
any of the following: (a) any of the real estate (and real
estate-related) activities listed on Schedule A hereto and
the Chairman’s ownership, marketing, sale, transfer or
exchange of any of the Chairman’s interests in any
of the properties or entities listed
on Schedule A hereto, (b) the direct or indirect ownership
by the Chairman of up to five percent of the outstanding equity
interests of any public company, (c) any activities with respect to
non-institutional grade office property real estate or Non-Office
Building Real Estate, including, without limitation, residential,
hotel, retail, industrial or recreational, and (d) a direct or
indirect ownership by the Chairman of equity or similar ownership
interests of any corporation, partnership, limited liability
company, joint venture, association or other entity that is not a
public company, provided that the Chairman is not involved in the
management or operation of such Person or its business (as a
director, trustee, officer, employee or otherwise) and such Person
is not engaged in the Company Business. Notwithstanding the
foregoing, during the one and one-half (1-1/2) year
“tail” period included in the Restricted Period, the
restrictions set forth in this Section 1 shall apply only within
the following “ Restricted Areas ”: (I) the
District of Columbia and the states of Maryland and Virginia; and
(II) the area within a 50-mile radius of any property owned or
leased by the REIT, as of the date of the Chairman’s removal
as a member of the Board. For purposes of this Agreement, (i)
“ Person ” means any individual, firm,
corporation, partnership, company, limited liability company,
trust, joint venture, association or other entity, and (ii)
“Non-Office Building Real Estate” means any real
estate which has an office space component equal to five percent
(5%) or less of such real estate’s total net rentable square
footage. Notwithstanding the foregoing, the Restricted Period
shall terminate, if not earlier terminated in accordance with this
Section 1, upon the first to occur of (i) the consummation of a
Change of Control of the Company, as defined in Section 6 of this
Agreement or (ii) the failure of the Chairman to be reelected as a
member of the Board.
2.
Nonsolicitation . The Chairman agrees with the Company that
for the longer of (i) the three-year period beginning on the date
of this Agreement or (ii) the period during which the Chairman is a
member of the Board, and for eighteen months thereafter, the
Chairman will not (a) directly or indirectly solicit, induce or
encourage any employee or independent contractor to terminate their
employment with the REIT or to cease rendering services to the
REIT, and the Chairman shall not initiate discussions with any such
Person for any such purpose or authorize or knowingly cooperate
with the taking of any such actions by any other Person, or (b)
hire (on behalf of himself or any other person or entity) any
employee who has left the employment of the REIT (or any
predecessor thereof) within one year of the termination of such
employee’s employment with the REIT.
3.
Referrals . In addition, the Chairman agrees that for
the longer of (i) the three-year period beginning on the date of
this Agreement or (ii) the period during which the Chairman is a
member of the Board of the Company (or any successor thereto), the
Chairman will refer to the Company any investment and fee-based
development opportunities for commercial office properties in
Greater Washington, D.C. which are presented to the
Chairman.
4.
Reasonable and Necessary Restrictions . The Chairman
acknowledges that the restrictions, prohibitions and other
provisions hereof, including, without limitation, the Restricted
Area, the Restriction Period and the restriction period set forth
in Section 2, are reasonable, fair and equitable in terms of
duration, scope and geographic area, are necessary to protect the
legitimate business interests of the REIT.
5.
Specific Performance . The Chairman acknowledges that
the obligations undertaken by the Chairman pursuant to this
Agreement are unique and that the Company likely will have no
adequate remedy at law if the Chairman shall fail to
2
perform any of the Chairman’s
obligations hereunder, and the Chairman therefore confirms that the
Company’s right to specific performance of the terms of this
Agreement is essential to protect the rights and interests of the
Company. Accordingly, in addition to any other remedies that
the Company may have at law or in equity, the Company shall have
the right to have all obligations, covenants, agreements and other
provisions of this Agreement specifically performed by the
Chairman, and the Company shall have the right to obtain
preliminary and permanent injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this
Agreement by the Chairman. The Chairman hereby acknowledges
and agrees that the Company shall not be required to post bond as a
condition to obtaining or exercising such remedies, and the
Chairman hereby waives any such requirement or
condition.
6.
Miscellaneous Provisions .
(a)
Assignment; Binding Effect . This Agreement may not be
assigned by the Chairman, but may be assigned by the Company to any
successor to its business or to any subsidiary or affiliate of the
Company and will inure to the benefit of and be binding upon any
such successor. Subject to the foregoing provisions
restricting assignment, all covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors, assigns,
heirs, and personal representatives.
(b)
Entire Agreement . This Agreement constitutes the
entire agreement between the parties hereto with respect to the
matters set forth herein and supersedes and renders of no force and
effect all prior oral or written agreements, commitments and
understandings among the parties with respect to the matters set
forth herein. This Section 6(b) shall not be use
